To transform LDCs, turning tourism into new kinds of growth
The role and significance of the manufacturing sector for economic development is well established. At the early stages of development, manufacturing and industry-related services can act as true engines of development due to their potential to generate high economic growth, strong direct and indirect employment, good wages and rapid productivity enhancements. This explains why manufacturing is so important for structural transformation – especially for the Least Developed Countries (LDCs).
LDCs remain on the margins of industrialization and most notably in Africa, as evidenced by key indicators such as the share of manufacturing value added (MVA) in GDP and MVA per capita, which are lagging significantly behind developing country averages. Tiny shares of manufactures in total LDC exports, as well as the high degree of product concentration, further point to the urgent need for economic diversification and structural transformation.
At the same time, international tourism, or “export tourism”, has a footing in many LDCs, and continues to have excellent growth potential. The Enhanced Integrated Framework (EIF), the World Tourism Organization (UNWTO) and the International Trade Centre (ITC) noted in the 2017 Tourism for Sustainable Development in the Least Developed Countries: Leveraging Resources for Sustainable Tourism with the Enhanced Integrated Framework that tourism is a crucial growth sector, stating, "Tourism is widely recognized as a key sector for achieving the United Nations Sustainable Development Goals (SDGs), given its major potential to contribute to jobs and wealth in the developing world."
TRADE IN TOURISM
Tourism's export performance in LDCs has indeed been impressive (see Chart 1). The World Trade Organization (WTO) in its World Trade Statistical Review 2017 notes that tourism's export growth rate in LDCs since 2005 has been significantly higher than for other major sectors (see Chart 2). Indeed, while the LDC share of global merchandise exports in 2017 was only 0.95%, and for commercial services overall 0.6%, the share for international tourism, or “travel exports”, was significantly higher at 1.4%.