International tourism Flashcards
(56 cards)
1
Q
GDP / GNP
A
gross domestic product / gross national product
2
Q
Fair trade
A
- Involves ensuring that the workers behind these goods and services are treated fairly and that human rights are maintained throughout the supply chain
- The ideal of a fair economic system where people are paid fair wages for their work
- Is not a protected term, it mean anyone can use it even if they aren´t fair trade
- Fair trade policies add more checks and balances to the supply chain, and these policies also consider consumers in the chain
3
Q
Free trade
A
- Emphasize the need for less borders, restriction, and tariffs on goods and service passing through countries and continents
- The belief that international trade should not be restricted by tariffs, quotas, or other restrictions
- Belief that the free market will allow the best products to rise
- Reduction in barriers between countries
- Aims to eliminate trade policies that favor certain countries or specific industries
- Business don´t need governmental protections to protect the industry or its workers
- Low price for goods -> no price-minimums and little labor wage standards, non-existent worker protection
4
Q
Fairtrade
A
- A trademarked term referring to the Fairtrade international system
- They certify that goods from the global south are produced ethically and sustainably under fair trade principles
Why not Fairtrade (discussed in class): - they as Fairtrade behave with companies that behave unethically
- very high prices for example for coffee
- the quality of the product is not perceived important
- and in many cases coffee without the Fairtrade label is more valuable than many others with the label
- the Fairtrade label does not cover migrant laborers, but which many companies hire
- the Fairtrade benefits do not reach migrant laborers
- transparency in business dealings
- farmers can not decide if they would like to focus on quality or on innovation with the Fairtrade incentives
5
Q
Globalization
A
Rapid movement of goods and services – is it non stoppable?
Denationalization (the nations stays less important) and convergence (coming together).
- Trading of goods
- Sharing of experiences
- Trend toward greater and more rapid economic, cultural, political, and technological interdependence among national institutions, economies and people.
- Globalization is characterized by denationalization and convergence.
- The word “globalize” appeared in the 1960s, meaning “to make global in scope or application”
- In 1492 a German geographer, Martin Behaim created one of the first globes
- First group of humans left central Africa 100,000 years ago, arriving in the Mediterranean
- 50,000 years ago, a second group arrived in Asia
- These were the first globalizers-migrants before there were any borders.
6
Q
GATT
A
general agreement on tariffs and trade
7
Q
WTO
A
world trade organization
8
Q
IMF
A
international monetary found
9
Q
UN
A
United nations
10
Q
1st wave of globalization
A
- Late 1700s to early 1800s
- Steam engine, locomotives, telegraph
The process of globalization has always moved as rapidly as technology would allow. It has kept pace with collapsing distance… - Steam engine
- Steam ship
And with collapsing time: - Telegraph
- Telephone
- Time zones – delayed timetables of the train stations (long times of transportation between cities and states).
11
Q
2nd wave of globalization
A
- Mid 1800s to 1914
- Electric generator, light bulb, automobile, radio
12
Q
3rd wave of globalization
A
- Late 1980s to today
- Web, machine intelligence
Gap between 1914 and 1980, it was because of the 1ww and the great depression, ww2 and after until the 80s the world was very divided (north, south east and west divided, global south was the third world).
13
Q
4th wave of globalization
A
- The fourth industrial revolution
- Slobalization ?
Communicate is now more accessible, thanks to those facilitators like: - containers for the transportation of goods (cargo ships, TEU) – intermodal transportation (more than one way of transportation), for example truck, ship and plane or train.
A part of this phase of industrial change is the joining of technologies like artificial intelligence, gene editing, and advanced robotics that blur the lines between the physical, digital, and biological worlds.
Fundamental shifts are taking place in how the global production and supply network operates through ongoing automation of traditional manufacturing and industrial practices, using modern smart technology, large-scale machine-to-machine communication (M2M), and the internet of things (IoT).
14
Q
what drives globalization?
A
globalization of markets: convergence in buyer preferences in markets around the world
globalization of production: dispersal of production activities worldwide to minimize costs or maximize quality
15
Q
Globalization forces: 5 major kinds of drivers leading international firms to the globalization of their operations:
A
- Political/social
- Technology
- Market
- Cost
- Competitive
16
Q
Globalization is a result of:
A
- Cost forces
demand economies of scale – product line and manufacturing – to reduce unit costs
lower cost production factor seeking efforts in other countries - Competitive forces
more intense due to explosive growth internationally of small and new businesses
17
Q
Globalizations outcome: Globality
A
: describes economic globalization’s unavoidable outcome
* Nothing that happens on our planet is only a limited local event
* All inventions, victories, and catastrophes affect the whole world
18
Q
comparative vs absolute advantage:
A
- comparative advantage: the ability to produce a good or service at a lower opportunity cost compared with producers
- absolute advantage: the ability to produce more output from given inputs or resources than other producers can
19
Q
trade theory timeline
A
- Mercantilism
- Absolute advantage
- Comparative advantage
- Factors proportions theory
- internal product life cycle
- new trade theory
- national competitive advantage
20
Q
What is mercantilism
A
- Believed nation’s welfare was in accumulation of stock of precious metals.
- Trade surplus created by import restrictions and government subsidies to exporters.
- Mercantilist era ended in 1700s.
- Replaced by the “Classical Economists”
21
Q
How mercantilism worked:
A
Trade theory that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports.
22
Q
Pillars of mercantilism:
A
- to maintain a trade surplus
- government intervention
- colonialism
23
Q
Flaws of mercantilism:
A
- world trade is not a zero-sum game
- limits colonies´ market potential
- constrains output and consumption
24
Q
Capital injection theory:
A
A capital injection is an investment of capital into a project, company, or investment, typically in the form of cash, equity, or debt. Oftentimes, the word injection implies that the company or organization receiving funding may be in financial distress. (google)
25
Instruments of trade restriction (protectionism)
- tariffs
- quotas
- embargoes
- local content requirements
- administrative delays
- currency controls
26
Tariff / non-tariff barriers:
Tariff barriers:
- Taxes levied on imported goods
- Used promarily fort he purpose of raising their selling price in the importing nations´ market to reduce competition for domestic producers
Non-tariff barriers:
Forms of discrimination against imports other than import duties such as
* Specifications
* Customs procedures
Quotas are numerical limits on specific classes of imports
* Absolute: once number is reached imports stop
* Global: no regard to source
* Allocated or discriminating: assigned to specific countries
VERs: volountary export restraints: are export quotas imposed by the exporting country
Orderly marketing arrangements are VERs based on formal agreements between exporting and importing countries
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Pros of protectionism
* Protection of the home market
* Can’t compete with cheap foreign labor
* Need to keep money at home
* Maintenance of the standard of living and real wages
* Environmental
* Maintenance of employment and reduction of unemployment
* National defense: a country cannot be dependent on its security from other countries
* Protection of infant industry: the contention that tariffs should be imposed to protect form import competition an industry that is trying to get started. Presumably, after the industry becomes technologically efficient, the tariff can be lifted
* Dumping
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Arguments against free trade:
- National defense
A country cannot be dependent on its security from other countries.
- Infant Industry Argument
The contention that tariffs should be imposed to protect from import competition an industry that is trying to get started
Presumably, after the industry becomes technologically efficient, the tariff can be lifted.
- The cost of protecting domestic jobs
For example, restrictions on textiles and apparel goods cost U.S. consumers $9 billion/year
Cost $50,000 for each $20,000 job saved
Restriction on Japanese cars
Cost $160,000/year for each job saved
29
Regional economic integration:
Process whereby countries in a geographic region cooperate to reduce or eliminate barriers to the international flow of products, people, or capital.
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Degrees of economic and political integration
- Political union: Requires members to coordinate their economic and political policies against nonmembers, with a few exceptions
- economic union: requires members to harmonize their tax, monetary, and fiscal policies, create a common currency, and concede some sovereignty to the larger organization
- common market: Adds the free movement of labor and capital and sets a common trade policy against nonmembers
- custom unions: Adds the requirement that all members set a common trade policy against nonmembers
- free trade area: Removes all barriers to trade among members with each nation determining its own barriers against nonmembers
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Case for regional integration:
- trade creation
-greater consensus
- political cooperation
- employment opportunities
- corporate savings
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Pros of regional trade blocs:
* Trade Creation: Member countries have (a) wider selection of goods and services not previously available; (b) acquire goods and services at a lower cost after trade barriers due to lowered tariffs or removal of tariffs (c) encourage more trade between member countries the balance of money spend from cheaper goods and services, can be used to buy more products and services
* Greater Consensus: Unlike WTO with huge membership (147 countries), easier to gain consensus amongst small memberships in regional integration
* Political Cooperation: A group of nation can have significantly greater political influence than each nation would have individually. This integration is an essential strategy to address the effects of conflicts and political instability that may affect the region. Useful tool to handle the social and economic challenges associated with globalization
* Employment Opportunities
* As economic integration encourage trade liberation and lead to market expansion, more investment into the country and greater diffusion of technology, it create more employment opportunities for people to move from one country to another to find jobs or to earn higher pay. For example, industries requiring mostly unskilled labor tends to shift production to low wage countries within a regional cooperation
33
Cons of regional trade blocs:
* Creation Of Trading Blocs: It can also increase trade barriers against non-member countries.
* Trade Diversion: Because of trade barriers, trade is diverted from a non-member country to a member country despite the inefficiency in cost. For example, a country has to stop trading with a low cost manufacture in a non-member country and trade with a manufacturer in a member country which has a higher cost.
* Loss of Employment: the “giant sucking sound” as jobs go to member countries for cost and other considerations.
* National Sovereignty: Requires member countries to give up some degree of control over key policies like trade, monetary and fiscal policies. The higher the level of integration, the greater the degree of controls that needs to be given up particularly in the case of a political union economic integration
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Common characteristics of developing countries:
* Lower levels of living and productivity
* Lower levels of human capital
* Higher levels of inequality and absolute poverty
* Higher population growth rates
* Greater social fractionalization
* Larger rural population- rapid migration to cities
* Lower levels of industrialization and manufactured exports
* Adverse geography
* Underdeveloped financial and other markets
* Colonial legacies- poor institutions etc.
* External dependence
* Primary products and low value added & agriculture focus
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FDI
foreign direct investment: how much one country invests in another country
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UNWTO
united nations world tourism organization: works with governments to advocate tourism
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WTO
world trade organization
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tourism arrivals vs. tourism receipts
how many people come vs. how much money they spend
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VFR
visiting friends and relatives
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TSA
tourism satellite accounts
standard statistical framework and the main tool for the economic measurement of tourism -> 10 tables with figures and numbers
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world economic forum
global meeting in Davos, made up of corporations and businesses (focus on manufacturing, on tourism, on air transport manufacturing etc)
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WTTC
world travel and tourism council
made of companies in the private sector, it brings together the biggest entrepreneurs in the tourism industry
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FAO
food and agriculture organization of the united nations
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OECD
organization for economic co-operation and development
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SIDS
small island developing states
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Is tourism an export?
* Domestic tourism is not an export - Money staying in the country.
* International tourism is an export, as domestic money leaves the country. The international tourist is paying with international money in a different place.
* Tourism is the world’s third largest export category
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Differences between UNWTO barometer and tourism highlights
* more specific, more recent, highlights are on an annual basis only
* barometer is covered more often with more statistics
* Both are done for governments by governments
* barometer gives more information on trends that are actually happening
* Barometer has more detail
48
UNWTO tourism highlights 2019
* Balance of payment -> balance sheet of the country / tourism helps to balance the high expenses for goods that country cannot produce internally
* Domestic tourism is over six times larger than international tourism (China is a good example, Thailand government made holidays for 4 day vacations and offers on domestic tourism, that way Thais stayed in the country and spent there money not in international countries)
* Covid: Domestic tourism boomed
* domestic tourism is more valuable in terms of revenue generated (than international tourism)
* Difference tourism arrivals and receipts: Arrivals are tourists coming, receipts is the money they spend
* 10 countries in the world are generating for 50% of the world’s tourism
* Europe accounts for one in two trips
* China remains the world’s largest spender, with one fifth of international tourism spending, followed by the United States of America
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UNWTO tourism barometer:
* Current information on tourism activity
* Done by the UNWTO
* Tourism arrivals in numbers: Yearly and quarterly
* divided into advanced and emerging economies, as well as regions
* this document is more recent and it contains specific information about trends in tourism compared with the tourism highlights
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TSA: tourism satellite account
* = Taking out tourisms share on a country's economic activities
* The biggest challenge for national economists is to identify where the revenues are coming from - TSA helps to understand where the revenue is coming from and who is responsible for the revenue. The TSA helps to identify potential tourist services so that DMO’s can strengthen this product / service.
* = standard statistical framework and the main tool for the economic measurement of tourism
* Tourism: Bundle of services. Hard to measure. Intangible. Not storable.
* Example of the gas station: it is hard to measure if the revenue comes from tourists or from locals.
* non tourism industries: indirect businesses like petrol station worker. It can serve tourists but also locals.
* most of the employment in Jordan is concerning non tourism industries
* TSA: Brakes out tourism from all categories and say that said part is tourism employment
* It enables users to gain an understanding of the size and role of tourism-related economic activity, which is usually «hidden» within standard national accounts.
* Internal tourism: Includes international tourists in a country + domestic tourists
* Difference number of overnights and number of trips: One trip can have more overnights
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Travel & Tourism Development Index 2021
* WEF - World Economic Forum: Corporations and Businesses. Focusing on different sectors, where travel & tourism is one part of it.
* Travel & Tourism Competitiveness Index (TTCI) turns into Travel & Tourism Development Index (TTDI) in 2021 as a turn after the Covid crisis.
* What TTDI means:
This revised index serves as a strategic benchmarking tool for policy-makers, companies and complementary sectors to advance the future development of the Travel and Tourism (T&T) sector by providing unique insights into the strengths and development areas of each country/economy to enhance the realization of sector potential and growth
* international openness of a country relates to Visa regulations
* Old index: Nothing was directly talking about sustainability. In 2021, they included their own pillar for it. Old one includes forecasts.
* big similarities between 2019 (competitiveness index) and 2021 (development index)
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Investment / FDI
* Agenda of governer (wanting to bring in money, jobs), local investor, foreign investor, other options (cruise chips: inject money into locals). It is very dynamic.
* Takeaway: Everybody acts in their own interest. Tourism is a business that you invest in. If you invest you want to make money. Challenge: Private sector vs. government / public sector.
* Nepal: Chinese foreign investors are coming. You don’t want them in Nepal. They aren’t paying taxes, bringing no money, no transparency. Is it Nepal's problem? Class says yes. Organizational problem of the government. Solution? Create working payment system, enforce the law. Taxes are income / revenue to the government. Attracting foreign investors that will pay taxes.
* Tourism has too much leakages. Money is not coming into the country, but only going out. Great example Nepal with its chinese foreign investors.
* Investment guidelines
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Different types of taxes
* income tax (from work)
* apartment rental tax
* value added tax (VAT)
* church tax
* airport tax
* health (insurance) tax
* TV tax
* house property tax
* road / car tax (tolls)
* trash tax
* stock /shares tax
* cigarettes tax
* liquor tax
* gas / petrol tax
* inheritance tax
* tourist tax
* savings tax
* vintage car tax
* carbon / pollution tax
* lottery tax
* pension tax
* lottery tax
* pet tax
* agriculture tax
* over revenue tax (energy)
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Direct vs indirect taxes:
* Direct tax: collected by the government
* Indirect Taxes: Going through another channel: Payed by a business / retail store
* Good taxation:
o Fair:
o efficient: wasting as little money and resources as possible; raise revenue without negative distortions
o administrative simple:
* Tourists get taxed more than locals, as they are not voting.
* 3 things you need to travel: time, disposable income, motivation
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WTTC Intelligent taxation
1. Equity
2. Fair revenue generation
3. Efficiency
4. Simplicity
5. Effective stimulus to growth
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WTTC
world travel tourism council
