The Impact Of Drug Crimes On International Tourist Arrivals In Langkawi Island, Malaysia

Threat to tourism

A potentially important factor that could influence tourism demand is the safety of the destination. A place with a high risk of victimization would likely hinder tourists from visiting the destination. The risk of victimization would be from any activity that poses a threat to tourists such as criminal activity. In the Malaysian Crime Index, seven types of crime are considered as violent crimes; namely robbery without firearm, gang robbery using firearm, gang robbery with no firearm, rape, attempted murder, murder, as well as causing hurt voluntarily ( Tang, 2011a). Today, criminal activities all over the world are increasing rapidly. Thus, crime has become a new field of study in economics. Ishikawa and Fukushige ( 2009) believed that crime rates are not only related to economic factors but also to non-economic influences such as culture, backgrounds, and ethics. There is also some research that has proved the existence of a relationship between crime rates and some economic variables.

Crime in Malaysia

Historically, Malaysia used to be one of the safest countries in Southeast Asia. However, according to ValueWalk’s on November 2013 edition by Jacob Wolinsky, crime rates in the country have reached an alarming stage and he claims that Malaysia is among the most dangerous places in Asia. Kuala Lumpur, which is the country’s capital, has become a hub for criminal pursuits. Malaysia records an increase in firearm-related crimes even though the country has very strict laws on firearm possession and use. The headquarters of the Malaysian police reported that violent crimes involving the use of firearms such as murder and robbery had increased during the first six months of 2016 compared to the same period in 2015. Another popular crime in Malaysia is the usage of illegal drugs. Illegal drugs are not a new phenomenon in our country and the rest of the world. Earlier, in the 19 ^th century, United States of America used drugs for medical purposes. The drugs introduced at the time were opium-type drugs used as pain-resisting drugs, for treating coughs and insect bites, as medication for children and widely used by women for medical purposes. However, the use of drugs has been abused for criminal activities. Drug abuse in Malaysia involves types such as heroin, ganja, morphine and other psychotropic substances ( Kamarudin, 2007). The abuse of drugs is to get ‘high’. This getting ‘ high’ purpose which causes the individual to be physically dependent on drugs or is called addicted to drugs. Drug abuse is a major social problem in Malaysia. The National Drug Agency (ADK), now known as the National Anti-Drug Agency (AADK), is an agency under the purview of the Ministry of Home Affairs in charge of the entire aspects of the country's anti-drug operations by conducting prevention, treatment and rehabilitation programs, evaluating program effectiveness, and establishing regional cooperation. According to the AADK, a total number of 30,844 cases were recorded in 2016. Out of this number, 22,923 were new cases and 7,921 were repeat cases. The number of cases in 2016 showed an increase from 2015 which recorded 26,668 cases. This shows that the number of cases on average were 84 per day in Malaysia.

Crime against tourist in Langkawi

According to the statistics of the Langkawi district police, there are five main types of crimes in Langkawi. The five main types of crimes are crimes against persons, property crime, crimes against morality (illegal drugs), white-collar crime, and organized crime. Among the crimes mentioned above, crimes against morality which is illegal drugs contributes to the highest portion of crimes in Langkawi. Most of the tourists are victims of theft, burglary and robbery. In the police statistic most of the tourists are victimized by drug addicts. The drug addicts break and enter the rooms or chalets that are built at the beach side because tourists have a tendency to lower their guards and neglect the usual safety measures when they are on a holiday. They leave valuables unattended and sometimes in unlocked cars by the roadside or beach. Personal items such as watches, cash and mobile phones are left in hotel rooms or apartments that are not secured properly, thus making it easy for the criminals to do their job.

Drugs in Langkawi

Drug related crimes in Langkawi pose a major threat to the tourism industry. Figure 1 shows the statistic of drug cases in Langkawi from 2006 to 2016. It shows an upward trend. The high number of drug-related crimes in Langkawi could have an impact on tourist arrivals and the level of foreign investment on the island. In selection of news on drug crimes in Langkawi (Figure 01 ), two worrying occurrences can be seen. First, the criminals involved young adults whose age is around 19-23 years old. Second, the amount or quantity of drugs seized were alarming for a small size island like Langkawi.

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Tourism: the measurement and model

There are many indicators used to calculate the level of tourism in a particular destination. Martins, Gan, and Ferreira-Lopes ( 2017) used the total number of international tourists and the amount spent at the holiday destinations in their study on the association between the macroeconomic factors and the global demand for tourism. They used the econometric analysis in explaining the impact of macroeconomic factors on the demand for tourism. Research on the factors affecting tourism has been studied by many, for example, by Mohammed and Sookram ( 2015), Ajagunna ( 2006), Alleyne and Boxill ( 2003), and Tang ( 2011b). The studies on the factors considered many spectrums, such as from economic perspective, social perspective, management perspective, and crime perspective. Researchers such as Ismail ( 2015), Cao ( 2016), and Ishii ( 2012) even integrated these perspectives in their models due to the availability and limitation of the data; this will be explained further in Section 2 .4. Among these perspectives (e.g., economics, social, management, and others), almost all of them explain about the importance of economic factors in influencing the tourism industry. Nonetheless, research on the effects of crime on tourism has been gaining much importance due to the wider coverage given by both the national and international media on crimes and misdemeanors. Since the security and safety of a tourism destination is of paramount importance to travelers, such news do not bode well for the reputation of a tourism destination.

Factors influencing international tourists may be examined from two opposite perspectives, namely, the supply side and the demand side. Khadaroo and Seetanah ( 2007), and Martins et al. ( 2017) are examples of research that examined the matter from the supply side. According to Khadaroo and Seetanah ( 2007), supply is a major factor in attracting tourists to visiting one’s country. They added that the transport infrastructure is crucial in the development of a tourism destination, indicating that it is a part of the standard demand in international tourism functions. Nevertheless, demand factors are also vital for explaining the number of international tourist arrivals. Researchers including Muchapondwa and Pimhidzai ( 2011), Zhang and Jensen ( 2007), and Vietze ( 2011) have conducted research from this perspective. The demand for tourism is influenced by numerous determinants, such as income, prices of tourist goods and services, transportation costs, as well as exchange rates ( Kosnan et al., 2012). Song and Li ( 2008) provided the empirical evidence regarding the major factors affecting the demand for tourism, which are the tourists’ income, prices of tourist goods and services in the destination country relative to those in the home country, prices of tourist goods and services in competing destinations, as well as the exchange rates. For example, high-income earners tend to travel to high-income countries such as Dubai, Europe countries and other high-end countries. Meanwhile, those who earn a much lower income would opt for cheaper packages in countries such as Thailand, Indonesia, Philippine, and other related countries.

The influence of crime on tourism

Development of the tourism industry in a country will always cause crimes committed against tourists. Both of them are correlated and it is not a new phenomenon for the tourists. In an earlier study by Giddens ( 1990), he stated that crimes against tourists influence numerous individuals, other than the victim and their families. This reality is true; bad experiences by tourist at specific place are secured by the media or announced by tourist themselves to their families and friends, verbally. There are two types of crimes against tourists; the first is the organized crime, where it means a pre-planned crime such as terrorism. The second category is the crime of opportunity, such as robbery, burglary and rape. Safety and security are the main issues faced by all countries in the world, but many countries would face this issue in a more serious manner. Mohammed and Sookram ( 2015) attempted to test the hypothesis that the rates of crime in Jamaica and Trinidad and Tobago have an impact on the number of tourists visiting those countries by examining the relationship between tourist arrivals and crime rates during a 35-year period. Their results showed violent crimes and property crimes affect tourist arrivals negatively in both cases. The authors pointed out that it is likely that such a result was obtained because the governments of both countries have implemented strategies and policies drafted to curtail crime. At the same time, the author uses some other macroeconomic variables such as GDP, CPI and oil price of the country to find out the relationship between the dependent variable and the independent variables. These independent variables were selected by author based on the literature on tourism demand.

Drug addicts and tourism

In this study, we are more concerned about the drug addicts than the drug dealers. There is a wide range of perspectives as to why individuals take drugs and no hypothesis made has demonstrated satisfactory work to clarify all types of substance misuse. Recent research by Golub et al. ( 2006). Golub and Johnson ( 1995) revealed individuals who take drugs usually face various problems in their family and social groups, while having individual traits with an inclination towards addiction and are exposed to numerous social issues. When drug addicts cannot get access to their drugs, they will most likely do anything to get their fix (this includes breaking the law). This is where the crime will take place. Drug abuse and crime are believed to have a connection between them, making them the main reason behind criminalization. Previous researchers revealed that most criminal offenders have had experience with drug abuse. Therefore, drug abusers will commit crime activities. Various crimes including domestic abuse, homicide and armed robbery are often associated with drug addiction ( Siegel, 2005).

Other tourism determinants

Macroeconomic variables and economic ties have a huge impact on tourist arrivals. The first macroeconomic component is the GDP. The tourism industry affects a country’s GDP through its economic activities, mostly by increasing the demand for goods and services. Higher consumptions are associated with more economic activities that will boost the GDP growth. Even though tourists have a positive effect on a country’s GDP, some leakages could happen, particularly in smaller destinations.

The second most important macro-economic component is the unemployment rates, which serve as a prime indicator of the local labor market conditions. Unemployment rate is defined as the percentage of people who is prepared for employment at the current wage rate but are unsuccessful in securing a job. Tang ( 2010) covered the yearly data in the period of 1970–2006 to examine the crime rates in Malaysia by using price levels and unemployment rates as the determinants. He applied the Johansen’s co-integration test and proved co-integration between the price level and unemployment, while both determinants have a positive relationship with crime rates in the country. Inflation is the third major macroeconomic component; consumer price index (CPI) measures the changes in the overall price level. This index demonstrates fluctuations in the value of cash over time. Policymakers and economists have huge interest in inflation, as it entails various costs on a country’s economy.

Model specification

This section specifies the tourism model which is adapted from the study by Mohammed and Sookram ( 2015). This model illustrates the relationship between crime and the number of tourist arrivals in Jamaica and Trinidad and Tobago. The tourism demand equation was adjusted for this study to address the tourism issues in Langkawi. The original model by Mohammed and Sookram ( 2015) is demonstrated as follows:

$$ta=f(cpi,usgdp,op,vcr,\mathrm{}pcr)$$

where ta is tourist arrival, cpi is consumer price index, usgdp is the market size of US economy, op is oil price, vcr is violent crime rate and pcr is property crime rate.

Referring to Mohammed and Sookram ( 2015) study, although they successfully depicted the influence of crime on tourist in the country, their study did not take drug crime into account. Therefore to address the gap in this study, we extend their model by including the impact of drug crime, violent crime and property crime on the number of tourist arrivals in Langkawi. Justifications for including drug crime have been elaborated in Chapters 1 and 2. Drug crime is included because:

• Drugs dealing can make easy money.

• Drugs-related crime can spoil the morality of a destination such as prostitution activities, theft, and etc.

Therefore, the basic tourism model is as follows:

$$ta=f(crime,gdp,cpi)$$

where ta is the number of tourist arrival in Langkawi (dependent variable), and other independent variables are crime which will be segregated into property, violent, and drug crimes, GDP, representing the market size of Malaysia, and CPI representing the consumer price rate in Malaysia.

Econometrically, the basic equation will be as follows:

$$lta=f(lcrime,lgdp,lcpi)$$

where all variables are in a logarithm form. Witt and Witt ( 1995) indicate that 75 per cent of the models used to analyze tourism demand employed the double log functional form of the model. In terms of measurement, ta will be measured using the number of tourists from China, India, Indonesia, Singaporean and Thailand between the year 2006 and 2016. These countries are chosen because they are identified as the largest and consistent contributors to the percentage of tourists to Malaysia. Other reasons for their inclusion are geographical proximity and cultural and heritage factors.

Our policy independent variable that is crime encompasses crimes such as drug, violent, and property crimes. Although there are other types of crime such as commercial crime and cybercrime, these crimes are not chosen due to data unavailability. Drug, violent, and property crimes’ definition and seriousness toward the island have been explained in Chapter 1.

Property, violent, and drug crimes were measured by the number of cases reported in Langkawi. For macroeconomic variables, the measurement for market size is Real GDP and the price of goods will be taken from the CPI measurement. Both macroeconomic variables data are taken from the BNM statistic website.

Hypotheses

Based on previous literature, the subsequent hypotheses are postulated for this study:

H1. The relationship between crime and number of tourist arrivals is expected to be negative. This is because a higher crime crate in the island will discourage tourist arrivals. The main concern for tourists when choosing a travel is safety and crime rate. Tourists usually opt to travel to secured destinations as they feel safer when travelling

H2. The relationship between drug crime and number of tourist arrivals is expected to be negative. Drugs related tourist destination considered not a healthy tourism destination. This is because a higher drug crime crate in the island will discourage tourist arrivals.

Estimation method

The data analysis utilized static and dynamic estimators. Four modern econometric models were used in the tourism demand to examine the relationship between tourist arrivals in its determinants. The four econometric models were time series properties, tests of non-stationarity, Vector Error Correction Model (VECM), and Johansen Co-integration test. Time-series methods were deployed and are found to be quite accurate, particularly over a short-term period. The Johansen Co-integration Test and VECM were used to determine the existence of long-term and short-term equilibrium relationships.