Assessing the Economic Impact of Protected Area Tourism on Local Economies in Brazil Heng Zhu, Anubhab Gupta, Elizabeth Earley, Urvashi Narain, Sylvia Michele Diez, Bernadete Lange, Hasita Bhammar, Phoebe Spencer, Carlos Eduardo F. Young, Alexandre Kotchergenko Batista, Camila Rizzini Freitas, Edward Whitney, and J. Edward Taylor © 2021 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. 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Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. designer Sergio Andres Moreno Tellez cover photo Ricardo Dias / Shutterstock.com acknowledgements We are grateful for the valuable assistance provided by Fernando P.M. Repinaldo Filho, Head of Abrolhos Marine National Park, Betania Fichino, Amanda Silva, Ricardo Castelli Vieira and Renata Carolina Gatti from the Brazilian Ministry of Environment (MMA); Valerie Hickey, Adriana Moreira, Sergio Margulis, Jo Pendry, Paula Montenegro, Wanessa Matos, Eduardo Romao Rosa, and Charlotte De Fontaubert from the World Bank; and Guilherme Dutra from Conservation International. This project would not have been possible without the dedicated and enthusiastic work of our Brazil survey team: Lucas de A. N. Costa, Maira L. Spanholi. Lucas Rolo Fares, Rodrigo Fernandes Gonçalves, Daniel Sander Costa, Rodrigo Abreu Carvalho, Marcos P. Mendes, João Augusto Muniz Videira, Gabriel Pabst da Silva, William John Hester, Aline Guzenski Fioravanso, Patricia Camara de Brito, Miguel Ângelo Portela Pinheiro, and Thais de Jesus Custodio. Contents Acknowledgements ........................................................................................................................ 4 Executive summary........................................................................................................................ 9 How was the study done?..............................................................................................................10 What did the study find...................................................................................................................10 What lessons can policy makers draw from the study? ........................................................ 13 1. Introduction ................................................................................................................................. 14 2. Background .................................................................................................................................20 2.1 Policy and institutional context .............................................................................................. 21 2.2 Study Site .................................................................................................................................. 23 2.3 Government Expenditures..................................................................................................... 25 3. Methodology................................................................................................................................26 3.1 Avenues for economic impacts of protected areas......................................................... 27 3.2 LEWIE model.............................................................................................................................29 3.3 Data collection ......................................................................................................................... 30 4. Data Summary............................................................................................................................32 4.1 Tourists and tourism businesses (hotels) ........................................................................... 33 4.2 Households............................................................................................................................... 34 4.3 Businesses................................................................................................................................. 35 5. LEWIE model findings..............................................................................................................36 5.1 Impact of an additional tourist on the local economy...................................................... 38 5.2 Impacts of nature tourism on the local economy ........................................................... 40 5.3 Impacts of complementary investments and outside shocks....................................... 41 Conclusions and policy recommendations........................................................................ 44 Protect natural assets.......................................................................................................... 46 Grow and diversify the tourism business....................................................................... 48 Share benefits with local communities............................................................................ 51 Economic recovery ............................................................................................................. 52 References.........................................................................................................................................52 Annex. Summary statistics...................................................................................................... 54 Crops....................................................................................................................................... 54 Livestock.................................................................................................................................55 Fishing.....................................................................................................................................56 List of figures, maps, boxes and tables Figures figure es-2. Real-income multipliers for an additional Real or US$ of tourist spending. . . . . . . . . . 11 figure es-1. Economic Impact Pathways of Protected Area Tourism. . . . . . . . . . . . . . . . . . . . . . . . . . 11 Figure ES-3. Distribution of Multiplier Across Poor and Non-Poor Populations . . . . . . . . . . . . . . . . 12 Figure 1. Brazil Travel & Tourism Competitive Index Score, World Economic Forum (2019) . . . . 16 Figure 2. Legal establishment of Marine Protected Areas in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Figure 3. Comparison of investment per hectare of protected areas acros countries, 2010 (R$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Figure 4. Visitors to Federal Protected Areas (Millions), 2012–2018 . . . . . . . . . . . . . . . . . . . . . . . . 22 Figure 5. Economic pathways. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Figure 6. Number of Visitors to Abrolhos Marine National Park by Month, 2017-2019. . . . . . . . . 33 Figure 7. Real-income multipliers of an additional R$ or US$ of tourist spending. . . . . . . . . . . . . 39 Figure 8. Multiplier Share by Household . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Figure 9. Distribution of Multiplier Across Poor and Non-Poor Populations. . . . . . . . . . . . . . . . . . 39 Figure A2. Livestock distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Figure A3. Distribution of Catch (by Kgs). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Figure A4. Fishing Habitats by Trip (Targeted Habitat) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Figure A1. Crop type distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Maps Map 1. Brazil’s Protected Area Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Map 2. Abrolhos Marine National Park and surrounding towns that are a part of the local economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Tables Table 1. Government of Brazil expenditures on Abrolhos Marine National Park in 2019. . . . . . 25 Table 2. Hotel Summary Statistics (R$). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Table 3. Number of Annual Visitors to Abrolhos Marine National Park . . . . . . . . . . . . . . . . . . . . . 33 Table 4. Summary Statistics of Tourist Expenditure (survey data). . . . . . . . . . . . . . . . . . . . . . . . . . 34 Table 5. Household Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Table 6. Wage Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Table 7. Business Types. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Table 8. Avenues of Impact Captured by LEWIE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Table 9. Local Income Impacts of an Additional Tourist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Table 10. Production Effects of One Additional Tourist. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Table 11. Estimated Impact of Tourism (US$). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Table 12. Peak Season Maximum Capacity Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Table 13. Estimated Impact of an Additional Fulltime Hire by Abrolhos Marine National Park. . . 41 Table 14. A 5 Percent Increase in Local Input Purchases by Businesses. . . . . . . . . . . . . . . . . . . . . 41 Table 15. Monthly Income Loss from No Tourism to Abrolhos Marine National Park. . . . . . . . . . . 42 Table 16. Monthly Production Loss from No Tourism to Abrolhos Marine National Park. . . . . . . . 42 Table 17. Monthly Income Loss from No Tourism to the Whale Coast. . . . . . . . . . . . . . . . . . . . . . . 43 Table 18. Monthly Production Loss from No Tourism to the Whale Coast. . . . . . . . . . . . . . . . . . . . 43 Table 20. Benefit Sharing Arrangements with Local Communities. . . . . . . . . . . . . . . . . . . . . . . . . . 51 Table A1. Crop Production and Inputs (Plot level) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Table A2. Crop use and sales (Household level) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Table A3. Livestock and Inputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Table A4. Fishing Summary Statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Table A5. Business Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Table A6. Business input purchases (monthly). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Boxes Box 1. Previous studies of the impacts of tourism in protected areas. . . . . . . . . . . . . . . . . . . . . 19 Box 2. Marine protected area-related terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Box 3. What Is the Local Economy?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Box 4. Building capacity while doing research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Box 5. Financing Beyond the Public Sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 8 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L List of figures, maps, boxes and tables Scuba diver in a tropical coral reef / Photo: blue-sea.cz ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 9 Executive Summary Brazil is the most megadiverse country in the lack of staff and operational infrastructure, poor world. It is home to one-third of the world’s decision-making capacity, and weak stakehold- tropical rainforests, 20 percent of the world’s er engagement and governance objectives. The freshwater, and has the world’s most biodiverse challenges facing coastal and marine conserva- terrestrial, freshwater and marine ecosystems. tion are pressing, as these areas also contribute These assets fall within an extensive system of to the country’s GDP; Brazil’s coastal zones are 3,201 terrestrial protected areas which cover home to 26.6 percent of its people, an esti- approximately 30 percent of the country’s land, mated 3.5 million of whom directly or indirectly and 158 marine protected areas covering 26.82 depend on coastal and inland fisheries, and percent of its oceans and 9,000 km coastline, aquaculture. which hosts 3,000 km of coral reefs and the lon- gest stretch of mangrove forest globally. Brazil For these reasons, there is much potential for thus exceeds its Aichi Target 11 of protecting 10 Brazil’s protected areas to improve their perfor- percent of its coastal and marine areas. mance, further contribute to development, and to maintain the country’s rich natural assets. Its On the World Economic Forum’s Travel and protected areas and biodiversity are equally a Tourism Competitiveness Index Brazil ranked major tourism asset in an industry which attracts second in the world on natural resources, and eight billion visitors a year to protected areas, its terrestrial and marine protected areas under- provides one-in-ten jobs globally, and contrib- pin an important travel and tourism economy. In utes up to 10 percent of global GDP. 2018, these sectors generated US$55.8 billion, or 3 percent of the country’s GDP, and in 2016, This unrealized potential mirrors that of many 16.8 million tourists visited 209 national and countries in which governments value protected state parks. areas in conservation strategies but overlook them in economic development plans. This However, tourists visit only a small number of oversight is of concern, as countries, globally, the parks in Brazil’s protected area network, struggle to contain unprecedented biodiversity E xe cu t iv e Su mma ry and federal and state parks are substantially losses while trying to address development set- underfunded. Indeed, to maintain protected backs inflicted by COVID-19. In Brazil, between areas in Brazil would require budget increases March and November 2020, the tourism sector of R$ 540 million for federal protected areas, lost approximately R$ 228 billion and shed near- and R$ 360 million for state parks. Estimated ly 500,000 formal jobs, affecting 13.5 percent of investment costs to consolidate state and the country’s workforce. Awareness is growing federal protected areas are R$ 1.2 billion and that these two challenges – precipitous declines R$ 610 million, respectively. Together, such in global biodiversity, and the imperative for shortfalls severely constrain protected area a green recovery from the pandemic – must managers from meeting conservation objec- be addressed as one: neither problem can be tives, and leave conservation areas vulnerable. solved without solving the other. Brazil’s Marine Protected Areas, in particular, face multiple challenges. In addition to environ- Additionally, these challenges must be met in mental degradation, other challenges include the vast and often isolated rural regions in which poor management and institutional coordination, many of Brazil’s protected areas are found. 10 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L Through the economic benefits it generates, Despite this context, however, governments protected area tourism is often one of the few often lack evidence for the economic impacts means through which governments can support of protected area tourism on local and national livelihoods, stimulate economic development, economies, and fail to see the development and cultivate local community support for gains which result from public funding of conservation. In this context, the importance of protected areas. Thus, the objective of this protected area tourism cannot be overstated, study is to make the economic case for public because of its potential to address losses to investment in protected areas by estimating economies, promote development, and support tourism’s direct and indirect benefits to local biodiversity conservation. economies around protected areas in Brazil. How was the study done? The study site is the Abrolhos Marine National locations of transactions (i.e., whether inside Park, which was established in 1983, covers or outside the local economy). These data over 91,000 hectares, and is roughly 67 kilome- were used to quantify and trace the economic ters off the southern coast of Bahia State, with pathways through which protected area tourism its populated coastline, the Costa das Baleias (or stimulates local economies. A general equi- Whale Coast). The region hosts major townships librium model for local economy-wide impact south of and including the city of Prado, namely evaluation (LEWIE) was used to describe direct Alcobaça, Caravelas and Teixeira de Freitas. and indirect impacts of tourism by integrating The Park includes the five volcanic islands in the models of actors (businesses and households) Abrolhos Archipelago, the largest whale nursery within a local economy, based on the survey in the South Atlantic Ocean. data. Direct impacts refer to monies spent directly by tourists in protected areas; indirect The tourism driven by the park requires hotels, impacts describe the knock-on effects of this guesthouses, and tourist businesses along the spending, via production linkages which grow coast, and data were gathered, over a single to support expanding tourism markets, and con- season, through surveys of tourists, lodges sumption linkages, through which wages and and resorts, local businesses, and local house- profits trigger fresh rounds of spending which holds. The surveys gathered information on ripple through local economies (Figure ES-1). production, income, and expenditures, and the What did the study find The study affirms that investment in protected spending at local retail stores, and on local areas pays off, and is good for biodiversity services and transport. The study estimates Ex ecu tiv e Su mma ry conservation and the development of the local that a Real spent by visitors at Abrolhos raises economy. The study found that the economic the income of households around the park by return per Real of government spending in 1.74 Reais, a multiplier that is positive, and large, protected areas is significantly greater than 1: and reflects the penetration of tourist spending economic returns of 6.2 Reais per Real of gov- into local economies, creating new income in ernment spending are estimated for Abrolhos communities around the park. This multiplier Marine National Park. Findings also show that benefits households directly involved in the spending by tourists visiting Abrolhos Marine tourism sector and those not, and both poor National Park and the Whale Coast generates and non-poor households, and is striking, given significant income multipliers for households in that hotels and other tourism businesses in the the local economy (Figure ES-2). region purchase many of their inputs outside the local economy. The multiplier is defined as the change in local household incomes per Real of tourist ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 11 figure es-1. Economic Impact Pathways of Protected Area Tourism Environmental Impact PARK AUTHORITY, Businesses pay GOVERNMENT taxes and fees b a Pay taxes and fees a Daily Fee b Guides, workers, revenue sharing Protected Areas a Natural Parks a Purchase goods Spend money on and services lodging, tourist TOURISM, HOUSEHOLDS LODGES AND OU activities G N BUSINESSES RIST S VISITI T Purchase food, a b,c goods and local Local incomes businesses increase; b Source goods households spend and services their income to source goods LOCAL FARMS AND BUSINESSES a Trade with outside/ non-local markets Direct Impact Legend of Pathways of Influence a. Direct impacts Indirect impact through b. Production linkages production linkages c. Income and consumption linkages figure es-2. Real-income multipliers for an additional Real or US$ of tourist spending E xe cu t iv e Su mma ry 1,200,000 80 70 1,000,000 60 Cumulative number of MPAs 800,000 50 Km2 600,000 40 30 400,000 20 200,000 10 0 0 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 20 20 20 19 19 20 20 20 19 19 19 20 19 19 19 19 19 19 20 20 20 12 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L Figure ES-3. Distribution of Multiplier Across Poor and Non-Poor Tourism also generates a significant number of Populations jobs, directly and indirectly. The study estimates that tourism to the Abrolhos Marine National 44% Non-poor Park adds 300 jobs to the local economy, while tourism to the Whale Coast as a whole supports 46,800 jobs, employing approximately 12.1 per- cent of the local population. The study also flags losses inflicted on the sector by the COVID-19 pandemic i.e., shocks which produce negative income multipliers in 56% local economies in the same way that tourism Poor produces positive multiplier effects. In Brazil, the pandemic has caused substantial losses in tourism, including a shutdown of Abrolhos Marine National Park. Tourism losses linked to Park closure in an average month reduced local Figure ES-3 shows how income from tourist real income by R$ 2.75 million (US$0.70 million) spending benefits poor and non-poor house- – local poor households lose R$ 0.47 million holds in the local economy. Most benefits (US$0.12 million) and local non-poor households accrue to non-poor households which are better lose R$ 2.28 million (US$0.58 million); regionally, placed to increase production in response to our simulations show that a complete loss of growing demand generated through tourism. tourist revenue along the Whale Coast reduces For each Real spent by a tourist in the local real income (GDP) by R$ 247.5 million (US$62.7 economy, an additional R$ 1.44 of income is million), with each month without tourism reduc- generated for non-poor households, while poor ing the income of local poor households by R$ households receive R$ 0.30. 73.3 million (US$18.6 million) and local non-poor households by R$ 357.1 million (US$90.4 million). However, despite the large portion of the All production activities suffer, with sales losses multiplier going to non-poor households, the ranging from R$ 13.0 million (US$3.3 million) in economic contribution to local communities fishing to R$ 239.6 million (US$60.7 million) in appears to benefit poor residents more than retail businesses. These impacts indicate the non-poor residents, and normalizing multiplier support which protected areas will need to shares by these populations, as shown in figure recover from these losses, and to realise their ES-3, shows that the multiplier share per resident potential to assist a green economic recovery. is higher for poor residents than for non-poor. Ex ecu tiv e Su mma ry A man holds fish he caught. Credit: Carlos Eduardo Young ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 13 What lessons can policy makers draw from the study? Protected areas visited by tourists protect bio- services/concessions program will be need- diversity, develop local economies, and provide ed to develop new sites, attract tourists, and jobs for poor and non-poor households, and for generate revenue, and Brazil needs to build on those directly involved in the tourism sector, and the promising start made by ICMBio, the Semia those not. While roughly 30 percent of its land Institute BNDES and other partners. and 27 percent of its marine and coastal areas are protected, tourists visit a small number of 3. SHARE BENEFITS WITH LOCAL COMMUNITIES protected area sites overall, and there is thus Development of local communities around great potential for Brazil to grow and diversify its protected areas is a goal in-and-of itself, but tourism sector. However, the primary need is to at present Brazil has no formal mechanisms fund, secure, and manage protected areas and to share protected area benefits with these to share the benefits described in this report communities, and such mechanisms should be with local communities. These approaches – put in place, and informed by international best grow the tourism sector, secure conservation practices. Benefit sharing advances develop- assets, and share benefits – form the three ment goals and incentivizes local communities pillars of a strategy to jointly address biodiversi- to resist encroachment, poaching, and other ty loss, development challenges, and a green, activities which degrade protected areas. Thus, post-COVID recovery, and as the most mega-di- benefit sharing which is equitable, transpar- verse country in the world, Brazil is well-placed ent, and sustainable is critical to biodiversity to pursue this development path. conservation. While the income multiplier for local households at Abrolhos is significant, 1. PROTECT THE NATURAL ASSET BASE Governments can enhance the impacts of To promote biodiversity conservation and protected area tourism through their policies secure the natural assets which attract visitors, and programs to further benefit local econo- it is critical that protected areas be conserved, mies; these opportunities, such as strengthening restored to reverse degradation, and well-man- linkages between tourism value chains and aged. To address the poor performance of stakeholders in the local economy, upskilling Brazil’s protected areas, the report identifies the women, and supporting local producers need to following actions: increase public investment in be explored. protected area management and use emerg- ing, conservation-specific financial instruments; In conclusion, and in the wake of the COVID-19 consolidate the expanding Marine Protected pandemic, Brazil needs to address losses to Area system through improved connectivity and its protected area tourism sector in order to integration; build capacity of protected area regain regional and park-specific benefits, and managers; engage broadly with stakeholders; to secure the conservation status of its signif- regularly assess the effects of tourist spending icant natural assets. To do this, Brazil should at the National level. champion sustainable and inclusive tourism in protected areas. It should increase public 2. DIVERSIFY AND GROW THE TOURISM SECTOR and private investment in protected areas Brazil’s tourism sector needs to expand beyond on a growing evidential basis for attractive E xe cu t iv e Su mma ry the small number of parks currently visited by and far-reaching returns which support both tourists, and this will require policies, programs, conservation and sustainable, green/blue and investments that transcend protected areas development strategies. Finally, in response to to address broader challenges faced by the a pandemic which has caused development set- tourism sector. Brazil’s protected areas need backs, Brazil’s protected area tourism and Blue to be assessed, and ranked by their tourism Economy sectors should enact mechanisms to potential to select priority sites for develop- distribute its benefits fairly in the face of poverty ment and diversification. A strong commercial and losses incurred by local communities. 14 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L 1 Introduction In tro d uc tio n Aerial image of Rio do Fogo. Natal, Rio Grande do Norte / Image: Bernardo Emanuelle / Photo: XXX ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 15 Brazil is the most megadiverse country in the stretch, of the world’s mangroves, which are world (Butler, 2019; CBD, n.d.). It is home to important nursery sites, biological filters, and one-third of the world’s tropical rainforests, carbon sinks (Abreu, 2015). Coastal and marine 20 percent of the world’s freshwater supply, ecosystems are also important for flood preven- and has the world’s most biodiverse terrestrial, tion, storm protection, and recycling of nutrients freshwater and marine ecosystems (Forzza et and polluting substances (Prates et al., 2012). al., 2012) 989 species; 18,932 endemic. It has an extensive system of protected areas to preserve Coastal and marine areas also contribute to the this biodiversity – 3,201 terrestrial protected country’s GDP. The coastal zones are home to areas covering 30.28 percent (2,582,478 km2) 50.7 million inhabitants, or 26.6 percent of the of its land area and 158 marine protected areas national population (IBGE, 2013).2 Moreover, an which cover 26.82 percent (985,042 km2) of estimated 3.5 million people directly or indi- marine and coastal areas (UNEP-WCMC, 2020); rectly depend on coastal and inland fisheries see Map 1. Brazil thus exceeds its Aichi Target and aquaculture (FAO, 2019). Marine fisheries 11 of protecting 10 percent of its coastal and were responsible for 39% of total catch in 2016 marine areas1. (1.02 million tons), almost the same mass as inland aquaculture (1.01 million tons) (Pereira et Brazil’s extensive coastline (~9,000 km) provides al., 2018). Brazil’s economically important travel a wide range of ecological services. It provides and tourism sector similarly depends on marine habitat for an immense variety of wildlife, includ- and terrestrial protected areas. In 2018, Brazil’s ing endemic species, and has 3,000 km of coral travel and tourism sector generated US$55.8 reefs and 12 percent, the longest continuous billion, or 3 percent of the country’s GDP. On Map 1. Brazil’s Protected Area Network In t ro du c tio n 1 In 2018, with the support of the Protected Marine and Coastal Areas (GEF Mar) project, four new federal conservation units (UCs) were created, increasing marine protected area coverage from 1.5 percent to 26.3 percent. GEF Mar is a project co- ordinated by the Brazilian Ministry of the Environment, financed by GEF through the World Bank with FUNBIO as its financial manager. 2 Most of the Portuguese settlements were established along the coasts, where they established sugar cane and other plan- tations. This region also received the majority of Africans forced into slavery, and the interaction between European, African, and native American populations resulted in an extremely rich and diverse culture along the coast. Key Indicators Sources: World Tourism Organization (UNWTO) and World Travel and Tourism Council (WTTC) International tourist arrivals 6,588,800 T&T industry Share of GDP % GDP 3.0 16 THEtourism International ASSESSING ECONOMIinbound receipts C IMPAC US T OF PROTE C$5,809.2 TED AREA million TOURISMT&T ONindustry LO CA L employment E CONOMIES IN BRA Z I L 2,442,800 jobs % of total 2.7% Average receipts per arrival US $881.7 T&T industry Share of Employment % total employment 2.7 T&T industry GDP US $55,845.5 million % of total 3.0% Figure 1. Brazil Travel & Tourism Competitive Index Score, World Economic Forum (2019) Performance Overview Key Score International Openness Price competitiveness 3.0 5.4 89th 72nd Prioritization of Travel & Tourism Environmental sustainability 4.0 4.3 106th 67th ICT readiness Air transport infrastructure 4.8 3.7 66th 42nd Human resources Ground & port & labour market infrastructure 4.3 2.4 88th 114th Tourist service Health & hygiene infrastructure 5.4 4.5 69th 59th Safety & Natural security resources 4.3 5.8 4.5 124th 2nd Cultural Business resources & environment business travel 3.7 127th Overall Score 9th 5.4 7 6 5 4 3 2 1 Score 1-7 (best) 1 2 3 4 5 6 7 Past performance the World Economic Forum’s Travel and Tourism waters through the release of untreated sewage Competitiveness Index (see Figure 1), Brazil (it is estimated that only 14 to 46 percent of the Travel & Tourism Competitiveness Edition 2015 2017 2019 ranked second in the world (behind Mexico) sewage generated is treated) and solid waste. Rank 28 / on on natural resources and ninth in the world 141 27 / 136 These anthropogenic 32 / 140 pressures are compound- cultural resources, a testament to Brazil’s natural ed by the impacts of climate change. Score 4.4 4.5 4.5 and cultural assets (World Economic Forum, 2019).3 Rodrigues et al. (2018) estimated that in In addition, overfishing, unsustainable fishing 2016, 16.8 million tourists visited 209 National practices, and lack of fisheries management (Federal), State Parks, and other types of con- are reducing fish stocks and jeopardizing local servation units.4 livelihoods that are dependent on the fisheries sector (Brazil, Ministry of the Environment, 2015). There are many challenges to the sustainability It is estimated that 2.87 percent of fisheries of marine and coastal resource use in Brazil. in Brazil are at very high risk, 22.6 percent at Loss of habitat due to the lack of regulations high risk and 74.5 percent at moderate risk for the use of natural resources, conversion of (Pauly & Zeller, 2017) e.g., China, Myanmar. Also, natural areas for aquaculture and coastal de- concerns are raised as to why FAO chose to velopment, and deterioration of aquatic habitat ignore the well-documented data ‘reconstruc- quality mainly due to the damming of rivers5 are tion’ process, which fills the gaps that exist in putting pressure on the fragile marine envi- data reported by countries to FAO. It is being ronment (Tedesco et al., 2017). Pollution from ignored despite its importance for governance aquaculture, particularly the growing shrimp and resource conservation being well known. In tro d uc tio n farming industry, likewise threatens mangrove This process and its findings could be used by ecosystems and their associated biodiversity. FAO to encourage countries to improve their Other pressures affecting Brazil’s Exclusive data reporting, including retroactive corrections. Economic Zone (EEZ) include unsustainable This is important in view of successive analyses maritime port activities (e.g., unsustainable of the status of fisheries resources undertaken ballast discharge) and contamination of marine by FAO (published in current and past SOFIAs. 3 Over 6.3 million international tourists visited Brazil in 2019. Brazil’s domestic tourism, however, is more important economical- ly than international tourism, accounting for an estimated 90 percent of total tourism spending (Lopez, 2020). 4 Rodrigues et al. (2018) highlight that there are 784 Federal and State protected areas not included in the “Parks” category. Therefore, they considered that their study analyzed only 9 percent of Federal and State protected areas in Brazil (Castro, Correa, Costa, Costa, Medeiros & Young. n.d.). 5 Brazil’s energy sector is heavily dependent on hydroelectricity produced by some 1,127 small and large-scale hydroelectric power plants spread throughout the national territory (Brazil, Ministry of the Environment, 2015) ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 17 Figure 2. Legal Establishment of Marine Protected Areas in Brazil As in other parts of the world, marine and coastal protected areas in Brazil are essential 1,200,000 80 to conserve biodiversity and maintain critical 70 ecosystem services, and to generate jobs and 1,000,000 improve livelihoods of many traditional and local 60 Cumulative number of MPAs communities. The first Brazilian marine protected 800,000 50 area, the Atol das Rocas Biological Reserve, was established in 1979. While the number of these Km2 600,000 40 areas has steadily increased (see Figure 2), the 30 increase in marine area under protection was 400,000 20 modest until 2018, when four large offshore pro- 200,000 tected areas were declared (Mills et al., 2020). 10 0 0 An assessment of federal protected areas found that about 30 percent of these areas had 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 20 20 20 19 19 20 20 20 19 19 19 20 19 19 19 19 19 19 20 20 20 low management effectiveness due to poor inter-institutional coordination of coastal and Source: Mills et al. 2020 ocean governance, poor management of marine protected areas, including lack of staff and One hundred fish species are at risk of extinc- resources (operational infrastructure support), tion because of targeted fishing and by-catch lack of capacity to effectively implement deci- related losses (Maretti et al., 2019) Brazil has sions, and weak participatory decision making advanced significantly with the expansion and and planning due to the erosion of stakehold- improvement of its national system of protected er engagement (Gerhardinger et al., 2011). areas. Until recently most of the expansion was Additionally, only 40 percent of marine protect- concentrated in the Amazon region (with useful ed areas have management plans, and of these, lessons. none have monitoring programs linked to their ecological, social or governance objectives COVID-19 has impacted the tourism sector in (Mills et al. 2020). Also, marine protected areas Brazil, with reported losses of R$ 228 billion be- are based on species data and do not take tween March and October 2020, during which account of other facets of biodiversity, such as time the sector generated only 29 percent of its habitat/community diversity, ecosystem services monthly revenue. Employment data show that (Fonseca & Venticinque, 2018). between March and September 2020 almost five hundred thousand formal jobs were lost in Insufficient and varying funding for protected the sector - equivalent to 13.5 percent of the area management is yet another challenge. workforce (CNC, 2020). Beyond the economic ICMBio provides the majority of protected area losses, it has been reported that capacity to system financing (SEMEIA, 2014). Adequately monitor illegal fishing during the lockdowns has maintaining federal protected areas in Brazil also been reduced, causing a surge in illegal would require a budget increase of R$ 540 fishing (Campos Lima, 2020). million (US$136.7 million);6 at the state level the financial shortfall was R$ 360 million (US$91.1 In 2018, the Government created the Brazilian million) (OECD, 2015). In addition, an estimated Blue Initiative (‘Iniciativa Azul do Brasil’), a R$ 610 million (US$ 154.4 million) in investment strategic framework for sustainable develop- would be needed to adequately consolidate In t ro du c tio n ment and conservation of marine and coastal federal protected areas (e.g. to put in place the resources expressed through national and necessary infrastructure), along with some R$ international commitments, goals, and targets. 1.2 billion (US$303.8 million) for state protect- The strategy was initiated through two projects ed areas (OECD, 2015). Figure 3 below shows – the Brazilian Mangroves Project (GEF Mangue) the investments made by Brazil to maintain its and the Brazilian Coastal and Marine Protected protected area network compared to oth- Areas project (GEF MAR) with components to er countries. The lack of financial resources develop sustainable financing mechanisms for heavily constrains protected area managers protected areas. from meeting conservation objectives and from hiring staff (Chiaravalloti et al., 2015). The Marine 6 Throughout this report, US$1 = 3.95 Real (R$; 2019 average). 18 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L Figure 3. Comparison of investment per hectare of protected areas across countries, 2010 (R$) 180 160 140 120 R$ invested 100 80 60 40 20 0 il ina a o da a ca nd es az Ric ali xic tat fri na ala nt Br str Me hA sta dS ge Ca Ze Au ut Ar Co ite w So Ne Un Source: Medeiros et al., 2011 Fund, created under GEF MAR, and established income generation, lifting households out of to promote long-term financial sustainability for poverty and providing them with incentives to marine and coastal protected areas, is the first support conservation. US Parks are estimated to of its kind in Brazil, and will partly address the support 329,000 jobs in gateway communities, funding gap. and Parks Canada 40,469 jobs. Governments all over the world face competing Governments often lack evidence for the demands over limited public finances, and often economic impacts of protected area tourism on do not prioritize investments in marine protect- local and national economies, and therefore fail ed areas, in part because these investments to see the development gains which result from are seen to generate conservation benefits but public funding of protected areas. The objec- not to further development goals. But marine tive of this study is to make the economic protected areas can provide development case for public investment in protected areas opportunities and generate returns on public by estimating tourism’s direct and indirect investments which far exceed the amounts that benefits to local economies around protected governments spend. In the United States, in areas in Brazil. Direct benefits include the mon- 2017, an annual investment of US$3 billion of ey tourists spend at lodges and other tourism public resources in the National Parks System businesses, and indirect benefits include the resulted in a contribution to GDP of US$23.4 money spent by these tourism businesses and billion through visitor spending. Similarly, Parks those employed in the tourism sector. These Canada, in 2018, generated a contribution estimates of economic impacts can strengthen to GDP of US$3.1 billion and tax revenues of the economic case for public investment in almost US$0.4 billion for a public investment protected areas, much like public investments in In tro d uc tio n of approximately US$1 billion. In the Galapagos roads and other infrastructure and assets. The Islands, tourism generated US$62.9 million study also estimates benefits to local commu- to income on the island and US$113.9 million nities from poor and non-poor households in in mainland Ecuador (Taylor et al., 2003). The order to understand how protected area tourism Great Barrier Reef in Australia contributes may provide incentives to communities to US$6.4 billion to the Australian Economy support conservation, and how protected areas and provides 64,000 jobs (Deloitte Access can improve household incomes. Moreover, this Economics, 2017). Moreover, investments in pro- study builds on two previous studies which have tected areas can generate significant benefits estimated the economic impacts of protected for local economies through job creation and areas in Brazil (see Box 1). ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 19 Box 1. Previous studies of the impacts of tourism in protected areas There are two notable studies: Beraldo Souza et al. (2019) and Young & Alvarenga Junior (2017). Beraldo Souza et al. (2019) estimated that tourism around federal protected areas in Brazil generated more than US$1.3 billion in total sales, US$342 million in personal income, US$473 million in value added to the GDP, and created 43,602 jobs nationally. The authors estimated that a dollar invested in the terrestrial protected area system produced US$7 in economic benefits. The methodology employed by the authors was based on the Money Generation Model 2 (previously used by the US NPS), and used an assumed value for the income multiplier, and not an estimated value. Moreover, the study used a higher value for the multiplier than those used in previous studies. Young & Alvarenga Junior (2017) estimated the economic impacts of a concession held by Cataratas do Iguaçu in the Iguaçu National Park. They found that the concession supported output valued at between R$ 40.1 and R$ 46.3 million per year, most of which was retained locally -- 69% in municipalities surrounding the Park, and 77% in the State of Paraná. The amount of taxes collected was estimated between R$ 17.8 and $ 19.0 million per year. In addition, the company transferred R$ 14.3 million to ICMBio for granting the concession, corresponding to 25% of the revenues received in 2015 for visitation in Federal protect- ed areas. The activities of other concessioners were not considered, nor were tourism’s effects on other sectors of the economy such as hotel, food, transportation, and other services to tourists. Therefore, the figures in the study considerably underestimate the economic effects of tourism in the park. In t ro du c tio n People diving in a natural pool on the beach of Taipu de Fora, in Barra Grande district, Marau / Image: Joa Souza 20 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L 2 Background Backg ro u n d A beach in Brazil. Credit: Carlos Eduardo Young ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 21 2.1 policy and institutional context The government of Brazil has established complemented by ‘other effective area-based policies on coastal and marine management conservation measures’ such as indigenous to tackle the rising concerns of environmental lands (referred to as latu sensu protected areas) degradation and the economic relevance of and quilombola7 territories under the Law for the marine resources. The first of these was Law N. Protection of Native Vegetation (Forest Code 6,938/1981 or the National Environmental Policy Law 12.651/2012). (PNMA) to preserve and restore environmen- tal quality. This law established the National The National Commission on Biodiversity Environmental System (SISNAMA), composed of (CONABIO), in line with CBD targets, has ap- federal, state, and municipal organizations re- proved the national goal of 10 percent of marine sponsible for the protection and improvement of and coastal zones in protected areas under environmental quality. The Federal Constitution, any category, of which at least one percent is enacted in 1988, conferred on the Coastal Zone required to be under strict biological protec- the status of “National Heritage”; thus, the use of tion status and/or no-fishing zones (CONABIO coastal areas, including natural resources, must Resolution 3 of 2006). While there are 12 preserve the environment (Abreu, 2015). categories of protected areas in the national system, that vary based on primary objectives In 2000, the Government of Brazil passed (e.g. sustainable use or strict conservation) Law Nº. 9,985/2000 (SNUC Law) regulated by and governance structure or management Decree Nº. 4,340/2002, which established a regimes, they can be divided into two broad National System of Protected Areas (SNUC), or groups: (i) “Strict Protection” (i.e. no-take), in National System of Conservation Units. SNUC which only specific non-extractive activities are integrates protected areas established by allowed (e.g. National Parks, Biological Reserves federal, state, and municipal governments, and and Ecological stations) and (ii) “Sustainable those proposed by private stakeholders into Resource Use” in which some extractive activi- one national system. Federal and state protect- ties are allowed and regulated, as long as they ed areas account for 76 percent of the total area maintain conservation and cultural objectives. under protection (UNEP-WCMC, 2020). SNUC is Extractive Reserves that serve local needs while conserving biodiversity fall into the sustainable use group, as do environmental protection Box 2. Marine protected area-related terms areas, national and state municipal forests, sus- Marine Protected Area (MPA) - any area of intertidal or subtidal terrain, tainable development reserves, fauna reserves, together with its overlying water and associated flora, fauna, historical and private natural heritage reserves, among others. cultural features, which has been reserved by law or other effective means to Pereira et al. (2018) estimated the output of protect part or all of the enclosed environment (IUCN, 1999). artisanal fishing from Brazilian “Marine Extractive Exclusive Economic Zone (EEZ) is an area of the sea in which a sovereign Reserves” (MERs) to be between 14,015 and state has special rights to use and explore marine resources, including ener- 34,006 tons/year, producing an annual income of gy production from water and wind (prescribed by the 1982 United Nations Convention on the Law of the Sea). Brazil’s EEZ includes areas around the between R$ 37.1 – 86.6 million. Most of the pro- Fernando de Noronha Islands, Saint Peter and Saint Paul Archipelago, and tected areas lie in the sustainable use category. the Trindade and Martim Vaz Islands. It is called the “Blue Amazon”. Extractive Reserves (ERs) are a category of protected areas that explicitly The Government agencies which create and aims to safeguard the livelihoods and cultures of traditional populations, and maintain federal protected areas are the Ministry B ac kgrou n d to conserve natural resources and biodiversity. Marine Extractive Reserves of Environment (MMA) and its executive agency, (MERs) are government-supported efforts to protect the common property the Chico Mendes Institute for Biodiversity resources upon which traditional small-scale fishers depend. MERs allow traditional extractive practices by local communities, such as artisanal fishing. Conservation (ICMBio). These agencies have state and municipal counterparts responsible for No-Take Marine Protected Areas – areas in which fishing and mining are prohibited. state and municipal protected areas. In addi- tion, these arms of government work with the Brazilian National System of Protected Areas - The legal framework for pro- tected areas in Brazil created in 2000 with the establishment of the National Brazilian Navy to protect and sustainably man- System of Protected Areas (SNUC) by Law No. 9985/2000. age Brazil’s EEZ. Civil society and NGOs play a complementary role to establish and manage 7 A quilombola is an Afro-Brazilian resident of quilombo settlements first established by escaped slaves in Brazil. They are the descendants of Afro-Brazilian slaves who escaped from slave plantations that existed in Brazil until abolition in 1888. 22 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L protected areas and support local communities ICMBio is developing public-private tourism living around them. The SNUC Law requires that partnerships in protected areas. Currently, there decisions regarding protected areas are over- are 11 major concession contracts, 5 of which seen by management committees composed are at Iguacu. Franchise fees to the government of government officials, civil society, and the were R$ 15.9M in 2019 (based on 11 contracts). private sector. The SNUC Law requires that 25-50 percent of concession revenues come back to the budget The SNUC Law requires all parks to have spe- of the protected area used by the concessioner; cific master management plans which outlines however, these franchise fees go directly into possible uses or activities for different park the National Treasury, and are only returned areas (pristine, extensive use, intensive use, through appropriations. recovery). These plans are used to determine which commercial activities (for example, food Similarly, legislation (Law 9985/2000, Art. 35.) and beverage, extreme sports, ecotourism) are on the use of park visitor fees includes using allowed in specific areas. benefits toward land tenure regularization of conservation areas but does not establish formal The SNUC Law does not regulate commercial rules for sharing park fees and concession rev- activities in parks, however. Nor does it provide enues with communities adjacent to protected for concessioning, other than to invoke separate zones. However, there are other mechanisms to statutes i.e. the general concession law (Law benefit local populations. The most important is 8,987) used for all sectors of government and the Ecological ICMS (imposto sobre circulação the economy, and Law 13,668, which authorizes de mercadorias e serviços), a tax redistribution the use of this law in protected areas. The three system in some states which increases transfers most common levels of contracts permitted un- to municipal governments with protected areas der the law are: (i) Concessions: used for large, in their territory or other environmental perfor- complex projects with multiple services in one mance criteria. Castro et al. (2019) and Young park, and which can authorize concessions; (ii) & Medeiros (2018) show that municipal govern- Permissions: used for smaller projects, typically ments tend to react positively to Ecological ICMS a single service, under which structures may legislation by expanding protected areas and be assigned to a concessioner, who may be the budgets allocated to environmental manage- expected to maintain them, but no construction ment. This, however, does not establish a direct is authorized; and (iii) Authorizations – a simple mechanism for communities to benefit from permit to operate a service such as guiding, tourism in protected areas. catering or transportation. Additional contract regimes include partnerships with not-for-profit The number of visitors to Brazilian protect- organizations (Law 13.019/2014) and concessions ed areas was steadily increasing before the exclusively based on government payments COVID-19 pandemic. Between 2012 and 2018, (Law 11.079/2004). Concession tenders are ICMBio recorded significant increases in visitors prepared by ICMBio but selection (evalua- to Federal protected areas (Figure 4). tion and award) is conducted by the Brazilian Procurement Authority and contracts are man- aged by ICMBio. 2.2 Study Site Backg ro u n d The study site is the Abrolhos Marine National Abrolhos Marine National Park covers over Park, and its populated coastline which runs 91,000 hectares and is located roughly 67 along the southern tip of the Brazilian state kilometers off the southern coast of Bahia State. of Bahia, known as the Costa das Baleias (or It was established in 1983 and covers the five Whale Coast). This region includes major town- volcanic islands in the Abrolhos Archipelago. ships south of and including the city of Prado, The park is part of the Abrolhos reef complex, namely Alcobaça, Caravelas and Teixeira de the largest known reef in the South Atlantic Freitas (see Map 2). (RAMSAR, 2012). The largest of the five islands, Santa Barbara Island, is outside the confines of the park and used as a military facility. The ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 23 other islands in the archipelago are uninhabited. rich diversity of marine species and provides im- Presently, only one of the five islands, Siriba, portant nurseries for endangered species such is open to visitors, and can only be reached as the humpback whale and green sea turtles. by boats, which are mainly launched from the The Abrolhos archipelago is the largest whale township of Caravelas. The Park is home to a nursery in the South Atlantic (Agencia EFE, Figure 4. Visitors to Federal Protected Areas (Millions), 2012–2018 14 12 Number of Visitors (Millions) 10 8 6 12,4 10,7 4 7,3 8,1 8,3 5,7 6,4 2 0 2012 2013 2014 2015 2016 2017 2018 Source: ICMBio (2019) Map 2. Abrolhos Marine National Park and surrounding towns that are a part of the local economy B ac kgrou n d 24 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L for infrastructure, burgeoning “summer houses”, Box 3. What Is the Local Economy? and oil extraction. For any local economy impact evaluation, one of the first questions to ask is “What is the local economy?” A local economy could be a village, a collection Regional tourism, a fraction of which can be of villages, a town, region, or even a country. The wider the geographic net, attributed to the presence of Abrolhos Marine the more economic activity and economic benefits will likely be captured, and how the “local economy” is defined depends on the goals of the study. National Park, fuels hotels, guesthouses, and To be effective, conservation policies that create marine protected areas rely tourist businesses along the coast. These, in on neighboring communities to act as stewards of biodiversity, and these turn, provide employment for the local com- communities need to benefit—including economically—from preserving wild- munity. Market linkages transmit the economic life and fisheries. For our study, the local economy is composed of Costa das impacts of tourism through the coastal economy, Baleias (or Whale Coast), which includes the city of Prado and the townships of Alcobaça, Caravelas and Teixeira de Freitas. creating local income multipliers while stimu- lating trade with other parts of the region and country. The local economic impacts of inter- national and domestic visitors to the southern 2018). The park is perhaps best known for its region of Bahia are captured through both direct unique mushroom-shaped corals, which rise up- and the indirect economic linkages. wards of six meters off the sea floor and balloon into a 50-meter diameter cap. The Archipelago This study focuses on the impacts of tourism harbors what may be the highest known marine around a single site in Brazil during a single biodiversity in the south Atlantic, and are a season, and is not generalizable to all protect- refuge which maintains healthy fish stocks in ed areas. Caution should be taken in applying nearby waters. In addition to providing a refuge recommendations from this study to other parks for a wide variety of species, the marine area and protected areas; and differences, for exam- supports the livelihoods of an estimated 20,000 ple, in domestic and international tourist levels, fisherfolk whose main source of income is from infrastructure, accessibility, natural capital, and small-scale fishing. type of IUCN protection category should be considered. However, the study uses a meth- At the same time, with a large population of odology to assess the economic impact of commercially valuable fish in the surrounding protected areas on the local economy, and this waters, overfishing by local and commercial approach may be replicated in other protected fisherfolk has become an issue. The coastal re- areas, and eventually the country. gion is also under threat from civil construction Backg ro u n d Fishing boats on the Caravelas River in the city of Caravelas, south of Bahiaa / Photo: Joa Souza ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 25 2.3 Government Expenditures Table 1 below summarizes Government of Brazil costs, followed by ~20 percent, or US$114,027 expenditures for 2019 on Abrolhos Marine on administration and transportation. The total National Park. Over 60 percent of expenditures expenditures (wage and non-wage) for 2019 or US$164,075 went to salaries and staff were R$ 1,822,420 (US$461,372). Table 1. Government of Brazil expenditures on Abrolhos Marine National Park in 2019 No. of Annual costs Annual costs Classification workers (R$) (US$) 1. Staff Costs (wages) Outsourced Employees Hostess 6 327,937.32 83,022.11 Wage Ship Commander 2 163,216.32 41,320.59 Wage Deck Manager 1 42,361.92 10,724.54 Wage Watchmen 8 80,783.28 20,451.46 Wage General Helper 1 33,796.44 8,556.06 Wage Subtotal 18 648,095.28 164,074.75 Employees Government Employees 3 480,000.00 121,518.99 Wage Researchers (GER-MAR Program) 24 84,000.00 21,265.82 Wage Subtotal 27 564,000.00 142,784.81 2. Administration costs (non-wages) Electricity 25,217.05 6,384.06 Non-Wage Water treatment 20,034.61 5,072.05 Non-Wage Water and Gas 21,272.16 5,385.36 Non-Wage Phone Service 237.27 60.07 Non-Wage Transportation 383,649.13 97,126.36 Non-Wage Subtotal 450,410.22 114,027.90 3. Equipment and Materials (non-wages) Office Supplies 11,813.01 2,990.64 Non-Wage Subtotal 11,813.01 2,990.64 4. Environmental / management Programs (wages and non-wages) GEF-MAR Program Legal Staff Services (maintenance, advertising material, 26,672.80 6,752.61 Non-Wage transportation, uniform) Nature Staff Services: Maintenance, residential painter, 58,658.20 14,850.18 Non-Wage archivist, cook, watchmen, performer) Materials and Equipment (construction material, PPE, car 23,739.95 6,010.11 Non-Wage B ac kgrou n d equipment) Meal-Tickets (market) 22,680.98 5,742.02 Wage Meal-Tickets (restaurant) 4,350.00 1,101.27 Wage Fuel-Tickets 12,000.00 3,037.97 Wage Subtotal 148,101.93 37,494.16 Total Wage Expenditures 1,251,126.26 316,740.83 Total Non-Wage Expenditures 571,294.18 144,631.44 Total Expenditures 1,822,420.44 461,372.26 26 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L 3 Methodology Me th od o lo gy A tourist takes photos of a whale’s tail on Garopaba beach, Santa Catarina. Photo: A. M. Teixeira ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 27 3.1 Avenues for Economic Impacts of Protected Areas Tourism in protected areas can impact local production linkages (shown by arrows b in economies through direct (shown by arrows a Figure 5) and income and consumption linkages in Figure 5) and indirect channels. Indirect chan- (shown by arrows c in Figure 5). nels can, in turn, be broadly classified into: Figure 5. Economic pathways Environmental Impact PARK AUTHORITY, Businesses pay GOVERNMENT taxes and fees b a Pay taxes and fees a Daily Fee b Guides, workers, revenue sharing Protected Areas a Natural Parks a Purchase goods Spend money on and services lodging, tourist TOURISM, HOUSEHOLDS LODGES AND OU activities G N BUSINESSES RIST S VISITI T Purchase food, a b,c goods and local Local incomes businesses increase; b Source goods households spend and services their income to source goods LOCAL FARMS AND BUSINESSES a Trade with outside/ non-local markets M e tho do logy 28 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L 3.1.1 Direct impacts fuller understanding of local marine protected Marine protected areas attract tourists and area tourism impacts. trigger spending on tourism services. Tourists spend money to visit Abrolhos Marine National Park and on various tourism activities in the park 3.1.2 Indirect impacts through pro- and along the coast (accommodation, restau- duction linkages rants, diving, surfing, adventure tours, etc.) which If tourism activities expand while resource support local businesses. Tourists also pay extraction contracts, these activities’ demand for fees and taxes which increase revenues for the intermediate inputs will change, producing a first government, some of which remain in the local round of indirect effects in the local economy. economy. To visit Abrolhos Marine National Park, For example, more tourists increase the demand the daily fee is R$ 46 (US$11.6) for Brazilians and for accommodation and restaurants, and thus R$ 93 (US$23.5) for foreigners.8 As noted, these everything from ingredients (meat, fish, fruits fees go entirely to the federal government. In vegetables, etc.) to beverages, restaurant and addition, boat operators, hotels, and restaurants hotel equipment, and workers. To the extent pay a services tax (Imposto sobre Serviços – that these inputs are supplied locally, these ISS), which is defined and charged by local increases in demand will have positive linkage municipal governments. Revenues from services effects on the local economy, while purchases taxes remain in the local economy. Taxes on from outside the project area will create positive goods (fuel, food, souvenirs and other marketed linkages for other parts of the country. Similarly, goods), on the other hand, are imposed as per if governments hire people from the community the Tax on Circulation of Goods and Services for conservation work, their wages are in turn (ICMS), which is defined and collected by the used to employ local people or to source local State of Bahia. Similarly, formal sales of fish are goods, and this spurs another round of spending taxed according to the State ICMS. and increase in economic activity. Finally, when municipal governments spend tourism-related A survey of tourists, together with the marine Services Tax revenues on the local economy to protected area’s effect on the number and types hire local labor or source local goods, this too of tourists, make it possible to estimate these generates additional rounds of economic activity. direct impacts. A tourism impact analysis based When tourism service activities and conserva- only on tourist expenditures would stop here, tion management expand, they create positive because it would only consider the amount of indirect impacts on the local economy. A con- money tourists spend on lodging and meals, traction in resource extraction activities on the and not the additional rounds of income this other hand could have the opposite effect, to the spending creates. extent that these activities rely on local inputs. An input-output (IO) analysis would stop here, However, marine protected areas also influence and only capture direct impacts and indirect local economies by affecting resource ex- impacts through production linkages.  traction—in the case of Brazil’s no-take marine protected areas, through restrictions on fishing. A critical issue when analyzing these produc- By regulating these activities, marine protected tion linkages is whether the local supply of areas may have an adverse effect on incomes goods and services can expand to meet the of households that otherwise would traditionally new demand. If not, growth in demand around fish. On the other hand, promoting the recovery protected areas may place upward pressure of over-exploited common property resources on prices. This reduces the real or inflation-ad- Me th od o lo gy (fish stocks) can lead to population recovery, justed income gains from protected areas. increased catches, and better prospects for Estimation of indirect impacts must take these sustainable use. The overall direct impact on potential inflationary effects into account. income from fisheries management on incomes is therefore ambiguous. While the impacts of Marine Extractive Reserves on fishing commu- 3.1.3 Indirect impacts through income nities are not assessed in this study, these are and consumption linkages important as well, and need to be estimated In addition, all production activities in the local alongside the direct impacts of tourism for a economy generate incomes in the form of 8 Official Park Entry fees for Abrolhos Marine National Park: General public (R$ 93), domestic visitors (R$ 46), visitors from Mercosur member states (R$ 69) and visitors from surrounding regions (R$ 9). Source: DIÁRIO OFICIAL DA UNIÃO, Ministério do Meio Ambiente/Instituto Chico Mendes de Conservação da Biodiversidade, 2019. ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 29 wages and profits. Wages paid to workers in the and the total (direct and indirect) effect of the tourism sector potentially also have a positive expansion in tourism eventually converges to an indirect effect on the local economy. Wages and income multiplier, defined as the change in local profits from locally owned tourism companies household incomes per unit of fresh infusion of and from local businesses that supply tourism cash into the economy through tourist spending businesses flow into households, which in as they visit the park. If local market linkages are turn spend income in the local economy. The strong, each dollar of tourist spending may in- increase in household incomes, and stimulus crease local income by more than a dollar. Local to household demand for goods and services income multipliers are not necessarily greater are represented by (two-headed) arrows c than one, because the new demand created by in Figure 5. If limits are imposed on resource tourist spending may be met by purchases from extraction then the indirect income effects of other parts of Brazil or abroad. In such cases, the marine protected area will be negative. the income “leaks out” from the local economy However, resource users may be able to shift to other places, creating benefits there instead. to other activities associated with the protected If the supply of goods and services in the local area; for example, fisherfolk may provide tourists economy is elastic, prices will not change much with transportation or guiding services. as local demand increases. However, rising local demand can place upward pressure on As local services expand to supply new house- prices, causing real or price-adjusted multipliers hold demands, new rounds of increased input to diverge from nominal (cash income) ones. demand, income, and household expenditures The general equilibrium (GE) model will capture follow, creating additional increases in income all of these effects, the direct impacts and both and demand in the local economy. Successive channels of indirect impacts. rounds of impacts become smaller and smaller, 3.2 lewie model Quantifying the direct and indirect impacts to construct models of firms, households, and of tourism in marine protected areas on local household-farms within local economies. These economies therefore requires an applied gen- micro-models are “nested” within a GE model of eral-equilibrium (GE) approach. For this study, a the local economy, drawing from an established GE method called “local economy-wide impact practice of GE modelling in economics (Dixon & evaluation—LEWIE” was used.9 Jorgenson, 2012). The models of firms describe how businesses combine various factors (e.g., LEWIE uses simulation methods to estimate hired labor, family labor, land, capital) and inter- the direct and indirect (or “spillover”) effects of mediate inputs (fertilizer, seed, and a variety of marine protected area-induced tourism. LEWIE purchased inputs) to produce an output (corn, uses a structural approach that integrates prepared meals, a service), which may be con- models of actors (businesses and households) sumed locally or sold to others. The household within a general-equilibrium (GE) model of the and household-farm models describe each local economy. Businesses include locally household group’s productive activities, income owned businesses and businesses not owned sources, and consumption/expenditure patterns. M e tho do logy by locals but typically employing some local In a typical model, households participate in workers and purchasing some locally supplied activities such as crop and livestock production, inputs. There is a well-established precedent resource extraction (e.g., fishing), retail, and in economics of using micro survey data to other business activities, as well as in the labor construct models of agricultural households market. Production functions turn inputs into out- that are both producers and consumers of puts by piecing together each activity as parts of food (Singh et al., 1986). LEWIE begins by using the whole economy. micro-survey data and econometric methods 9 A basic reference for this methodology, and examples of recent studies using the LEWIE methodology can be found at http://beyondexperiments.org/ (Taylor & Filipski, 2014). 30 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L Micro survey data are required to populate parameters for each household group and the LEWIE model and play two main roles in its sector, together with standard errors on these construction. They provide initial values for all estimates. The initial values and parameter variables in the model (inputs and outputs for estimates are entered into a spreadsheet de- each production activity, household expendi- signed to interface with Generalized Algebraic tures on each good and service). The data are Modeling System (GAMS) software used to also used to econometrically estimate model program the LEWIE model. 3.3 Data Collection To build the LEWIE model, data are gathered questionnaire. Lacking access to a master list through surveys of tourists, lodges and resorts, of businesses, the survey team adopted an local businesses, and local households. The every-nth business strategy, a simple procedure surveys gathered information on production, given that businesses typically are lined up income, and expenditures, and the locations along the main street. As with the household of transactions (i.e., whether they are inside or surveys, the business surveys were subject to outside the local economy). The household and the owner/operator’s willingness to participate. local business surveys were programmed onto Hotel and tourist surveys were administered by tablets using the Open Data Kit (ODK) platform a local partner trained in the survey methods. for Android. A team of 16 Brazilian enumera- tors were trained to carry out the business and The household surveys and non-tourism busi- household surveys (see Box 4). Data collection nesses were completed prior to the pandemic for households, businesses, tourists, and some (end of January 2020); however, the lockdowns hotels took place during and around the month severely affected the completion of surveys of of January 2020. tourists and tourism businesses. To compen- sate, information from previous tourist surveys Communities from the area constituting the local conducted by other researchers was used to economy – coastal villages and cities near the supplement the data from the tourist surveys.12 township of Caravelas, the main launching site Specifically, average expenditure information for boats carrying visitors to Abrolhos Marine from other studies was used to calculate the av- National Park10 and extending from Nova Viçosa erage expenditure for tourists in the Costa das in the south to the south-west of Caravelas and Baleias region, while the limited tourist surveys to Prado in the North – were selected random- that could be completed were used to disaggre- ly from a master list.11 In each sampled village, gate expenditure shares for key categories of roughly 45–55 households were randomly goods and services. The lockdown also restrict- selected using an every-nth household sampling ed hotel surveys, and a combined approach strategy based on the size and geographi- was adopted, complementing collected survey cal dispersion of the community. Overall, an data with outside studies to generate hotel ex- average of 50 households were sampled each penditures for the LEWIE model. To estimate the day from each village/village cluster, resulting numbers of tourists attracted to the Whale Coast in a total sample of 590 households. Additional because of the benefits of the marine protected businesses in the villages and nearby mar- area (including those that do not visit it) would Me th od o lo gy ket towns were surveyed using the business require additional region-wide data collection. 10 The other launching site is Prado in the north. 11 Villages in the region were randomly selected for surveys. The most isolated rural communities were avoided due to concerns for enumerator safety and other complications implementing the questionnaire. Isolated villages are not tourist destinations. 12 Information from two previous studies was used: 1.) SEBRAE’s Pesquisa de Perfil da Demanda Turistica – Costa das Baleias/BA, Brazil 2019, and 2.) The Ministry of Tourism International tourist demand Studies 2012–2018. ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 31 Box 4. Building capacity while doing research A team of 16 Brazilian students (11 men and 5 women) from the Federal University of Rio de Janeiro were trained to carry out the fieldwork for this study. This included a one-week, face-to-face course on the LEWIE methodology, how to conduct detailed household and business surveys with questionnaires, and programming survey questionnaires on tablets using ODK. After a pilot, the team spent two weeks at the project sites collecting data. All enumerators were awarded certificates of completion of the LEWIE survey training course and fieldwork. M e tho do logy A Nazca booby. Credit: Carlos Eduardo Young 32 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L 4 Data Summary Data S um m a ry A view of a lighthouse over the ocean. Credit: Carlos Eduardo Young ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 33 4.1 Tourists and Tourism Businesses (hotels) Table 2. Hotel Summary Statistics (R$) upkeep or renovation of the hotels is not includ- ed. On average, hotels spend R$ 1.06 million Total expenditures Wage Capacity Leakage (US$0.27 million) on wages. The data also show that roughly 23 percent of hotel purchases of Mean 2,722,359 1,055,608 206.8 0.23 inputs (by value) are outside the local economy. SD 2,956,475 1,303,390 105.3 0.05 The estimated number of visitors to the Whale Coast in 2019 was 1.2 million, most of whom Table 3. Number of Annual Visitors to Abrolhos Marine National Park are domestic visitors13, and only some of whom come to visit the Abrolhos Marine National Park, 2017 2018 2019 or visit the region because of the presence of Total Visitors 5563 6403 8044 the park. Among the dozen tourist surveys con- ducted prior to the pandemic, one third reported Source: ICMBio (2019) that their primary reason for visiting the region was to enjoy the beaches and diving sites. This Figure 6. Number of Visitors to Abrolhos Marine National Park by fraction may differ in winter during the whale Month, 2017-2019 watching season, when a larger share of visitors is likely coming to enjoy marine biodiversity. 1400 2017 2018 2019 1200 To protect the park from excessive use, the number of daily visitors is limited to 225. 1000 Moreover, only accredited boats can bring visi- 800 tors to the park.14 In 2019, 8,044 tourists visited Abrolhos Marine National Park, less than 10 600 percent of the allotted capacity. 400 While still well under capacity, the number of 200 visitors to Abrolhos Marine National Park is 0 rising (Table 3). Official records show that tourist rch ril ne r r er er st y ry y ly be be ar Ma Ju gu numbers increased from 5,563 in 2017 to 8,044 Ap ua mb mb Ju nu Ma em to Au br ve ce Oc Ja Fe pt De No in 2019, a 45 percent increase in two years. Se Source: Abrolhos Marine National Park management (2017 and 2018); ICMBio (2019) The peak season for tourism in Abrolhos Archipelago runs from July to January (Figure Table 2 presents summary characteristics for 6), and a key attraction is whale watching during hotels in the study area. Due to the disruptions the winter months (July to November). Other caused by the economic fallout of the COVID-19 draws to the region are the beaches and marine pandemic, it was only possible to gather life, which draws tourists during the summer information from surveys of seven hotels, with months of December and January when whales estimated expenditures used where missing. are absent. Within this sample, the average hotel capaci- ty is just over 200 beds. The average annual Tourist expenditures from the limited surveys Data S um m a ry expenditure for wages and purchase inputs was are summarized in Table 4 below. The average R$ 2.7 million (US$0.69 million), with substantial party size was 2.9, with an average stay of 6.82 differences between hotels, as expected. Inputs days. The average tourist spent approximately purchased by hotels include all items required R$ 500 (US$127) per day, with the majority of ex- to operate a hotel such as food (vegetables, penditures, R$ 306 (US$78) going to hotels. On livestock, fish, etc.), retail purchases (water, alco- average, each tourist spent R$ 49.7 (US$12.6) hol, etc.), and services (utilities). Expenditure on and R$ 55.4 (US$14.2) on retail and service 13 Estimates of tourist numbers are made by extrapolating data from previous years by the growth rate of tourism in the region and crosschecking with available data. A study titled Plano de Desenvolviment O Integrado do Turismo PIDTS (2001) conducted by the Getilio Vargas Foundation (FGV) estimates that the number of tourists was around 490,000 in that year, with most being domestic tourists. 14 In 2018 the number of visitors to Abrolhos Marine National Park was 5,439, of which fewer than 3 percent were foreign tourists. 34 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L Table 4. Summary Statistics of Tourist Expenditure (survey data) purchases, respectively. Service purchases include the cost of boat trips and other tourism Mean 2.91 related transportation costs. These expenditures Party Size represent injections of tourist spending into the SD (1.76) local economy. Mean 6.82 Nights Stayed SD (3.3) Representativeness is a concern given the Per-Capita-Per-Day Tourist Expenditures small sample size and limited area of the survey. To address this concern, tourist expenditure R$ US$ estimates from a previous, larger-scale survey Mean 499.6 126.5 were used, which also provided information on Total SD (290.9) (72.4) total expenditures per tourist: Pesquisa de Perfil Mean 306.3 77.5 da Demanda Turistica – Costa das Baleias/ Hotels BA, Brazil, conducted by SEBRAE/BA (Brazilian SD (220.4) (54.9) Micro and Small Business Support Service), and Mean 49.7 12.6 Retail Shops COMTUR and Bahia’s Tourism secretariat in SD (36.5) (9.1) 2019.15 These surveys, however, did not provide Mean 55.4 14.2 breakdowns across expenditure types, as Services (incl. tour cost) SD (51.6) (12.8) needed for the LEWIE model. Expenditure share information from the tourist surveys as present- Mean 2.5 0.6 Other* ed above was used for these breakdowns. SD (4.5) (1.1) N 12 *Other expenditures include direct purchases from local markets 4.2 Households 16 The household survey provides a rich set of income-earning activities. The average house- data on household characteristics and eco- hold size for the sample was just over four nomic activities. Using the World Bank defined individuals. Poorer households tend to be larger, poverty line of US$1.90 (ppp-adjusted) per-cap- with slightly younger and less educated house- ita per-day resulted, however, in a sample hold heads. Roughly 22 percent and 29 percent of poor households which was too small to of non-poor and poor households, respectively, estimate production and demand parameters grew crops in the twelve months prior to the for this group. To address this issue, the pov- survey. Poorer households tend to be in more erty cut-off was increased to expand the poor rural areas. A higher percentage of poor than household sample by 10 percent.17 non-poor households owned some livestock (18 percent vs 30 percent) and over 65 percent Socio-demographic characteristics are given in of households had at least one wage earner. Table 5, together with a summary of household Around 17 percent of non-poor households and Table 5. Household Demographics Data S um m a ry HH Head Income Generating Activities Dependency Educ Live- Wage HH size Ratio Age (years) Crop stock Work Business Fishing Non-poor Mean 3.44 0.198 49.86 8.12 0.22 0.18 0.65 0.36 0.17 SD (1.57) (0.21) (14.80) (5.11) (0.42) (0.39) (0.48) (0.48) (0.37) Poor Mean 4.20 0.266 45.04 6.88 0.29 0.3 0.68 0.23 0.07 SD (2.03) (0.23) (13.37) (4.66) (0.46) (0.46) (0.47) (0.42) (0.26) 15 The SEBRAE survey asked respondents why they visited the Whale Coast, only 12 percent mentioned “natural areas” as the reason for their visit. The majority (67 percent) reported visiting for beaches and popular festivals. 16 Additional summary statistics from the household survey are provided in Annex 1. 17 In practice this raises the definition of poverty to those living under US$5.8/person/day. ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 35 7 percent of poor households reported fishing at Fifty-three percent of the poor were employed least once a month. The overall percentage of for over 150 days in 2019, compared with 73 households fishing in the sample is 16 percent. percent of the non-poor. Around 10 percent of The non-poor were more likely to own a small households, poor or otherwise, worked a sec- business (36 percent, compared with 23 percent ond job. The average annual wage income for for poor households). 2019 was R$ 16,793 and R$ 10,324, respectively, for the non-poor and poor. Most workers employed in the town of Caravelas worked full time (see Table 6). 4.3 Businesses Between one-quarter and one-third of house- Most businesses operated by households were holds in the sample owned and operated some vendors, grocery shops and other retail-type form of business. The business surveys at- businesses that operated close to year-round. tached to the household surveys supplemented Only 3 percent of the businesses surveyed were the data with 126 independent business surveys directly related to tourist activities, including lodg- for a total of 318 observations. es, hotels, and boat and transportation operators. Table 7 provides a breakdown of the types of businesses surveyed. Table 6. Wage Work Tourism-related Activities Share Average Average Days working Wage Daily Share with Days Average Worked >150 days Income Wages 2nd job Worked Wage Mean 204.6 0.73 16,792.8 79.5 0.10 153.3 71.0 Non-poor SD (83.3) (0.44) (24,018) (106.4) (0.30) (137.0) (57.9) Mean 165.0 0.53 10,323.9 56.9 0.11 210.0 48.8 Poor SD (96.9) (0.50) (10,471) (40.2) (0.31) (71.7) (9.5) Table 7. Business Types Business Type Count % Data S um m a ry Vendor/Grocery/Corner Shop 130 41 Livestock/Fish seller 12 4 Other retail 87 27 Services 81 25 Tourism Business* 8 3 Sample 318   Source: World Bank Survey Note*: Tourism businesses include Lodges/Guest houses/Boat and Vehicle Transportation 36 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L 5 LEWIE Model Findings LE WIE M o de l F in di n g s Anchored fishing boats. Credit: Carlos Eduardo Young ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 37 As noted above, the LEWIE model can be used local price effects. Simulations require making to estimate the direct and indirect impacts of judgements, based on the survey data, about tourism in protected areas on the local econ- where and how prices are determined (that omy. There are many pathways through which is, market closure, which is not known with these direct and indirect impacts manifest, and certainty). Sensitivity analyses were performed, data availability determines in large part the combined with the Monte Carlo method extent to which these avenues can be captured described above, to test the robustness of simu- through the LEWIE model. A summary of the lated impacts to market-closure assumptions. avenues and the extent to which they are mod- eled within LEWIE is provided in Table 8. The impact of tourism in protected areas on the local economy is estimated in two steps. Step Once built, the LEWIE model can be used to one entails simulating the impact of an addition- estimate the impacts of protected area tour- al tourist on the local economy. This step also ism on a local economy. Because the model estimates the income multiplier for an additional parameters have been estimated econometri- dollar of tourist spending. The total impact is cally, Monte Carlo methods are used to perform estimated in the second step by multiplying the significance tests and construct confidence in- per-tourist estimate by the number of tourists tervals around the simulated impact results (see who visit the national park. Comparing these Taylor and Filipski, 2014). For this study, 500 impacts with public investment in the park also iterations of the simulations for Abrolhos Marine provides an estimate of the rate of return on National Park were conducted. Additionally, the public investment. LEWIE model accounts for nonlinearities and Table 8. Avenues of Impact Captured by LEWIE Impact Avenue Included in Comment LEWIE? Direct Tourist spending at Yes local businesses Restrictions on Yes These impacts are built into the base run of resource extraction and the model. It is important to note though that positive spillovers from this version of LEWIE is static and therefore Park to local area does not account for changes in resource availability and their effects on resource use patterns. Indirect – Hiring and local Yes These linkages are included for hotels but production sourcing of goods by not for other tourism service providers due linkages tourism establishments to data limitations. Hiring and local Partially Jobs offered by the park are captured in the sourcing of goods by household section of the surveys. However, park managers operational costs of park management are not included due to a lack of information. Municipal government No Because the expenditure categories needed L E WIE M o de l F in di n g s expenditures by LEWIE were unavailable, local impacts of tax revenues from tourism were not included in the analysis. Input use spillover Yes effects of resource use restriction Indirect – Expenditures by Yes consumption households based linkages on wages and profits earned through tourism sector linkages 38 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L 5.1 Impact of an Additional Tourist on the Local Economy Table 9. Local Income Impacts of an Additional Tourist in the economy surrounding Abrolhos Marine   One additional tourist National Park. The income effects are much larger than the average amount of money tour-     Results (R$) Results (US$) ists spend, which is given in the first row of the Amount spent by an average tourist 812.0 205.6 table. The result is striking, given that hotels and Change in local income other tourism businesses purchase a substantial Real income 1,411.9 357.4 amount of their inputs outside the local econo- my.18 Most local income gain goes to non-poor 95% CI Interval [2,000; 1,065] [506.3; 269.6] households, amounting to R$ 1,171 (US$297) per Poor Households 240.6 60.9 additional tourist in total, while poor households Non-poor Households  1,171.3 296.5 in the region receive a total of R$ 240 (US$61). Real multiplier in local economy 1.74 1.74 Tourist spending creates these income impacts Table 9 presents the impacts of an additional by stimulating local demand for goods and ser- vices, either directly (as when tourists or hotels buy goods and services from local businesses Table 10. Production Effects of One Additional Tourist and households), or indirectly (as when hotels pay wages to local households, which in turn Production Effects spend this income on locally-supplied goods (in monetary value) Results (R$)l Results (US$) and services). Table 10 summarizes the effects Local crops 46.0 11.6 of a tourist on production (in value) by local Local livestock 70.8 17.9 households and businesses. The largest impact Fish 42.3 10.7 is on retail activities, mostly small family-owned stores in which households around the marine Local Retail 786.2 199.0 park spend most of their incomes. The total val- Local services 521.6 132.1 ue of retail sales increases by R$ 786 (US$199) Hotels 181.1 45.8 while gross revenue in service-type activities Change in Employment* 722.3 182.9 increases by R$ 522 (US$132). Impacts on crops, livestock and fish outputs are smaller, but * Change in total payments made to labor. still substantial. The study estimates that each additional tourist generates an increase in pro- duction of crops/agricultural produce of R$ 46 (US$12), livestock of R$ 71 (US$18), and fishing of average tourist on household incomes, includ- R$ 42 (US$11). As production in these activi- ing the income spillovers that tourist spending ties expands, households hire labor, purchase creates. Simulations find that an additional tour- inputs, and generate profits that add further to LE WIE M o de l F in di n g s ist adds R$1412 (US$357) to real local incomes local incomes. 18 We estimate that 20.1 percent of operational expenditures (all expenditures excluding large scale investments) go to goods and services purchased from outside the local economy. ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 39 Figure 7 shows the income multipliers, that is, The majority of benefits accrue to non-poor impacts on local incomes from each additional households which have larger capacity to dollar of tourist spending. Note that this money increase production and take advantage of is spent by tourists primarily at hotels, and does growing demand generated through tourism. For not add to local income until it circulates through each Real spent by a tourist in the local econo- the local economy. These multipliers are my, an additional R$ 1.44 of income is generated adjusted for price inflation and thus represent for non-poor households, while households real-income effects. An additional Real spent by classified as poor receive R$ 0.30. visitors raises local incomes in the local econ- omy by 1.74 Real. The vertical lines at the top of Although a larger share of the multiplier goes the bar give a 95 percent confidence interval to non-poor households, the economic contri- around these multipliers, which are obtained by bution to local communities appears to benefit running 500 iterations of each simulation. The poor residents more than non-poor residents. estimated multiplier is positive and large, indi- Normalizing multiplier shares by these popula- cating that each Real spent by tourists creates tions (i.e., dividing the share of the multiplier by significantly more than one additional Real of the share of poor or non-poor residents; see new income in communities around the park. Figure 9) shows that the multiplier share per resident is higher for poor residents than for Figure 8 shows how much of the additional non-poor, with 56 percent of the per-resident income from tourist spending benefits poor and multiplier share going to poor individuals. non-poor households within the local economy. Figure 7. Real-income multipli- Figure 8. Multiplier Share by Figure 9. Distribution of Multiplier Across ers of an additional R$ or US$ of Household Poor and Non-Poor Populations tourist spending 2,5 2 1,8 2,0 1,6 44% 1,4 Non-poor 1,5 1,2 1 1,44 1,0 0,8 0,6 0,5 0,4 56% 0,2 0,3 Poor 0,0 0 L E WIE M o de l F in di n g s Real (inflation-adjusted) income multipliers Poor Non-poor 40 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L 5.2 Impacts of Nature Tourism on the Local Economy The total impact of nature-based tourism on Dividing the total economic impacts by the incomes around Abrolhos Marine National Park sum of wage and non-wage expenditures by can be approximated by multiplying the impact the government on the National Park provides per additional tourist by the number of tourists estimates of the returns on government spend- who visit the Abrolhos Marine National Park. ing. Government spending on Abrolhos Marine The number of tourists who visited the Park in National Park generates an estimated economic 2019 is 8,044 (ICMBio, 2019) and this number return of 6.2 Reais per 1 Real of government is used to estimate the impact on the local spending (Table 11).19 economy. We estimate that tourism adds R$ 11.4 million (US$2.8 million) to total income or GDP This is a conservative estimate of the Park’s in the coastal communities adjacent to the park impact, as the number of visitors to the National (Column A of Table 11). Monte Carlo simula- Park is likely to be an underestimate of the Park’s tions are used in the LEWIE model to construct influence on tourism to the region, because the 95 percent confidence bounds around this existence of the park, including the ecological estimate of impact, which in effect is a detailed spillovers it creates (most notably, on the whale sensitivity analysis of the findings. population) is likely to affect tourists’ decisions in a number of difficult-to-quantify ways. Given the challenge of understanding the role of Abrolhos Table 11. Estimated Impact of Tourism (US$) Marine National Park’s conservation efforts in drawing tourists to the Whale Coast, the park’s A B C D potential impact on the local economy was ap- Total Total proached through a simulation that answers the Estimated Expenditure Total question: what would be the impact if Abrolhos Rate of Economic on Non- Expenditure Impact of wages (park on Wages Return National Park operated at full capacity during the Tourism maintenance) five-month-long peak season? Abrolhos Marine Table 12 reports the results of this calculation. 11,357,324 571,294 1,251,126 6.2 National A total of 33,750 visitors (225 per day over 150 Park (R$) days) are assumed to visit the Park, with no Abrolhos visitors in other months. Under these assump- Marine tions, the total economic impact of tourism to 2,875,272 144,631 316,740 6.2 National Abrolhos Marine National Park is estimated at Park (US$) R$ 47.7 million (US$12.1 million) annually, and 95% CI the Park directly contributes to 1,259 local jobs. bounds [4,000,683; Abrolhos Marine National Park’s potential to (US$) - - [8.8; 4.6] 2,073,824] generate benefits for the local community is [upper; lower] substantial. The impact of tourism on employment around LE WIE M o de l F in di n g s Table 12. Peak Season Maximum Capacity Estimates the park includes employment in tourist ac- tivities and indirect employment impacts from Total Estimated tourism. These employment effects can be esti- Economic Impact of Local Jobs mated by dividing the total labor value-added by Tourism Added the average local wage.20 Based on this method, Abrolhos Marine National we estimate that tourism to the Abrolhos Marine Park (R$) 47,651,625 1,259 National Park adds an estimated 300 jobs to Abrolhos Marine National the local economy. Tourism to the Whale Coast Park (US$) 12,063,702 1,259 as a whole generates 46,800 jobs, representing 95% CI bounds (US$) employment for around 12.1 percent of the local [16,785,563; 8,701,088] [1,774; 920] [upper; lower] population in the tourism sector. 19 Approximately R$ 148,100 (US$37,000) of park expenditures was spent on local contract work, which we classify as part of wage expenditures (payments to labor in the local economy). 20 The total effect of labor value-added is estimated in the LEWIE model as the returns to labor, a productive asset, and rep- resents the total wage income gains to the local economy. Dividing by wages allows us to estimate the extra employment generated through tourist spending. ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 41 Governments can create additional benefits local income gains which follow from this action for local populations by hiring local people (see Table 13 below).21 This park-hiring impact to work at parks as guards, guides, etc. Local can also be expressed in terms of an income labor hiring would increase labor income in multiplier. A Real spent by the government on and around Abrolhos Marine National Park park wages creates a local economy real (in- and generate multipliers through increased flation-adjusted) multiplier of 2.68 Reais. These demand and spending. The model estimates park employment multipliers are higher than that an additional worker hired by the park tourist spending multipliers because all wages generates an increase in local real income of paid to locally hired park personnel go directly R$ 94,977 (US$24,045). The cost to government to local households, whereas a fraction of tourist of hiring an additional local worker is R$ 35,405 spending does. (US$8,963), which is considerably less than the 5.3 Impacts of Complementary Investments and Outside Shocks Besides estimating the economic impacts of number of local purchases by businesses (both tourism, the LEWIE model can be used to simu- services and retail) by 5 percent while holding late the local economy impacts of government outside purchases constant. The results are interventions and economic shocks. shown in Table 14. A 5 percent increase in local purchases boosts 5.3.1 Local Economy-Wide Impact of local incomes by R$ 403,076 (US$102,045). a 5 Percent Increase in Local Input Most benefits accrue to non-poor households, Purchases by Businesses which increase their incomes by R$ 350,365 (US$88,700) compared to Governments can also increase local benefits from tourism by encouraging businesses to R$ 52,711 (US$13,345) for poor households. Poor source more inputs locally. The LEWIE model households see substantially fewer benefits was used to simulate the impact of a 5 percent due to their lack of productive capacity to take increase in the amount of goods sourced locally advantage of such an intervention. by businesses. This was done by increasing the Table 13. Estimated Impact of an Additional Fulltime Hire Table 14. A 5 Percent Increase in Local Input Purchases by Abrolhos Marine National Park by Businesses   Additional Hired Worker (fulltime)   5% productivity increase in local   by Abrolhos Marine National Park   businesses L E WIE M o de l F in di n g s Income effects Results in R$ Results in US$ Income effects Results in R$ Results in US$ Changes in local economy incomes  Changes in local economy incomes Real (inflation-adjusted) Real (inflation-adjusted) 94,977 24,045 403,076 102,045 Income Income Changes in household incomes, by location Changes in household incomes, by location Poor Households 39,007 9,875 Poor Households 52,711 13,345 Non-poor Households 55,970 14,170 Non-poor Households 350,365 88,700 Increase in labor supply 14,170 3,587 21 The annual wage was calculated using the average wage of full-time employees in 2019. 42 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L 5.3.2 Local Economy-Wide Losses Due of July (1,298 visitors) may be as high as R$ 3.06 to COVID-19 million or US$0.77 million. Just as growth in tourism and tourist spending The simulations reveal that, for an average have positive multiplier effects, negative shocks month, a loss of tourism to Abrolhos Marine produce negative income multipliers in local National Park reduces local real income (GDP) economies. The COVID-19 pandemic has result- by R$ 2.75 million (US$0.70 million) for each ed in substantial losses in tourism and tourism month that the park is closed. This includes income, including a shutdown of Abrolhos both the lost tourism spending and the income Marine National Park. We used the LEWIE model spillovers this spending creates along the Whale to simulate the impact of a complete loss of Coast. Each month without tourism to the park tourism for one month on the local economies reduces the income of local poor households by around Abrolhos Marine National Park. We present two simulations, a conservative one that R$ 0.47 million (US$0.12 million) and local non- considers only the lost tourism directly related poor households by R$ 2.28 million (US$0.58 to the Park’s closure, and a more general one million). All production activities lose, with that considers lost tourism to the Abrolhos total sales losses ranging from R$ 0.08 million region, regardless of whether or not tourists (US$0.02 million) in fishing to R$ 1.53 million visited the park. (US$0.39 million) in retail businesses. Local retail and services are most heavily impacted. They Table 15 and Table 16 present the estimated im- are the two largest income-generating activ- pacts on income and production, respectively, of ities in the region, and are highly sensitive to one average month without tourism to Abrolhos changes in demand for the goods and services Marine National Park. In light of the annual they offer. nature of our model and data collection, we present monthly losses assuming an average The model simulates the monthly impacts of number of monthly visitors to the park. In actual- a loss of tourism to the Whale Coast, which ity, monthly losses would vary substantially; for includes visits to Abrolhos Marine National Park example, we calculate that losses incurred by and activities outside the park (e.g., excursions, the absence of visitors during the peak month beach activities, etc.). The results appear in Table 17 and Table 18. Table 15. Monthly Income Loss from No Tourism to Abrolhos Marine National Park Our simulations show that a complete loss of tourist revenue along the Whale Coast reduces Results in Results in real income (GDP) by R$ 247.5 million (US$62.7   R$ millions US$ millions million) in the region. Each month without tour- Tourism Expenditure Loss 1.58 0.40 ism in the coastal region adjacent to Abrolhos Change in Village-level income  Marine National Park reduces the income Real income 2.75 0.70 of local poor households by R$ 73.3 million (US$18.6 million) and local non-poor households Std. dev. [3.44; 2.06] [0.87; 0.52] by R$ 357.1 million (US$90.4 million). All produc- Change in Real Household incomes (mean) tion activities suffer, with sales losses ranging LE WIE M o de l F in di n g s Poor Households 0.47 0.12 from R$ 13.0 million (US$3.3 million) in fishing to Non-poor Households 2.28 0.58 R$ 239.6 million (US$60.7 million) in retail busi- nesses. Local retail and services are the most heavily impacted as they are the two largest Table 16. Monthly Production Loss from No Tourism to Abrolhos income-generating activities in the region, and Marine National Park are highly sensitive to changes in demand for the goods and services they offer. Production Effects Results in R$ Results in US$ (in monetary value) millions millions The simulations reported in Table 11 and Table 14 Local crops 0.09 0.02 show short-term impacts of lost tourism. In the Local meat 0.14 0.04 long term, changes to tourism would likely alter the structure of the local economy in ways that Local Fishing 0.08 0.02 cannot be addressed with a pre-COVID model. Local retail 1.53 0.39 Local services 1.02 0.26 ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 43 Table 17. Monthly Income Loss from No Tourism to the Whale Coast     Results in R$ million Results in US$ million Tourism Expenditure Loss 247.5 62.7 Change in Village-level income Real income 430.4 109.0 SD 107.7 27.3 Change in Real Household incomes (mean)       Poor Households 73.3 18.6   Non-poor Households 357.1 90.4 Table 18. Monthly Production Loss from No Tourism to the Whale Coast Production Effects (in monetary value) Results in R$ million Results in US$ million Local crops 14.0 3.5 Local meat 21.6 5.5 Local Fishing 13.0 3.3 Local retail 239.6 60.7 Local services 159.0 40.3 L E WIE M o de l F in di n g s Fishermen near the beach. Credit: Carlos Eduardo Young 44 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L Conclusions and Policy Recommendations ConclusionsandPolicyRecommendations Sunset behind the palm trees. Credit: Carlos Eduardo Young ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 45 The study set out to make the case for greater per Real of government spending. Furthermore, investment of public resources in protected data limitations mean that not all mechanisms area management by estimating the economic through which tourist spending benefits the impacts of tourism – direct and indirect – in local economy have been accounted for, includ- biodiversity-rich areas on the local economy, ing the impact on the local economy when park through the application of the LEWIE model. authorities employ people from local house- The focus on the local economy – defined as holds or source local goods. the households and businesses in the vicinity of the protected areas and in the main market Another key finding of the study is that expen- towns – was maintained to understand the ditures by tourists visiting Abrolhos Marine potential benefits from protected areas for local National Park and the Whale Coast generate households. These households often suffer significant income multipliers for households the negative impacts of restrictions on natural in the local economy. The study estimates that resource use in protected areas, and their co- an additional Real spent by visitors raises local operation is critical to maintain protected areas incomes in the region by 1.74 Reais. This rein- by discouraging illegal fishing, and other threats. forces findings from four other sites studied as Development of the local economy is a goal in part of this World Bank project. Tourists spend and of itself, warranting both this local focus and money at local retail stores, on local services, greater investment. and on local transportation, generating incomes for households in the local economy. These One of the key findings of this study is that transactions directly link tourists to the local the economic return per Real of government economy, but they are only a part of the benefit spending in protected areas is significantly generated for the local economy. Households greater than 1: economic returns of 6.2 Reais additionally benefit indirectly through production per Real of government spending are estimat- and income linkages, when tourism operators ed for Abrolhos Marine National Park. Public hire local households and source local goods, investment in protected areas not only helps and when households spend wages and to conserve biodiversity, it also helps to make businesses spend profits earned through the these protected areas more attractive to tourists tourism sector. Thus, not only households direct- – for example, by securing marine resources ly engaged in the tourism sector benefit but so through investments to prevent illegal fishing do households who are not directly involved. or by restoring coral reefs. When tourists visit Moreover, both poor and non-poor households protected areas, they pay park entry fees, and benefit. For each Real spent by a tourist in the spend money on lodging, meals, transportation, Abrolhos region, an additional R$ 1.44 of income souvenirs, and other tourism services. These is generated for non-poor households, while households classified as poor receive R$ 0.30. Co n clusi on s a n d Pol ic y Re co mm e n dati on s expenditures directly benefit the tourism sector, but the benefits do not stop there. Tourism service providers hire labor and source goods Because the local economic impacts of protect- and services from the local economy, and ed area tourism are both direct and indirect, trigger a chain of benefits for local businesses it follows that studies which look only at how and households that are not directly connected tourists spend money will underestimate im- with the tourism sector. It is the sum of these pacts on the local economy, and overemphasize direct and indirect benefits that result in the high leakage from tourism spending outside the local economic return per Real of investment by the economy. government. Investment in protected areas is therefore good for biodiversity conservation Tourism generates a significant number of jobs, and for the development of the local economy. directly and indirectly. While the 8,044 tourists to the national park generate 300 jobs along It is important to note that this is a conserva- the Whale Coast, tourism to the region, much of tive estimate of the economic return per Real which can be attributed to the pristine marine of government spending. Firstly, only benefits environment anchored by the marine protected to the local economy have been estimated. area, has a much larger footprint, providing Tourists who visit protected areas also spend 46,800 jobs which employ 12.1 percent of the money outside the local economy – for exam- local population. ple, when traveling to the protected area – and tourism businesses are likely to source goods In summary, the analysis in the report finds that and services from outside the local economy. protected areas visited by tourists not only pro- Both these channels add to the economic return tect biodiversity, develop local economies, and 46 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L provide jobs for poor and non-poor households, (See Box 5 on transitioning to a blue economy). and for those directly involved in the tourism It is critical to promote the governance, and the sector, and those not. institutional and legal framework of the system as a whole to enable conditions for improved With over 30 percent of its land area and management of the set of protected areas. This almost 27 percent of its marine and coastal may include pilots for integrated and participato- areas under protection, there is great poten- ry management approaches such as community tial for protected areas in Brazil to contribute co-management, ecological mosaics, Ramsar to development goals while maintaining the Convention sites, and ecological corridors; and country’s rich biodiversity asset base. Currently, implementation of national plans for exotic, tourists visit a relatively small number of threatened, or endangered species/ecosystems, protected areas. ICMBio (2020) report that and participatory fisheries management plans. the most visited national parks in 2019 were Tijuca National Park, with 2.95 million visitors, Build Capacity of Protected Area Managers: followed by Iguaçu National Park (2.02 million) It is important that protected area managers and Petrópolis Environmental Protection Area are trained and have the experience to be (2.00 million). The most visited federal marine effective. To manage commercial and busi- protected areas in 2019 were Arraial do Cabo ness operations, managers should understand Marine Extractive Reserve (0.97 million visitors) both protected area laws and policies, and the and Fernando de Noronha Marine National Park business needs of tourism operators, and must (0.61 million). Given this situation, there is a need manage commercial entities in accordance with to better secure and manage Brazil’s protected protected area needs. While these needs may areas, grow and diversify its tourism sector, and vary depending on the protected area, generic share benefits with local communities, as these skills are needed to run a commercial services actions underpin the goals of both development program, including: understanding the legal and biodiversity conservation. framework for operators; develop contracts, authorizing instruments and bid solicitations; monitor and evaluate operators; data collection Protect Natural Assets and analysis; business acumen; negotiation To promote biodiversity conservation and skills, and asset management training if gov- secure the natural assets which attract visitors, ernment facilities are used by operators. By it is critical that protected areas be conserved, developing training and on-the-job education in restored to reverse degradation, and generally a commercial services program, managers can well-managed. There is a need to address the develop these skills in their staff. underlying factors that are contributing to poor performance of Brazil’s protected areas, and the ICMBio’s program to develop public-private following actions are identified in this report: tourism partnerships in protected areas is led by a “Concession Coordinator,” a trained biologist, Increase public investment in protected area and a team of 12–15 people. The team is orga- ConclusionsandPolicyRecommendations management: As indicated in this study, publicly nized within the General Department for Public funding protected areas results in a high return Use and Tourism. Contracts are currently ad- on investment. Using public funds for park ministered by a team at ICMBio – a “President” management is especially important as the con- and 4 others – 1 technical person in the park, 1 servation of these parks and their biodiversity architect, 1 financial analyst and 1 economist, and is what attracts tourists and promotes a sustain- the team is hiring lawyers and financial analysts able industry and source of livelihoods for local to strengthen the program. communities. Broader Engagement with Stakeholders: Given Strengthen the Marine Protected Area System: Brazil’s extensive coastline and the need for In the last few years, Brazil significantly expand- better integration and connectivity of protected ed its protected areas. There is understanding areas, a new model for protected area manage- of the need for better connectivity and inte- ment and governance with greater engagement gration of protected areas into subregions of different stakeholders is needed (Maretti et al. and seascapes. It is important that the protect- 2019)Brazil has advanced significantly with the ed area system is effectively and equitably expansion and improvement of its national system managed, ecologically representative, well-con- of protected areas. Until recently most of the ex- nected, and integrated into the wider seascape pansion was concentrated in the Amazon region ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 47 Box 5. Financing Beyond the Public Sector While asset protection is largely a public sector responsibility, “Mobilizing Finance for Nature” provides detailed guidance on government investment in protected areas demonstrates a com- financing mechanisms for biodiversity conservation (World Bank mitment which makes private sector funding more likely. Table Group 2020). Robust strategies may involve several of these 19 provides an overview of financial instruments, and the report, mechanisms in a systems approach to protected area finance. Table 19. Financial Instruments for Protected Areas Instruments Description Conservation Conservation Trust Funds are legally independent institutions (i.e., non- Trust Funds government) managed by an independent board of directors, which provide long-term, sustainable funding for conservation and/or protected area agencies through local grants. Trust funds can be endowments, sinking funds, or revolving funds. Government budget/ Government revenue allocations come from local, regional, and national revenues bodies, and/or authorities’ public budgets. They also include earmarked government taxes on tourism, and on commodities such as gasoline, structured debt relief earmarked for conservation, and government bonds. Carbon Finance Carbon markets are a new opportunity for protected area funding but are usually inadequate to meet full management costs. Revenues from tourism Mechanisms include protected area entry and recreation fees, sport hunting and recreation and “green” safari fees, hotel and airport taxes, tourist and tourism operator contributions, and public land and tourism concessions, among others. Revenues should ideally be channeled to protected area management. Compensation Compensation payments are instruments to hold companies accountable for payments their impacts on ecosystems and biodiversity. They finance conservation by collecting fines for pollution, royalties for natural resource use, compensation for environmental impacts, or even voluntary contributions. Although compensation payments don’t necessarily reflect actual environmental impacts, or provide one-for-one compensation, they pay for the use of a natural resource by investing in the conservation of another. They are typically calculated as a percentage of project development costs and pertain to bioprospecting, royalties from resource extraction, fines for environmental damage, voluntary and mandatory payments, mitigation banking and biodiversity offsets. Revenues from the sale Revenue comes from the legal sale and trade of plants and wildlife products and trade of wildlife for conservation. International conventions, such as CITES and associated Co n clusi on s a n d Pol ic y Re co mm e n dati on s national laws govern and monitor the legality of such trade. Financing mechanisms such as fines, wildlife auctions, loans, and in-situ-ex-situ partnerships contribute funding to species conservation. Innovative financing Financial instruments can design and incubate mechanisms to raise and invest mechanisms new capital which finances conservation and pays for results. These include Wildlife Conservation Bonds such as the Rhino Impact Bond, Lion’s Share Fund, and Conservation Capital’s Umiliki Investment fund, among others. Collaborative CMPs between state wildlife agencies and NGOs can attract investment and Management technical capacity to improve protected area performance. The three main Partnerships (CMP) CMP models - financial and technical support, co-management, and delegated management - yield median funds that are 1.5, 2.6 and 14.6 times greater, respectively, than baseline state budgets for protected area management (Lindsey et al. 2021). (World Bank Group, 2020) (Lindsey et al., 2021) 48 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L (with useful lessons. Special focus is needed to Grow and Diversify the Tourism strengthen partnerships with civil society, NGOs, Business local and traditional communities, the private sec- tor, and academia, and to engage more broadly To grow and diversify tourism beyond the few with tourism stakeholders in protected areas. parks currently visited will require policies, Ideally, these stakeholders should collectively programs, and investments that go beyond pro- support protected areas, which may mobilize tected areas. To address the challenges faced resources for their protection and sustainable use by the tourism sector, it will also be important to through a wider participatory process. assess the tourism potential of Brazil’s protected areas and prioritize sites for development in Undertake Regular Visitor Spending Effects order to diversify the tourism portfolio. A recent Assessments at the National Level: This World Bank publication provides guidance on study presented a methodology to assess the identifying private sector opportunities and pri- economic impact of protected area tourism oritizing tourism development (see Box 7). on the local economy of one national park in Brazil. To make the case for regular allocation Another intervention to promote tourism in of public resources, and to support planning protected areas relates to concessions policy. and program design; for example, to identify As noted, Brazil’s protected area law, SNUC, where tourism services can be improved, it is is strong, particularly in protecting natural and important that national level assessments are cultural resources, but it does not go into detail regularly conducted by the government. This regarding the regulation of commercial ac- will require systematic collection of data on tour- tivities in parks. ICMBio concessions account ists, tourism businesses, local economies, and for around one-third of all park concessions park management. Therefore, a complemen- currently being structured in Brazil. ICMBio, tary recommendation is to: implement regular working with the Semeia Institute BNDES and visitor surveys for monitoring and evaluation. other partners, have implemented a strong A challenge for this study was the lack of such protected area concession program with some information, and visitor surveys are crucial to un- progressive policies. One highlight is their derstand the impacts of tourism and how it may methodology for establishing franchise fees change over time. Information on the number of using a sliding scale: Franchise fees (returns visitors to each park, and their spending habits to the government) are set using a financial are important for planning, and surveys should analysis (net present value) which takes into ideally also capture seasonal trends in tourism account all of the expenses required to run activities, and be administered at the end of a the concession, including construction costs, visitor’s trip. if any. The contracts usually allow for franchise fees based on revenue share (a preset per- centage of a concessionaire’s gross revenue), which can be lowered in case of exceptional performance. The Concession Law 8,987 also ConclusionsandPolicyRecommendations Box 6. Transitioning to a Blue Economy contains rare but important provisions. One is a Strengthening the management of Brazil’s marine and coastal protected provision protecting the intellectual property of areas will support its transition to a blue economy. It is important to have a the concession i.e., reserving it for the Brazilian vision for these areas as an arena for sustainable, equitable, and diverse government. The second provision of interest to economic development. More specifically, policy and regulatory environ- many countries developing concession law is a ments should mainstream blue economy principles, including those related to finance, into public policies for conserving and using coastal and marine government agreement to ensure all necessary resources. Well-managed marine protected areas can deliver multiple ben- licenses and authorizations are issued. While efits and adopt multisectoral planning, such as Coastal and Marine Spatial Brazil has a good concessions program, some Planning (CMSPs) to nurture the blue economy. regulatory components can be improved by: Strengthening governance through coastal and marine spatial planning (CMSP): Coastal and Marine spatial planning are tools for a coordinated and forward-looking vision of the blue economy which recognizes the multiple Seeking best practices from other economic uses of the oceans while preserving the marine ecosystem. The development of CMSPs in Brazil would support decision-making for sustain- sectors using the concession law able management at national and subregional levels. They are important to One of the advantages of using the general con- guide decision-making over ocean spaces and reduce conflicts over multiple cession law in protected areas is that each sector uses such as marine tourism, recreation, conservation of biodiversity, fish- using the law has benefited from those using eries, gas/oil, mining, transport, etc. CMSPs improve the regulation of these activities by helping to establish more effective geographical patterns of it before them, and prior learning and ongoing uses in a given area. This results in a more secure framework for sustained use generates the emergence of best practices, investment in the blue economy. which should continue. ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 49 Formalizing policies and regulations: ICMBio populations; nor does it require hiring local has introduced many concessions best practic- people. Certain contracts, however, provide es via policies or contracts. The program could for purchasing local goods and services. Not- be strengthened if these policies or contractual for-profit concessions under Law 13,019 do provisions are placed into regulation or law. allow for preferential treatment through com- These include, for example: plementary legislation, for example exempting associations representing traditional popu- » Contract terms are set by policy, not by law or lations from some bidding processes under regulation. Law 13,668. Regulations favoring local citizens when awarding contracts and/or employment » The contract length is based on the financial are important to grow local economies and feasibility analysis (FFA) and is the shortest establish community support for parks, partic- practicable under the FFA (minimum term for ularly if park regulations restrict resource use. the project to be feasible). Establishing an upper limit on the contract length in the law » Regulations should allow concessioners to or regulation is common practice, and allows sell their contracts before expiry of the con- the administering agency to set term lengths tract term if contract transfers are approved based on whether specific contract terms and by the agency. Where concessioners wish conditions, such as required capital invest- to encumber their contracts to obtain loans ment, warrant a longer term. The USNPS (exercising rights or expressing interest in has found that contract terms of 20 years property, including through contracts), protect- or less for most visitor service operations ed areas should retain the right to approve or are most effective. Other countries, such as deny such encumbrances, and should obtain New Zealand, use longer terms for certain legal counsel in doing so. A lack of oversight types of projects (particularly leases) when in this area has caused problems in the past, the investments make it necessary. Shorter and provisions are now included in the con- term contracts place a greater administrative cession contracts burden on protected area managers through more frequent contract renewals. On the Fast tracking protected area management other hand, shorter term contracts can foster plans: Law 9,984, the environmental law which competition between bidding companies, and established protected areas, Decree 43, re- may be coupled with contractual require- quires management plans to be in place before ments for industry best practices, resulting in a park can pursue commercial visitor services. better visitor services. However, many parks have not completed their management plans, and without them they » The law does not require a franchise fee, but Co n clusi on s a n d Pol ic y Re co mm e n dati on s cannot put a concession contract in place, hin- it does protect concessioners from exorbitant dering visits and economic development. fees. Typically, each commercial services/ concession opportunity, based on its unique Returning franchise fees to protected areas circumstances, has a different return on in- - SNUC required that 25-50 percent of conces- vestment. The commercial service/concession sion revenue earned from entrance fees and law should require a return to the govern- services come back to protected area budgets, ment. The return does not have to be money; which go directly into the National Treasury, and it could be the construction of a facility or are returned through appropriations. Because other item of value to the government. The franchise fees are not directly returned to regulations should specify how to determine protected areas, managers seek to benefit from a fair franchise fee which allows the operator/ concessions by inserting contractual require- concessioner to generate a reasonable profit. ments to perform park maintenance work, such The regulations should also specify what the as invasive species removal or trail work, or protected area can do with revenues from other tasks not associated with the concession. commercial service/concessions and how this This causes the concessioner to incur greater money will be made available to the agency. expenses and reduces the franchise fee to the Best practice is to invest such monies in visi- government. A review of this policy and related tor services and other park needs. procurement procedures is needed so that parks benefit more directly through laws requir- » For-profit concessions under Law 8,987 do ing the return of concession fees to protected not allow for preferential selection of conces- areas, with specific portions allocated to the sions based on special status, i.e., indigenous units where they were earned. This will protect 50 ASSESSING THE ECONOMI C IMPAC T OF PROTE C TED AREA TOURISM ON LO CA L E CONOMIES IN BRA Z I L the integrity of concession contracts (providing Strengthen linkages between the tourism value services to visitors, not the government) and chain and local economy: The government can provide additional money (appropriations) to the strengthen linkages across the tourism value park to pay for park (government) expenses. chain to improve income multipliers by: » Supporting local producers and households Share Benefits with Local to provide more of the goods and services Communities sourced by tourism businesses. The study Development of local communities around found that a 5 percent increase in local pur- protected areas is a goal in and of itself, and chases increases local incomes by R$ 403,076 sharing the benefits of protected area tourism (US$102,045). Most benefits accrue to non- helps further this goal. Moreover, local communi- poor households, which increase their incomes ties which benefit in this way are incentivized to by R$ 350,365 (US$88,700), while poor support conservation and discourage encroach- households increase their incomes by R$ 52,711 ment, poaching, and other activities which (US$13,345) due to their lack of productive degrade protected areas. Engaging stakehold- capacity to take advantage of the intervention. ers and designing benefit sharing mechanisms which are equitable and sustainable is critical to » Additionally, training women may increase la- this effort (Snyman & Bricker, 2019). bor productivity and inclusivity. Women often make up a significant portion of the tourism At present there are no formal mechanisms for labor force. Moreover, they often perform protected areas to share benefits with local low-skilled, menial tasks rather than mana- communities, and such mechanisms should be gerial positions. Formally training women to put in place, and informed by a review of inter- participate in community-level committees national best practices. and encouraging their roles as managers in other segments of the tourism industry could Table 20 provides an overview of benefit shar- help engage women in higher-value econom- ing arrangements along with examples that can ic activities with higher incomes. be used by park authorities in discussions with communities. Finally, as shown in the previous section, the COVID-19 pandemic has resulted in substantial While the income multiplier for local house- losses in tourism revenues along the Whale holds from visitor spending at Abrolhos Marine Coast. The study finds that a complete loss of National Park is significant, governments can tourist revenue along the Whale Coast reduces enhance the impacts of protected area tourism real income (GDP) by R$ 247.5 million (US$62.7 through their policies and programs to further million) in the region. Each month without tour- stimulate local economies. ism in the coastal region adjacent to Abrolhos ConclusionsandPolicyRecommendations Table 20. Benefit Sharing Arrangements with Local Communities Benefit Sharing Arrangement Examples Direct and indirect Direct: restaurant employees, wait staff, gardeners, taxi/boat drivers, park guides, and handicraft. employment Indirect: Construction, food/goods for restaurants etc. Revenue sharing mechanisms Refers to tourism revenues from concessions and partnerships, and income from levies, permits, of protected area authorities hunting fees and/or taxes which are allocated to local communities. Such funds may be distributed through organized/formal trusts and used to finance local public goods and community development initiatives such as schools, clinics, small scale infrastructure, energy projects, environmental protection, etc. (Spenceley et al., 2019) Revenue sharing schemes Approaches or partnership models include public-community initiatives, public-private partnerships, from tourism businesses and community-owned-and-run enterprises, community-private partnerships, and public-private- partnerships community-partnerships. Information on roles, responsibilities, challenges and limitations for each of these approaches are detailed in the World Bank report, “Supporting Sustainable Livelihoods through Wildlife Tourism” (Twining-Ward et al., 2018). Sustainable harvesting of Many communities depend upon natural resources for their livelihoods. Allowing local people to plants and animals sustainably harvest these resources can improve community support for protected areas. Shared decision-making and Local consultation on tourism development and protected area access, and support for communities capacity building to start small businesses and conservation enterprises. ASSESSING T H E E C ONOMI C IMPACT OF PROTE CTED AREA TOURISM ON LO CA L E CONOMIES IN BRAZ IL 51 Park reduces the income of local poor house- economies to continue productive trends and holds by R$ 73.3 million (US$18.6 million) and support nutritious seafood production during local non-poor households by R$ 357.1 million this time of crisis. The Brazilian population, (US$90.4 million). All production activities lose, including vulnerable groups who live along with total sales losses of R$ 13 million (US$3.3 the Brazilian coast will stand to benefit from million) in fishing to R$ 239.6 million (US$60.7 enhanced livelihoods supported by a healthy million) in retail businesses. Local retail and coastal and marine environment. As the gov- services are the most heavily impacted, as they ernment works to promote a safe economic are the largest income-generating activities in recovery, there is a unique opportunity for the the region, and are highly sensitive to changes country to ‘build back better’. This entails con- in demand for their goods and services. tinuing efforts in coastal and marine protected area management to protect natural assets. Creating jobs through labor-intensive civil works Economic Recovery to build sustainable infrastructure around nation- Transitioning to a blue economy may help mit- al parks and provide alternative livelihoods for igate the risks of the COVID-19 outbreak. Well people who have lost their jobs or businesses managed natural capital, through a blue lens, will stimulate economic activity and improve en- will incentivize tourism and other local coastal vironmental outcomes – a green/blue recovery. Co n clusi on s a n d Pol ic y Re co mm e n dati on s Crabs. 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Conservação ambiental, concessões privadas e dina- mismo econômico: Estudo de caso do Parque Nacional do Iguaçu. Young, C. E., & Medeiros, R. (Eds.). (2018). Quanto vale o verde: A importância econômica das unidades de conservação brasileiras. Conservação Internacional (CI-Brasil). https://www. funbio.org.br/wp-content/uploads/2018/08/Quanto-vale-o-verde.pdf 55 ANNEX 1 Summary Statistics Crops within villages. Use of pesticides was extremely low at 1–3 percent of plots, and fewer than 10 Poor and non-poor households cultivate similar percent of plots were fertilized. crops. Grain (primarily maize) and fruit produc- tion are most common (Figures A1 & A2). Owing Poorer households accounted for around half to the relatively urban nature of the region and the land and output of non-poor households sample, agricultural production plays a relatively that participated in agriculture. Nevertheless, the small role in the livelihoods of communities in the share of households selling crops at markets local economy. Tables A1 and A2 below summa- was very similar for the two groups. On average, rize key agricultural statistics at the plot level. 42–44 percent of the total harvest value was sold at local markets. Only three households On average, poorer households owned or reported selling their crops to a hotel or lodge farmed less land and had lower harvest values directly. Households retained approximately than non-poor households. Hiring agricultural a third of their harvest for home consumption. workers is not a common practice, though a Around 9 percent of crops were lost to spoilage. degree of labor exchange/cooperation exists Table A1. Crop Production and Inputs (Plot level) Inputs Average Plot Average Family Labor Pesticides Fertilizer Size (acres) Harvest Value days % Hiring Labor Poor 2,962.3 1,732.2 230.6 0.01 0.03 0.09 N=83 (4,253.8) (4,230.4) (201.9) (0.11) (0.19) (0.28)               Non-poor 4,641.5 2,318.7 262.1 0.03 0.01 0.06 N=502 (5,997.6) (8,879.4) (219.7) (0.18) (0.12) (0.25) Source: World Bank Survey Note: Information presented at the plot level Table A2. Crop use and sales (Household level) A N N E XE S Share of Crop Share to Gifts   Share Selling  Share Consumed Spoilage Sold and Storage Poor Mean 0.87 0.44 0.35 0.09 0.13  N=40 SD (0.34) (0.39) (0.34) (0.17) (0.23)               Nonpoor Mean 0.86 0.42 0.34 0.09 0.13 N=207  SD (0.35) (0.40) (0.35) (0.19) (0.21) Source: World Bank Survey 56 BANKING ON PROTE C TED AREAS Figure A1. Crop type distribution Figure A2. Livestock distribution 1% 7% 10% 10% 8% 13% 30% 29% 2% 2% 6% 26% Non-poor Poor Non-poor Poor 34% 76% 12% 83% 11% 24% 15% Chicken Cattle Cassava and grains Fruits Ducks/Fowls Other Legumes and tubers Cash Crop/Other Pigs Vegetables Source: World Bank Survey Livestock The main livestock in the coastal region of Bahia were by households; around 10–12 percent was sold during the chicken and cattle. Figures A3 and A4 give a snapshot of the year. Besides being a production activity, livestock are often distribution of livestock types. Bahia state has rich pasture- a means of savings and asset accumulation. land for cattle (Vilela et al., 2018), and its herds are valued at an estimated 10–15 times that of chicken production.22 Most livestock are purchased locally by both poor and non- poor households. Poorer households were less likely to sell Table A3 summarizes key livestock rearing statistics. On av- livestock locally; however, this may reflect the small sample erage, poor and non-poor households rearing livestock had size for poorer households. Less than 20 percent of house- R$ 6,350 and R$ 17,170 worth of livestock holdings, respec- holds classified as poor owned livestock. tively. Only 12–13 percent of livestock output was consumed Table A3. Livestock and Inputs Sales Purchase Input value (R$) Share Share Pens Total consu- Share Local purcha- (mainte- A N N EX ES value med sold % sing Local % nance) Vet Feed Mean 6,350 0.1 0.1 0.2 0.1 0.8 15.5 49.6 131.7 Poor SD (10,541.9) (0.19) (0.31) (0.45) (0.33) (0.45) (63.0) (165.0) (206.8) Mean 17,170 0.1 0.1 0.8 0.1 0.8 59.3 65.9 201.6 Non-poor SD (33,336.1) (0.19) (0.22) (0.42) (0.45) (0.42) (161.7) (207.6) (326.1) Source: World Bank Survey 22 To estimate the value of herds, we multiplied the reported number of animals by the median price. 57 Fishing in the coastal cities of Caravelas, Nova Viçosa More than one-fifth of residents in the sample and Alcobaçca, where most fishing is focused participated in fishing and fishing related activ- on near-shore catch. Table A4 summarizes key ities for their livelihoods, with non-commercial, fishing statistics. Fifty-three percent of fisherfolk small-scale household operations concentrated owned a boat, and the average value of a fish- ing boat and engine was R$ 34,200 (US$8,550); the value of other fishing equipment (hooks, Figure A3. Distribution of Catch (by Kgs) poles, nets, cages, etc.) was around R$ 10,700 (US$2,675). On average, just over 3 persons crewed the ship, including the survey respon- dent. The average interviewee made a trip 1% almost every other day (153 trips per year). The reported average catch per trip was around 32.5 kilograms. Pelagic Finfish (ex. Tuna, Mahi Mahi) Figure A3 gives a snapshot of catch distribution Inshore Finfish (ex. Jacks/Snapper) by kilograms and Figure A4 summarizes the 44% By Kilograms 48% Crab/Lobster/Shellfish frequency of fishing trips to various habitats. The most commonly chosen fishing sites were in the Other (ex. Coral Reef Fish) open ocean (52 percent), and approximately a quarter of trips were in rivers. Fisherfolk were 7% asked the type of catch they primarily caught for each fishing trip. Pelagic finfish are the most commonly caught by weight (48 percent), followed by crabs, lobster, and shellfish (44 Source: World Bank Survey percent). Trips to catch pelagic and nearshore finfish are around 22 percent and 12 percent of all trips, respectively. Figure A4. Fishing Habitats by Trip (Targeted Habitat) The average business size was small, consisting of 2.37 individuals for retail type businesses and 1.61 individuals for services. Table A5 summa- rizes key business statistics. Most businesses operated full time with family labor. Monthly 26% Pelagic/Open Ocean wages were higher for retail businesses. On Coral Reef average, retail and service businesses brought Targeted in R$ 56,710 and R$ 48,327 (US$13,400 and Seagrass US$11,400) in annual revenue and earned R$ Habitat 52% 10% Mangrove 12,535 and R$ 14,311 (US$2,950 and US$3,370) in net income, respectively. 3% River 10% Table A6 summarizes key expenditures for businesses. On average, service type business- es had larger monthly rents (R$ 82 vs R$ 65) and lower transportation costs (R$ 51 vs R$ 93) than retail businesses. Most purchases of retail A N N E XE S Source: World Bank Survey items, crops, livestock, and fish products were local, while around a quarter of services hired (construction, repair, maintenance, etc.) were from outside the local economy. Table A4. Fishing Summary Statistics Average % Fisherfolk Average vessel equipment Average labor Average annual Average catch with boats value (R$) value (R$) per trip trips per trip (kg) Mean 0.5 34,206.0 10,733.0 3.1 153.0 32.5 SD (0.5) (31,155.0) (22,937.0) (1.5) (106.1) (40.4) 58 BANKING ON PROTE C TED AREAS Table A5. Business Operations Labor Months Asset Monthly Revenue Profit Operated # Hired # Family Value Wage Retail Mean 10.8 0.83 1,782.30 1.54 16,742 56,710 12,535 N=202 SD (2.9) (4.1) (2,625) (2.5) (31,788) (93,788) (15,345) Services Mean 10.4 0.47 1,269.90 1.14 18,954 48,327 14,311 N=106 SD (3.3) (2.0) (1,963) (1.1) (30,400) (77,656) (16,630) Table A6. Business input purchases (monthly) Crop Livestock Fish Retail goods purchases purchases purchases Services hired purchased Rent Transport R$ % out R$ % out R$ % out R$ % out R$ % out Retail Mean 64.6 92.8 341 0.04 56.3 0.01 8.7 0.01 511.7 0.23 20.8 0.01 N = 202 SD (196.3) (182.2) (867.1) (0.19) (271.4) (0.1) (58.6) (0.08) (993.9) (0.42) (93.3) (0.08) Service Mean 82 50.7 96.1 0.01 90.7 0.02 15.1 0 906 0.26 19.1 0.03 N = 106 SD (210.0) (129.6) (293.9) (0.01) (348.2) (0.14) (62.6) - (1,391.0) (0.42) (69.3) (0.17) A N N EX ES