The Inlay Lake Region in the Mists of Tourism Governance

Martin Michalon explains the effects of tourism on the Inlay Lake Region.

Although Inlay Lake is a major tourism highlight in Myanmar, it also faces severe environmental threats, which jeopardize the whole region’s economic system. Because of weak governance under previous governments, tourism heavily used and abused the local environment, instead of benefiting it. The NLD government has formulated promising intentions, but the weighty legacy of previous regimes, top-down governance, red tape and personal interests might hamper their efforts.  This post is part of PhD research in Geography on the development of tourism in Inlay Lake region. It is mainly based on more than 200 interviews with local stakeholders, from farmers to ministry officials, to boat drivers and hotel managers.

Economy, Landscapes, Migrations: The weight of tourism

Inlay Lake is widely depicted as a unique region, with original features, and it is true. Located on the Shan plateau, at an elevation of 900 meters, its open-water part is approximately 17 km long and 5 km wide, which doesn’t include wide swathes of marshes, especially in the North and in the West. For centuries, this unique territory has been a contact zone for several ethnic groups: Inthas, Shan, Danu, Taungyo, Pa-O, and Bamars. The Inthas have managed to carve out a dominant position through effective control of the economy: floating agriculture on the lake, high-quality handicraft, and fishing. Their economic domination and their adaptability has also allowed them to take advantage of tourism.

While tourists did visit the region during the Ne Win era, those numbers were marginal. However, Visit Myanmar Year, launched in 1996 by Than Shwe’s regime, had a decisive impact: flows reportedly increased from 3200 to 21,000 visitors between 1994 and 1996. In Nyaungshwe, the main village, local elites (mainly tradesmen) and well-connected, Taunggyi-based businessmen built guesthouses and hotels. After disappointing results in the 2000s, local tourism actually gained traction in the wake of the 2010-2011 political transition: 22,000 visitors in 2010, 60,000 in 2012, and 138,000 in 2015, according to figures of the Ministry of Hotels and Tourism (even though the latter are based on declarations by hotels and guesthouses, which often under-declare their amounts of guests to escape tax).

Nowadays, beyond any doubt, the territory has become tightly structured by tourism. The main changes have taken place in Nyaungshwe, where the population increased from 11,500 inhabitants in 1999 to 16,200 in 2014.

The hotel sector is the most visible tip of the iceberg: the region features more than a hundred hotels with almost 3000 rooms, out of which 1420 are resort-standard rooms and 1540 hotel- and guesthouse-standard rooms; one room of each category reportedly generates 1.6 and 0.6 direct jobs, respectively, for a total of 3200 direct jobs in the hotel sector alone.

Beyond hotels, the Ministry counts  more than 1000 licensed boats for tourists (and at least as many boat drivers), at least 350 tour guides, more than 200 taxis, while field evidence show that 100 restaurants with their respective staff and 40 travel agencies can be added. Lastly, interviews with local leaders have cast a light on a floating population of approximately 1000 construction workers coming from Central Myanmar.

On Inlay Lake itself, a few dozen massive stilt restaurants dot the water; in Ywama village, more than twenty-five souvenir shops and silversmith showrooms wait for customers; in Nampan, visitors can visit a dozen cigar and boat workshops; and in Inn Paw Khone, there are seven vast textile showrooms. Some of the handicrafts sold are made in front of tourists, but most are actually sourced from cottage industries in the surrounding villages, which leverages the size of the tourism sector.

All in all, the economic impact of tourism is massive: the average spending of a foreign visitor is 90 dollars a day; with conservative estimates of two day-stays and 170,000 visitors in 2016, the total direct tourism spending would be more than thirty million dollars, without including spending by domestic tourists (significantly more numerous than foreigners).

Between loose control and authoritarian decisions: the weaknesses of tourism governance

However, this dynamic also brings with it some nuisances: Nyaungshwe has become a busy, dusty city, with dense traffic of taxis and buses shuttling tourists around, bicycles, tuk-tuk, horse carts, and every evening, twenty-odd express buses snake through the city’s narrow streets. Traffic has become such an issue that several interviewees now feel uncomfortable in their own town, avoid Yone Gyi Lan (the main road), and take alternative, unpaved streets to move around. The market has become a black spot and on market day, housewives dread to go there; what used to be a place of social connections is now a place of frenzy, hassle and bustle, where one stays as short as possible before rushing back home.

The local landscape has been utterly transformed in the last few years: in 2013, only three hotels in town featured four floors; nowadays, no less than 9 hotels feature five floors or more, most of them are made of concrete and glass, with barely any attention to the local architecture. Officially, it has been prohibited to build hotels in Nyaungshwe town since 2013; officially, there are some height limitations. However, rules were loosely enforced for a long time, and even more so as those hotels’ owners are usually well-connected investors.

Another kind of landscape has also appeared: garbage dumps. Solid waste management is indeed quite out of control. According to a GIZ report (Buijtendijk, 2015, unpublished), only 41% of hotels use the municipal collection service (which does not guarantee that rubbish is properly processed), and the rest have their “own arrangements”, which basically means dumping in the open.

While Inlay people used to have control over touristic resources until the 2010s, the situation has changed since then. Visitors have grown more demanding in terms of comfort and service quality. In spite of the authorities’ efforts to train local manpower, most high positions are now held by skilled workers from Yangon, Mandalay, Taunggyi, or even abroad. In Tha Le Oo region, in the southeast of the lake, it has led to discouragement of the local villagers, who do not apply to hotel jobs anymore, as they will be limited to entry-level positions, while the higher ones – with higher remuneration –will be taken by outsiders. The pioneers of tourism, who opened their hotels before 2010, have difficulties resisting the competition. Some of them are seeking to sell or rent their assets, others bet instead on backpackers or domestic tourists. But clearly, they are withdrawing from the most lucrative swathes of the market, which are now under the control of outsiders.

Even the ten-dollar entrance fee to the region seems out of reach. This fee has never been levied by the Shan State government itself, but by private companies winning opaque tenders. For the budget year 2016-2017, the successful bidder spent 22,222 lakhs Kyat (i.e 1.7 million dollars). Half of this one-time sum went to the Shan State government’s coffers, the other half to an “Inle Lake Trust Fund” created by the junta, where money was scattered to each township of the watershed, mainly through the Irrigation Department, whose efficiency and transparency are questionable. Local political leaders and activists unanimously say that the entrance fee, touted as serving the lake and its environment, actually provides little benefit to Inlay.

Opacity is also obvious in a controversial major project, which deeply marks the local territory. So as to cater to the seemingly booming hotel demand, in 2012 the government launched a hotel zone project in the hills dominating the south-eastern part of the lake. Although it was begun during Thein Sein’s era, it strikingly reminds one of the junta’s methods of land-grabbing: bulldozing of fields without informing the farmers, low compensations of $400 per acre in take-it-or-leave-it-style “negotiations”, physical threats, night raids by the police, arrests, etc.

This over-sized project, featuring no less than 87 plots of land, more than twenty kilometres from Nyaungshwe, far from everything, is a failure. Massive earthwork was done by a well-connected company, hills were cut in two to build roads, leaving very visible scars. For a project meant to preserve the Nyaungshwe landscape from anarchic construction, it is quite paradoxical. It was also supposed to dampen the environmental impacts of tourism, but the landless farmers around now survive by cutting firewood all year long in the surrounding hills, generating a nuisance that did not exist before. All in all, more than four years after the hotel zone’s start, only one hotel is about to be finished; the half-abandoned land is getting reconquered by vegetation and vines cover half of the wide two-lane roads.

A water body under environmental threat

In the meanwhile, the Inlay Lake environment is facing some severe threats. It is very common to point out tourism for its environmental impact, which is partly true. For example, it generates rubbish which is not properly processed and the heavy boat traffic on the lake is, to some extent, responsible for the murky water and noise pollution. However, the most concerning threats originate from the “traditional” activities: the 32 km² of intensive floating tomato farms use staggering amounts of chemical products, which pollute the water, harm the local fauna, and generate a dramatic expansion of water hyacinth.

In the hills, demographic growth has transformed slash-and-burn agriculture into a more permanent type, with heavier impacts in terms of erosion. The lake is now under severe threat of siltation, especially in its shallower western part, where interviews with farmers revealed the extent and the speed of the process. In Lwe Nyein village, 170 acres of floating gardens have become firm land between 2005 and 2010; in Ye Oo village, the boat jetty had to be shifted by one kilometre in 2013 because of water abstraction; in Kyay Sar Kone, most floating gardens get stranded during the dry season, and they may even disappear altogether in a near future; in Than Taung village, it was impossible to grow paddy twenty years ago because of the excess of water; nowadays, farmers grow sunflowers and corn.

Facing those challenges, the authorities have mainly focused on costly, heavy dredging work on the lake. However, it does not solve the problem, as all the mud is dumped a few hundred meters further, either in floating garden perimeters or in marshes, which contributes to infilling those fragile areas and accelerates the shrinking of the lake. At the moment, one can count no less than three massive excavators piling mud at the northern side of the lake, in what is supposed to be the Inlay Wildlife Sanctuary. From a scientific point of view, the Irrigation Department, which is the main body in charge of the lake, has concerning shortcomings: statistics are routinely collected, but never truly analysed, compared, or spatialized. Some measurements are also based on outdated formulas that deeply bias statistics. All in all, it appears that the inscription of Inlay Lake as a UNESCO biosphere reserve in 2015 has done little to improve the situation.

In this context, NGOs, foreign cooperation organizations and consultancy companies have produced numerous reports to preserve Inlay Lake, or promote responsible and sustainable tourism in the region. However, lack of funding and labyrinthine administration have brought most of those initiatives to a standstill. Some local NGOs, such as Inle Speaks, also do important work for education or environment, but feel little commitment from the authorities.

Towards sound governance for a better articulation of tourism and its environment  

With the new NLD government in power, and with the famous local entrepreneur U Ohn Maung as Minister of Hotels and Tourism, it seems that the region is in safe hands. For instance, authorities seem to have regained control over the construction sector, and at last curbed the local building frenzy. They have emphasised vocational training to fix the lack of manpower, and they support the local Community-Based Tourism projects in the hills.

Above all, in February 2017 they initiated a 37-million-dollar, Norway-funded, ten-year action plan to “save Inlay Lake”. Such a plan is obviously welcome, and it is a great opportunity to dust off the reports sleeping in Nay Pyi Taw offices. However, its modalities remain to be seen: Will the amounts pledged eventually and fully materialize? Which approach will be taken: a heavy, technical, very visible (and expensive) one, or a more flexible, locally-based (and cheaper) one? Will this project really help to put tourism at the service of the environment, and structure a sustainable articulation between both, or will the plan simply be a substitute to it? Will action be genuinely swift, or hampered by red tape? Even under the new government, NGOs still complain about the slow pace of administration: the long-awaited Inlay Lake Authority, for which the green light was given in 2014, is now slowly taking shape, but it will take time to become a fully-operational organization. As for the Regional Tourism Destination Management Plan proposed in 2014 by the Myanmar Institute for Integrated Development, it still has to face many hurdles to be implemented.

At the municipal or township level, there does not seem to be any clear view for Nyaungshwe and its region, no coherent plan. The latest example: the local authorities are planning to tackle the lack of space inside the market by destroying the current one and building a three-storey concrete building instead. If this project actually materialized, then it would definitively ruin the charm of Nyaungshwe as a city. Instead of following the “there is no alternative” approach of the municipality, why not offer some innovative ideas? What about closing a few streets around the market to any motorized traffic for a few hours during market days to allow more villagers to sell their goods in the streets? This initiative would not be a selfish proposal for the tourists’ good: even locals suffer from the current situation, and they would probably be glad to go to the market by foot, bicycle, trishaw or horse cart.

If one goes one step further, what about designing a real urban plan for Nyaungshwe? Even though a state-of-the-art study by professionals will always be the best solution, a few common sense ideas can make a difference. For instance, what about avoiding the daily procession of express buses by denying them entrance to town, and building a bus station at the outskirts of the city, with a proper shuttle system based on traditional mobility? And what about reserving the heart of the city to pedestrians and non-motorized transportation, using some other streets as bypasses? This could be done with a minimum input of money and, if well implemented, may be beneficial to all.

As for the lake environment, it definitely deserves swift action and political proactivity. The good news is that the hoteliers association managed to get the right to levy the entrance fees for the budget year 2017-2018, which would be a very significant change. However, it remains to be seen whether it will be actually implemented, how this bonanza will be managed, and which share will effectively go to the lake.

If favourable conditions can be gathered, much can be done by the Inlay Lake Authority, but under which modalities? All the previous reports emphasize heavy dredging, which is a slow and expensive project, with marginal benefit to the local people. Instead of this, what about paying them for their ecosystem services, promoting their sense of ownership over the environment, and keeping tourism money local? Concretely, if one used only 5% of the 1.7 million dollars of entrance fees to tackle the siltation issue or the water hyacinth problem, that would amount to 7,000 dollars per month, enough to pay almost 50 people at a wage of $5/day. (Such a salary is just an example, but I consider it as a potential base for consideration, as it would be slightly higher and more stable an income than a fisherman, a daily laborer or a construction worker in the area.) With even larger amounts, no doubt spectacular results could be obtained.

On the lake, it is widely known that organic agriculture is not possible: vegetables cannot get such a label as the water already contains chemical products. Although it is technically true, such a way of thinking also freezes action. What about committing to the intermediary solution of good agricultural practices (GAP) in some selected perimeters – with financial incentives to do so -, which would be a first step towards genuinely organic products later? In this regard, the tourism sector has a major responsibility: restaurants and hotels may organize to build a coherent – and massive – market for GAP/organic products, offering higher prices for better products. Previous research has already shown that those players have a significant willingness to pay more for these products (Buijtendijk, 2015), and little doubt that customers would follow. Considering the hardships of agriculture, how about supporting the local people’s conversion to tourism by allowing carefully-planned community-based tourism in the stilt villages? It is currently forbidden for fear of undermining the local hotel sector, but in my opinion, a few small structures will not do much harm to the massive resorts of the lake, and can have significant impacts locally.

Apart from quite uncertain foreign aid, neither authorities nor NGOs have funds to work properly for the environment; in the Inlay context, only tourists can spend the extra dollars for a bed, a meal or a boat trip that can make a difference. Then, it is for the local authorities (backed by the dense network of local NGOs and CSOs) to have a wide vision, the political will and the right kind of governance to make the change.

Photo credit: Alexandre Sattler/Regards d’Ailleurs, 2016

Martin Michalon is a French PhD candidate in geography (Center for Southeast Asia Studies, EHESS, Paris). After a MPhil about the insertion of the Inlay Lake region into globalization (2014), he has engaged in a PhD thesis about the construction of tourism in that region, with an approach focused on stakeholders relations and strategies. Currently based in Myanmar, he has led extensive fieldwork in Inlay Region in the last two years. He wishes to thank the French University cluster heSam (Paris) for their financial support in his research, and Oscar Haugejorden (Partnership for Change) for his advice in writing this paper. You can contact him at