Guntur Sugiyarto

Competitiveness Indicators in the Travel and Tourism Industry

The competitiveness of tourist destinations is important, especially as countries strive for a bigger market share. However, competitiveness is a complex concept, encompassing various aspects that are difficult to measure. This paper discusses an innovative approach for measuring tourism competitiveness using eight main indicators – price, openness, technology, infrastructure, human tourism, social development, environment and human resources – for over 200 countries. Weights for each theme are derived using confirmatory factor analysis in order to compute an aggregate index, and it is found that the social and technology indicators have the highest weights while the human tourism and environment indicators have the lowest. Cluster analysis is used to group destinations according to their performance level. The USA, Sweden, Norway, Finland and Australia are found to be the most competitive destinations, while Burkina Faso, Chad, Benin, Ethiopia and Cambodia are the least competitive.

Tourism and globalization: Economic Impact in Indonesia

Abstract The issue of whether globalization is beneficial remains controversial, particularly because globalization policies are often examined without consideration of their interactions with key sectors of the economy, notably tourism. This paper uses a computable general equilibrium model of the Indonesian economy to examine the effects of globalization via tariff reductions, as a stand-alone policy and in conjunction with tourism growth. The results show that tourism growth amplifies the positive effects of globalization and lessens its adverse effects. Production increases and welfare improves, while adverse effects on government deficits and the trade balance are reduced.

Quantifying the Impact of Foot and Mouth Disease on Tourism and the UK Economy

The foot and mouth disease (FMD) outbreak significantly reduced tourism expenditures in the UK, as well as affecting the agricultural sector. This paper quantifies the effects of FMD on tourism, agriculture and all other sectors of the UK economy using a computable general equilibrium (CGE) model of the UK economy. The results show that the FMD outbreak had larger adverse effects on GDP through reductions in tourism expenditures than through other effects. The implication for policy makers is that the roles of tourism-related sectors should be considered in the formulation of agricultural policy.

Remittances in Asia: Implications for the Fight against Poverty and the Pursuit of Economic Growth

This study examines the potential of remittances for promoting economic growth and reducing poverty in Asian countries using data for more than 20 countries in the region for 1988-2007. The results indicate that remittances positively affect home country real gross domestic product (GDP) per capita growth. A 10% increase in remittances as a share of GDP leads to a 0.9-1.2% increase in GDP growth. The findings also show that remittances only have a negligible effect on the overall poverty rate, but they tend to decrease the poverty gap and thereby ameliorate the depth of poverty. The estimates suggest that a 10% increase in remittances decreases the poverty gap by about 0.7-1.4%. The paper also explores the robustness of the key results by using 5-year average data and addresses potential endogeneity issues through instrumental variable estimation.

The Global Crisis and the Impact on Remittances to Developing Asia

Remittances to Asia plunged during the 1997 Asian financial crisis, but the drop was temporary as the flows were increasing once again after just 1 year. The current crisis, however, is fundamentally different in that even the countries that send remittances have been adversely affected. The global nature of this crisis raises several questions such as whether it will also last for a short time or developing Asia should prepare for a long period of remittance stagnation. This study examines remittances data to several Asian countries to shed light on such issues. The results suggest that while remittance flows to key recipients in the region have slowed down in the current year, there has not been a sharp drop. Moreover, there is no indication that the remittance flows will slow down further, suggesting that the flows should be back on a higher growth path in a few years. It is unlikely, however, to see the same growth rates of the past, given that an important share of that growth during the last two decades was due to better recording of remittances and an increased use of wire transfers on the part of migrants.

Remittances and Household Welfare: A Case Study of Bangladesh

This paper examines the impacts of international remittances on household consumption expenditure and poverty in Bangladesh using computable general equilibrium modeling of the Bangladesh economy and microeconometric analysis at the household level. The former assesses the economic effects and distributional implications of remittances at the macro, sectoral, and household group levels, while the latter shows the association between remittances and household consumption expenditure, including poverty status. The first results show that remittances have positive effects on the economy and reduce poverty. It is estimated that 1.7 out of the 9 percentage point reduction in the headcount ratio during 2000–2005 was due to the growth in remittances. A closer look at the household level further reveals the positive and significant impacts of remittances on the household’s food and housing-related expenditures. The impacts on education and health expenditures are also positive but insignificant. Moreover, the logit regression results suggest that the probability of the household becoming poor decreases by 5.9% if it receives remittances, which further confirms the positive impact of remittances. Given that migration and remittances also bring costs to the society, the study findings call for policies to maximize their benefits. This includes attracting more remittances through formal channels and increasing their productive use.

Remittances and Household Behavior in the Philippines

As one of the world’s largest recipients of remittances, the Philippines received remittances roughly 12% of its gross domestic product in 2008. Remittances have become the single most important source of foreign exchange to the economy and a significant source of income for recipient families. Using the instrument variable estimation technique, this study examines the role of remittances in increasing household consumption and investment and thereby their potential for rebalancing economic growth and creating long-term human and capital investment. The results indicate that remittances negatively influence the share of food consumption in the total expenditure. However, unlike previous studies, the estimations show that remittances to the Philippines do not have a significant influence on other key items of consumption or investment such as spending on education and health care. A further analysis using logistical regression shows that remittances help to lift households out of poverty. Remittances thus may help in fighting poverty in the Philippines but not in rebalancing growth, especially in the long run.

Impact of water supply and sanitation assistance on human welfare in rural Pakistan

The paper examines impact of two water supply and sanitation projects in rural Pakistan in improving access to water supply and sanitation and on health, education, and labour supply based on a household survey of 1300 project and 1300 comparison households. The impact was estimated using treatment effects based on a control-function approach. Overall findings show that the projects improved households’ access to water supply, reduced drudgery associated with fetching water and improved attendance of high-school-age girls in schools. However, the projects had no significant impact on the incidence and intensity of diarrhoea and on increasing labour force participation and hours available for work.

Labor Markets in Indonesia: Key Challenges and Policy Issues

Until 1997, Indonesia’s economy was among the faster growing in both the region and the developing world generally. Economic growth of around 5% over a period of 25 years had brought significant gains to workers and the population more widely. Poverty rates declined dramatically from the 1970s to 1996, and at the same time a steadily growing share of Indonesia’s labor force made the transition from agriculture to industry and services. Poverty rates decreased from around 40% in 1976 to around 11% in 1996. The share of workers in agriculture declined fairly constantly from around 55% in 1990 to around 41% in 1997. Over this period, industry saw its share of the workforce increase from 14% to 19%.

Macroeconomic Effects of Road Corridor Investment in Kazakhstan: General Equilibrium Perspective

Infrastructure development across Central Asia facilitates connectivity, competitiveness, productivity, and ultimately economic growth and regional integration. A sample development project is a large road corridor in Kazakhstan. This report shows the economic impact of such a project. The quantitative work follows a dynamic general equilibrium model covering both direct and indirect effects, including trade facilitation, transport cost reduction, and increased productivity. The cumulative indirect impacts benefit Kazakhstan and the many economies linked to it.