South Africa : Finance, construction lead SA's service sector
By Michael Appel
Johannesburg - The finance and construction industries have been identified as the most significant contributors to growth in South Africa's services sector.
Deputy Minister of Trade and Industry, Rob Davies, on Wednesday said in South Africa, service sectors contributed 74 percent of the Gross Domestic Product (GDP), and 72 percent 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," said Mr Davies, speaking at the Service Exporter Network Annual Meeting and Conference.
He highlighted the importance of sectors such as the services sector to the growth of South Africa's economy.
Services and trade within the services sector is becoming increasing important to both developed and developing countries, Mr Davies said, adding that the sector had become inclusive of telecommunications, transportation, finance, insurance, distribution, information services and entertainment services.
The services sectors currently account for two thirds of global output, one third of global employment and nearly 20 percent of global trade, the deputy minister said.
Between 2000 and 2007, global services sectors grew at an annual rate of 10.1 percent which was 1 percent more than the growth in trading goods.
The Accelerated and Shared Growth Initiative of South Africa (AsgiSA) identified two important services sectors, namely Business Process Outsourcing and off-shoring (BPO&) 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," Mr Davies said.
Developing countries such as South Africa have historically adopted a relatively defensive stance towards negotiations on trade in services whether at multilateral or bi-lateral levels.
This, the minister explained, was probably due to the fact that developing countries perceive the service sector to be less advanced and less developed than those in the developed world.
Developing countries have 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," the deputy minister highlighted.
He added that it is necessary for developing countries to advance their interest in trade in services and identify areas where they can make headway by cross border exports of trade, in particular. - BuaNews