SDG target 17.11 aims at significantly increasing the exports of developing countries, and at doubling the’s share in global exports by 2020. Statistics show that while exports in developing countries are growing, they are no longer outpacing the rest of the world. At the same time, trade openness has decreased most in developing economies.
While global trade is still dominated by exports of goods, with a 77 per cent share in 2018, the weight of trade in services is steadily increasing, reaching 23 per cent in 2018 compared with 17 per cent in 1980 (UNCTAD, 2019a). This is due to several factors, including the increasing commercialisation of intangible products, the larger role of services in global value chains and the gradual liberalisation of this sector.
Developing economies exports have become more diverse with manufactured goods now the largest item of merchandise exports, while services exports are driven by travel and transport. Developing countries today account for an increasing share of world tourism receipts, thus, taking tourism markets from developed economies. A dedicated section will look at sustainable tourism following the discussion on the inclusion ofand other developing economies in world trade.
Developing economies in pace with world exports
Though the value of exports of goods and services from developing countries has increased notably since 2000, this growth has not outpaced the developed world. Developing countries’ share in global exports has not grown since 2012. The growth of global exports has levelled off since 2012 and the same is true for the developing economies. In 2018, the total value of exports originating from developing countries was 4.3 times higher than in 2000. Developing countries’ share of global exports of goods and services has risen from 29.7 per cent in 2000 to 41.5 per cent in 2012 and has levelled off since.
Looking at the trade in goods, developing economies’ share in world exports of goods has plateaued at just above 44 per cent since 2012 (see figure 1). In the developing economies of Africa, the 2017 upswing in world trade manifested itself in export growth; African exports increased by 18 per cent compared with the previous year, and by 14 per cent in 2018.
As shown in figure 1, in 2018, developing economies’ share of world services exports (US$5.8 trillion) was 29.7 per cent (US$1.7 trillion), while exports from developed economies were valued at US$4.0 trillion. Since 2000, growth has been significant when they accounted for 21 per cent (US$0.35 trillion). The top five services exporters, China, India, Singapore, Hong Kong SAR and the Republic of Korea, account for half of developing economies’ services exports.
LDCs’ are a small player in world trade with less than a 1 per cent share. The 2030 Agenda sets a target to double LCDs’ share in global exports by 2020. Their share in world merchandise exports almost doubled from 0.54 per cent in 2000 (US$35 billion) to over 1 per cent in 2011-2013. Since then, this trend has reversed slightly. Taking 2015 as a baseline, when their share of global exports was 0.9 per cent, LDCs still have a long way to go before doubling their share. In 2018, the value of merchandise exports from LDCs was US$193 billion, accounting for 1 per cent of world exports. For services trade, in 2018, the LDCs’ share in world services exports (US$5.8 trillion) was 0.78 per cent (US$46 billion), showing an increase from under 0.5 per cent (US$7 billion) in 2000, but a slight decrease from 2015.
Most LDCs (79 per cent) are oriented to commodity exports as a share of their goods exports exceeds 60 per cent.1 The periods when LDCs’ exports declined more strongly than world exports (2008-09 and 2014-16) coincided with a fall in commodity prices.
Trade openness decreasing in developing economies
Over the last ten years, international trade in goods has significantly lost importance in relation to domestic production in developing economies. Developing economies in Asia and Oceania experienced a particularly strong decline in the ratio of exports and imports to GDP, indicated by a fall in the trade openness index from 35 to 25 per cent between 2007 and 2017 (see figure 3). Nevertheless, in 2017 their exposure to trade was still high compared with other groups of developing economies and developed economies.
Notes: This index measures the relative importance of international trade in goods relative to the domestic economic output of an economy. Exports are given equal weight to imports.
China, EU and the United States are the top trading partners of developing countries
In 2017, developing economies shipped most of their exports to the United States of America (US$1.3 trillion), China (US$1.0 trillion) and other Asian economies. For LDCs, the top export destination was China. LDCs in Africa and Haiti delivered goods worth US$28 billion to China, more than to any other economy in the world (see figure 4). Exports of LDCs in Asia were more oriented towards the European Union and the United States of America. The importance of the European Union as a trading partner for LDCs in Asia has increased significantly since the turn of the century. China has taken a first position in trade with LDCs in Africa and Haiti, while its trade with the United States’ has decreased over the last ten years. Intra-regional trade is also high for LDCs from East Asia and the Pacific, and low but rising for LDCs from most other regions.
LDCs’ export product mix becoming more diverse
The concentration of LDC exports, as measured by the Herfindahl-Hirschman Index2, increased from 2000 to 2008. Since then concentration has gradually declined, converging with patterns typical of developing economies (see figure 5). Developing economies in Africa have followed a similar trend. In other words, their export mix is becoming more diverse.
LDCs in the Middle East and North Africa had a relatively high export concentration until 2008. Since then it has declined significantly, following the general trend in LDCs. However, East Asia and the Pacific and South Asia have the most diverse export mix.
Among developing economies, the product mix of exports is most concentrated in Africa. The export mix is more varied in the developing economies of America and Asia.
Notes: An index value closer to 1 indicates a country’s exports or imports are highly concentrated on a few products. On the contrary, values closer to 0 reflect exports or imports are more homogeneously distributed among a series of products.
The structure of exports by product group has changed significantly in LDCs and developing economies over the last ten years (see figure 6). In 2017, manufactured goods accounted for 35 per cent of total exports in LDCs – a notable increase from 2007. Fuels formed the second largest product group in 2017 (28 per cent) – in 2007 they accounted for half of the exports. The share of ores, metals, precious stones and non-monetary gold increased from almost 12 per cent to 20 per cent in the ten years from 2007 to 2017. The proportion of food items in exports also increased from 9 to almost 14 per cent during the same period.
In 2017, manufactured goods accounted for 70 per cent of total merchandise exports from developing economies – almost as much as from developed economies. The share of fuels has reduced from almost 23 per cent in 2007 to 14 per cent in 2017. Food continues to be strongly represented in the exports of some economies in South America and Eastern Africa in particular; and ores, metals, precious stones and non-monetary gold in the exports of several Southern and Western African and Central Asian economies.
The growth of services exports is a general trend registered across all economic regions, but it has mainly benefited developed economies. In 2018, this group still accounted for 67.9 per cent of all traded services. With US$1.7 trillion worth of services exported in 2018, developing economies took only 30 per cent of the global services market. LDCs were responsible for 0.8 per cent of total services exports and passed the one per cent mark for travel services (1.4 per cent).
Among broad services categories, travel has the most prominent role in developing economies’ exports. At US$559 billion, it accounted for 40 per cent of the services these economies supplied internationally. Transport is also an important export sector for the developing world, worth US$346 billion in 2018. Grouped together, insurance and financial services and business and intellectual-property-related services represent US$483 billion of developing economies’ exports.
Notes: Other includes goods-related services; construction; personal, cultural and recreational services; government goods and services n.i.e.; and non-allocated services.
Smaller in dollar value than transport and travel – but linked to travel – the exports of personal, cultural and recreational services have been the most dynamic sector in LDCs’ services exports. They grew, on average, by over 15 per cent annually between 2010 and 2018. In the same period, notable annual average increases were recorded for charges for the use of intellectual property, transport and travel services (11 per cent, 10 per cent, and 7 per cent, respectively). Of the broad services items, only construction has seen a downturn in the same period (-8 per cent).
Travel is the only type of service export where LDCs and other developing economies have a 3 The revealed comparative advantage of travel services for LDCs reached 1.8 and was 1.3 for other developing economies, in 2018. The value is also slightly greater than 1.2 for transport services..
Notes: The revealed comparative advantage is measured as the proportion of a country group’s exports by service category, divided by the proportion of world exports in each category. A country or region is considered to have a revealed comparative advantage for a product or sector if the index is greater than one.
Tourism makes a significant contribution to developing economies
One of the most important drivers of trade in travel services is international tourism. In addition to the direct service itself, tourism can create large multiplier effects for the domestic economy. It promotes growth and employment in a multitude of economic sectors such as domestic transportation, hotels and restaurants, financial services, cultural services and many others. It also attracts investment and promotes the development of the private sector. This is the reason why UNCTAD has recognized that touristic services, if properly harnessed, can become an important engine for inclusive growth and sustainable economic growth in developing countries (UNCTAD, 2017).
Map 1 shows that tourism has a significant economic contribution in many countries. For example, many (World Bank, 2019). Other countries in South-East Asia (Cambodia, Thailand), North Africa (Tunisia, Morocco), the Caucasus (Georgia), Latin America (Belize, Mexico), Europe (Malta, Greece, Croatia, Portugal) and Oceania (New Zealand) also benefit from the employment generated by tourism industries. Overall, current estimates place tourism’s direct contribution at 3.2 per cent to worldwide GDP and 3.8 per cent to global employment (WTTC, 2019).4depend on exporting tourism services to a great extent, accounting for more than, on average, 50 per cent of total exports
The contribution of tourism to the global economy is forecast to increase. The annual growth rate of worldwide arrivals of international tourists, a volume indicator for this sector, have been close to 5 per cent or more since 2010. The UNWTO estimates that this indicator increased by 5.6 per cent in 2018 and will continue to grow at 3-4 per cent in 2019 (UNWTO, 2019). A similar evolution is expected over the 2030 horizon (UNWTO, 2011).
Still, more than half of all tourist arrivals are recorded in Europe and Northern America, two developed regions. As can be seen in figure 10, other regions of the world, mostly developing countries, including LDCs, receive a relatively small share of international tourist arrivals.
However, this is gradually changing. Figure 11 shows that Europe and Northern America are also the two regions with the lowest rate of growth in recent years. Most parts of Asia have shown a remarkable dynamism in tourism, with Western Asia, affected by conflict and political instability, as the only exception.
The 2030 Agenda reaching for sustainable tourism
SDG Target 12.b aims to develop and implement tools to monitor sustainable development impacts for sustainable tourism that creates jobs and promotes local culture and products. Although tourism can bring substantial resources and economic opportunities, it can also bring challenges for sustainable development: Tourism can help finance the preservation of historical and environmental treasures, but if poorly managed it will achieve the opposite (UNCTAD, 2016, target 12b). Tourists contribute to climate change in many ways – through travel by air, rail, roads and sea, and by consuming goods and services, such as food, accommodation, events and souvenirs.
Gössling and Peeters (2015) estimate that the global tourism system was responsible for 1.12 of in 2010. For comparison purposes, this is equivalent to 3.3 per cent of global CO2 emissions for that year. A country with this amount of emissions would be the 7th most polluting country in the world in terms of CO2 (Muntean et al., 2018). Comparably large amounts of energy, fresh water, land and food are also consumed by this industry. According to the authors, tourism’s resource consumption is expected to grow by a factor of 2.6 for CO2 emissions and energy use, and by almost 2 for freshwater use.
Another study, with a more comprehensive scope, that includes upstream supply chains and all greenhouse emissions, (Lenzen et al., 2018) estimate that global tourism had a carbon footprint of 4.5 Gt of CO2 equivalent in 2013, representing 8 per cent of global greenhouse gas emissions (Lenzen et al., 2018).5
When not properly managed, tourism can exploit natural resources in an unsustainable way, harm biodiversity and natural capital, undermine cultural heritage, and exacerbate existing socioeconomic inequality. In this context, the UNWTO has called for policies and other measures to promote “tourism that takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities” (. and UNWTO, 2005)
is a major consumer of energy. In countries with generally low household energy consumption rates, large tourist establishments represent major exceptions where energy is used, in particular, for comforts such as air-conditioning, heating and laundry. Tourist and sports infrastructures, such as ski lifts, may also be a significant energy consumer relative to local consumption.
According to the UNWTO, the accommodation sector accounts for approximately 20 per cent of emissions from tourism (Chiesa T and Gautam A, 2009). This involves heating, air-conditioning and the maintenance of bars, restaurants, pools and so on. In 2005, North America accounted for 40 per cent of these emissions, Asia and the Pacific just under 30 per cent, and Africa only 2 per cent. Although tourism is growing rapidly in the Middle East, its share of emissions will continue to be small (around 5 per cent). By contrast, North America and Europe will together contribute to about 50 per cent of global accommodation emissions in 2035 (down by 10 per cent compared to 2005).
Growth in tourism is resulting in increasing amounts of investment in infrastructure: buildings, traffic networks and access to transport services, land take and supply services in destinations. This has a direct impact on the environment in terms of resource use (land and water), biodiversity and waste generation.
- A country is considered to be export-commodity-dependent when more than 60 per cent of its total merchandise exports are composed of commodities.
- The Herfindahl-Hirschman Index (HHI) is a measure of market concentration. A higher index value indicates a more concentrated export structure.
- The revealed comparative advantage is measured as the proportion of a country group’s exports by service category, divided by the proportion of world exports in each category.
- WTTC also calculates that the total contribution of tourism to the economy. This includes, in addition to the direct impacts, the indirect contribution (tourism-related investment spending, government collective spending and domestic supply chain purchases of goods and services) plus the induced contribution (spending of those directly and indirectly employed by the tourism sector). According to these estimates, the total contribution of tourism is 10.4 per cent of GDP and 9.8 per cent of employment. For details on the methodology of these estimates, see WTTC and Oxford Economics (2018).
- Note that both studies consider the environmental impact of total tourism, including both international and domestic tourists.
- Chiesa T and Gautam A (2009). Towards a low carbon travel & tourism sector. World Economic Forum. Available at http://www.greeningtheblue.org/sites/default/files/Towards%20a%20low%20carbon%20travel%20&%20tourism%20sector.pdf (accessed 12 June 2019).
- Gössling S and Peeters P (2015). Assessing tourism’s global environmental impact 1900–2050. Journal of Sustainable Tourism. 23(5):639–659.
- Lenzen M et al. (2018). The carbon footprint of global tourism. Nature Climate Change. 8(6):522–528.
- Muntean M et al. (2018). Fossil CO2 Emissions of All World Countries: 2018 Report. European Union. Luxembourg.
- Tian E, Mak J and Leung P (2011). The direct and indirect contributions of tourism to regional GDP: Hawaii. Working Paper No. 2011-5. The Economic Research Organization at the University of Hawai’i. Available at https://www.uhero.hawaii.edu/assets/WP_2011-5.pdf (accessed 11 June 2019).
- UNCTAD (2016). Development and globalization: Facts and figures 2016: Sustainable tourism. Available at https://stats.unctad.org/Dgff2016/ (accessed 11 June 2019).
- UNCTAD (2017). Tourism for Transformative and Inclusive Growth. Economic development in Africa report, No. 2017. United Nations publication. Sales No. No E.17.II.D.2. New York and Geneva.
- UNCTAD (2019a). UNCTADStat. See https://unctadstat.unctad.org/ (accessed 10 April 2019).
- UNCTAD (2019b). UNCTAD product groups and composition (SITC Rev. 3). April. Available at https://unctadstat.unctad.org/EN/Classifications.html.
- UNEP and UNWTO (2005). Making Tourism More Sustainable: A Guide for Policy Makers. Paris.
- United Nations, European Commission, and UNWTO (2010). Tourism Satellite Account: Recommended Methodological Framework 2008. United Nations publication. Sales No. E.08.XVII.27. Luxembourg, Madrid, New York and Paris.
- UNWTO (2011). Tourism Towards 2030: Global Overview. Madrid.
- UNWTO (2018). UNWTO Tourism Highlights: 2018 Edition. UNWTO. Madrid.
- UNWTO (2019). UNWTO World tourism barometer. Volume 17. Issue 2. May 2019. Excerpt. Available at http://marketintelligence.unwto.org/content/unwto-world-tourism-barometer (accessed 6 June 2019).
- UNWTO and ILO (2014). Measuring Employment in the Tourism Industries: Guide with Best Practices. Madrid.
- World Bank (2019). World Development Indicators Database. See http://data.worldbank.org/data-catalog/world-development-indicators (accessed 6 November 2019).
- WTTC (2019). Economic impact 2019: World. Available at https://www.wttc.org/economic-impact/country-analysis/ (accessed 11 June 2019).
- WTTC and Oxford Economics (2018). City travel & Tourism impact: Methodology. Available at https://www.wttc.org/economic-impact/city-analysis/methodology/ (accessed 11 June 2019).
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