Developing countries to benefit from services export – WB

Developing countries are seen to further benefit from the export of services as new opportunities lead to the creation of more jobs, according to the World Bank.

In its blog, the World Bank said developing countries which have benefited from the exports of services, are expected to see further gains from more export opportunities.

World Bank economists Alen Mulabdic and Gaurav Nayyar said export opportunities are likely to increase as more trade agreements between countries reduce restrictions on services trade, digital platforms make services more tradable, and more multinational firms from developing countries tap opportunities by making outward investment.

According to the multilateral institution, developing economies are seen to benefit through the creation of jobs as services exports have been driving employment generation over the past 15 years.

Across major developing economies, exports related to distribution services, as well as information and communications technology (ICT) and business services, have each created around 2.7 million new jobs.

Globally, 16 million new jobs have been created by services exports.

Meanwhile, the number of jobs supported by exports of goods declined by 31 million.

Manufacturing industries have traditionally been considered the engines of job creation.

According to the World Bank, services exports have been growing globally, more than doubling between 2005 and 2019.

Exports of goods, on the other hand, rose by around 80 percent over the same period.

“Clearly, although the value of trade in goods is still considerably larger than trade in services, the trajectory has changed decisively in favor of exports of ICT and business services,” the World Bank said.

Services exports have enabled countries like the Philippines to diversify its exports.

In the Philippines, the World Bank said ICT, finance and other business services which are typically delivered remotely, accounted for more than 20 percent of the total exports covering goods and services in 2019.

Last year, the country’s information technologybusiness process management (IT-BPM) sector saw a 9.1 percent year-on-year growth in full-time employees to 1.44 million, which also exceeded the 1.43 million target for this year.

In terms of revenues, the country’s IT-BPM sector generated $29.49 billion last year, up 10.6 percent from 2020 and surpassing the $29.1 billion goal set for this year.