UNIVERSITI PUTRA MALAYSIA

WILLINGNESS TO PAY FOR TURTLE CONSERVATION AND THE

FINANCIAL VIABILITY OF RANTAU ABANG TURTLE SANCTUARY, TERENGGANU

ZAITON SAMDIN

FEP 2002 3

WILLINGNESS TO PAY FOR TURTLE CONSERVATION AND THE FINANCIAL VIABILITY OF RANTAU ABANG TURTLE SANCTUARY, TERENGGANU

By

ZAITON SAMDIN

Thesis Submitted to the School of Graduate Studies, Universiti Putra Malaysia, in Fulfilment of the Partial Requirement for the Degree of Master of Science

March 2002

Untuk mak, abah, taufik, ika ............... ...... ........... .

Abstract of thesis presented to the Senate of Universiti Putra Malaysia in fulfilment of the partial requirement for the degree of Master of Science

Will ingness to Pay for Turtle Conservation and the Financial Viabil ity of Rantau Abang Turtle Sanctuary, Terengganu

By

ZAITON SAMDIN

March 2002

Chairman: Associate Professor Khalid Abd Rahim, Ph. D.

Faculty: Economics and Management

Conservation is an important measure to ensure that the endangered turtles will

be able to survive for the benefit of future generations. Cardinal approach i.e. Contingent

Valuation Method was used in this study to evaluate the will ingness to pay for

conservation of turtles in Rantau Abang, Terengganu. The study also estimated the

benefits of turtle conservation, evaluated the viability of the existing Turtle Sanctuary and

identified the factors that influenced society's wil l ingness to pay for turtle conservation

based on a survey of d ifferent groups of respondents.

Three different groups of respondents i .e. group A (residents), group B (visitors

to Rantau Abang Turtle Sanctuary) and group C (tourists) were classified in this study.

Each group consists of a different number of sample sizes i .e . 1 1 0 for group A, 1 00 and

1 30 for groups B and C respectively. I n the estimation of benefits for each group of

respondents, the Contingent Valuation Method yielded mean values of RM 1 0.02,

RM1 07. 1 1 and RM61 .93 using the Logit technique.

i i i

It is also found that among the factors that influenced will ingness to pay for turtle

conservation for groups A and B were bid, monthly income and age. For group C, bid ,

monthly income and membership in some environmental organisations were the main

factors influencing peoples' will ingness to pay.

The study also evaluated the role of government contribution to the viability of

the project. Using RM1 0 as the ticket price and with the government allocation of

RM1 50,000, the financial analysis showed that the Net Present Value (NPV) was

RM1 ,327,603.45. However, without government allocation, the NPV was negative

RM6,229.77. This infers that the government contribution is essential to ensure the

viability of the project. I n fact, with the current contribution of RM1 50,000, the ticket price

could be reduced to RM5 and the project would still be viable. At this ticket price, the

NPV was RM263,649. 1 5.

A sensitivity analysis showed that the project was sti l l viable even with a 1 0%

decrease in total cash inflow or with a 1 0% increase in total cash outflow. Further

analysis was carried out to determine the amount of government allocation needed for

the project to reach break-even point only. At the ticket price of RM1 0, the amount of

government allocation that made the NPV equaled zero was RM700.59 per year. At the

price of RM5, the amount of government allocation was RM1 20,350.59 per year.

iv

Abstrak tesis yang dikemukakan kepada Senat Universiti Putra Malaysia sebagai memenuhi sebahagian keperluan untuk ijazah Master Sains

Kesanggupan Membayar untuk Pemuliharaan Penyu dan Anal isis Kewangan Santuari Penyu Rantau Abang, Terengganu

Oleh

ZAITON SAMDIN

Mac 2002

Pengerusi: Profesor Madya Khalid Abd Rahim, Ph. D

Fakulti : Ekonomi dan Pengurusan

Pemuliharaan adalah penting bagi memastikan penyu akan terus hidup untuk

generasi akan datang. Tujuan kajian ini dijalankan adalah untuk menganggar

kesanggupan membayar untuk pemuliharaan penyu di Rantau Abang, Terengganu. Oi

sam ping itu, ia juga menganggar faedah daripada pemuliharaan penyu, menilai sarna

ada Santuari Penyu yang ada sekarang berdaya maju atau tidak dan mengenalpasti

faktor-faktor yang mempengaruhi kesanggupan membayar untuk pemuliharaan penyu di

Rantau Abang, Terengganu berdasarkan kumpulan responden yang berlainan.

Tiga kumpulan responden telah diklasifikasikan kepada kumpulan A (penduduk

tempatan), kumpulan B (pelawat Santuari Penyu) dan kumpulan C (pelancong). Setiap

kumpulan merangkumi bilangan sam pel yang berbeza iaitu 1 1 0 untuk kumpulan A

manakala 1 00 dan 1 30 untuk kumpulan B dan C. Faedah yang dianggarkan dengan

adanya pemuliharaan penyu untuk setiap kumpulan berdasarkan Kaedah Penilaian

Kontingen adalah RM 1 0.02, RM1 07. 1 1 dan RM61 .93.

v

Bagi kumpulan A dan B, analisis logit menunjukkan di antara faktor-faktor yang

mempengaruhi kesanggupan membayar adalah bida, pendapatan bulanan dan umur.

Sementara itu, bagi kumpulan C, faktor-faktor yang mempengaruhi kesanggupan

membayar adalah bida, pendapatan bulanan dan keanggotaan dalam organisasi alam

sekitar.

Kajian juga menilai peranan peruntukan kerajaan dalam menentukan sam a ada

projek in i berdaya maju atau tidak. Dengan menggunakan harga tiket RM1 0 dan

peruntukan kerajaan sebanyak RM1 50,000, analisis kewangan menunjukkan Nilai Kini

Bersih (NKB) adalah RM1 ,327,603.45. Namun, tanpa peruntukan kerajaan NKB adalah

negatif iaitu RM6,229.77. Ini menunjukkan bahawa perlunya peruntukan kerajaan dalam

memastikan projek ini berdaya maju. Dengan peruntukan kerajaan sebanyak

RM1 50,000 dan harga tiket diturunkan ke RM5, analisis kewangan menunjukkan projek

ini masih berdaya maju. Dengan harga tiket in i , NKB adalah RM263,649. 1 5.

Analisis Kepekaan menunjukkan projek ini masih berdaya maju walaupun

dengan penurunan sebanyak 1 0% dalam aliran tunai masuk atau pun pen ingkatan 1 0%

dalam aliran tunai keluar. Analisis selanjutnya adalah menentukan amaun peruntukan

kerajaan bagi memastikan titik pulang modal bagi projek ini . Dengan harga tiket RM1 0,

amaun peruntukan kerajaan yang diperlukan untuk menjadikan NKB bersamaan dengan

sifar adalah RM700.59 setahun manakala pada harga tiket RM5 adalah RM1 20,350.59

setahun.

vi

ACKNOWLEDGEMENTS

First of all , praise be to Allah the cherisher and the sustainer of the world, for

giving me strengths, wil l and determination throughout the way in fin ishing my thesis.

I would also like to take this opportunity to express my sincere gratitude and

appreciation to my supervisor, Associate Professor Dr. Khalid Abdul Rahim.

Furthermore, my indebtedness goes to my committee members, En. Kusairi Md. Noh

and En. Mohammad Salleh for their assistance and guidance.

Special thanks goes to En. Abdul Rahman Kassim and Cik Salini from Rantau

Abang Turtle Sanctuary, Encik Alias Radam, Dr. Tai Shzee Yew, staff of Faculty of

Economics and Management (UPM) and the library of Universiti Putra Malaysia.

My special appreciation is also extended to my parents, my husband, my

daughter, and other family members. Finally thanks to Ella, N itti, Nina, Juliana, Linda,

Melissa, Anne, Ikin, Ida, Kak Yuhanis, Wani , Dahlia, and Nawal for the support,

enjoyable and memorable time spent together.

vii

I certify that an Examination Committee met on 22 nd March 2002 to conduct the final exam ination of Zaiton Samdin on her Master of Science thesis entitled "Willingness to Pay for Turtle Conservation and the Financial Viability of Rantau Abang Turtle Sanctuary, Terengganu" in accordance with Universiti Pertanian Malaysia (Higher Degree) Act 1 980 and Universiti Pertanian Malaysia (Higher Degree) Regulation 1 981 . The Committee recommends that the candidate be awarded the relevant degree. Members of the Examination Committee are as follows:

Tai Shzee Yew, Ph.D. Associate Professor, Faculty of Economics and Management Universiti Putra Malaysia (Chairman)

Khalid Abd Rahim, Ph.D. Associate Professor, Faculty of Economics and Management Universiti Putra Malaysia (Member)

Kusairi Mohd. Noh Lecturer, Faculty of Economics and Management Universiti Putra Malaysia (Member)

Mohamad Salleh Lecturer, Faculty of Economics and Management Universiti Putra Malaysia (Member)

��MAD�MA:'Ph .D Professor/Deputy Dean School of Graduate Studies Universiti Putra Malaysia

Date: 0 � MAY 2002

viii

This thesis submitted to the Senate of Universiti Putra Malaysia has been accepted as fulfi l lment of the requirements for the degree of Master of Science.

ix

AINI I DERIS, Ph.D. Professor/Dean School of Graduate Studies Universiti Putra Malaysia

Date : 1 3 JUN 2002

DECLARATION

I hereby declare that the thesis is based on my original work except for quotations and citations, which have been duly acknowledged. I also declare that it has not been previously or concurrently submitted for any other degree at UPM or other institutions.

ZAITON BINTI SAMDIN

Date : May 2, 2002

x

TABLE OF CONTENTS

DEDICATION ............................ .................................. ................. i i ABSTRACT ................. .. ........... ........ ......... .................. ................. i i i ABSTRAK . ... .... ... .. ........ .................... ................... ...... ................. v ACKNOWLEDGEMENTS. ... .... ............ .............. ............ ... .... .......... vii APPROVAL................................................................................. vii i DECLARATION ............................... ........ .. .... ............. ....... ........... x LIST OF TABLES ......... ......... ......... ....... ........ ............... ... ....... ....... xiv LIST OF FIGURES. ... .......... ... ..... ... ......... ............ .......... ........ ........ xvii LIST OF BOXES .... ...... ... .......... ... .... .. .. ..... ............... ........... ...... ... xvi i i LIST OF ABBREVIATIONS .... ... .... ..... .......... ..... ............... ... ............ xix

CHAPTER

II

INTRODUCTION .... ... .... .............. .......... ... ..... .... ... 1 Coastal Setting . .. .. . . . . . . . .. . . . . . . . . . . . .... . . . . . . ... . . . . . . . . . , . . . . 1 Tourist Arrival and Receipts . . . . . .. . .. . , ..... , ... ... ... ... ...... 2 Impacts of Tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Economic Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Environmental I mpacts . . .. . .. . . . . . . . .. . , . . . . . . . . . '" . . . . . . 4 Socio-cultural Impacts . . . . .. . . . . . . . . . . . . . .. . . . . . .. . . . . . . . . 5

Tourism and Sustainable Development . .. . . . . . . . , . . . . . . , . . . . 6 Status of Major Sea Turtle Populations in Terengganu . . 7 Turtle Conservation in Malaysia .. . . . ... . . . . . . . . .. . . . .. ... . .. . . 9

Legislation . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Hatchery Programme . . . .. .. . . . . .. . . . .. . . , ... ............... 10 Turtle Sanctuary . . . . . . . . . . . . . . .. . . .. . . . . . . , ..... , ... ... ... .. 1 1 Conservation - Oriented Research . . . . . . . . . . . . .. .. . . . . . 1 1

Turtle Conservation in Terengganu . , ...... , ...... ...... ..... 12 Legislation : Turtle Enactment 195 1 (Amendment) 198 7 . . . . . .. . . . .. . . . . . . . . . .. . . . . . ,. '" .............. , ... ... ..... 12

Turtle Sanctuary . . . .. . . . . ... ... ...... ... ... ... ... ... ... ... ...... ... 12 Hatchery Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Hatchery Programme .. . .. . . . . .. . . . . . . . . . . ... . . . ... . . .. . . .. . . . . . . 13 Problem Statement . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15 Objective . . . .. . .. . . ... .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . .. . 1 7

General Objective ......................................... 1 7 Specific Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. 1 7

LITERATURE REViEW ......................................... 18 Malaysian Sea Turtles . .. . ... . . . . . . .. . . .. . .. . . . . . .. . . . . . . . . . . . . . . 18

Leatherback Turtle. . . . . . ... .. . ... ... ... .. . .. . ... ... ... .. . .. 18 Green Turtle .. . . . . . . . .. . .. . . . . . . . . . . . . , ...... '" ........ , .... 19 Hawksbill Turtle . . . .. ... . . . . . . , . .. ... ... . .. .. . ... ... ... ... ... 19 Olive-Ridley Turtle ......................................... 19

Distribution of Malaysian Sea Turtle . . . . . . ...... .. .... ... ..... 20 Biotic Sources of Mortality . . .. . . . . . . . . . . . .. .. . . .. . . . .. . . .. . . . . . . . 20

xi

I I I

IV

Predation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Diseases and Parasites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 Other Nesting Turtles ..................................... 22 Vegetation ................................................... 22

Abiotic Sources of Mortality . . . ... ... . .. ... . .. .. . . . . .. . . . . . . . . .. . 22 Erosion, Accretion and Tidal I nundation . . . ... ... ..... 22 Heavy Rains ................................................. 23 Thermal Stress ............................................. 23

Anthropogenic Sea Turtle Mortality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Beach Erosion and Accretion ........................... 23 Beach Amoring ............................................. 23 Beach Nourishment .............. , . .. . . . . .. . . . ... . . . ... .. . 24 Artificial Ught .... , ........ , .................. , ... ... . . . .. . .. . 24 Recreational Beach Equipment . . . . . . . . . . . . . . . . . . . . . . . . 24 Beach Vehicles .................... , .. . . .. .. . . .. .. . . . . .. . . .. 24 Shrimp Trawls . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . 2 5 Other Trawls . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . .. . . . . . . . . . . . . . . . . . 2 5 Dredging ..... , ............. , ........ , ......... , .. . ... . . . .. . ... 25 I ngestion of Plastics and other Debris . . . . . . ... ... .... 2 6

Contingent Valuation Method (CVM) . . . . . . .. . . .. .. . . .. ... .. . . 2 6 CVM Studies Done Locally .............................. 31 CVM Studies Done Abroad . . . . . . . . .. . . . . , . . . . , . . .. . . . . . . 35

Cost Benefit Analysis (CBA) ......... .. . ... ... . . . .. . ... . .. . . . . .. 37 Past Studies on CBA ............................................. 39

Korup National Park ..... , ............. , ... , .... , ..... " . .. 39 Kangaroo Island . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . ... . . . . . 42 Khao Yai National Park . . . . . . . . . . . . . . . . . . . ,. ... ... ... ..... 44

Discount Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .. . . .. . . .. . .. . . 45

METHODOLOGy ................................................. 47 Location of Study ................................................. 4 7 Questionnaire Design ............................. , .... ,. ... ...... 48 Sampling Procedure and Size ................................. 49 Conceptual Model and Approach . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . 5 1

Descriptive Analysis . . . . . , . . . . , . . . . . . . . , . . . . . . . . , . . . . . . . . . . 5 1 Welfare Economics and Welfare Measurements. . . 51 Contingent Valuation Method . . . . . . . . . . . . . . . .. . . . . . . . . . . 55 Cost Benefit Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

RESULTS AND DISCUSSION .. ... ................................. 63 I ntroduction . .. . . . .. . . . . . . . . . . . . . . .. . . . .. . . . . . . . . . .. . .. . . . . . . .. . . . . . . . . . . . .. . . . . . 63 Socio Demographic Profile of Respondents ................ 64

Gender .................................................................. 64 Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Marital Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Nationality ............................ .................................. 64 Educational Level . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Type of Profession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Monthly Gross I ncome . . . . . . . . . . . . .................. ............. 67 Membership of Environmental Organisation . . . . . . . . . . 67

xii

I nterest in Travelling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 68 Sources of Knowledge about Rantau Abang. . . . . . . . 68 Reasons for Visiting Rantau Abang. .. ... ... . .. . . . . .. .. 69

Respondents Opinion ....................................... ... ... 70 Identity of Rantau Abang ....... , ........ , ........ ,. ... ..... 70 Status of Turtles in Rantau Abang ..................... 70

Perception of Residents .............. , ........ , ........ , ... ... ... 71 Length of Residency .............................................. 71 Number of Tourists ................................................ 71 Conservation of Turtles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

CVM Model Estimation .................................................. 74 Distribution of Willingness to Pay for the Proposed Conservation Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Socio Economic Factors Influencing Willingness to Pay. 76 Monthly Income. . . ... ... ... ...... ... ... ... ... ...... ... ... ... 78 Age ............................................................ 82 Education Level ............................................. 8 6 Membership in Environmental Associations . . . . . . . . . 90 Marital Status ................................................ 93

Logit Models Estimation Results ......................... , ... ..... 9 7 Estimation of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 7 Factors Influencing WTP ............... ...... ................. 100

Financial Analysis ................................................. 102 Development Cost . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Operating Expenses ........ . ..... .. . . . .. ...... . . . . . . . . . . . ....... 103 Estimated Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Financial Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 6

V SUMMARY, CONCLUSION AND RECOMMENDATION ..................................................... 109 Summary ........................................................................ 109 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 Limitations of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 4 Recommendations for Future Research . . . . . . . . . . . . . .. . . . . . . . . . . 1 15

REFERENCES ............................................................... 1 1 6

APPENDICES ................................................................ 122 Appendix A - Questionnaire . . . . . . . . . . ...... ................. 123 Appendix B - Estimation of Benefits . . . . . . . . . . . . . . . . . . . . . 139 Appendix C - Factors Influencing WTP. . . . . . . . . . . . . . . . 1 60 Appendix D - Financial Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . 1 64

BIODATA OF THE AUTHOR......................................... 185

xiii

LIST OF TABLES

Table Page

1. 1 Tourist Arrival and Receipts, 1995 -2000 ............................ . 2

1.2 Tourist Arrival and Receipts in Terengganu, 1995-2000 ......... 3

1.3 Number of Nestings and Eggs in Terengganu by Species, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

1.4 Number of Nestings in Terengganu by Species, 1995 - 1999. 8

1.5 Number of Turtle Deaths in Terengganu by Species, 1995 - 1999 ........................................................................... . 9

1. 6 Number of Eggs Hatched and Released in Terengganu, 199 6 - 1999 ........................................................................... . . 14

1. 7 Number of Eggs Hatched and Released in Rantau Abang, Terengganu, 1996 - 2000 ..................................................... . 14

3. 1 Visitor Arrivals to Turtle Sanctuary, Rantau Abang, February, 199 6-2000 ........................................................................... . 50

4. 1 Socio Demographic Profi le of Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

4.2 Respondents Membership in Environmental Organisations . . . 67

4.3 Respondents I nterest in Travelling . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 68

4.4 Frequency of Respondents Travelling in a Year . . . . . . . . . . . . . . . . . . 68

4.5 Respondents Sources of Knowledge about Rantau Abang . . . . 69

4. 6 Respondents Reasons for Visiting Rantau Abang . . . . . . . . . . . . . . . . . . 69

4. 7 Respondents Opinion on Identity of Rantau Abang . . . . . . . . . . . . . . . . 70

4.8 Status of Turtles in Rantau Abang, Terengganu . . . . . . . . . . . . . . . . . . 71

4.9 Local Respondents Length of Residency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1

4. 10 Opinion of Local Respondent on Current Number of Tourists 72

4. 1 1 Opinion of Local Respondent on Conservation of Turtles . . . . . . . 72

xiv

4. 1 2 Opinion of Local Respondent on Positive Impact of Turtle Conservation in Rantau Abang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

4. 1 3 Opinion of Local Respondent on Negative Impact of Turtle Conservation in Rantau Abang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

4. 1 4 Bid and WTP of Respondents . . . . . . . . . . . . . . ; . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . 77

4. 1 5 Income and WTP of Respondents (Group A) . . . . . . . . . . . . . . . . . . . . . . . . . . 79

4 . 1 6 Income and WTP of Respondents (Group B) . . . . . . . . . . . . . . . . . . . . . . . . . . 80

4 . 1 7 I ncome and WTP of Respondents (Group C ) . . . . . . . . . . . . . . . . . . . . . . . . . . 8 1

4 . 1 8 Age and WTP of Respondents (Group A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

4. 1 9 Age and WTP of Respondents (Group B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

4 .20 Age and WTP of Respondents (Group C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

4 .21 Education Level and WTP of Respondents (Group A) . . . . . . . . . . . . 87

4 .22 Education Level and WTP of Respondents (Group B) . . . . . . . . . . . . 88

4.23 Education Level and WTP of Respondents (Group C) . . . . . . . . . . . . 89

4 .24 Membership in Environmental Associations and WTP of Respondents (Group A) . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

4.25 Membership in Environmental Associations and WTP of Respondents (Group B) . . . . . . . . . . , . . . . . . . . . . . . . . . . . . , . . . . . . . . , . . . . . . . . . . . 91

4 .26 Membership in Environmental Associations and WTP of Respondents (Group C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . , . . . . . . . . . . . 92

4.27 Marital Status and WTP of Respondents (Group A) . . . . . . . . . . . . . . . . 94

4.28 Marital Status and WTP of Respondents (Group B) . . . . . . . . . . . . . . . . . 95

4.29 Marital Status and WTP of Respondents (Group C) . . . . . . . . . . . . . . . . 96

4 .30 The Estimated Parameters of the Dichotomous Choice Models for Conservation of Turtles in Rantau Abang, Terengganu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

4 .31 Estimated Mean and Median Willingness to Pay for Conservation of Turtles in Rantau Abang, Terengganu . . . . . . . . . . 99

4 .32 Estimated Benefits of Conservation of Turtles in Rantau Abang, Terengganu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 00

xv

4.33 The Expected Benefits of Rantau Abang Turtle Sanctuary Based on Median for Logit Analysis ..... . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 .34 Logit Estimation for Groups A, B and C . . . . ... . . . . . . . . .. . . . . . ..... . . . . . . . . 1 01

4 .35 Sensitivity Analysis of the Rantau Abang Turtle Sanctuary (Case 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 08

0. 1 Sensitivity Analysis of the Rantau Abang Turtle Sanctuary (Case 1 ) . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . ... . . . . . . . . . . . . . . . . . . .... ... . . 1 65

0 . 2 Sensitivity Analysis of the Rantau Abang Turtle Sanctuary (Case 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 69

0.3 Sensitivity Analysis of the Rantau Abang Turtle Sanctuary (Case 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. ... .. . . . 1 73

0. 4 Sensitivity Analysis of the Rantau Abang Turtle Sanctuary (Case 4) . . . . .. . . . . . . . . .. . . . . . . . . . . . ... ' " .... .. . ....... . . . . . .. . . ... . .. ... . . . . 1 77

0.5 Sensitivity Analysis of the Rantau Abang Turtle Sanctuary (Case 5) . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 81

xvi

LIST OF FIGURES

Figure Page

1 . 1 Leatherback turtle nestings in Terengganu State, 1 984 - 1 998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6

3 . 1 Four measures of the welfare gain from a price decrease . . . . . . 54

4.1 WTP of respondents by conservation fee (group A) . . . . . . . . . . . . . . . 74

4.2 WTP of respondents by conservation fee (group 8) . .. . . . . . . . . . . . . 75

4.3 WTP of respondents by conservation fee (group C) ... . ..... . . . . . . 75

xvii

LIST OF BOXES

Box Page

3.1 Costs and Benefits of the Korup National Park, Ruiteenbeek ( 1 989) . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . , . . . . . 40

3.2 Costs and Benefits of the Kangaroo Island, Touche Ross ( 1 994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . 42

3.3 Costs and Benefits of the Khao Yai National Park, Dixon and Sherman ( 1 990) . . . . . . . . . . . , . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

xviii

LIST OF ABBREVIATIONS

WTP Will ingness to Pay

CVM Contingent Valuation Method

CBA Cost Benefit Analysis

NPV Net Present Value

IRR Internal Rate of Return

BCR Benefit Cost Ratio

xix

CHAPTER I

INTRODUCTION

Coastal Setting

Malaysia lies on the Malay Peninsula (West Malaysia) in tropical Southeast Asia,

with Thailand bordering to the north, the Straits of Malacca to the west, the South China

Sea to the east, and the island of Singapore to the south. The country also occupies the

northern one-thi rd of the island of Borneo (East Malaysia) , with Indonesia to the south,

the South China Sea to the north , and the Sulu Sea and Celebes Sea to the east.

Malaysia has a long coastl ine. The total length is approximately 4,800 km, with

1 ,963 km in Peninsular Malaysia, 1 ,802 km in Sabah and 1 ,035 km in Sarawak. The

status of these coastlines is determined by the influence of the natural forces of sun,

wind, rain , storms and waves and the impact of man's activities.

The coasts of Malaysia are of vital economic importance. They support the

livelihood of thousands of f isherfolks who go out to sea daily and bring in their harvest of

1

2

fish, prawns and squids which are essential food for the population. Any damage to the

coast, natural or anthropogenic, will have negative implications.

Tourist Arrival and Receipts

Tourism in Malaysia has become an important industry since 1 980's. In 1 959,

the national government income from tourism industry was only RM 3 mill ion; but since

1 990, tourism industry has become one of the main contributors to Malaysian foreign

exchange earnings (Tourism Malaysia, 1 995) . In 1 985, income from tourism industry

was RM 1 .73 bill ion putting it at sixth place in foreign exchange earnings. While in 1 990,

the contribution of this industry had increased to RM 4.41 billion and tourism became the

third biggest contributor to the foreign exchange earnings.

In 1 990's , the growth of the tourism industry was quite favourable. Total tourist

arrival had reached more than 7 m ill ion in 1994, the highest tourist arrival destination in

the ASEAN region. Table 1 . 1 shows tourist arrivals and receipts from 1 995 to 2000. In

1 995, tourism industry was moderate compared to 1 994 figure. Tourist arrivals were 7.5

mill ion and total income via tourist receipts were RM 9. 1 75 bill ion , a growth of 3 .8% and

1 0.6% respectively (Tourism Malaysia, 1 995) .

Tourist Arrival (million) Tourist Receipts (RM billion)

Sources:

Table 1 . 1 : Tourist Arrival and Receipts , 1 995 - 2000

1995 1996 1997 1998 1999

7.5 7 .1 6.2 5.6 7.9

9. 1 75 1 0.354 9.669 8.580 1 2.321

Tourism Malaysia, various years

2000

1 0.2

1 7.3

3

Tourist arrivals however declined from 6.2 mill ion to 5.6 mill ion from 1 997 to

1 998 because of the economic crisis. But based on statistics from Tourism Malaysia

(1 999), tourist arrival increased by 43.8% to 7.9 mill ion while total income via tourist

receipts increased to RM1 2.321 bil l ion in 1 999. In the year 2000, tourist arrivals

increased further by 28.9% to 10 .2 mil l ion while tourists receipts increased to RM 1 7 .3

bil l ion (Tourism Malaysia, 2000). From January to March 2001 , tourists arrivals were 4.9

mil l ion compared to 3.2 mill ion in the same period in 2000, an increase of 54.3%

(Tourism Malaysia, 2001 ) .

Table 1 .2 shows tourist arrivals in Terengganu from 1 995 to 2000. It shows that

both the domestic and foreign tourists have been increasing year by year. The highest

tourist arrivals were in 1 997, i .e . 1 .6 mi l l ion domestic and 2.3 mill ion foreign tourists.

Similar to national trend, tourist arrivals declined from 1 997 to 1 998 due to economic

crisis from 1 .6 mil l ion to 0.9 m ill ion for domestic tourists while 2 .3 million to 0. 1 mill ion for

foreign tourist due to the economic crisis.

Table 1 .2 : Tourist Arrival in Terengganu, 1 995 - 2000

1995 1996 1997 1998 1999 2000 Domestic Tourist 0.7 1 . 1 1 .6 0.9 1 .0 1 .2 (million) Foreign Tourist 0 . 1 1 . 7 2 .3 0. 1 0 . 1 1 .6 (million)

Sources: Unit Perancang Ekonomi Negeri Terengganu, 2001

Impacts of Tourism

In order to develop and manage tourism industry successfully in the country,

consideration of economic, environmental and socio-cultural impacts must be well

4

understood. The concept of sustainable development wil l be achieved if economic,

environmental and socio-cultural impact are weighed together.

Economic Impacts

Possible economic impacts of tourism are:

(a) I ncome generated and its contribution to Gross National or Domestic Product

(b) Foreign exchange from international tourism

(c) Generation of local employment through direct and indirect employment

(d) As a catalyst for other economic activities using tourist expenditure

(e) Contribution to government revenues e.g. airport departure taxes

Tourism wil l generate some economic problems if not properly control led. High

imports on goods and services used in tourism and tourist facil ities owned and managed

by outsiders wil l cause economic losses. To enhance the economic benefits of tourism,

l inkages between tourism and other economic sectors should be strengthened. It can be

achieved through the reduction in import content of tourism and by using more

employment of local resources. Tourist expenditure and tourist activities also wil l

enhance economic benefits. Tourist expenditure wil l be increased through the provision

of more shopping opportunities especially local crafts and arts. Expansion in tourist

activities such as organising more attraction and tours wil l influence tourists to stay

longer.

Environmental Impacts

Tourism can generate both positive and negative impacts to the environment.

The relationship of tourism and environment is one of inter-dependence because the

environment provides resources which form the major attraction for tourists. And a

sustainable tourism will enhance environmental protection.

5

Positive environmental impacts can be generated if tourism is well planned,

developed and managed. These positive impacts include:

(a) conservation of wildl ife and natural areas including marine environments,

national parks and reserved parks

(b) conservation of archaeological and historic sites

(c) improvement of environmental quality

Without proper planning , development and management, tourism can generate

negative environmental impacts such as:

(a) water pollution e.g. sewage and solid waste disposal for hotels

(b) air pollution e.g. cars and buses

( c) noise pollution

(d) visual pollution e .g . poorly designed hotels and other tourist facilities

(e) waste disposal problems by tourist e.g . littering

(f) overuse and misuse of natural areas by tourist which will affect ecological

discruption.

Socio-cultural lmpacts

Tourism can bring both benefits and problems to the local societies. These

impacts can be critical especially in the country where the traditional culture holds

strongly.

Positive socio-cultural impacts from well planned, developed and managed

tourism are:

(a) improvement of living standards of people

(b) conservation of the cultural heritage