Inclusive Tourism for Sustainable Development in a Fast-Changing World

Seán Cleary

INVESTING IN TOURISM FOR AN INCLUSIVE

FUTURE

Petra, October 26th, 2016

Message from UNWTO, EBRD and Ministry of

Tourism and Antiquities of Kingdom of Jordan

• Inclusive and sustainable tourism

development in Southern & Eastern

Mediterranean can help enable

advancement to benefit of all, including

future generations.

• Generate new/better jobs, stimulate

economy, and safeguard sensitive

ecosystems services.

• But no trivial task: Needs sound

investments in human and natural capital

– quality training and employment,

particularly for youth and women,

– responsible use and efficient

management of natural resources.

• Public-private cooperation needed for a

competitive, inclusive and sustainable

sector.

3

Sustainable development • “…balancing the fulfillment of

human needs with the protection of the natural environment so that these needs can be met not only in the present, but in the indefinite future”

• Brundtland Commission: development that "meets the needs of the present without compromising the ability of future generations to meet their own needs"

• Four dimensions: social, economic, environmental and institutional

• First three - key principles of sustainability; fourth - institutional policy & capacity

Inclusiveness: including many different types of people and

treating them all fairly and equally [Cambridge]

What do we mean by inclusive tourism?

• Inputs (training, engagement MSMEs…)

• Participation (national/regional; accessible to all?)

The Tourism-Climate Nexus: Davos Process

Source: Adaptation to Climate Change in the Tourism Sector, UNWTO

2009 -http://cf.cdn.unwto.org/sites/all/files/docpdf/adaptationtoclimatechangeonthetourisms

ector08-01-2009.pdf

Four categories of climate change impacts

affecting tourism

Climate change impacts on tourist destinations

Source: Adaptation to Climate Change in the Tourism Sector, UNWTO

2009 - http://cf.cdn.unwto.org/sites/all/files/docpdf/adaptationtoclimatechangeonthetourisms

ector08-01-2009.pdf

Relative adaptive capacity

Air connectivity

Internet connectivity

10

IMF Global Growth

© Parmenides Foundation 12

IMF Assessment 2016

• Global recovery weakened: Low commodity prices:

Commodity exporters suffered. Moderate AE recovery -

weak demand & low growth. U.S. Growth flat; $ strength.

€-area: Low investment, high unemployment, weak

balance sheets, lower demand from EMs depressing

growth. Japan: Growth/ inflation/private consumption

weak.

• EM/DEs slowing further – deep recessions in Brazil &

Russia,, PRC rebalancing, and tighter financial

conditions. China: Vision 2030 shift will slow growth, but

make sustainable. India bright- rising real incomes and

domestic demand. ASEAN-5 - Indonesia, Malaysia,

Philippines, Thailand, and Vietnam - growing strongly;

Mexico & Turkey moderately. DE’s face weak external

conditions.

• Risks to financial stability: Market volatility/risk aversion

higher, tightening financial conditions. Rising

vulnerabilities in EMs, nonperforming loans in AEs and

weak systemic liquidity.

• Durable recovery elusive: Unemployment, high debt.

low investment, long-term decline in productivity growth.

Trade growth slowed. Geopolitical conflicts, terrorism,

refugee flows, potential BREXIT, all weaken.

• Actions required : – Reinforce monetary policy

– Use fiscal policy where possible -

especially for infrastructure .

– Need structural reforms to boost

productivity/ output.

– Strengthen financial sector: Fix private

sector balance sheets. Complete EU

Banking Union with common deposit

guarantee scheme. Complete global

regulatory reforms; transform shadow

banking into stable source of finance,

and strengthen resilience of market

liquidity.

– Need joint decisive action: National

policies must enable joint monetary, fiscal

and structural actions

…so, in the face of fragility, what does the future portend?

Secular Demographic and Economic Trends

• Population growth – 7.3bn – 9.4bn

• Accelerating urbanization – 54% to 67%: an increase of 2.5 billion urban dwellers; 90% in Asia and Africa

• Aging - 60 +: 11.7% (of 7.2bn) – 842.4 million in 2013; to 21.1% (of 9.3bn) 1 962.3 million in 2050

• Digitization and innovation – transformative and disruptive, but with unpredictable impacts

Global Trends to 2030

Continuation

of geo-

economic

trends

Forced

migration

Gaia in the

Anthropocene

Disruptive

congruent

technologies

Weakening of

representative

democracy

Higher returns

to capital;

falling returns

to labour

Jobless growth

– social

dislocation

Return of

geopolitics

Geo-economic trends continue… …the unwinding of an era

Shifting Geo-economics

• Global GDP – 2000:

– US 31%

– Japan 14%

– EU 26%

– China 3.7%

– ASEAN 1.5%

– LAC 6.6%

• Global GDP – 2018

– US 21.6%

– Japan 6%

– EU 20%

– China 15.3%

– ASEAN 3.3%

– LAC 8.3%

Globalization and World Order, The Royal Institute of International Affairs, May 2014

US $18tn <3%/a; PRC $13tn >6%/a

Source: Parag Khanna, Connectography, 2016

Asian Infrastructure Investment Bank and Silk Road Fund

New Development Bank - BRICS

One Belt one Road

Higher returns to capital; falling

returns to labour …and rising inequality

24

0

50

100

150

200

250

300

350

1980 1985 1990 1995 2000 2005 2010

bottom 20% top 5% top 1%

S

Rising inequality

200%

250%

300%

350%

400%

450%

500%

19

50

19

55

19

60

19

65

19

70

19

75

19

80

19

85

19

90

19

95

20

00

20

05

20

10

Rising wealth/income

Falling interest rates

10-year Yield 20-year Yield

% o

f n

atio

nal

inco

me

%

Rising leverage

Wealth, Debt, Inequality and Low Interest Rates:

Four big trends and some implications,

Adair Turner, 26.03.2014

World capital to income ratio

[In]equality and Social Pathology

• Richard Wilkinson and Kate Pickett (University of York) - The Spirit Level: Why More Equal Societies Almost Always Do Better: – high measures of income

inequality strongly correlated with dangerous social pathology in all societies

– greater equality of income correlates with better social indicators across the range.

• Based on a global analysis, as well as across all 50 states in the USA

• Data cover physical and mental health, educational performance, child well-being, trust and community life and social mobility, teenage births, obesity, drug abuse, violence and imprisonment

• Even the privileged in unequal societies suffer higher pathologies than their peers in more equal societies

Breakthroughs in disruptive

congruent technologies …reinforcing returns to capital

Economic landscape changing

• Composites, robotics, 3D and 4D-printing,

driverless/electric cars, renewable energy,

gene therapies, internet of things: Close to

tipping point!

• Acceleration in CPU capabilities, big data

and data analytics drive automation of

repetitive actions - manual (assembly), or

mental (accounting/audit, legal

discovery/precedent search; medicine

• Disruptive technology breakthroughs in

energy, agriculture, communications, health,

- new unforeseen shifts in employment

patterns and opportunities

• Concentration/acceleration of innovation -

falling cost/rising investment in info-, bio-,

nano– and cognotech further enhance

returns to capital (RoI/RoTechnology

ownership) rather than labour

http://www.digitaltrends.com/cool-tech/japanese-ai-writes-novel-

passes-first-round-nationanl-literary-prize/

Barack Obama: Now Is the Greatest Time to Be Alive Wired, Final Frontiers October12, 2016

• …one reason why I’m so optimistic about the future: the constant churn of scientific progress. Think about the changes we’ve seen just during my presidency.

• When I came into office, I broke new ground by pecking away at a Black-Berry. Today I read my briefings on an iPad and explore national parks through a virtual-reality headset.

• Who knows what kind of changes are in store for our next president and the ones who follow?

Political systems transforming • Weakening of paradigm of representative democracy

• Reversion [in some areas] to more-primitive identities

• Onset of post-Westphalian order

• Rise in migratory flows

…past the peak of representative democracy? • Social media empowered millennials - 76% own

smartphone; most online >6 hours/day – but 52% say their country’s political system doesn’t represent their values/beliefs: >60% in Europe and LatAm, 53% in USA, 44% in Asia, 41% in the ME/Africa. Family (85%), school (61%) and friends (56%) (technology 30%) have shaped their outlooks, government influenced only 8%

• “Most important way to make a difference in the world”: 42% “access to [quality] education”; 41% “protecting the environment” (+24% “promoting sustainable energy”; 39% “eliminating poverty” (+ 24% “providing basic food/shelter to people”)

• 62% believe can impact, as individuals, on local issues; only 45% believe possible through the political system. Very high percentages believe digital networking is effective in influencing outcomes; 40% believing they can have a global impact

• …but Facebook and Twitter haven’t built organizations or leaders …

Bangkok, Rio, Kiev and Hong Kong

A democratic polity doesn’t fall from the sky… • Democracy not just overthrow of an autocrat, or even

popular elections: It Involves constitutional entrenchment of:

– fundamental human rights, including rights of assembly and political organisation;

– the rule of law and equality before the law – the separation of powers; and – free elections, usually based on adult suffrage

• Elected representatives exercise power subject to the law, under a constitution protecting the rights and freedoms of individuals and limiting the right of the majority to override minority interests

• Liberal democracy requires all parties to accept: – legitimacy of the state and the political system – the principle of sovereignty of the people – equal rights to participate in society and the

economy, and – political competition

• Personal and economic freedoms associated with the “middle class” and a broad-based civil society, probably essential – deferment of immediate gratification

• Free elections alone don’t bring transition from autocracy to democracy. A wider shift in political culture and establishment and entrenchment of institutions of democratic government are needed.

Populism and anarchy

A privileged Anglo-Irishman

Turning and turning in the widening gyre

The falcon cannot hear the falconer;

Things fall apart; the centre cannot hold;

Mere anarchy is loosed upon the world,

The blood-dimmed tide is loosed, and everywhere

The ceremony of innocence is drowned;

The best lack all conviction, while the worst

Are full of passionate intensity.

W,B. Yeats, The Second Coming, 1929

…and an Italian neo-Marxist

“La crisi consiste appunto nel fatto che il vecchio muore, e il nuovo non può nascere: in questo interregno si verificano i fenomeni morbosi piú svariati.” – “The crisis arises from the fact that the old is dying and the new cannot be born; in this interregnum many morbid symptoms appear.” [Antonio Gramsci, writig from prison in 1930, Quaderni del carcere, ‘Ondata di materialismo’ e ‘crisi di autorità’, vol. I, quaderno 3, p. 311].

“I am a pessimist by dint of reason, but an

optimist by force of will “ (Gramsci, 1929)

Gaia in the anthropocene • Rising pressure on planetary boundaries

• Increasing incidence of extreme weather events

Urbanization accelerating: • 2015: 55% of 7.3 bn in

urban areas. 67% of 9.4bn by 2050 - increase of 2.5 bn.

• <90% of increase in Asia and Africa.

• By 2030 - 41 mega-cities >10 million inhabitants.

China’s scale enables solar PV

breakthroughs • Solar energy could be top

source of electricity by 2050,

due to plummeting costs,

International Energy Agency,

October 6, 2014

– solar photovoltaic (PV)

systems could generate

up to 16% of the world’s

electricity by 2050; while

– solar thermal electricity

(STE) - from

“concentrating” solar

power plants - could

provide a further 11%

Disruptive technology, capital and business models • New CIT - big data, ubiquitous sensors, and

mobile connectivity creating new economies of scope and scale due to massive cheap, granular, and actionable information

• Energy tech. integration: Across RE, EVs (PIGS* to SEALS**) smart grids, and storage - creating new performance standards and synergies

• Capital innovation: Sophisticated investors shifting capital flows and lowering cost of capital

• Disruptive business models: New business models in disruptive companies (e.g. Uber, Tesla, SolarCity, Nest, Crowley Carbon) creating value and fostering innovation – Mobility as a System

• Corporate innovation: Google and Apple in mobility, Apple and Walmart in RE, and Cargill in shipping - are rattling incumbents.

• Cities and regions: leading in regulatory reform for climate mitigation; much innovation at smaller scales Adapted from Rocky Mountain Institute, February 2015

*PIGS: Personally-owned, independently used, gasoline, steel vehicles **SEALS: Shared, environmentally-aligned, autonomous, lightweight vehicles

The Challenge and Opportunity for Tourism

• Tourism is fast-growing socio-economic sector. In 2015, international tourist arrivals were nearly 1.2 bn, with 1.8 bn expected by 2030

• Now >10% of global GDP, 30% of global trade in services, and 9% of jobs - powerhouse capable of improving livelihoods everywhere – also in this region

• But need three things:

• Socially inclusive: Investment in needed skills provide businesses with a larger & better workforce and offer economic opportunities to youth & women

• Economically inclusive: Smart backward & forward linkages can fully engage local MSMEs in tourism value chain

• Environmentally sustainable: Emerging best practices in energy and resource efficiency, climate resilience and building sustainability to ensure benefits in future

Source: ConnectographyParag Khanna, 2016

Tourism as a complex [adaptive] system

• Complex systems (Kastens et al., 2009):

• Many strongly interdependent variables, with many inputs contributing to observed outputs – attribution of causality difficult

• Feedback loops, where change in a variable, results either in amplification or dampening of the change

• Chaotic behaviour: extreme sensitivity to initial conditions, fractal geometry, and self-organizing criticality

• Multiple (meta)stable states, where a small change in conditions may precipitate a major change in the system

• Non-Gaussian distribution of outputs

• Complex adaptive systems: dynamic systems able to evolve with changing environments - closely linked with other related systems, making up an ecosystem. Change is co-evolution of all related systems, not adaptation to a separate environment.

Societal harmony

Necessary

for society to

survive

Humanity

depends on

ecosystem

for survival

PERSONAL FREEDOM

Essential for

innovation,

creativity and

progress

Balances vary, but recognised in Abrahamic faith traditions, Buddhism, the Bhagavad-Gita and

other Mukhya Upanishads, the Tao Te ching, Confucian ren & li, and Aristotelian Golden Mean.