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Contribution of Tourism to Economic Diversification and Poverty Reduction

03 May 2017

UNCTAD Expert Group Meeting underscores the need to effectively harness the potential of tourism for economic diversification and poverty reduction in poor and vulnerable developing countries.

An expert group meeting on the "Contribution of Tourism to Economic Diversification and Poverty Reduction" was held in Geneva from 2-3 May 2017.

The meeting brought together senior experts, policy makers and private sector representatives to discuss the role of tourism in economic diversification and poverty reduction in poor and vulnerable developing countries.

Participants identified economic channels through which tourism could drive diversification and also discussed the type of policy measures that should be put in place to unlock the potential of tourism for diversification and poverty reduction.

Participants also identified lessons that least developed countries (LDCs) and other vulnerable economies could learn from the experiences of developing countries that have effectively unlocked the potential of tourism for development.

Some of the key messages that emerged from the meeting include:

  • Tourism has the potential to contribute to poverty reduction, but it can do so effectively if it is inclusive and does not result in an increase in income inequality.

  • A major channel through which tourism could have an impact on diversification is as a source of foreign exchange needed to import intermediate inputs for industry. It permits countries to lift binding balance of payments constraints thereby making it possible to enhance productive capacities and diversify economies. Tourism revenue also makes it possible for countries to invest in infrastructure which is a driver of diversification and development.

  • Air transport development has been a determinant factor in promoting not only tourism development but also diversification through making it possible for certain domestically produced goods (for example horticulture) to reach foreign markets.

  • Tourism is a cross-cutting sector and as such strategies to promote it should be developed jointly with other development strategies such as in agriculture, industry, finance, and the labour market.