Working Paper Series: Special Edition of 2016 to 2018 Interns

as gov . Government activity is very large in these economies and contributes substantially to economic activity. The hhc captures household consumption. Trade openness redefined in the context of the ECCU. This research suggests tourism arrivals (ta) to capture economic openness in the context of the ECCU, three rationales are provided. (i) Theory. (ii) Problems with traditional trade openness. (iii) Statistical trends. Faber and Gaubert (2016) highlighted tourism as a medium for market integration (or globalization) where instead of the traditionally shipped goods; tourism involves exporting non- traded local services to consumers moving across the market. Moreover, the authors noted that tourism exports have become crucial to advance the global integration of a country, in particular developing countries. To this end, tourism has attracted extensive policy attention globally as countries have been focusing on bolstering their tourism product such as the introduction of promotion agencies. Similar study carried out by Wong and Tang (2010) on economic openness and economic growth in Singapore utilized tourism arrivals as their measure for openness with respect to the economy. Yet more evidence from Carsamer (2015) who supports the notion that tourism exports contribute a large portion to Less Developed Countries’ (LDCs) exports citing an estimated 45 per cent contribution due to tourism service exports globally. Ajvaz (2015) noted that worldwide increases in tourism trends resulted in countries opening up their borders to tourism and tourism based investments and have become competitive with food products and vehicles exports. In fact, The United Nations World Tourism Organization (UNTWO) posited that international tourism represents 7 per cent of the world’s exports in goods and services, outpacing world trade for the past four years. 26 In addition, from a worldwide export category, tourism ranks third after fuels and chemicals but ahead of food and automotive products; but in developing countries tourism ranks as the number one export sector. The traditional metric is a measure of country size and its level of integration into internationalmarkets than trade policy oriented. This is evident in light of the fact that the United States of America (USA) is considered one of the most restrictive countries while developing countries (e.g. Jamaica) rank at the top of the list. Moreover, the measure appears imprecise when making comparisons, statistics show that developing countries are rank higher than developed

26 Refer to the UNWTO Tourism Highlights 2016 Edition for more insight into to global trends of tourism activity.

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