Trade Reforms for Export Competitiveness
5
underlines the importance of providing sector-specific public goods that are selected in consultation with the private sector in a transparent manner. Simply removing general barriers to competition, although important, is not sufficient to achieve the structural transformation required for sustained growth.
Services Trade Part II examines developments with respect to services trade. For a long time, most services were considered to be nontradable, but innovations in information and communication technologies have led to a fragmentation that has made it possible for many more services to be provided at a distance, including across borders. Indeed, services exports from countries in the Middle East and North Africa have grown dynamically in recent years, driven by the ongoing trend in industrial countries of outsourcing back office and information technology functions to take advantage of advanced skills and to reduce the labor costs of specialized service providers. Other modes of services trade—consumption abroad (tourism), commercial presence (foreign direct investment) and the temporary movement of workers—are equally, if not even more, important for the economies of the region. In chapter 5, Cattaneo, Diop, and Walkenhorst assess the prospects for emerging services exports in Tunisia. They identify a number of significant strengths that have driven growth in services exports, including the large pool of skilled engineers willing to work at relatively low wages and the geographical and cultural proximity of Europe. The authors note a number of impediments that could hamper further expansion and warrant the attention of policy makers. Lack of competition in fixed-line telecommunications and restrictions on the entry of foreigners into professional services drive up the costs of service providers; poor payment discipline of public procurement services exacerbates the financial difficulties facing small and medium-sized firms; and weaknesses in selected areas of education and training, such as nursing and managerial education, create staffing bottlenecks for aspiring exporters. The authors see substantial potential for growth in medical tourism, back-office outsourcing, and information technology-enabled services for Tunisia. In addition to being a key area of export growth potential, services are also important for economic efficiency and growth. In chapter 6, Diop looks at several “backbone” services (telecommunications, banking, and air and maritime transport) in Morocco. These services play critical roles in