11 Nov 2020 - Small Island Developing States (SIDS) have experienced great success in expanding their tourism industries, particularly over the past 10 years. The industry is an economic lifeline and driver of development for many SIDS. Their rich biodiversity and beautiful ecosystems attracted around 44 million visitors in 2019. However, global travel restrictions imposed as a result of the COVID-19 pandemic have devastated SIDS’ economies. Compared to Gross Domestic Product (GDP), export revenues from tourism represent about nine percent of SIDS economies. In countries like St. Lucia and Palau, tourism revenues make up 98 and 88 percent of total exports respectively.
It is a vital source of revenue for community livelihoods, disaster recovery, biodiversity and cultural heritage preservation. The sharp decline in international tourism is having a significant macroeconomic impact on island states. SIDS are facing a 3.6 percent decline in GDP in 2020, a rate much greater than the global average. Many SIDS, particularly in the Caribbean, are heavily dependent on export revenues from tourism to service their heavy debt burdens. Debt that is primarily a result of their disproportionate vulnerability to climate change. Many are now facing debt to GDP ratios over the thresholds for sustainable debt defined by the International Monetary Foundation. SIDS leaders have expressed the severity of the situation, warning that what was a crisis of liquidity is evolving into a solvency crisis.
The sudden decline in visitors has left many SIDS without a key revenue source to sustain the welfare of locals. The industry is a major source of both formal and informal employment across SIDS. In Caribbean island states, tourism accounts for 27 percent of employment, while in Atlantic Indian Ocean and South China Sea (AIS) and the Pacific regions these levels are 24 and 20 percent respectively. The job losses occurring as a result of the crisis are impacting the most vulnerable workers, including those dependent on micro, small and medium enterprises as well as women (54 percent of global tourism employment) and young people.
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