COMCEC Tourism Outlook-2016
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than world trade over the past four years. Tourism exports account for as much as 30% of the
world’s exports of commercial services. Globally, tourism ranks third after fuels and chemicals
and ahead of food and automotive products as an export category. However, in emerging
economies, tourism ranks third after fuels and food category (UNWTO, 2016a).
In over 150 countries, tourism is one of the top five foreign exchange earners and in 60 countries
it is the number one foreign exchange earner. In 23 of the 49 Least Developed Countries,
international tourism is among the top three foreign exchange earners, and for 7 LDCs, it is their
single largest revenue earner (UNWTO, 2012b).
It is known that tourism contributes in reducing poverty and empowering women, youth and
migrant workers and provides new employment opportunities. There are three main pathways
through which tourism affects poverty reduction. Firstly, the wages and earnings of workers or
entrepreneurs who participate in the sector can be regarded as direct effects of tourism.
Tourism is more labor intensive than other sectors, and uses a relatively high proportion of
unskilled or semi-skilled labor. For advanced, diversified economies, the contribution of tourism
to GDP ranges from approximately 2% for countries where tourism is a comparatively small
sector, to over 10% for countries where tourism is an important pillar of the economy. For small
islands and developing countries, the weight of tourism can be even larger, accounting for up to
25% in some destinations like in the Member Countries. Secondly, indirect effects occur through
the tourism value chain which includes inputs like food and beverage, construction,
transportation, furniture and many other sectors. Evidence suggests that in developing
countries, the inter-sectoral impact adds an extra 60-70 % on top of the direct effects of tourism.
Finally, dynamic effects of tourism occur on the livelihood strategies of local households, the
business climate for small enterprise development or infrastructure in countries. Moreover,
tourism tends to employ women and young people and enhance their economic positions
(Ashley, C. and others, 2007).
A cross country study by the IMF showed that an increase of one standard deviation in tourism
activity would lead to an annualized additional growth of about 0.5 percentage point per year,
ceteris paribus, that means everything else being constant (IMF, 2009). Thus, particularly low
income economies should view investing in its tourism industry as a means to stimulate growth
over the long term and enabling the poor to share in economic gains.