nep-tur New Economics Papers
on Tourism Economics
Issue of 2021‒01‒11
two papers chosen by
Laura Vici
Università di Bologna

  1. THE SIGNS OF DUTCH DISEASE IN CROATIA By Marija Beg; Martina Basarac Serti?
  2. Belize; Selected Issues By International Monetary Fund

  1. By: Marija Beg (Faculty of Economics & Business, University of Zagreb); Martina Basarac Serti? (Croatian Academy of Sciences and Arts)
    Abstract: Croatia is the EU member specific by the highest share of tourism in GDP, making one-fifth of it. As tourism is prone to various external factors that are out of state control (clearly visible in the current coronavirus pandemic), along with its growing share in Croatia, the question of Dutch disease arises. The Dutch disease phenomenon refers to the state where one booming sector (e.g. natural resources, which are impersonated by tourism in this case) causes adverse effects on other sectors (e.g. manufacturing sector, industry) which finally leads to the decline in the economy's international competitiveness and deindustrialization. A core model of Dutch disease explains that a large inflow of foreign money will appreciate real exchange rate and cause both the spending and reallocation of resources between non-tradable and tradable sectors thus causing deindustrialization. The aim of this paper is to investigate whether the increasing tourism sector in Croatia has caused resource movement from other sectors towards the tourism sector which would confirm the presence of Dutch disease. Based on Croatian data in period 1995-2019 we conclude that (i) Croatia is highly specialized in tourism with (ii) tourism being a more important growth factor than industry and (iii) a highly important export category; also, (iv) there is a positive relationship between the tourism revenues growth and a number of employees in the tradable sector, and negative between the tourism revenues growth and a number of employees in the non-tradable sector; finally (v) the growth of tourism revenues did not lead to an appreciation of the real effective exchange rate. We conclude that Croatia is not sick with the Dutch disease but if the rapid growth of the tourism sector in Croatia continues, there could be negative effects of the Dutch disease in the future.
    Keywords: Dutch disease, Tourism, Exchange rate, Croatia
    JEL: F31 L83 P28
  2. By: International Monetary Fund
    Abstract: This Selected Issues paper provides an overview of Belize’s tourism sector and main achievements and discusses the country’s comparative advantages and bottlenecks in tourism. It also analyzes the impact of structural and institutional reforms on tourist arrivals. The outturns in tourism have significantly exceeded targets set in the authorities’ National Sustainable Tourism Masterplan (NSTMP). The implementation of the NSTMP reforms has supported the tourism sector’s expansion. In order to guide the development of the tourism sector, the NSTMP 2011 proposes reforms and targets to propel Belize into an internationally recognized tourist destination by 2030. The emergence of the shared economy business model has also brought new challenges, in addition to opportunities. The benefits of the peer-to-peer accommodation available to customers on digital platforms include the expansion of tourism product, service, and sector offerings; improved access to market; and opportunities for income generation. It is imperative that reforms in the near term should focus on addressing the impact of recurring natural hazards, infrastructure bottlenecks, fortifying the institutional and governance framework, reducing crime, and mitigating concerns relating to the shared economy.
    Keywords: Corporate income tax;Tourism;Income and capital gains taxes;Income tax systems;Tax incentives;ISCR,CR,Belize,firm
    Date: 2019–12–09

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