With a growing tourist industry sweeping the islands of Cape Verde, the nation faces a quandary over how to preserve its tradition and culture while maximizing the potential windfall from the spectacular natural beauty of the remote African archipelago.

Guide Joao Monteiro steps lightly amidst the ruins of a 16th century fort, on a hill overlooking the town of Cidade Velha on the southern coast of the Cape Verdean island of Santiago. The impressive stone walls of the structure, he explains, have recently been rebuilt with financial support from the Spanish government, with the hopes of bringing more tourists to the town.

Cidade Velha, founded by the Portuguese in 1462, is the oldest European settlement in the tropics. But on this day at the fort, painstakingly reconstructed stone by stone by Spanish archaeologists with the help of the local population, few visitors are to be found. Monteiro says tourism on Santiago is not growing at the rate of other Cape Verdean islands.

Monteiro says Cape Verde's northern islands of Sal and Boavista have more spectacular beaches, which attract foreign tourists. The Cape Verdean government has taken steps in recent years to promote foreign investment in tourism infrastructure, resulting in large scale development on a few of the 10 principal islands.

But Santiago, the largest of the nation's islands, and home to the capital, Praia, still mostly lacks the new, large hotels that have attracted European vacationers in growing numbers to Sal and Boavista. Cidade Velha resident Abel Sanchez, who owns a small bed and breakfast, one of the few options for lodging in the historic town, says a renewed focus on development of tourism would be good for the local economy.

Sanchez says many things could be done to promote tourism on Santiago. He says the island, with so much history and natural scenery, would benefit from its own large hotels like those being constructed elsewhere in Cape Verde.

But that model of touristic development has failed to convince some. Sibylle Schellman, a native of Germany, runs a small restaurant overlooking the ocean in the coastal town of Calheta on Santiago's northeast coast.

"The government right now and the ministers of tourism, they only have in mind these big hotels. And they think, cause there was a study once, which said that all included tourism is the best thing for a third world country, and so they said, well, that is what they want, and they want to have a water source, and they want to have golf, and a marina," she said.

Schellman says she came to Cape Verde for the first time years ago, after hearing a performance by Cape Verdean folk singer Cesaria Evora. She and her husband decided, after a number of return visits, to make the island their permanent home, opening their restaurant, as well as a tour agency aimed at bringing visitors from Europe to experience local Cape Verdean culture.

Cape Verde offers much more than just beautiful scenery and nice beaches, Schellman says, adding that she feels the experience of tourists can be enriched far past that offered by the all-inclusive beach resorts, where foreign tourists are sequestered from the local population. Schellman says, besides missing out on much of the beauty of Cape Verdean culture, all-inclusive resorts do not benefit the Cape Verdean population.

"On Sal and Boavista Islands is that the big tour operators are coming, and they are building these all-included hotels. So for the locals it is very hard to start a business there. Even if they make a little restaurant or little tour agency, nobody comes because it is all-included, people already paid everything so it is no use for them to go outside for a dinner or lunch or whatever," she said.

Despite its poverty relative to the European Union, Cape Verde has developed significantly in recent decades. The island population is estimated by the UN at over half a million, with an equal number of Cape Verdeans living abroad. Foreign remittances from the diaspora now account for almost 20 percent of GDP by some estimates, and new cars frequent the streets of the capital.

Cape Verde graduated from the United Nations' list of least developed countries in 2007, and joined the World Trade Organization last year. Along with growth in GDP, foreign tourism has increased substantially this decade, including a 6.5 percent increase in visitors last year, according to the government. The government also noted a 5.5 percent increase in the supply of hotel rooms last year, largely the result of continued development of beachfront resorts on the northern islands.