International Trade in Services: Evolving Issues for Developing Countries

Transcription

1 International Trade in Services: Evolving Issues for Developing Countries WTO/ESCAP/ARTNeT Advanced Regional Seminar on Multilateral Negotiations in Services for Asian and Pacific Economies Kolkata, September 2006 Prabir De, RIS, New Delhi

2 Growing importance of services sector Services have become the single largest sector in many developing countries 45% of GDP in low-income countries 55% of GDP in middle-income countries 70% of GDP in high income countries Services sector contributes 2/3rd of world production 1/3rd of global employment 1/5th of global trade Demand for services is highly income elastic Efficient services sector is crucial for the economy as well as competitiveness

3 Rising trend in global trade in services Growth in trade in services is uneven. Global trade in services has grown up spectacularly during 1981 to US$ 825 billion in 1980 US$ 4.36 trillion in 2004 Growth of trade in services > Growth in goods 1980s: 8% goods / 10% services 1990s: 9% goods / 13% services : 15% goods / 17% services Asymmetry exists between developed and developing countries in services trade U S $ b illio n Developed Developing World

4 Global distribution of services trade Global distribution of trade in goods and services is very much lopsided. Developed countries shares (2004)- 65% in trade in goods 73% in trade in services Developing countries shares (2004) - 35% in trade in goods 27% in trade in services Developed countries (2004) Net importers in trade in goods ( deficit US$ 514 billion) Net exporters in trade in services ( surplus US$ 94 billion) Developing countries (2004) Net exporters in trade in goods ( surplus US$ 191 billion) Net importers in trade in services ( deficit US$ 55 billion)

5 Trade balance (US$ billion) Trade in Goods Developed Developing* Trade in Services Developed Developing* *Including LDCs

6 Developing countries moving up.. Trade in goods and services in developing countries grew at higher rate than that of developed countries Exception: Developing countries share in trade in services grown up only since 2001 but static thereafter 29% in 1981 / 22% in 1991 / 27% in 2004 Annual Average Growth Rate (%) Trade in Goods Exports Trade in Services Developed Developing Imports Developed Developing

7 witnessing widening gap in global services exports Services exports to total trade in developing countries is declining - 17% in in % in 2004 Higher growth rates in exports in goods than exports in services in developing countries. Higher services exports in developed countries 18% percent in % in The gap between developed and developing countries is widening in services exports % Developed Developing y = x R 2 = y = x R 2 =

8 Structure of services exports from developing countries Developing countries are quite successful in exports of Transport Tourism

9 Exports of transport services Largest exporter Korea US$ 22 billion exports Over 50% country s total services exports About 1 percent of global services exports. Performance of Latin American countries are worse 51% (Argentina) and 48% (Brazil) share in country s total services exports in 1981 => 20% (Brazil) and 22% (Argentina) in 2004 Share of Transport Services in World Total Services Exports (%) Country 2004 Korea China,P.R.: Hong Kong Singapore China, P.R.: Mainland China, P.R.: Taiwan 0.241

10 Exports of travel services Tourism is the main component Largest exporter - China Exports of US$ 26 billion in 2004 (just US$ 2 billion in 1991!) Over 40% country s total services exports About 1% of global services exports. Travel services exports contribute over 70% in South Africa, 77% in Mexico. Indonesia and Singapore seen deceleration in exports of travel services Share of Travel Services in World Total Services Exports (%) Country 2004 China, P.R.: Mainland Turkey Mexico Thailand China,P.R.: Hong Kong 0.410

11 Exports of communication services Exports of communication services are dominated by developed countries. As opposed to transport and travel services, which rely mostly on mature technologies, communication services are among the most hightechnology intensive economic activities. Major exporters from developing countries are not many, and most of them hold negligible shares of the world export market India the only billion exporter! Share of Communication Services in World Total Services Exports (%) Country 2004 India China,P.R.: Hong Kong Indonesia Philippines Russia 0.021

12 Exports of construction services Presence of developing countries in international markets for construction services is scare. China, Russia and Turkey are three largest exporters of construction services (2004). US$ 1.58 billion (Russia) US$ 1.48 billion (China) US$ 0.74 billion (Turkey) Share of Construction Services in World Total Services Exports (%) Country 2004 Russia China, P.R.: Mainland Turkey Indonesia Egypt 0.019

13 Exports of financial services The developing countries share in global exports of financial services is less and stagnated during 1991 to 2004 Hong Kong, Singapore, Korea and Taiwan have achieved over US$ 1 billion exports of financial services in 2004 Share of Financial Services in World Total Services Exports (%) Country 2004 China, P.R.:Hong Kong Singapore China, P.R.: Taiwan Korea Mexico 0.039

14 Exports of computer and information services Computer and information services are one the fastest growing sectors in developing countries Except India and China, none has yet crossed billion mark in exports of computer and information services India has achieved US$ 11 billion of exports of computer and information services in 2003 ~ 50% of country s total exports of services China has witnessed almost 50% jump in exports of computer and information services in 2004, (exports US$ 1.64 billion in 2004) Share of Computer and Information Services in World Services Exports (%) Country 2004 India China, P.R.: Mainland Singapore Malaysia Russia 0.012

15 Exports of personal, cultural and recreational services Exports of personal, cultural and recreational (PCR) services have been growing quite steadily in developing countries During 2001 to 2004, PCR services have grown over 18% per annum in developing countries, touching almost the world average. Malaysia and Turkey are the top two largest exporters, both achieved over US$ 1 billion exports in PCR services in Share of Personal, Cultural and Recreational Services in World Services Exports (%) Country 2004 Malaysia Turkey Mexico China,P.R.: Hong Kong Romania 0.010

16 Export competitiveness of services exports Category of Services Sector Countries with RCA>1 Labour and resource intensive Labour and resource intensive Labour intensive Skill and technology intensive Skill and technology intensive Skill and technology intensive Miscelleneous Transport Travel Construction Communicati ons Computer and information services Financial services Personal, cultural and recreational services Argentina, China Hong Kong, Egypt, India, Korea, Kuwait, Romania, Russia, Singapore, Thailand, Turkey, Ukraine Argentina, China Mainland, Egypt, India, Malaysia, Mexico, Philippines, South Africa, Thailand, Turkey China Mainland, Egypt, Malaysia Romania, Russia, Thailand, Turkey, Ukraine Argentina, Brazil, Egypt, India, Indonesia, Philippines, Romania, Turkey, Ukraine Argentina, India, Romania China Hong Kong, India, Singapore Argentina, Egypt, Mexico, Romania, Turkey

17 Important Issues Growing asymmetry between developed and developing countries in global services exports Developing countries are relatively specialised in transport and travel services Developing countries have comparative advantage in one or many services trade sectors Not every developing country is successful services exporter To gain higher market access, developing countries need to take steps to specialize in services sector Will enhance their domestic services market Will strengthen export capacity Available statistical information is particularly scant and inadequate (Developing countries governments are unaware about true potentials!)

18 Thank you