Structure and specifics of the global services market

Along with the world markets for goods, capital, labor, there is and interacts with them the world market for services. A specific feature of a service as a commodity is that it does not have a material form, but acts as a result of a certain activity. The production and purchase and sale of services are subject to the law of value, and their exchange for goods in material form or other services is carried out in accordance with the amount of labor spent on their production. Services in the world market are services entering the foreign market, i.e. consumer values.

The World Bank classifies services according to the principle of their interaction with other forms of IER into the following groups:

factor services – payments arising in connection with the international movement of capital, labor and technology; non-factor services – other types of services (transport, tourism and other informal services).

In the system of national accounts, services are divided into consumer (tourism, hotel services), social (education, medicine), production (engineering, consulting, financial and credit services), distribution (trade, transport, freight).

International trade in services (MTU) is a specific form of world economic relations for the exchange of services between sellers and buyers of different countries.

The global services market is broken down into narrower markets, as services are diverse and heterogeneous. At the heart of this market is a huge and fast-growing part of the world economy – the service sector. The provision of services is the most dynamic item of world trade, so the share of all types of services in the GDP of developed countries is close to 70%. In developing countries, the figure is close to 55%.

The global services market consists of many narrower “specialized” markets, which is caused by the heterogeneity and diversity of services. Services typically include transportation, communications, trade, logistics, marketing and procurement, domestic housing and utilities, catering, hospitality, tourism, financial and insurance services, science, education, health, physical education and sports, culture and the arts, as well as engineering consultancy, information and computing, advertising, legal, stock exchange and brokerage services, real estate transactions and equipment rental, market research and quality control services: pre-sale and after-sales service, maintenance, activities of government agencies, organizations and departments. In a number of countries, construction is also considered to be a service.

Services are growing at a faster rate than foreign trade; it took only seven to eight years to double the growth, compared to the 15 years that were needed for a similar increase in exports. In addition, international trade in services has an increasing impact on international trade in goods. For example, more and more services are being used to supply goods abroad, from market analysis to the transportation of goods.

Table 4 Resource requirements by component

Volume of world exports and imports of services (millions of dollars)

Source: IMF. Balance of payments statistics. Balance of Payments Statistics Yearbook IMF, Wash, 2002

International trade in services has a number of features compared to traditional trade in goods.

First, services, unlike goods, are produced and consumed mainly simultaneously and are not subject to storage. Therefore, most types of services are based on direct contacts between producers and consumers, which separates international trade in services from trade in goods, in which intermediation is often used.

Secondly, this trade interacts closely with trade in goods and has an increasing impact on it. For the supply of goods abroad, more and more services are attracted, starting with market analysis and ending with the transportation of goods. The success of a product in the foreign market largely depends on the quality and quantity of services involved in its production and sale (including after-sales service).

Thirdly, the service sector is usually more protected by the state from foreign competition than the sphere of material production. Moreover, transport and communications, financial and insurance services, and science in many countries are traditionally wholly or partially owned or strictly controlled by the state. As a result, there are more barriers to international trade in services than to trade in goods.

Fourthly, not all types of services, unlike goods, are suitable for wide involvement in international economic turnover. First of all, this applies to some types of services that come mainly to personal consumption (for example, utilities and household).

The reasons that stimulate the rapid growth of the global services market are as follows:

high standard of living, increasing the demand for services; development of all modes of transport that stimulate international mobility, both entrepreneurs and the population; new forms of communication to replace the personal contacts of sellers and buyers; the accelerated process of expansion and deepening of the international division of labor, leading to the formation of new types of activities, primarily in the non-production sphere.

At the present stage, international trade in services is characterized by the following features:

the share of freight and other transport services decreased, which is associated with a decrease in the share of raw materials in international trade; the share of tourism in the export of services is increasing, which is due to the growth of incomes of the population, the improvement of transport facilities, the development of tourism infrastructure; the most dynamically developing segment of the global services market was the segment “special private services”, which includes financial and various business services; there is a decline in the share of official or government services; the share of developing countries is growing, primarily at the expense of Asian countries, for example, South Korea specializes in engineering and consulting construction services, Hong Kong and Singapore are focused on financial services. The share of Latin American and African countries in MTU has declined; in the income of developed countries, the largest share is made up of business services, and in the income of developing countries, the main item is “tourism” (on average, 17% of all foreign exchange earnings, and in some countries and more, for example, in Jamaica – 30%, in Panama – 55%).

In the Republic of Belarus, the export of services has a stable positive balance. The largest share in the total volume of exports of services (58%) is occupied by transport services, the volume of which reached 860.2 million dollars in 2003, which is 21.1% more than in 2002.

In 2003, exports of tourist services (15.3 per cent of total exports of services) increased by 17.1 per cent to $225.4 million. The volume of business trips amounted to 87.2 million dollars, personal trips –
$138.2 million Exports of communication services (share – 4.9%) amounted to 72.2 million dollars, which is 18.9% more than in 2002.

Imports of services in 2003 amounted to $993 million. or 109.4% to the level of 2002. The largest share in the import of services (47.0%) is occupied by the article “Trips”. At the same time, imports of tourism services, which account for 54 per cent of total imports of services, fell by 4.1 per cent in 2003 to $535.4 million.