2010年-世界发展银行全球_Belarus_-_Industrial_Performance_Before_and_During_the_Global_Crisis___Belarus_Economic_Policy_Notes_-_Note_No_3_38页_1mb

Summary of Trends and Issues in the Services Sector of Belarus

Core Content

This document presents an analysis of the services sector in Belarus, focusing on its current state, challenges, and potential for growth. It outlines key trends and issues related to business services, trade in services, and the business environment, and provides policy implications for a more balanced economic development strategy.

Main Messages

1. Underdeveloped Services Sector

   • The services sector in Belarus is significantly underdeveloped relative to its level of economic development.
   • Its share in GDP is lower than expected, and its contribution to GDP growth has been declining.
   • Despite providing half of the total employment, growth in the sector has slowed down in recent years.

2. Impact of Policy Choices

   • Belarus has historically prioritized industrial and agricultural growth at the expense of the services sector.
   • This has led to a distorted economic structure, with a heavy reliance on state-owned enterprises (SOEs) and a lack of private sector development.
   • The services sector has not kept pace with the growth of other sectors, particularly in terms of productivity and efficiency.

3. Potential for Growth

   • Reducing regulatory and administrative barriers could significantly boost the services sector’s growth.
   • The sector could act as a driver of productivity and provide a more balanced contribution to economic growth.
   • A shift in policy towards a more open and competitive environment would be beneficial for both domestic and foreign investment.

4. Importance of Business Services

   • Business services are crucial for the development of manufacturing and FDI.
   • They enable enterprises to focus on core activities and contribute to the modern knowledge economy.
   • The availability of high-quality business services influences FDI location decisions.

5. Challenges in the Business Environment

   • The services sector faces major constraints such as excessive tax and administrative burdens, limited access to resources, and skills shortages.
   • Issues with intellectual property rights could hinder the development of R&D and human-capital intensive services.
   • The current business environment is not conducive to innovation and productivity.

6. Outsourcing Patterns

   • Many industrial enterprises in Belarus outsource non-core business services, such as logistics, marketing, and IT support.
   • Legal and HR services are often provided in-house, while some services like accounting and IT are more commonly outsourced.
   • SOEs tend to outsource more to other SOEs, which limits competition and affects service quality and pricing.

7. Need for Structural Reforms

   • A more balanced growth strategy is needed to improve the economic structure and promote private sector development.
   • Structural reforms in the services sector would enhance productivity, efficiency, and competitiveness.
   • The shift towards efficiency and innovation could increase the demand for high-quality business services.

Key Trends and Issues

I. Services Sector in Belarus: General Trends

• The share of services in GDP is significantly lower than expected for Belarus’s income level.
• Services contributed less than 1% to GDP growth in the period 2005-2008, while industry and construction contributed over 5%.
• The share of industry and construction in GDP increased by almost 11 percentage points between 2001 and 2008.
• The share of "other services" declined by 12 percentage points, indicating a shift away from diversified services.
• Employment in the services sector is relatively high, but growth has been slow, especially in the decade before the global crisis.
• Total factor productivity (TFP) growth in the services sector has been modest, with a relatively flat trend compared to industry.
• Labor productivity in the services sector has remained higher than the average in the economy, but growth in non-traditional services has been limited.

II. Business Services

• Business services are mainly supplied to other enterprises, though the public sector and households also use them.
• The survey of 516 industrial enterprises highlights the demand for and use of various business services.
• Outsourcing intensity varies by service type, with some services like logistics and IT support being more commonly outsourced.
• Legal and HR services are often provided in-house, while others like marketing and IT are more frequently outsourced.
• SOEs dominate the provision of certain services, such as new product development and HR services, which limits competition and affects service quality.
• The use of foreign organizations for outsourcing is limited, but more likely in specific service areas such as IT and equipment servicing.

Policy Implications

• A more balanced growth strategy should be adopted to promote the services sector and reduce the distortion in the economic structure.
• Structural reforms in the services sector are necessary to improve the business environment, reduce regulatory barriers, and enhance productivity.
• Encouraging the development of market services, especially those with high potential for FDI, could contribute to economic diversification and growth.
• Improving access to resources, reducing tax and administrative burdens, and addressing skills shortages are critical for the sector’s development.
• Enhancing the quality and availability of business services would support the competitiveness of the manufacturing sector and attract foreign investment.

Conclusion

The services sector in Belarus is underdeveloped and has not kept pace with the country’s economic growth. This is due to a combination of policy choices, regulatory barriers, and a lack of a competitive business environment. Addressing these issues through structural reforms and a more balanced growth strategy could unlock the sector’s potential and contribute to long-term economic development.