Dutch Disease in Tourism: the case of the Small Island Developing States

Abstract

[eng] The tourism industry has been defined as a key sector for the development of the Small Island Developing States (SIDS). These economies are characterized by their vulnerability in terms of poverty and environment, thus the optimization of the tourism activity is essential to guarantee the sustainability of those regions. The Dutch Disease is one of the negative effects that the tourism activity may return to the destinations. In this project, this issue is broadly analyzed focusing on clarify the concept and its framework from the literature review. The empirical analysis shows not conclusive results in terms of Dutch Disease symptoms on tourist specialized SIDS. However, these results are not surprised as the empirical analysis is a marginal work due to the lack of data (just to demonstrate the techniques uses among the Master course). In addition, this project analyses cases with policies successfully applied in other economic sectors to avoid the Dutch Disease. Following this, the application of those policies considering the tourism industry specifications may contribute to prevent the tourism Dutch Disease in the future. Therefore, the main contributions of this project are the clarification of the concept (which is little confused on the literature) and the application of success policies to the Tourism Dutch Disease framework.