Tourism-induced poverty impacts of COVID-19 in Indonesia

Abstract

International tourism is an important sector in developing countries for its ability to alleviate poverty. Impacts of COVID-19 are detrimental to all tourism destinations. This paper examines the pandemic effects on poverty of regional economies based on a multi-household CGE model using Indonesia as a case study. Results are critically important for policymakers, as the pandemic retracts achievement of poverty reduction significantly, more than a decade of effort for Bali in this case study. Adverse impacts are transferred to other non-tourism destinations through inter-regional trade flows. The paper provides empirical evidence to call for government's targeted support to combat the economic impacts of the pandemic improve poverty more effectively.