International Economics: IB Economics

Good news for Thailand in that tourism revenues are recovering, although still below pre-pandemic levels, because this represents an injection into the circular flow of income and it will trigger a multiplier effect.

However, equally, the government have imposed a tourist tax - 300 baht ($9.20; £7.40) per tourist - and hope that this will raise tax revenues too. It's an interesting idea and set at a level that is unlikely to deter many tourists from coming, which is important because the Thais are hoping to attract 80m tourists annually by 2027.

This Guardian article looks at how the pandemic has really had a severe impact upon the Sri Lankan economy with at least half a million people having slipped into poverty and rising food prices threatening to add to this. 

In addition, it seems that the government have made some odd policy choices - banning the use of fertiliser, for example - which have compounded the country's problems. Additionally, the collapse of tourism has had a significant adverse impact; factor in high levels of debt, not least to China, and a lack of foreign exchange reserves and many people are predicting both a humanitarian and a financial crisis in this small developing economy. 

Another example of the uneven effects of the pandemic on all aspects of economic life - in this case, development. The IMF have highlighted the fact that coronavirus will impose the greatest costs on those economies that are tourism-dependent, but that, overall, they anticipate its effects being less severe that the global financial crisis. 

This World Bank clip look at the ability of nature-based tourism to generate important, and sustainable revenues for Laos, fostering development that is sensitive to the needs of the environment. What's not to like?

And I can promise you that if you watch the clip, you'll realise why the country is one of the world's hidden gems. It is stunning.

Proof that African economies are as badly affected by coronavirus as elsewhere, with growth on the continent expected to decrease by between 3-8% this year. 

However, like elsewhere, the extent to which this has affected different economies varies: those most dependent upon tourism are going to suffer the most, and in common with the rest of the world, companies have had to adapt. The picture associated with the article shows how Uganda's Premier Distilleries have repurposed their distillery to produce hand sanitiser.

The European Commission is anticipating a sort of Wencelas-type recession "deep and crisp, uneven" perhaps. 

However, a 7.5% drop in economic activity over the year doesn't make for great reading, with the effects likely to be uneven and most heavily concentrated on those economies that are dependent upon tourism. More trouble ahead for the Mediterranean nations, I fear.  

It's not just the UK that's going to be damaged by Brexit - our trading partners will also suffer, with Central and Eastern Europe likely to bear the brunt of this. This Guardian article looks at how Brexit will affect Eastern and Central European service sector providers, luxury furniture manufacturers and tourist destinations.

This BBC article looks at the state of the Turkish economy, with official inflation at 48.7%, and unofficial inflation even higher. Factor in high levels of unemployment, and even worse youth unemployment, and a current account deficit, and the country's economic fortunes don't look great. 

The article wonders whether tourism could be the saviour: the depreciation of the lira has made Turkey exceptionally cheap - but whether or not people will want to go there is another matter. 

And other problems face those economies most dependent upon tourism, such as Turkey and South Africa, at a cost of as much as $4 trillion by the end of 2021.

Factor in the multiplied effects of a decline in tourism and the health of the sector is an important determinant of growth in many economies. 

The Indonesian economy has slipped into recession for the first time in nearly a quarter of a century, largely as a result of a collapse in tourism. 

The economy has experienced unprecedented growth up until now but this will set back its development.

A lengthy Guardian piece that looks at the future of travel and immigration post-lockdown. It would seem that this year's foreign holidays are going to be largely cancelled and this is going to have dramatic repercussions for a variety of economic agents going forward. 

Tourism-dependent economies are going to be the worst hit, and firms involved in the hospitality sector are also going to take quite a hit too. We live, as they say, in interesting times.

Reuters looks at the extent of the EU-wide recession, with the European Commission expecting all member states to experience a recession this year. 

The extent of that recession will vary from country to country but will reflect differences in their level of dependence upon tourism.

I hate to rain on the World Bank's parade, but I'd love to know what their models are predicated upon. I think that still expecting positive growth in South Asia is optimistic, given the nature of the coronavirus outbreak. I'd be delighted to be proved wrong, but given that the virus hasn't really started to hit the region, and given that demand from the West has collapsed, I think that South Asia has further to fall.

And to be honest, I'm not convinced that forecasts at this moment in time are an awful lot of use either.