Tourism in the Aid for Trade (AfT) Agenda
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1 Tourism in the Aid for Trade (AfT) Agenda Maximizing the Opportunities for Financing with the Enhanced Integrated Framework for Least Developed Countries UNWTO Towards Measuring the Economic Value of Wildlife Watching Tourism in Africa A
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3 Tourism in the Aid for Trade (AfT) Agenda Maximizing the Opportunities for Financing with the Enhanced Integrated Framework for Least Developed Countries
4 Table of contents Tourism, a key export sector for LDC development 1 The EIF: Financing tourism for development 2 Making tourism a priority in national development strategies 3 Identified priorities in Aid for Trade for tourism 4 Unlocking the potential of tourism 6 The way forward 8
5 Tourism, a key export sector for LDC development Tourism represents nearly 10% of the world s GDP and 30% of global services exports. The sector ranks fourth after fuels, chemicals and food in international trade. Tourism is a major source of foreign exchange and investment, and it generates employment and business opportunities. 1 The cross-cutting and labor-intensive nature of tourism creates links to many other economic sectors and positions it as a valuable contributor to national development strategies. Tourism is a crucial growth sector for LDCs. In 2014, the 49 LDCs 2 received 24 million international tourist arrivals nearly three times as many as a decade ago and earned US$ 18 billion from international tourism. Tourism now represents 7% of the LDCs total exports of goods and services, and for non-oil exporters, the figure stands at 10%. 3 Tourism was among the main contributors enabling the International tourist arrivals 24 million Exports Total exports US$ 18 billion 7% graduation of Cabo Verde, Maldives and Samoa from their previous LDC status. Tourism is not yet a priority for donor countries. Despite its proven impact and development potential, only 0.09% of total Official Development Assistance (ODA) and 0.78% of total AfT disbursements were allocated for tourism in To access Aid for Trade (AfT), developing countries, including LDCs, must clearly prioritize their needs and mainstream tourism trade into their national development strategies. In return, development partners need to provide 1 trade-related assistance and capacity building. 1. UNWTO/ILO. 2. This was prior to Samoa s graduation in January UNWTO. International tourism and LDCs, 2014 Tourism and development assistance, 2013 of ODA of AFT in tourism 0.09% 0.78% 14% average annual growth in international tourist arrivals, compared to 7% worldwide ( ) Source: OECD/DAC; UNWTO. Source: World Tourism Organization (UNWTO). UNWTO EIF Tourism in the Aid for Trade (AfT) Agenda 01
6 The EIF: Financing tourism for development Launched in 1996, the Enhanced Integrated Framework (EIF) is the only global AfT programme exclusively designed for the LDCs and is therefore uniquely placed to assist countries to develop sustainable trade strategies, including tourism, which have a positive impact on people s lives through the promotion of private sector development and job and income opportunities. Through a multi donor trust fund, the programme provides catalytic support to build trade capacity in 51 countries, which include 48 LDCs and the three graduated countries (Cabo Verde, Maldives and Samoa). The EIF supports the LDCs through two funding facilities called Tier 1 and Tier 2. Under its Tier 1 funding, the EIF finances Diagnostic Trade Integration Studies (DTISs), which are evidence-based analyses that help countries identify and address major constraints to trade while ensuring that the EIF process is aligned with the priorities of the respective LDC governments. The priorities and needs identified by the DTIS are captured in an Action Matrix, which functions as a blueprint for future EIF interventions. Under EIF Tier 2 tourism projects (US$) its Tier 2 funding, the EIF supports feasibility studies and small scale priority projects in sectors identified in the DTIS Action Matrix, such as tourism. This funding is designed to be catalytic, and countries are encouraged to leverage these funds through securing additional bilateral support. Since 2011, the EIF has supported tourism projects in Burundi, Cambodia, Liberia, Sierra Leone, Solomon Islands and Vanuatu. In all of these countries, tourism was identified as a key priority in their DTISs. At the end of 2014, the total EIF commitment for tourism was of US$ 8.63 million, equivalent to 9% of the Tier 2 project portfolio. Between 2013 and 2014, the EIF commitment for tourism had increased by 50%, demonstrating the dynamic uptake and interest of tourism for LDCs. In order to increase the opportunities for the LDCs to secure resources for tourism development, the World Tourism Organization (UNWTO) works with the EIF to maximize the inclusion of tourism in trade export strategies. Vanuatu Sierra Leone Solomon Islands Cambodia Burundi Liberia 3.15 million 2.99 million 1.54 million 0.95 million 0.2 million Feasibility study approved Source: EIF ( ). 02 UNWTO EIF
7 Making tourism a priority in national development strategies Tourism is an integral part of LDC development strategies, and the EIF helps the LDCs translate trade-related development needs into funded and deliverable projects. The EIF s intervention is based upon the Diagnostic Trade Integration Studies (DTIS) and the Action Matrix. DTISs are conducted at the request of the LDCs and encompass a review of the macroeconomic environment, regulatory and trade policies, the business climate and country competitiveness. Their emphasis varies depending on the needs and priorities of the requesting government. The analysis is enriched by a focus on priority sectors for tradable goods and services, often including tourism. Through the DTISs, the LDCs can prioritize traderelated developmental needs in the context of national development and poverty reduction strategies, with the objective of enhancing their participation in the multilateral trading system. EIF-UNWTO research Tourism, a key services sector for LDCs To better understand the tourism-related needs of the LDCs, UNWTO and the Executive Secretariat for the EIF conducted a review of 47 DTISs. The EIF National Implementation Units (NIUs) 4 and the National Tourism Authorities (TAs) 5 were also consulted via a questionnaire. The research identifies avenues for EIF stakeholders and beneficiaries government, institutions and small and medium-sized enterprises to increase efficiency so as to maximize the positive socio-economic impacts of tourism while mitigating any potential negative environmental and cultural impacts. Responses provided by the NIUs and TAs also presented the DTIS as an innovative tool to analyze tourism in a country. However, a better dialogue between NIUs and TAs and additional involvement and expertise provided by EIF Implementing Agencies could lead to a more effective identification of AfT priorities for tourism. Overall, the research provides a roadmap for making tourism part of an inclusive and sustainable growth strategy for LDCs by creating jobs and reducing poverty and inequality. The research covers the following topics: References to tourism priorities in the DTISs; and Challenges/opportunities for tourism to positively contribute to development out of 47 EIF countries 6 identify tourism as one of their priority sectors for development Source: UNWTO/EIF 2015 desk research of 47 EIF Countries with a DTIS. 4. NIUs coordinate and monitor at country level the implementation of assistance and projects funded under the EIF. 5. TAs within the countries are usually part of the EIF National Steering Committees (NSCs), which provide overall policy guidance and monitor the implementation of EIF national projects. 6. There are currently 51 EIF Countries, but only 47 have completed a DTIS as of August UNWTO EIF Tourism in the Aid for Trade (AfT) Agenda 03
8 Identified priorities in Aid for Trade for tourism References matching the five pillars of tourism development, as defined in the UNWTO-EU/DEVCO Sustainable Tourism for Development Guidebook (2013), were common in the DTISs and provide an insight into how tourism needs are perceived and prioritized in LDCs. The references in the DTISs to tourism demonstrate how the LDCs can benefit from AfT in specific areas corresponding to the tourism for development pillars and sub-pillars. Tourism policy and governance (Pillar 1): to ensure that the sector is correctly positioned as a force for sustainable development, the DTISs note that it must be fully integrated into national development plans and frameworks and be given due recognition across government departments for building inclusive growth. Economic performance, investment and competitiveness (Pillar 2): brand, marketing and product positioning was the most commonly identified sub pillar in the DTISs. Five tourism development pillars Employment, decent work and human capital (Pillar 3): the DTISs note that adequate planning of human resources, involving extensive consultations with private enterprises and employee representatives, is needed to ensure that tourism can fulfill its employment creation potential, particularly for women and youth. Poverty reduction and social inclusion (Pillar 4): the income generation and entrepreneurship opportunities for women were overwhelmingly ignored in the DTISs. However, there was a limited recognition of tourism as a tool to eradicate extreme poverty through job creation, supply of goods and services and improved infrastructure. Sustainability of the natural and cultural environment (Pillar 5): the sustainable use of natural and cultural resources was not fully examined in several DTISs. A focus on climate change was also lacking from most of the DTISs, even though tourism projects in LDCs are often at risk because of the negative consequences of climate change. Pillar 1 Pillar 2 Pillar 3 Pillar 4 Pillar 5 Tourism policy and governance Economic performance Employment and decent work Poverty reduction Sustainability Source: Joint UNWTO/EC (2013), Sustainable Tourism for Development Guidebook. 04 UNWTO EIF
9 Chart 1 DTIS tourism references by tourism development pillars and subpillars (number of mentions) Pillar 1: Tourism policy and governance The position of tourism in development policies and programmes Tourism policy and regulatory framework Tourism governance and institutional setup 21 Pillar 2: Economic performance, investment and competitiveness 2.3 Brand, marketing and product positioning Trade, investment and the business environment Resilience, security and risk management Measuring tourism and its contribution to the economy 21 Pillar 3: Employment, decent work and human capital Skills assessment and the provision of training Human resources planning and working conditions 20 Pillar 4: Poverty reduction and social inclusion An integrated approach to poverty reduction through tourism The inclusion of disadvantaged groups in the tourism sector Strengthening pro-poor tourism initiatives The prevention of negative social impacts 1 Pillar 5: Sustainability of the natural and cultural environment Relating tourism to natural and cultural heritage Enhancing sustainability of tourism development and operations Focusing on climate change 5.4 Measuring and monitoring tourism impacts Source: UNWTO/EIF 2015 desk research of 47 EIF countries with a DTIS based on the joint UNWTO/EC (2013), Sustainable Tourism for Development Guidebook. UNWTO EIF Tourism in the Aid for Trade (AfT) Agenda 05
10 Unlocking the potential of tourism DTISs are an important way to understand the tourism related needs of LDCs. However, as DTISs are only updated every few years, it is important to draw on other sources to fully understand the evolving challenges faced by LDCs. Chart 2 highlights the key tourism challenges as identified by the DTISs, the NIUs and the TAs. These issues will need to be addressed to maximize tourism s potential to contribute to sustainable development. Infrastructure and access: poor transport and infrastructure policies and the lack of accommodation facilities limit the competiveness of LDCs in the global tourism market. Skilled and trained human resources: tourism is a laborintensive sector and requires adequate training and capacity building. This also provides the opportunity to create jobs for women and youth while stimulating entrepreneurship. Statistics and data: statistics and market intelligence are key for tourism development, particularly for the private sector and foreign direct investors. The inability to measure tourism s socio-economic impacts hinders the allocation of the necessary resources to tourism development. Tourism policy/regulatory framework: lack of investment, poor management of natural and cultural resources and insufficient coordination between public and private stakeholders can create significant bottlenecks. Currently, natural disasters and other pandemics have stalled the development of the tourism sector in some of the LDCs. For example, the ecotourism project in Sierra Leone was placed on hold due to the outbreak of Ebola, which has also undermined tourism service development in Liberia and Guinea. Likewise, the tragic earthquake in Nepal and the devastating cyclone in Vanuatu have caused major setbacks to the tourism sector in these countries. This indicates that risk management and resilience need to be fully integrated in future support provided to EIF Countries. 06 UNWTO EIF
11 Chart 2 Challenges for tourism development in the LDCs (as identified in the DTISs and questionnaires, %) Lack of transportation infrastructure (roads, access, geographical isolation) Lack of accommodation facilities Lack of leisure facilities (restaurants, other tourism activities) Lack of human resources (trained staff, skills) Lack of sector management/adverse business climate/ Bottlenecks in important sectors Lack of tourism policy/regulatory framework/strategy Lack of investment Security issues/corruption/political instability Effective coordination between public authorities DTISs TAs NIUs Source: UNWTO/EIF 2015 desk research of 47 EIF countries with a DTIS based on the joint UNWTO/EC (2013), Sustainable Tourism for Development Guidebook. Note: Questionnaire responses from 18 NIUs* and 13 TAs**. * NIUs coordinate and monitor at country level the implementation of assistance and projects funded under the EIF. ** TAs within the countries are usually part of the NSCs, which provide overall policy guidance and monitor the implementation of EIF national projects. UNWTO EIF Tourism in the Aid for Trade (AfT) Agenda 07
12 The way forward How can tourism contribute to LDC development? Most LDCs recognize tourism as a sector with a huge potential for economic growth. Tourism can improve a country s image, facilitate export diversification and contribute to the creation of jobs and value chains. The DTISs also emphasize that the rich natural and cultural environments of the LDCs need to be sustainably managed, as they are the backbone for developing highly attractive tourism sectors. EIF budget New Zealand Aim US$ 3.15 million US$ 15.6 million Tourism s underrepresentation in international financing for development flows remains a critical obstacle to unlocking its full development potential. Despite its wide-reaching and well-documented socioeconomic impacts, tourism still receives insufficient attention as a tool for development (less than 1% of total ODA flows and total AfT disbursements in 2013). Vanuatu EIF Tier 2 tourism project on upgrading tourism infrastructure The direct beneficiaries will be people, businesses and traders linked to tourism. To transform the seafront into a functional, safe and attractive area. Resilience to natural disasters and climate change will be improved This includes an estimated 11,000 women working in the handicrafts sector 08 UNWTO EIF
13 Increased tourism AfT will produce results. Development partners need to provide more tourismrelated trade assistance and capacity building. The connections between the export of goods and services, market access, country branding and tourism promotion should also be strengthened. The EIF process needs to be country driven. LDCs must document and prioritize their tourismrelated needs in order to more effectively access AfT. EIF support is designed to ensure that the programme is demand driven with the LDCs managing their own trade and development agenda. Tourism has strong linkages with other development priorities. Tourism provides employment opportunities for women and youth and can contribute to environmental protection, including wild life conservation. The EIF can be a powerful catalyst for leveraging AfT resources for tourism development. A better understanding of the EIF by tourism ministries and a closer dialogue with trade ministries can lead to substantial improvements in addressing tourismrelated needs. UNWTO, as an EIF partner, is committed to promoting the EIF within the tourism authorities of its LDC Member States. Moving forward towards the new Sustainable Development Goals agenda and Phase Two of the EIF programme from , there is now a unique opportunity to better harness tourism s vast potential to foster inclusive and sustainable LDC development. Chart 3 Rich environment/natural/ cultural resources Mentions in DTISs of how tourism can contribute to development (number of DTISs references) Economy growth Improving country s image Job creation Export diversification Poverty reduction/gender/ improved livelihoods Value chains/backward linkages/sector spillovers Foreign exchange earnings Government priority Development driver Source: UNWTO/EIF 2015 desk research of 47 EIF countries with a DTIS based on the joint UNWTO/ EC (2013), Sustainable Tourism for Development Guidebook Number of countries UNWTO EIF Tourism in the Aid for Trade (AfT) Agenda 09
14 Copyright 2015, World Tourism Organization (UNWTO) and Enhanced Integrated Framework (EIF) Photos: Enhanced Integrated Framework (EIF). Cover photo: Eranda Ekanayake, Dreamstime.com Tourism in the Aid for Trade (AfT) Agenda Maximizing the Opportunities for Financing with the Enhanced Integrated Framework for Least Developed Countries ISBN (printed version): ISBN (electronic version): Thursday, September 24, :18:44 AM - IP Address: Published by the World Tourism Organization (UNWTO) and the Enhanced Integrated Framework (EIF). Printed by the EIF, Geneva, Switzerland. First printing: 2015 All rights reserved. The designations employed and the presentation of material in this publication do not imply the expression of any opinions whatsoever on the part of the Secretariat of the World Tourism Organization or the Enhanced Integrated Framework concerning the legal status of any country, territory, city or area, or of its authorities or concerning the delimitation of its frontiers or boundaries. World Tourism Organization (UNWTO) Executive Secretariat for Calle Capitán Haya, 42 the Enhanced Integrated Framework at the WTO Madrid Rue de Lausanne, 154 Spain CH-1211 Geneva 21 Switzerland Tel.: (+34) Tel.: (+41) Fax: (+34) Fax: (+41) Website: Website: omt@unwto.org eif.secretariat@wto.org Citation: World Tourism Organization and Enhanced Integrated Framework (2015), Tourism in the Aid for Trade (AfT) Agenda Maximizing the Opportunities for Financing with the Enhanced Integrated Framework for Least Developed Countries, UNWTO, Madrid, and EIF, Geneva. All UNWTO/EIF publications are protected by copyright. Therefore and unless otherwise specified, no part of a UNWTO/ EIF publication may be reproduced, stored in a retrieval system or utilized in any form or by any means, electronic or mechanical, including photocopying, microfilm, scanning, without prior permission in writing. UNWTO and EIF encourage dissemination of their work and are pleased to consider permissions, licensing and translation requests related to UNWTO/ EIF publications. Permission to photocopy this material in Spain must be obtained through: CEDRO, Centro Español de Derechos Reprográfico Tel.: (+34) Calle Monte Esquinza, 14 Fax: (+34) Madrid Website: Spain cedro@cedro.org For authorization of the reproduction of works outside of Spain, please contact one of CEDRO s partner organizations, with which bilateral agreements are in place (see: For all remaining countries as well as for other permissions, requests should be addressed directly to CONTACT Zoritsa Urosevic UNWTO Representative to the United Nations in Geneva World Tourism Organization zurosevic@unwto.org Sabrina Varma Executive Secretariat for the Enhanced Integrated Framework at the WTO sabrina.varma@wto.org
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16 The World Tourism Organization (UNWTO), a United Nations specialized agency, is the leading international organization with the decisive and central role in promoting the development of responsible, sustainable and universally accessible tourism. It serves as a global forum for tourism policy issues and a practical source of tourism knowhow. Its membership includes 158 countries, 6 territories, 2 permanent observers and over 450 Affiliate Members. The EIF is a multi-donor trust fund, which provides financial and technical support to build trade capacity in all 48 least developed countries (LDCs). The EIF is the only global Aid for Trade programme exclusively designed for LDCs and is therefore uniquely placed to assist countries to develop sustainable trade strategies, which have a positive impact on people s lives through the promotion of private sector development and job and income opportunities. UNWTO Towards Measuring the Economic Value of Wildlife Watching Tourism in Africa
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