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COVID-19 Impact on Tourism; Global Economy can Lose $4 trillion: UNWTO, UNCTAD 

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Global economy could lose over $4 trillion due to COVID-19

As per the joint report released by the UN (United Nations) Conference on Trade and Development (UNCTAD) and the UN World Tourism Organisation (UNWTO) named ‘COVID-19 and Tourism: An Update’, India has experienced a 54 percent drop in tourist arrivals in 2020 due to COVID-19.

  • The report has estimated a loss of $4 trillion in terms of global GDP (Gross Domestic Product) for 2020 and 2021 due to the fall down of international tourism due to COVID-19.
  • In 2020, a loss of $2.4 trillion is estimated for ‘International tourism and linked sectors’ due to the sharp drop in international tourist arrivals.

Key Facts of the Report:

i.Economic Loss:

  • The economic loss in developing countries due to inactive tourism (mainly due to the asymmetric roll-out of vaccines) could account for 60 percent of the global GDP losses.
  • Due to linkages with sectors such as agriculture, a drop in tourist sales leads to a 2.5-fold loss in real GDP, as per the report, world tourism is not expected to return to pre-COVID levels until 2023 or later.

ii.Based on three scenarios (optimistic, pessimistic, and a third scenario in which the uneven rollout of vaccines is considered), UNCTAD reported an economic loss between 1.7 trillion dollars and 2.4 trillion dollars in 2021 (By comparing with 2019 levels).

iii.Unemployment: The reduction in tourism causes a 5.5 percent rise in unemployment of unskilled labour and the report highlighted the importance of the vaccine rollout to restart global tourism. Around 100 -120 million tourism jobs are at stake due to COVID-19.

iv.The report has commended the European Union’s (EU) digital COVID certificate and acknowledged the International Air Transport Association’s (IATA) travel pass which includes a vaccine certificate and test results.

v.The UNWTO reported a decline in international tourist arrivals by about 1 billion/ 74 percent in 2020 and by 84 percent in January – March 2021.

v.The least affected Regions from tourism include North America, Western Europe and the Caribbean, while, the most affected Regions include North-East Asia, South-East Asia, South Asia, Oceania, and North Africa.

Recent Related News:

According to the ‘World Investment Report 2021’ released by UNCTAD – India received Foreign Direct Investment (FDI) inflows worth USD 64 billion in 2020 making it the 5th largest recipient of inflows in the world. The US with 156 Billion was the top destination for FDI in 2020 followed by China (USD 149 billion) & Hong Kong, China (USD 119 billion).

About UN World Tourism Organisation (UNWTO):

Establishment – 1975
Headquarters – Madrid, Spain
Secretary-General – Zurab Pololikashvili
Member States – 159

About UN Conference on Trade and Development (UNCTAD):

Headquarters – Geneva, Switzerland
Acting Secretary-General – Isabelle Durant