Prospects for a services agreement in South Asia: Trade, investment and development issues

Description

Services have been a key driver of economic growth in South Asia since the 1990s, consistently growing faster than overall GDP. The sector’s share in regional GDP increased from about 36 percent to nearly 50 percent between the 1980s and 2006, reflecting similar trends across individual countries. However, employment generation in services has not kept pace with its contribution to output, raising concerns for poverty alleviation and human development goals. Subsectoral patterns highlight the importance of deregulation and policy reforms—especially in telecommunications and financial services—as well as rising incomes and domestic demand in segments such as trade and distribution. Non-commercial services, including public administration and social services, also contribute significantly in some countries. Trade data show increasing intra-regional trade in services and growing participation of South Asia in global services trade, indicating rising competitiveness and untapped potential. However, there are considerable asymmetries across countries in terms of scale, growth and trade patterns, with regional trends largely driven by India. All four modes of service delivery under the WTO’s General Agreement on Trade in Services (GATS) offer scope for deeper regional integration. The study suggests that complementarities and convergence in services are likely to be stronger than in goods, driven by income growth, policy reforms and public sector involvement. Nevertheless, effective integration will require addressing asymmetries in interests and capabilities, with India playing a central role. The analysis focuses on a select group of services to provide deeper insights across infrastructural, commercial and social sectors rather than a broad but less detailed overview.

Publication Date

1-1-2012

ISBN

978-9746803137

Publisher

United Nations Development Programme

Keywords

Trade agreement, Services agreement, Services sector, Economic growth, Poverty reduction

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