Hey Frontier Market countries, visa-free travel is an easy way to growth

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Hey Frontier Market countries, visa-free travel is an easy way to growth

Visas have always been a tit-for-tat issue, where countries are reticent to provide open access to a country’s citizens unless they too have the same privileges within that country.  This approach makes no sense.  Frontier markets would be well-served to provide open access to anyone who wishes to come into their country.

Whether tourists or businesspeople, inbound travelers bring money, perspective, and opportunity.  Unless you are North Korea or the Taliban every single government should desire this flow of exchange, ideas, and most certainly investment.  Instead, we have countries like the list below, where entering the country becomes difficult, annoying, and an impediment to growth.

Country

 GDP per capita (nominal)

Afghanistan

               659

Algeria

            5,498

Angola

            5,424

Benin

               825

Bhutan

            2,381

Brazil

         11,385

Burundi

               286

Cameroon

            1,429
Central African Republic

               371

Chad

            1,025

China

            7,594

The Democratic Republic of the Congo

               440

Equatorial Guinea

         17,430

Eritrea

               755

Ghana

            1,443
Guinea

               540

Iran

            5,315

Iraq

            6,391

Liberia

               461

Libya

            6,570
Mali

               707

Nauru

            8,570

Niger

               427

Nigeria

            3,203

North Korea

            1,013

Pakistan

            1,334

Republic of the Congo

            3,138

Russia

         12,736

Saudi Arabia

         24,161

Sierra Leone

               775

Somalia

            1,000

South Sudan

            1,097

Sudan

            1,876

Syria

            1,650

Turkmenistan

            9,032

Uzbekistan

            2,038

Vietnam

            2,052

Yemen

            1,408

 

The countries above, require visas for Canadians.  This list excludes those countries that provide a visa on arrival, although that too is annoying, we would term that as a “first-world problem.”  Not one of these 38 countries would not benefit from a little bit of Canada.  We say this as Canadians but also as a matter of fact.  We intentionally did not provide a list for the United States given that there are several countries with visas as a requirement motivated by political issues.  However, Canada has very little, to no direct conflict with the rest of the world.  Canada is one of the wealthiest countries in the world with businesses and citizens that have the capacity to invest time, money, and knowledge to the world.

The median GDP per capita of these countries is $1,546 or less than 4% of Canada’s nominal GDP per capita.  According to Henley and Partners Visa Restriction Index, Canadians enjoy the 6th most powerful passport in the world, in terms of visa-free travel.  What exactly are these countries afraid of?  This is particularly silly when one considers how unappealing most of these countries are on the surface, places like Afghanistan, Somalia, Burundi, Central African Republic, North Korea, and Yemen do not solicit images of pleasant tourist and business experiences.

There are several countries that should also be on this list because their visa on arrival scheme only applies to a limited subset of people, countries like Pakistan which offer it to business visa holders and tour groups, but not individual tourists.

Visas were typically not required until after the introduction of airplanes.  When trains were common, visas and passports were uncommon as they would have created unacceptable bottlenecks in travel.  It could be argued that those same “unacceptable bottlenecks” exist today, but we have become tolerant of them in a way that those in the early 20th century populace would not have been.

Tourism constitutes approximately 10% of global GDP and 1 in 11 of all jobs globally are in some way connected with travel and tourism.  This is a huge industry, and it can only grow if people are free to enter and exit as they please.  Indonesia in 2014, removed numerous restrictions and enabled visa free travel for 169 countries to Indonesia.  The net result? 60% growth in tourism in three years, compared to historical trends which would have increased tourism by only 22%.  Accompanying this growth has been a 10% increase in GDP per capita (nominal) past $4,000 and aggregate GDP growth of 11% to $1 trillion.

This issue is most acute for Africans, the list above is dominated by African countries, and you can be sure that if Africans are not allowing Canadians to come in visa-free they surely aren’t allowing fellow Africans to come in either.  This article, explains this issue very well.   The map below highlights the countries where visas are required for Canadians.  If Africans are unable to travel to each other’s countries, how can they be expected to grow as economies? Regions grow together, we know this, Malaysia and Singapore would not be what they are today without each other; ditto for South Korea and Japan, or the Gulf, or Eastern Europe or Scandinavia.  The impact to the United States would be devastating if a farmer in California was unable to sell his/her produce to a customer in New York or Illinois.

Our conclusion is straightforward if countries want to grow and increase tourism removing barriers is a very easy step towards that objective.  Open borders should not be used as a diplomatic chess piece, and countries should not be guided by their ego (only allowing visa-free travel when the other country does the same).  A businessperson who knows that they could setup shop in a country, travels freely, hires freely, and is welcomed would be very likely to have a desire to invest and grow.   It’s usually true too, that the more your own citizens see the rest of the world, the fewer chances for xenophobia, racism, and instability.

As always, any comments or questions, please let us know.

 

 

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