How holidaying in developing countries affects local inequality
Retrieved on:
Thursday, July 6, 2023
The staff at the mammoth hotel were making as little as US$1 (£0.79) for a 12-hour shift.
Key Points:
- The staff at the mammoth hotel were making as little as US$1 (£0.79) for a 12-hour shift.
- The hotel also exploited its power over local farmers to procure food exceedingly cheaply.
- But how bad is tourism for inequality in developing countries overall?
- Our recent research has sought to answer this, looking at 71 countries around the world.
Upsides and downsides
- Tourism sustains a lot of jobs and economic value overall, making it attractive to governments as a way of boosting growth.
- They were serviced by nearly 300 million travel and tourism workers, and the sector generated over 7% of global GDP.
- Equally, tourism is associated with other knock-on effects such as water scarcity, pollution, crime, sex exploitation and destroying tradition.
- If you were wondering about the Dominican Republic, there’s a study showing that tourism actually has a negligible impact on inequality.
Our findings
- These factors include the country’s level of economic and financial development, inflation rate and government policies seeking to redistribute wealth.
- We would have ideally looked at even more than 71 countries, but others had to be excluded because good-quality data was unavailable.
- We found that tourism eased income inequality in lower income countries when it went hand in hand with redistributive policies.
- In wealthier countries, the opposite was counterintuitively the case: increasing tourism exacerbated inequality when combined with redistributive policies.
- But clearly tourism can be good news for inequality in poorer countries when it’s combined with redistributive policies and financial inclusion.