South Services Exports Grew at Slightly Slower Pace than Manufacturing Exports
Aug 20, 2002
According to a recently published study by Rolf J Langhammer, of the Kiel Institute of World Economics, “Developing Countries as Exporters of Services,” in the June issue of the Journal of Economic Integration merchandise exports of the developing countries during the last decade registered an annual 8.9% growth rate, while services grew at a slightly slower 8.3%. The study, which uses trade data released by the WTO, shows that in the same period merchandise trade exports of the industrialized countries (including those of the transition economies) grew by an annual 6.4% between 1989 and 1998, while commercial services exports grew at a faster 7.6% per year over the same period.
The author points that the absence of a more intensive use of new information technologies (IT) have prevented developing countries from exporting more producer services. As a result, developing countries continue to depend on slow-growing exports of labour-intensive consumer services.
Given the link between goods production and goods distribution, successful exporters of manufactures mostly overlap with successful exporters of services. The research argues that for the time being over proportionate growth of service exports from developing countries will remain limited to country episodes, but will not have the same wide country coverage as growth of manufactured exports.
The paper also studies how movement of persons and the growing importance of services trade through subsidiaries of multinationals helps explain the performance of both developed and developing nations.
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