Finance, construction drive services
Michael Appel
17 November 2008
The finance and construction industries have been identified as the most significant contributors to growth in South Africa's services sector.
Deputy Trade and Industry Minister Rob Davies said last Wednesday that South Africa's services sector - which includes telecommunications, transportation, finance, insurance, distribution, information services and entertainment services - contributes around 74% of the country's gross domestic product (GDP) and 72% of employment.
"Service sectors such as finance and construction have been particularly significant contributors to growth during the upswing which we experienced between 2001 and 2007," he told delegates at the Service Exporter Network Annual Meeting and Conference in Johannesburg.
He highlighted the importance of sectors such as the services sector to the growth of South Africa's economy.
Services and trade
Services and trade within the services sector is becoming increasing important to both developed and developing countries, Davies said.
The services sectors currently account for two-thirds of global output, one-third of global employment and nearly 20% of global trade, he said.
Between 2000 and 2007, global services sectors grew at an annual rate of 10.1%, which was one percent more than the growth in trading goods.
Asgi-SA
The Accelerated and Shared Growth Initiative of South Africa (AsgiSA) identified two important services sectors, namely business process outsourcing and tourism.
"Beyond that, and beyond the sectors already mentioned, service sectors like mining, engineering, medical services and a huge range of business services and transport and communication services have a huge potential in terms of their contribution to GDP and employment.
"It is for this reason that we have begun work on a comprehensive National Service Sector framework strategy document, which is now in its first draft," Davies said.
Trade in services
Developing countries such as South Africa had historically adopted a relatively defensive stance towards negotiations on trade in services, whether at multilateral or bi-lateral levels.
This, he explained, was probably due to the fact that developing countries perceived the services sector to be less advanced and less developed than those in the developed world.
Retaining policy space
Developing countries had also argued the need to retain policy space, both to allow for the fostering and development of local service sectors and, critically, to allow for domestic regulation of the sector.
"We as South Africa need to take note of and be proud of the fact that our domestic financial sector has thus far been relatively unscathed by the global credit crunch and financial sector meltdown.
"This has to a large extent been due to the quality of our domestic regulation, and it is noteworthy that measures like our National Credit Act are now the subject of considerable international interest," Davies said.
He added that it was necessary for developing countries to advance their interest in trade in services and identify areas where they could make headway by cross-border exports of trade, in particular.
Source: BuaNews
