The Export That Isn't: Tourism

I have had reason before to question the credentials of Luis de Guindos, he who has the title of minister for the economy and competitiveness but who does his very best to demonstrate that he shouldn't be minister for either. Let's be fair though to Sr. de Guindos. He may not have noticed something, so let's just go back, for example, three years to 2010. What, as reported by the World Bank, contributed 15.4% of Spain's total exports in that year? Did Sr. de Guindos not notice? Has he not noticed since? The 15.4% was the percentage of exports through tourism.

There has been an arcane debate about whether tourism is an export or not, a debate I don't intend to bore you with, but it is one that has now been won and has come down on the side of export. The World Bank recognises tourism as an export, the UN's World Tourism Organization recognises it as such (tourism, according to the WTO, ranks fourth in global export categories), the US Government recognises it also - 168,000 million dollars were contributed to the US economy in 2012. And even the Spanish Government recognises tourism as an export. Maybe.

In an address in Madrid in January, Taleb Rifai, the secretary-general of the WTO, said that "here in Spain (and the WTO is based in Madrid), the government identified tourism as the country's main export sector as it took office". When the national government launched its national tourism plan, Soraya Saenz de Santamaria, the deputy prime minister who does a very good impression of in fact being the prime minister, emphasised the importance of tourism. It is "the policy of the state", she said. However, there is someone in the Spanish Government who seems to be unaware of this state policy. Luis de Guindos. Or maybe he is aware, just that, and he is only minister for the economy and competitiveness after all, he manages to overlook tourism's export role.

The Spanish Government's one bit of good economic news over the past couple of years has been the strength of exports. De Guindos pitches up from time to time at press conferences, says how marvellous the export sector is and totally ignores tourism. He talks about everything else but the sector which, by only a small margin, is the second largest contributor to Spain's exports. In 2012, tourism contributed 43,306 million euros, beaten only by a category of capital equipment (43,732 million euros). As a percentage of total exports, tourism had risen to 16.2%.

The astounding fact is that the data for the performance of different export sectors come from, yes, de Guindos's ministry and these data are used for the calculation of Spain's balance of payments. So why does the minister repeatedly fail to recognise tourism as an export? It's a very good question, the answer to which is that I haven't a clue. And nor do any other commentators. There are guesses as to why, and principal among them is that, though the government talks a good tourism talk, it doesn't walk it, as in making tourism a priority economic sector. So much for state policy, if this is true. 

Another guess is that the government is a bit too embarrassed to admit to the contribution that tourism makes when it is doing what it can to reduce this export competitiveness - increasing IVA, increasing airport taxes, these sorts of far-sighted policies. It puts up the tourism minister Soria to say how wrong the Balearic Government is for imposing a tax on car hire, and so attempt to appear to be righteous and to be emphasising state policy, while at the same time failing to recognise that its own policies might not be the most advantageous for tourism.

It is through exports that the government will manage to effect some positive growth. It will not do it any other way. But, and I've said this previously, it is hard to see how this could be sustained. When, if, recession comes to an end, pressure will be brought to bear to reverse the downward trend in labour costs, i.e. there will be pressure for wage and salary increases. While these would have an impact on tourism, the impact would be greater in other export sectors; tourism is remarkably resilient compared with some other parts of the economy. The government, therefore, should be doing all it can to not just ensure tourism growth but to ensure its grows more quickly. Not in two or three years time but now. But then, and despite state policy, if the minister for the economy and competitiveness is unaware of tourism, then how can it?


Any comments to andrew@thealcudiaguide.com please.

MALLORCA TODAY - Sa Pobla potatoes cannot meet demand

The cold weather in February which caused a loss of the new potato crop has also meant that Sa Pobla's producers are unable to meet export demand. The producers are getting assistance from the regional government in pressing claims for compensation from their insurers.

See more: Diario de Mallorca

How Will I Know

Somewhat dire predictions that the British will turn their backs on Mallorca this summer in favour of a fortnight in the rain on the so-called English Riviera should prove to be little more than scaremongering. Whilst the UK freezes and subsides under snow and rain, even the hardest pressed of families, concerned with the onset of rickets, will be thinking that they will need with getting some sun, at some point, and will thus spurn the overcast attractions that are Littlehampton or Morecambe. Meanwhile, the island's Chamber of Commerce is seeking to broaden Mallorca's economy by engaging in an export drive. This might sound a bit odd, as one could legitimately ask what exports. But do not scoff, for you may have in fact scoffed on one of the island's exports. i.e. the potato, though unfortunately, owing to the fact that the final quarter of 2008 was the soggiest since the year Nottingham Forest last won the FA Cup and the first section of the M1 motorway was opened, the spud harvest of Sa Pobla has been a bit of a wash-out. But never fear, because there are other exports, one of which is, apparently, computer software. I must admit I was unaware of the Mallorcan Silicon Valley, and I fancy that pirated copies of Vista are not quite what qualify as forming an export business - well not an official one at any rate. So what this software industry is exactly I'm unsure. Maybe it's the WishfulThinking.com software empire.

Another export possibility is, apparently, food and drink. To this end, there is already a successful (it claims) trade with Seoul in South Korea. This is one way, I suppose, of tackling the stray-dog problem in Mallorca: round them up and ship them off to some Korean kitchens. Given that many a dog is allowed to roam freely by its owner, I would suggest that perhaps that owner, and indeed others, is a little more careful about letting Rover out minus a chaperon, or he could end up as lunch in a Seoul restaurant.

The "big idea", though, of the as-yet unformed Mallorcan export drive is, as I mentioned a week ago, the trade in tourism expertise, otherwise known - in business circles - as "know-how". This is one of those utterly vague concepts which, because it is so vague, can be invoiced at vast amounts on the principle that the vaguer and the more obscure it all is, the more valuable it must be. It is also known, in some business circles, as "bullshit". One grand example of this know-how is that by which lesser developed countries have spent vast proportions of their GDP acquiring the skill to enable them to ruin their own economies. This particular know-how comes from and is known as the British banking sector. Anyway, the main area of know-how that is knocking around the Mallorcan economy is that to do with tourism. I confess that I have a slight problem with this. What actually does it mean? Does it refer, for example, to instructing Mongolians as to how to build entire streets of karaoke bars or is it something more general, like advising other essentially summer tourism destinations how to create a flourishing and vibrant winter tourism market, just like the one that the Mallorcan tourism expertise has produced in Mallorca? Maybe this export drive could be targeted at a market that has long suffered because of competition from Mediterranean resorts, even though it was the market in which tourism was first developed. Coals to Newcastle. But, for God's sake, don't sell too much tourism expertise or people might start taking their holidays in Britain.


QUIZ
Yesterday's title - Captain Beefheart (http://www.youtube.com/watch?v=O9UKANkpPLI). And thanks to John who pointed out that it could have been Human League and also David Thomas of Pere Ubu of whom (Pere Ubu) there will probably be more at some point. Today's title - from when she was any good.

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