View from Europe: Mallorca anti-tourism protests should spark concern

When we think about FDI, we often do so in the context of manufacturing. However, one of the fastest growing industries – and areas of FDI – in the world is tourism. Many predict industry growth rates of about 5% to 7% for the next few years.

But gathering storm clouds of global protectionism and – specific to the tourism industry – environmentally driven grassroots anti-tourism movements could threaten this predicted growth trajectory.

There have long been mutterings about the concreting over of coastlines with hotels, but what was witnessed in Mallorca, Spain, surely shows a new level of discontent – as well as a willingness to take action. Thousands of people protested (and occasionally agitated violently) against the influx of tourists, which according to them is responsible for rising rents, environmental degradation and other evils.

From an economist’s perspective, tourism seems to be an important industry for economic growth. So why are people in Mallorca, and other European regions, so unhappy about it?

For one, there is a growing disconnect between international organisations, the political and economic elites, and the general population. So much so that people are apparently willing to act against what elites interpret as their own best interests. That the tourism industry, the poster child of many national economies whose growth rate outpaces general economic growth, is experiencing such difficulties should be cause for concern.

Such a highly visible industry falling out of favour with the general public could suggest a new zeitgeist spreading across Europe: the ephemeral, but festering, disaffection of large sections of the population with a system where wealth appears to aggregate only at the top, and where profits are privatised while losses and problems are socialised.

Whether or not this is the case and whether corrective actions need to be taken is a different debate. The issue must be treated as a matter of urgency. Otherwise, these vociferous protests against tourism-related investment might not be a blip caused by a newly budding ecological conscience, but the harbinger of days that are unfavourable to FDI in general – in whatever guise that story might raise its head (for example, ‘foreigners buying up our companies’, ‘foreign corporations jostling out our small family enterprises’, and so on).

Mallorca isn’t yet cause for panic (unless you work in tourism), but it should be a cause for concern.

Martin G Kaspar is head of business development at a German mittelstand company within the automotive industry and a PhD candidate at Durham University. E-mail: martin.georg.kaspar@gmail.com