Income inequality is on the rise
The richest 1% globally currently have more wealth than the other 99% of the world (Oxfam, 2015); The richest 10% earn up to 40% of total global income / The poorest 10% earn only between 2% and 7% of total global income (UNDP).
In the OECD countries, the gap between the richest 10% and the poorest 10% is at a record level, with ‘Palma ratio’ showing the most severe levels of income inequality in the United States, Turkey, Mexico, and Chile (Kroll, 2015).
Individual incomes are often largely associated with a person’s citizenship and location, but income inequality is a global problem – which requires global solutions – to bridge the widening divide, which otherwise threatens long-term social and economic development with higher levels of unemployment, social instability and crime. High inequality has an inverse correlation with social mobility and also plays out in large disparities in access to health and education services.
This requires the adoption of policies and practices to empower the bottom income earners, promote economic inclusion of all regardless of sex, race or ethnicity, globally, and prevent financial outflows such as crime, corruption and tax evasion. Corporate tax transparency is increasingly important. Inequality cannot be effectively tackled unless the underlying inequality of opportunities is addressed.
For this reason, Goal 10 of the UN 17 Global Goals of the 2030 Agenda for Sustainable Development is:
SDG #10 "Reduce inequality within and among countries.”
This goal and its targets address reducing inequalities in income as well as those based on age, sex, disability, race, ethnicity, origin, religion or economic or other status within a country and between countries.
Inequalities between countries
The most vulnerable nations are the least developed countries, the landlocked developing countries and the small island developing states: The World Trade Organization has agreements which authorise them differential treatment. To enable equality between countries, these less developed countries’ voices need to be strengthened in decision-making forums of international economic and financial institutions.
Development assistance and foreign direct investment can support regions where the need is greatest, but improving the regulation and monitoring of such monies and institutions for effectiveness, credibility, accountability and legitimacy is required too.
Safe migration and mobility of workers is also key to reducing inequality, with many of the global poor dependent on remittances - money sent home to families by migrant workers. In this way, migrants not only contribute positively to growth where they work, but also their countries of origin through the remittances they send home.
Total remittances globally are over double the level of global official development assistance, forming 20% of GDP in some of the poorest countries such as Gambia and Lesotho, penalised by high transactional costs globally averaging over 7%, reducing the benefits remittances can bring.
Inequalities within countries
Overall economic growth is not sufficient to reduce poverty if it is not inclusive and does not involve all three pillars of sustainable development – social and environmental as well as economic development. Discriminatory policies and practices need to be eliminated too.
Even in developing countries, more than 75% are living today in societies where income is more unequally distributed than it was in the 1990s (UN SDGs).
“Within-country inequality for the average person in the world was wider in 2013 than 25 years previously [and] developing countries tend to exhibit wider within-country inequality relative to developed countries” (World Bank, 2016).
And of course, there are huge inequalities within countries on the gender pay gap: worldwide, women earn 77% of men.
Inequality not only harms growth and poverty reduction, but also society as a whole, political spheres and individuals’ sense of fulfilment and self-worth.
To reduce inequality, policies need to meet the needs of the disadvantaged and marginalized in society too, include tax, wage and social protection, for greater equality progressively.
What have inequalities got to do with tourism?
Tourism can be a powerful tool for community development & reducing inequalities if it involves local populations & all key people in its development.
Tourism can contribute to urban renewal & rural development & reduce regional imbalances by giving communities the opportunity to prosper in their place of origin. Tourism is an effective means for the Least Developed Countries (LDCs) to take part in the global economy. In 2015, LDCs received US$ 1.4 billion in exports from international tourism (7% total exports) helping some graduate from LDC status.
But tourism infrastructure requires investment, and subsequent use: both the supply and demand for services needs to be developed. As well as finance for the necessary structures, systems and processes, tourists are required and governments spend hugely on marketing, even going as far as subsidising flights to be more competitive as a tourist-attracting destination.
But it is too often assumed that tourism growth automatically leads to development and diminishes inequalities, which is not true. Tourism growth can easily exacerbate inequalities, further dividing the ‘haves’ and ‘have nots’. ‘All-inclusive’ tourism too easily leads to local expenditure excluded. International competition comes at the expense of benefits for purpose, local people and place and leads to inequalities.
Academic research from diverse countries such as Thailand and Brazil found that incomes of the poor relative to the rich do not increase as a result of a ten percent increase in foreign tourist arrivals: Domestic tourism fares better in this regard.
“Sea-sun-sand” tourism by the economically affluent to economically deprived countries too frequently relies on low cost base with profits remaining in originating markets, not benefiting locals in destinations. This economic ‘leakage’ can be as high as 40-50% in developing countries (UNWTO, 1995), which can “can seriously undermine the positive development impacts of tourism” (The United Nations Conference on Trade and Development , 2010).
Tourism taxes collected from international arrivals might not be invested into local infrastructure or tourism, and “trickledown” affluence has been shown to not work within countries. Governments and companies can consider tax positions to increase positive impacts in the destination economies. For example, the share of exports from LDCs and developing countries that benefited from duty-free treatment increased from 2000 to 2014, reaching 84 per cent and 79 per cent, respectively (UN stats).
Inequalities within tourism establishments may also exist: there can be huge differentials between employment of the different genders, qualifications and skills. Upper echelons of management with language and business skills maybe supported and fairly compensated, where housekeeping or kitchen roles are under-compensated. Fair pay considers the top-to-bottom ratio of highest paid executives to the lowest paid workers.
Tourism has a long way to go to have the regulatory structures in place globally to curb inequality.
How can Tourism help Reduce Inequalities?
People will still travel internationally, so for international tourism to reduce inequalities it needs to be proactively and sustainably managed to do so.
Local employment with fair wages
One of the most important elements in responsible tourism overall, and as a tool to equalise, is inclusiveness of local people, who should be involved in all tourism planning and implementation. All our partners' Places focus on more sustainable tourism and with local people priority, asmutually dependent stakeholders in the tourism business impacts and benefits.
- In Nepal, local employment and career development opportunities and comprehensive employment benefits is a priority,
"The communities in which Tiger Mountain Pokhara Lodge is privileged to operate are our stakeholders, vital partners in the business".
97% of the staff has been working with the lodge over 8 years, most having formed part of its initial construction team, with most local families having at least 1 member employed – as well as being supported by the lodge in other ways, such as private water taps, fair price produce and access to local education and health initiatives.
- At Chumbe Island Coral Park, employing women is given preference, currently forming 40% of the workforce. Local people are also offered income opportunities through construction and maintenance of the ecolodge, food supplies, transport operations, handicrafts sold in the boutique, and organic toiletries by local women's co-operative.
Local & indigenous rights & access
Tourism can threaten the culture, lifestyles and livelihoods of indigenous people and too often locals can be deprived of land rights in the tourism development process.
- Campi ya Kanzi in Kenya was co-created as a true partnership with the Maasai people: A community-run boutique ecolodge, on Maasai community land, employing local Maasai people, paying tourism revenues locally and supporting a community trust, to ensure the Maasai were and continue to be the decision makers in the tourism product.
But it has also meant some challenges: whilst the benefits of tourism have brought vital health, education, infrastructure and services, safari wildlife tourism likes big cats - a potential conflict as predators to the Maasai’s pastoral livelihood. The ‘Wildlife Pays’ Program thus compensates for livestock killed, funded by a nightly Payment for Ecosystem Services (PES) conservation fee.
- Lapa Rios in Costa Rica was about the local people and community from its outset, as stewards of their land. In 2010, a Stanford University study confirmed it not only delivers social, economic and environmental benefits in the region, but makes a substantial contribution to local livelihoods and environmental conservation.
In 2013, the future use of the reserve for educational purposes only was confirmed with the signing of a conservation easement to ensure its primary forest will always be preserved in perpetuity, ie. conserved regardless of ownership.
Fair distribution of costs and benefits
Positive impact tourism works as a social enterprise to generate funds through tourism to channel into local development projects to reduce locals’ inequality.
- In Nicaragua, Jicaro Island Ecolodge buy local not just to support local people but also involve the local community and culture. For example, the freshly caught seafood isn’t just an economic agreement with the local fishermen, but an opportunity to learn about sustainability approaches, and cultural exchange for guests.
Where Jicaro looked to cut unsafe drinking water from the lake being replaced with expensive bottled water and unnecessary plastic bottle waste, it did so for the whole 600-strong community by installing a filtration system; likewise it’s provided community solar energy panels and helped fight malnutrition within the children with its “glass of milk” school initiative.
- The first community-based tourism in the Galapagos was created on Floreana as the island’s small resident population have not been able to enjoy the passing-through tourism’s benefits, whilst offering guests a rare insight into real community and culture with the opportunity to stay on the Island.
Community-based tourism is not all plain sailing however: Tropic who developed this used their model from award-winning Huaorani Ecolodge, where they sadly had to stop operations in May 2016 due to oil company seismic explorations within the Huaorani territory.
Redistribution of wealth
From 2008 to 2013, the per capita income or consumption of the poorest 40 per cent of the population improved more rapidly than the national average in 49 of 83 countries (accounting for three quarters of the world’s population) with data, reducing the inequality gap.
That said, faster growth for the poorest does not necessarily imply greater prosperity, since nine of the 56 countries experienced negative income growth rates over this period (UN Stats, 2016).
How does Earth Changers help?
Ultimately, transforming inequalities is one of the reasons we exist, a raison d’etre. Earth Changers are here to help, explain, educate and to catalyse and facilitate Change, to see wondrous places and people on this Earth equalise and flourish.
We prioritise and enable booking to be made direct to get more money into destinations, rather than international online travel agencies.
Our Places demonstrate People’s absolute commitment to positive impact sustainability. They are the manifestation of hopes of a better world and the delivery vehicles for locals’ dreams.
We put People at the centre. All our People are Earth Changers, developing and supporting amazing Places to grow to potential and be everything they can be. All our Places are Earth Changers, demonstrating awesome destination strengths in the face of often incredible adversity to thrive. And all our guests and followers are Earth Changers too, by supporting and learning about the cause.
Links with the other Sustainable Development Goals
Reducing inequalities is not just a goal on its own; true achievement lies in mutual dependence with other SDGs: Failing to curb inequalities would result in failure of other SDGs, and failure of other SDGs would result in failure to reduce inequalities.
Earth Changers’ overall Purpose is to bring greater equality in the world through tourism which has a significant positive impact, for communities and/or conservation. That involves results which align with many of the other SDGs. For this reason, our Purpose section articles break down the multi-dimensional issues into more digestible chunks. Though serious stuff, hopefully we make it understandable as to how issues inter-relate with each other and tourism, through its opportunities for Industry, Infrastructure and Innovation (goal 9).
Inequality is directly related to poverty (goal 1), including of energy (goal 7), often due to lack of decent work and economic growth (goal 8), employment and training local community, especially for gender equality (goal 5) and youth. Integrating local businesses into the tourism supply can help can help end hunger (goal 2), also by supporting local food production and provenance in the tourism supply chain, thus local access to basic goods – including water and sanitation (goal 6) in tourism. These can help support health & well Being (goal 3) and thus attendance to quality education (goal 4) where available. Many of these aims depend on partnerships (goal 17) and Peace, Justice and Strong Institutions (goal 16) within countries and between countries, also required to support macro-environmental Climate change resilience (goal 13).