Below, you will find a summary of two research proposals that AEclipse’s development economics’ committee could potentially undertake as their 2021 International Research Project.
Restructuring the post-COVID-19 economy: Diversify tourism-dependent economies
This research project would center on a lesson taught from the coronavirus crisis: a lack of economic diversity translates into vulnerability to economic shocks. One non-negligible side-effect of the coronavirus crisis is the halt in global tourism. This transformation has had unequal effects on economies around the globe. No two countries will emerge from this crisis in the same way; however, a general pattern can be drawn with regards to the crisis’ impact on the tourism industry.
Countries can be divided into three categories. First, there are countries with higher rates of domestic tourism relative to international tourism. Examples of that category include China or India. Second, there are countries with higher rates in international tourism relative to domestic tourism. Examples of this category include Morocco, Mauritius, Croatia, Turkey, Iceland, Jamaica, and Barbados. Third, there are countries where tourism counts for 60 or 70 percent of the national economy. This is where the situation is most alarming and where the tourism workforce requires a consequent shift. Examples mostly include islands, like Bali in Indonesia, some Greek islands, or the Maldives.
Our research project would focus on the most adequate response to the COVID-19 crisis for countries lying in the second or third of the categories mentioned above. The study will delve into the country’s potential economically profitable sectors and industries. With a proposal for both short-term and long-term economic policies.
Restructuring the post-COVID-19 economy: Develop global supply chains with greater resilience
As of today, the ongoing debate about globalisation and its future is growing in influence. Trade wars, nationalism, and protectionism are terms we come across more and more often. The coronavirus crisis has further questioned the relevance of our global trade system.
Do we need a reversal of globalisation? Or shall we respond with a newer version of globalisation that emphasizes resilience?
Trade Economists have for long speculated that a reversal of globalization would come at a huge economic cost for all countries. The COVID-19 crisis has confirmed this prediction as estimates forecast a worldwide 5% GDP loss (World Economic Forum) and a 12% loss in global trade (IMF) in 2020. Whereas this fall is seriously testing the safety nets of governments in the developed world, developing countries are now facing gigantic mountains to climb before reaching economic recovery.
The adequate response to COVID-19 should not be a reversal of globalisation, rather it should be the development of global supply chains that have better resilience. Supply chains should be more diverse and local. This means that instead of having one single supplier overseas, countries should seek for multi-sourcing from suppliers of their own economic region.
This research project will focus on the African continent, and study means by which intra-African trade can be enhanced. Such a study would go in the direction of the goal set by the African Union to reach a continental free trade agreement by the end of 2020.
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