Overlooked opportunity: tradable business services, developing Asia, and growth

Business services are key for growth. This paper argues that developing Asia is overlooking an opportunity for increased growth and development through trade in business services.

The paper argues that developing Asia would benefit from liberalising services trade as it has benefited from liberalising goods trade - the same potential exists in business services.

Findings include:

• Asian business service sectors are relatively small and expensive
• in fact, many business services are tradable, but developing Asia has relatively high barriers to services trade

Recommendations are that:

• developing Asia should reduce policy impediments to business services trade
• the long run fix to small and expensive business service sector is to increase the skill abundance of Asia
• in this context, increasing educational attainment in developing Asia is likely to resolve this issue over the long term, so the region should continue to make education a priority
• similarly, all Asian countries should collect and publish more detailed information on the service sector and its trade - to understand what is happening in the service sector requires a much richer view than is currently possible
• however, in the short run, it makes sense to import business services from the developing world and take advantage of the gains to trade in this large and vital sector