Services sector growth provides export diversification opportunities and jobs to LDCs
(BALI, INDONESIA) — Least developed countries (LDCs) require significant technical assistance to build their capacities in services exports, agreed members of a panel at the Trade and Development Symposium yesterday. The session was organized by ITC to coincide with the Ninth World Trade Organization (WTO) Ministerial Conference, which is taking place in Bali, Indonesia this week.
Services are important not only in their own right, but also as contributors to agribusiness and manufacturing exports, said Aicha Pouye, ITC’s Director of Business and Institutional Support, in opening the session. "Breaking total world trade flows of goods and services down into their intermediate components, services represent 45% of world exports in value added terms," she said.
"To remain competitive, goods firms are rapidly integrating services into their production chains: services activities are contributing importantly to economy-wide productivity growth," said Jose Rizal, Head of Economics at the Centre for Strategic and International Studies in Jakarta.
"We also see new opportunities opening up in services outsourcing," said Christopher Findlay, Executive Dean at the University of Adelaide in Australia. Growth in knowledge intensive services is the fastest growing component of world trade today, he said.
Business process outsourcing and information technology exports represent a major opportunity for the development of countries like Senegal, said Alioune Sarr, the country’s Minister of Trade, Entrepreneurship and Informal Sector.
Jean Louis Billon, Minister of Trade, Crafts and SME Promotion of Côte d’Ivoire said that policy focus and public-private dialogue to help build an enabling environment for services was essential. The ministers of both Senegal and Cote d’Ivoire stressed that technical assistance was required for their countries to improve their services sectors and to access global value chains, creating jobs.
"It is vital, also, to ensure that the services links in goods value chains, such as transport and logistics, are working efficiently," said Chris Kanter, Chairman of Sigma Sembada Group, incoming President of the Indonesian Employers’ Federation, Vice Chairman of the Indonesian Chamber of Commerce and business cordinator of the Indonesian Services Dialogue.
Aissatou Diallo, Senior Services Officer at ITC introduced the agency’s new services programme, which includes the development of services oriented trade intelligence, as well as capacity building of services SMES, services sector business associations and trade promotion organizations (TPOs)."TPOs in LDCs do not generally have experience in the promotion of services exports, having traditionally focused on agriculture and manufacturing,"she said. "This will need to change in order to diversify LDCs’ exports base."
David Primack, Executive Director of International Lawyers and Economists Against Poverty said that SMEs in poor African countries need to be helped to organise themselves effectively into business coalitions to give greater voice to services sector concerns. Sammy Yen, General Manager of Lion Medical Tourism Services and Executive Director of the Taiwan Coalition of Service Industries added that joining a services coalition had helped to multiply his company’s voice on factors driving future business competitiveness.
Sir Thomas Harris, Vice President of Standard Chartered Bank and Chairman of the European Services Forum stressed the importance of dealing more consistently worldwide with the prolific barriers to international trade in services. Mere Falamaka, Permanent Representative of the Pacific Island Forum to the WTO noted that some of the barriers to diversification of developing country services exports lay in inefficient domestic regulatory regimes, which held back export competitiveness in services.
Many of the speakers referred to the employment intensiveness of services activities and that a focus on this sector brings growth in job opportunities including especially for women and youth. "Awareness raising of the importance of trade in services for development and poverty alleviation continues to be essential," said Jane Drake-Brockman, ITC’s Senior Services Adviser.
In summing up the session, Ms. Pouye reiterated the importance of trade support institutions to sustainably increase services competitiveness. ‘Let this be a wake up call to boost the services sector in poor countries as a contribution to development,’ she said and invited participants to attend next year’s World Trade Promotion Organizations Conference, which will provide a platform to showcase best practices in service promotion in LDCs.