Tourism and the G20

G20 Travel and Tourism Summit

24th February 2010

Ian GoldinDirector, James Martin 21st 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 • 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: • 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:Dashed line:constant-fertility 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, 21st 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

Source: United Nations World Tourism Organisation, Tourism Highlights 2009 edition.

• 25 million international arrivals in 1950 to an estimated 806 million in 2005

• Average annual growth of 4.3% between 1995 and 2008

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 How T&T contributes...

Poverty • Employment and income generating

opportunities

Gender

equality

• Female leadership

• Fair working conditions for women.

Disease • Entry points to raise awareness about

disease transmission.

Environmental

sustainability

• Economic incentive to protect the

environment

• Promotes understanding of the value of NR

and cultural landscapes

Global

Partnership

• 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

Source: European Commission, 2009, ‘Millennium Development Goals - Impact of the Financial Crisis on Developing countries’

demand for goods and services are

all expected to adversely affect

developing economies and

emerging markets

• Risks subtracting the MDG gains

already made

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

Source: UNWTO World Tourism Barometer, 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

Forecast 2020

• International tourist

arrivals to reach 1.6 billion

by the year 2020

• 2.5 times the volume

recorded in late 1990’s

US$ 5 billion a day spent on

1561

2000

1500

2000

2500

1995

Source: UNWTO Tourism 2020 Vision, volume 7 , Global Forecasts and Profiles of Market Segments.

• US$ 5 billion a day spent on

tourism in 2020

• Top 3 receiving regions in

2020; Europe (717million

tourists), East Asia (397

million), Americas (282

million)

565

401

0

500

1000

International Tourist

Arrivals (million)

International Tourism

Receipts (US$ billion)

1995

2020

“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 • 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 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 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 • 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

Source: Prasad, E & Sorkin, I, 2009, ‘Assessing the G-20 Economic Stimulus Plans: A Deeper Look’

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

The Economic Crisis

-4

-2

0

2

4

6

8

10

Rea

l GD

P G

row

th, P

PP

A 6% point decline worldwide in 2009 and modest recovery in 2010

• 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?

-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 countriesWorldAdvanced economies

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

1. Stimulating clean tech innovation, stabilizing and

boosting employment and protecting vulnerable

groups.

“The travel and tourism sector can be a leader in the transformation to a

new green economy”

- Taleb Rifai, Secretary-General UNWTO

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 • Renewable energy

• Buildings and construction

• Transportation

• Basic industry

• Agriculture

• Provide greater R&D funding for zero-carbon technologies

• Upgrade polluting public transport systems with hybrid, electric

and hydrogen technologies

• Renew airline fleets

Zero-carbon transportation technology

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 Economy

United NationsThe 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 developmenteconomic 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 • 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

Thank you Thank you

www.21school.ox.ac.uk

info@21school.ox.ac.uk

Challenge of Climate Change

By 2020, the physical impacts of climate change will still be less

than 1°C, but the political climate will reach a tipping point

Source: Stern Review (2006). Figures taken from IPCC (2001) report.

T&T accounts for 5% of global carbon emissions

Shares of World Energy in 2020

Source: Energy Information Administration, Annual Energy Outlook, 2004

Fossil fuels will continue to dominate in 2020, but

the political climate means the carbon footprint of

tourism will be under unprecedented scrutiny.

Emissions Per Capita

Source: World Bank, online database, 2004

G20 amongst the highest polluters