Columns

Tourism, remittances and the partial US government shutdown

Wayne Campbell

Tuesday, January 15, 2019

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I had always hoped that this land might become a safe and agreeable asylum to the virtuous persecuted part of mankind, to whatever nation they might belong. — George Washington

According to the World Travel & Tourism Council, travel and tourism accounts for more than 313 million jobs as well as 10.4 per cent of global gross domestic product (GDP), or 9.9 per cent of total employment in 2017. The travel and tourism industry is especially vital to Caribbean societies.

Tourism is very often referred to as the engine of growth for Caribbean islands. The tourism industry is a major player in providing employment both directly and indirectly in the region. A survey done in 2010 by the Oxford Economic Organization found that tourism played a larger role in Caribbean economies than it did in any other region.

Effects of partial government shutdown on tourism

We are all familiar with the saying if the United States economy sneezes the economies of the region come down with a cold. Due largely in part to globalisation, the world is more interconnected now than at any other time in the history of mankind. Events and decisions happening in the major capitals of the world have a direct as well as an indirect impact for peoples far removed.

According to the tourism minister, 65 per cent of all visitors to Jamaica are from the United States. Data from the Jamaica Tourist Board (JTB) shows a record 4.3 million tourists visited Jamaica in 2017. This figure comprised 2,353,461 stopover arrivals and 1,946,780 cruise passengers, contributing US$3 billion to Jamaica's GDP. This arrival figure represents a 12.1 per cent increase over arrivals in 2016.

Undoubtedly, if US workers do not receive a pay cheque they are not going to travel. The partial government shutdown in the United States is now entering its fourth week. Not only are some government services no longer being provided to its citizenry, but we have seen where the Miami International Airport, which is a major international and connecting hub, has been forced to close one of its terminals due to the unusually high number of its employees not reporting for work. According to the Orlando Sentinel newspaper, screeners employed at the airport have missed their pay cheque and the airport, out of a concern, thought that there would not be adequate staffing to handle all 11 checkpoints during normal hours over the weekend. According to an airport spokesman, Terminal G will close at 1:00 pm on Saturday and reopen for flights Sunday morning and close again at 1:00 pm that same day. It is important to note that Terminal G serves United Airlines, which is a major US-based carrier. The Miami Herald reported that Terminal G is the slowest concourse with only 12 flights departing after 1:00 pm. The spokesperson at Miami International Airport stated that Terminal G's flights will be diverted to other terminals. The spokesperson cautioned that if additional screeners did not show up for work the airport could be forced to close a security checkpoint at a terminal with multiple entry points such as Concourse J or D.

It is imperative that the Republican-controlled Senate and the Congress, which is controlled by the Democrats, work assiduously to arrive at a solution, as failure to do so will have catastrophic consequences for the geo-political arena. A solution satisfying US President Donald Trump hinges on him getting $5.7 billion to build a wall on the Mexican border before he signs off on any such deals. It is within reason to envisage the US economy going into a recession if this partial government shutdown is prolonged. One can also envisage that such a recession can drag the international community in recession.

In 2017 international tourism revenue amounted to US$1.34 trillion. According to the World Bank, international tourism receipts are expenditures by international in-bound visitors, including payments to national carriers for international transport. It bears thought that a discussion on travel and tourism is incomplete unless the issue of global remittances is examined. Data from the World Bank states that remittances to low- and middle-income countries reached US$466 billion in 2017 — an increase of 8.5 per cent over $429 billion in 2016. The same source stated that global remittances, which include flows to high-income countries, grew seven per cent to US$713 billion in 2017.

The World Bank top five remittance recipients are India with US$69 billion, China with US$64 billion, The Philippines US$33 billion, Mexico at $31 billion, and Nigeria with $22 billion. Latin America and the Caribbean accounted for nearly US$80 billion in remittances in 2017, according to the World Bank. Should the US President prevail and construct his wall along the Mexican border if is safe to conclude that Mexico will see a drop in remittance inflow.

Interestingly, the World Bank pointed out that among the risks to growth of remittances are stricter immigration policies in many remittance-source countries. As a major remittance-source country the United States continue to grapple with its refashioning its immigration policies against the background of a Republican president. There is no question that the United States has millions of undocumented immigrants. However, too often in the political realm we hear of figures which bear no resemblance to reality, as the research to substantiate the figures are often suspect or fake.

A recent study published by the respected Pew Research Center put the number of undocumented immigrants in the United States at 10.7 million in 2016 far less than the 12.2 million in 2007. The research added that while Mexicans account for the largest percentage of illegal immigrants living in the United States migration out of Mexico has slowed against the background of global political and economic shifts. There are millions of undocumented immigrants in the United States who have intention of growing old there. This is clearly no excuse for not using the legal channels to get to the United States.

Undeniably, remittances keep many societies afloat. Remittances are used for paying school fees and extra lessons, burials, covering medical expenses, buying groceries, as well as paying rent or mortgage. So while both parties continue pussyfooting around finding a suitable immigration policy, many families, especially children and women, are going to be negatively impacted more so than any other category in the population.

As reported in the one of our local newspapers, consular services provided by the United States might be impacted in an extended government shutdown. Isn't it ironic that an extended government shutdown has the potential to do the opposite of what the essence of the shutdown is about? There are thousands in line who have chosen the legal channels to get to the United States. We need to keep a close eye on the developments in Washington regarding how much longer the partial government shutdown will continue since there will be certainly shock waves not only in Kingston but in other capitals across the world.

In the words of John F Kennedy, everywhere immigrants have enriched and strengthened the fabric of American life.

Wayne Campbell is an educator and social commentator with an interest in development policies as they affect culture and or gender issues. Send comments to the Observer or waykam@yahoo.com.


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