Reviving tourism

With the Covid-19 pandemic bringing all economic activities close to a grinding halt, the tourism sector of the country has suffered the worst in recent memory. The worldwide outbreak of Covid-19 has brought the world to a standstill, and tourism has been the worst affected of all major economic sectors. The tourism industry of Assam and the Northeast has been even worse, because much before the Covid-19 virus had hit China, the ani-CAA agitation had literally brought everything to a standstill across the region. And, this had happened at a time when the tourism sector of the region was just beginning to enter a new phase with the overall environment becoming much more congenial than before. Thousands of people directly engaged in the tourism industry were thrown out of job. Many more thousands who were indirectly related to tourism were robbed of their vital livelihood. Those who had taken huge sums as loans from banks and financial institutions and had employed people to work in their enterprises were the worst sufferers as they were caught between repaying loans and paying salary to their employees. Many tourism entrepreneurs have been compelled to bid goodbye to their employees just because of the impact of the pandemic. For many developed and developing countries, the tourism sector is a major source of employment, government revenue and foreign exchange earnings. Without this vital lifeline, many countries may experience a dramatic contraction in GDP and a rise in unemployment. In 2019, the tourism sector accounted for 29 per cent of the world's services exports and about 300 million jobs globally. The global contraction in tourism arrivals could have devastating economic consequences as some developing countries are highly dependent on tourism. In some countries, such as several small island developing states (SIDS), tourism accounts for more than half of the GDP. The United Nations World Tourism Organization (UN-WTO) has estimated a loss of 850 million to 1.1 billion international tourist arrivals, between 910 million dollars and 1.1 trillion dollars in export revenues and about 100-120 million jobs till July. According to UN-WTO, for Least Developed Countries (LDCs), tourism is also an important sector contributing 9.5 per cent to their GDP on average. For 42 out of 47 Least Developed Countries, tourism is considered a key sector of the economy. Some larger high or middle income countries, such as Croatia, Greece and Thailand, also depend significantly on tourism with a share of inbound tourism between 8 and 18 per cent. As per travel mojo, a decline in tourist arrivals affects employment and income along the supply chain. Therefore, the GDP and employment effects are much greater than the inbound tourist expenditure data would suggest. Many countries depend heavily on tourism and will experience dramatic effects in the labour market and national income. What can countries do to mitigate the devastating effects of lack of international tourism during and after the COVID-19 pandemic? UN-WTO has suggested that in the short term, protecting people and maintaining a healthy tourism industry are important. Appropriate social protection can often prevent the worst effects of any type of shock, including the COVID-19 pandemic. Casual and self-employed workers are common in tourism related sectors and should be helped where possible. Governments should protect workers. Where some enterprises are unlikely to recover, wage subsidies should be designed to help workers move to new industries. Governments can further assist tourism enterprises that may otherwise go bankrupt, such as hotels and airlines. One approach for financial relief is low interest loans or grants. Although support is needed urgently, this requires a thorough analysis of the costs and benefits of support to specific sectors. The data have shown, the economic effects are not only directly in the tourism sector but spread across many sectors. It is against this backdrop that the BJP-led government of Sarbananda Sonowal on Friday held a state tourism conclave, with the chief minister launching the 'Paryatan Sanjeevani Scheme', a scheme under which loans ranging from Rs 1 lakh to Rs 20 lakh would be given to tourism entrepreneurs to revive their respective units. One of the highlights of the scheme is that the loan would be given for a period of five years and a moratorium period of one year would be given to the loanee. Additionally, the first year's interest of the loan amount would be paid by the government. The good news is that some tourism entrepreneurs of Assam and the Northeast have slowly started resuming their activities despite the pandemic. At this juncture, the initiative launched by the State government should provide a much-needed succour to the most environment-friendly industry.