Tourism and the G20 G20 Travel and Tourism Summit 24 th February 2010 Ian Goldin Director, James Martin 21 st Century School Professorial Fellow, Balliol College University of Oxford
Presentation Outline Globalisation and changing demographics Economic growth and the MDGs Crisis and recovery Jobs, trade, infrastructure, and sustainable development G20 Challenge What has the G20 achieved? How can the G20 stimulate the T&T sector?
Globalisation will bring affluence Source: A. Johansen & D. Sornett, Finite-time singularity in the dynamics of the world population and economic indices, Pysica A 294 (3-4), 465-502, May 2001
Globalisation benefits Since 1970: Life expectancy increased by 20yrs Illiteracy halved Income increase: population on <$1/day down 300m, despite population increase of 2bn Source: Globalization for Development, Goldin and Reinert
Global inequality will increase Source: Branko Milanovic 2007. Worlds Apart: Measuring international and global inequality.
Eco-affluence
Global population will be close to 9bn Solid line: medium variant Shaded region: low to high variant Dashed line: constantfertility variant Source: http://esa.un.org/unpp/
Asia has the largest, fastest growing older population Source: UN Population Division, World Population Prospects: the 2006 revision, New York, UNESA, 2007
Increasing life expectancy Source: Oxford Institute of Ageing, 21 st Century Institute, University of Oxford
Rapid fertility decline Source: UN Population Division, World Population Prospects: the 2006 revision, New York, UNESA, 2007
Ageing
Growth of Tourism International Tourist Arrivals, 1950-2020 25 million international arrivals in 1950 to an estimated 806 million in 2005 Average annual growth of 4.3% between 1995 and 2008 Source: United Nations World Tourism Organisation, Tourism Highlights 2009 edition.
Tourism and Economic Growth Tourism demand depends on economic conditions in major generating markets In years when world economic growth >4%, the growth of tourism volume is higher When GDP growth <2 %, tourism growth is lower. Tourism proves resilient in economic downturn with strong recovery Source: UNWTO, 2007, Tourism Market Trends: World Overview
T&T and the MDGs MDGs Poverty Gender equality Disease Environmental sustainability Global Partnership How T&T contributes... Employment and income generating opportunities Female leadership Fair working conditions for women. Entry points to raise awareness about disease transmission. Economic incentive to protect the environment Promotes understanding of the value of NR and cultural landscapes National and international agencies contributing to marketing of local tourism products to increase local economic development.
The Economic Crisis and the MDGs The crisis has undermined progress in developing countries reducing per capita growth rates Decreasing remittances, reduced foreign investment, and falling demand for goods and services are all expected to adversely affect developing economies and emerging markets Risks subtracting the MDG gains already made Source: European Commission, 2009, Millennium Development Goals - Impact of the Financial Crisis on Developing countries
The Economic Crisis and Tourism International tourist arrivals declined worldwide by 4% in 2009 to around 880 million. Growth returned in the last quarter of 2009 after 14 months of negative results. Source: UNWTO World Tourism Barometer, 2010.
Forecast 2010 International tourist arrivals to grow by 3-4% for 2010 reaching 1 billion East/South Asia, the Middle East and Africa to experience strongest rebound Source: UNWTO World Tourism Barometer, 2010.
Forecast 2020 International tourist arrivals to reach 1.6 billion by the year 2020 2500 2000 2000 2.5 times the volume recorded in late 1990 s 1500 1561 US$ 5 billion a day spent on tourism in 2020 1000 1995 2020 Top 3 receiving regions in 2020; Europe (717million tourists), East Asia (397 million), Americas (282 million) 500 0 565 International Tourist Arrivals (million) 401 International Tourism Receipts (US$ billion) Source: UNWTO Tourism 2020 Vision, volume 7, Global Forecasts and Profiles of Market Segments.
Tourism and travel mean jobs, infrastructure, trade and development...what we need is recognition of the value of travel in this mix and most importantly its capacity to generate jobs. - Taleb Rifai, Secretary-General, UNWTO
Employment T&T drives 6 % of jobs in G20 economies. Strong multiplier effect on related services, manufacturing, and agriculture. Fast entry vehicle into the workforce for young people and women in urban and rural communities. 238.3 million jobs in 2009 296.3 million jobs by 2019. Source: World Travel and Tourism Council, progress and priorities, 2008/09: UNTWO, 2010
Trade and Investment Export income generated by T&T was US$ 1.1 trillion in 2008 T&T exports account for 6% of overall global exports of goods and services. As an export category, tourism ranks fourth after fuels, chemicals and automotive products. Source: UNWTO, 2009. International Tourism Highlights 2009 Edition.
Infrastructure Investment Tourism can induce the local government to make infrastructure improvements such as better water and sewage systems, roads, electricity, telephone and public transport networks Source: UNWTO, 1994. National and Regional Tourism Planning: Methodologies and Case Studies
Sustainable Development Global Sustainable Tourism Criteria 1. Demonstrate effective sustainable management. 2. Maximize social and economic benefits to the local community and minimize negative impacts. 3. Maximize benefits to cultural heritage and environment and minimize negative impacts. Source: The Partnership for Global Sustainable Tourism Criteria, 2008
Tourism in South Africa 9.6 million arrivals in 2008 (highest recorded) T&T Economy is expected to grow by 4.3% per annum in real terms between 2010 and 2019. Contributed directly 3.2% to GDP in 2009 483,000 tourists are expected to travel to SA for the World Cup, resulting in US$ 1.1 bn of foreign spending and the creation of 415,000 jobs Source: WTTC, Travel and Tourism Economic Impact, South Africa, 2009: Grant Thornton FIFA World Cup economic impact assessment, 2003
Tourism in Brazil 6.5 million arrivals in 2009 Tourists seek out the following activities in Brazil: 1. sun & beach (44.6%), 2. culture (22.1%), 3. ecotourism (20.6%) 4. sports (6%). FIFA World Cup 2014 and Olympic Games 2016 projected 10-15% increase in tourist arrivals Source: Brazil Ministry of Tourism (EMBRATUR), Plano Aquarela, 2020.
The G20 The G20, established in 1999, brings together systemically important industrialized and developing economies to discuss key issues in the global economy. The G20 have not explicitly focused on tourism...
What has the G20 achieved? Coordinated the largest (US$5 trillion) macroeconomic fiscal stimulus plan in history Implemented monetary policy instruments and significantly enhanced financial regulations with Financial Stability Board (FSB) Strengthened the International Financial Institutions (IFIs), including the expansion of resources and the improvement of precautionary lending facilities of the IFIs Source: Prasad, E & Sorkin, I, 2009, Assessing the G-20 Economic Stimulus Plans: A Deeper Look
Real GDP Growth, PPP The Economic Crisis A 6% point decline worldwide in 2009 and modest recovery in 2010 10 8 6 4 2 0-2 -4 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Emerging market/developing countries World Advanced economies How can the G20 facilitate a greater contribution from the T&T sector for economic recovery? How can the T&T sector support the emerging G20 institutional architecture in the global agenda of job creation, economic growth and development? Source: Shelburne, R C, 2009. The Great Recession of 2007-2009: Analysis and Prospects
What should T&T ask from the G20? A Green New Deal Stimulus for Jobs and Technology Trade Policy and Tax Reform Development Assistance
A Green New Deal The travel and tourism sector can be a leader in the transformation to a new green economy - Taleb Rifai, Secretary-General UNWTO 1. Stimulating clean tech innovation, stabilizing and boosting employment and protecting vulnerable groups. 2. Cutting carbon dependency and GHG emissions, reducing degradation of ecosystems and their goods and services and tackling water scarcity. 3. Furthering the opportunity to achieve the MDG of ending extreme poverty by 2015. Source: UNEP, 2009, Rethinking the Economic Recovery: A Global Green New Deal
Stimulus for job creation Direct stimulus funding for jobs in the T&T service sector Creation of Green jobs T&T green employment sectors: Renewable energy Buildings and construction Transportation Basic industry Agriculture
Zero-carbon transportation technology Provide greater R&D funding for zero-carbon technologies Upgrade polluting public transport systems with hybrid, electric and hydrogen technologies Renew airline fleets Source: Institute for Carbon and Energy Reduction in Transport, 21st Century School, University of Oxford
Trade Policy and Tax Reform Visitors are exports Encouraging travel will strengthen two way trade This will promote essential export income for poorer countries and improve the performance of suppliers such as airlines who are largely from G20 states. Public expenditure on tourism infrastructure Scale up eco-taxes to lighten the tax burden falling on jobs and income Implement high carbon taxes to discourage polluting and carbon-intensive vehicles and industries
International Development Assistance G20 direct WB and other international agencies to give greater attention to the sector Channel development assistance towards T&T sectors of the Green Economy United Nations The World Bank
Summary More affluent, mobile and dynamic society who can engage in T&T T&T is a resilient industry that is projected to grow T&T results in jobs, infrastructure, trade, and sustainable economic development Climate change is a challenge for the sector but can lead the transition to a green economy G20 can facilitate a greater contribution from the T&T by stimulating jobs, technology, trade policy, tax reform and international development assistance
Tourism and the G20: T20 Strategic Paper Objectives Identify the contribution of T&T to economic recovery, growth, development, and transition to a green economy Part 1 Current economic situation and its impact on employment and growth Significance of the G20 in response to the economic crisis Part 2 Potential for T&T to contribute to the economic recovery and create sustainable job opportunities G20 facilitating a greater contribution from T&T G20 and World Bank development assistance
Tourism and the G20: T20 Strategic Paper Part 3 Measures to ensure the development of a Green Economy Address climate change and environmental degradation Trade and investment policies Promotion of zero-carbon technologies T&T supporting the emerging international architecture Part 4 Inclusive globalisation in which T&T play a greater role in addressing the economic crisis The G20 can utilise the T&T for economic recovery and growth The G20 can help stimulate the T&T sector
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