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Doug Krizner: The tiny principality of Andorra is tucked away in the mountains between Spain and France. It’s about half the size of New York City. Tourism is the principal driver of the Andorran economy, but global warming threatens to change that. Kyle James reports.
Kyle James: Two things are impossible to overlook when you’re in Andorra. The mountains, of course. And then, there’s the shopping.
No problem. Some might call it retail hell. But when Andorra, with its tax-free status, started offering goods and cigarettes at cut-rate prices back in the 1960’s, busloads of travelers came.
Before long, it was goodbye backwoods poverty, hello ski resorts and well-heeled tourists. Now, Andorra has a $2.2 billion tourist economy — and one of the highest standards of living in Europe.
You see and hear the boom all around you. Almost every inch of flat land has a building on it. But Andorrans are afraid forces out of their control might put an end to the party. Namely global warming. Last winter, it hardly snowed, and ski resorts lost 20 percent of their business.
Rosa Jordana is the head of the national tourism board:
Rosa Jordana: Now if we keep having warm winters, and having no snow, then it would be very serious matter. So we desperately need snow and good winter.
Andorra’s other economic pillar, retail, is also getting a little weaker. France and Spain have loosened price controls. That means goods in Andorra aren’t quite the bargain they used to be.
Pierre Davasse heads the country’s Bureau for Business Innovation:
Pierre Davasse: We are quite good for the moment, but if we do not begin now to work on diversificating our economy, we may face more difficulties in the future.
Andorra is trying to attract high-tech firms and small, specialized manufacturing — since there’s simply no room for big factories. The goal is round out the economy, so if skiing declines, something else can pick up the slack.
The country has a lot to offer, Davasse says. Most everyone speaks three languages, there’s no income tax, and when it’s quitting time at the office, you can be in the mountains in about 10 minutes.
In Andorra la Vella, Andorra, I’m Kyle James for Marketplace.
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