Asia must cut red tape to unlock full potential of service sector - ADB report
HONG KONG. October 4. KAZINFORM Booming service industries can be a powerful engine of economic growth and job creation for developing Asia, but the sector's true potential remains blocked by restrictions and red tape, a new ADB report shows.
"A slew of regulations restrict competition and hamper development of the services sector, affecting everything from the corner shop to mobile telephones," said Changyong Rhee, ADB's Chief Economist. "These barriers need to be dismantled so that everyone, particularly the region's poor, can seize the opportunities of growth."
Services now account for almost half of developing Asia's output, ADB says in the theme chapter of Asian Development Outlook 2012 Update . The sector contributed about two-thirds of the growth recorded in India between 2000 and 2010, and more than 40% in the People's Republic of China. Services have also been a massive source of jobs, employing 34% of the region's workers, and thus furthering inclusive growth.
Notwithstanding their large and growing quantitative significance, labor productivity levels of developing Asia's services industries still lag well behind those of advanced economies, less than 20% of OECD levels in most countries. The relatively low share of modern services such as information and communications technology (ICT) weighs down on the sector's productivity performance.
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