Asia and Europe : services liberalisation

227 Pages·2003·0.761 MB·English

by  OECD

«
Development Centre
Seminars
Asia and Europe
SERVICES LIBERALISATION
Preface by
Jorge Braga de Macedo and Tadao Chino
Development Centre Seminars
Asia and Europe
SERVICES LIBERALISATION
Preface by
Jorge Braga de Macedo and Tadao Chino
ASIAN DEVELOPMENT BANK
DEVELOPMENT CENTRE OF THE ORGANISATION
FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which
came into force on 30th September 1961, the Organisation for Economic Co-operation and
Development (OECD) shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a rising standard
of living in member countries, while maintaining financial stability, and thus to contribute
to the development of the world economy;
– to contribute to sound economic expansion in member as well as non-member countries
in the process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in
accordance with international obligations.
The original member countries of the OECD are Austria, Belgium, Canada, Denmark, France,
Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries
became members subsequently through accession at the dates indicated hereafter: Japan
(28thApril1964), Finland (28th January 1969), Australia (7thJune1971), New Zealand (29th May
1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996),
Poland (22nd November 1996), Korea (12thDecember 1996) and the Slovak Republic (14th December
2000). The Commission of the European Communities takes part in the work of the OECD (Article
13 of the OECD Convention).
The Development Centre of the Organisation for Economic Co-operation and Development was
established by decision of the OECD Council on 23rd October 1962 and comprises twenty-two member
countries of the OECD: Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany,
Greece, Iceland, Ireland, Italy, Korea, Luxembourg, Mexico, the Netherlands, Norway, Portugal, Slovak Republic,
Spain, Sweden, Switzerland, as well as Chile since November 1998 and India since February2001. The
Commission of the European Communities also takes part in the Centre’s Governing Board.
The purpose of the Centre is to bring together the knowledge and experience available in member
countries of both economic development and the formulation and execution of general economic policies; to
adapt such knowledge and experience to the actual needs of countries or regions in the process of development
and to put the results at the disposal of the countries by appropriate means.
The Centre is part of the “Development Cluster” at the OECD and enjoys scientific independence in the
execution of its task. As part of the Cluster, together with the Centre for Co-operation with Non-Members, the
Development Co-operation Directorate, and the Sahel and West Africa Club, the Development Centre can draw
upon the experience and knowledge available in the OECD in the development field.
THE OPINIONS EXPRESSED AND ARGUMENTS EMPLOYED IN THIS PUBLICATION ARE THE SOLE
RESPONSIBILITY OF THE AUTHORS AND DO NOT NECESSARILY REFLECT THOSE OF THE OECD
AND THE ADB, OR THE GOVERNMENTS OF THEIR MEMBER COUNTRIES.
*
* *
Publié en français sous le titre :
Asie et Europe
LA LIBÉRALISATION DES SERVICES
© OECD/ADB, 2003
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Asian Development Bank
Established in 1966, the Asian Development Bank (ADB) is a multilateral,
development finance institution owned by 61 members, mostly from Asia and the Pacific.
ADB’s fundamental goal is to reduce poverty in the Asia and Pacific region. To this end,
it fosters economic growth, supports human development, improves the status of women, and
protects the environment. ADB’s principal assistance for developing member countries comprises
loans and technical assistance. While a large portion of the assistance is used in public projects
and programs, ADB also pays special attention to private sector development.
ADB headquarters is in Manila, Philippines, and it has external offices worldwide,
including a regional mission for the Pacific and representative offices in Frankfurt, Tokyo,
and Washington, DC. ADB’s staff numbers 2,000 employees from nearly 50 countries.
Headquarters Mailing Address
6 ADB Avenue, Mandaluyong City P.O. Box 789
0401 Metro Manila, Philippines 0980 Manila, Philippines
Tel: [phone]
Fax: [phone]
E-mail: [email protected]
Website: http://www.adb.org
Publications: [email protected]
OECD Development Centre
The Development Centre of the Organisation for Economic Co-operation and
Development was established by decision of the OECD Council on 23 October 1962 and
comprises 22 member countries of the OECD: Austria, Belgium, Canada, the Czech Republic,
Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Korea, Luxembourg,
Mexico, the Netherlands, Norway, Portugal, Slovak Republic, Spain, Sweden, Switzerland,
as well as Chile since November 1998 and India since February 2001. The Commission of
the European Communities also takes part in the Centre’s Governing Board.
The purpose of the Centre is to bring together the knowledge and experience available
in member countries of both economic development and the formulation and execution of
general economic policies; to adapt such knowledge and experience to the actual needs of
countries or regions in the process of development and to put the results at the disposal of
the countries by appropriate means.
The Centre is part of the “Development Cluster” at the OECD and enjoys scientific
independence in the execution of its task. As part of the Cluster, together with the Centre
for Co-operation with Non Members, the Development Co-operation Directorate, and the
Sahel and West Africa Club, the Development Centre can draw upon the experience and
knowledge available in the OECD in the development field.
3
Foreword
This publication was undertaken in the context of the International Forum on
Asian Perspectives, jointly organised by the Asian Development Bank and the OECD
Development Centre. It forms part of the Centre’s research programme on The
Integration of Developing Countries into the World Trading System, and the Centre’s
External Co–operation activities. The Forum held its eighth meeting in Paris on 24and
25 June 2002. Contributions to the meeting are included in this volume.
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Table of Contents
Preface
Jorge Braga de Macedo and Tadao Chino................................................. 7
Introduction and Overview
Kiichiro Fukasaku and John Simpson......................................................... 9
PART ONE
VIEWS FROM THE FORUM
Keynote Address
John Lintjer.................................................................................................... 21
Deregulation and Liberalisation in Services: Experience and Perspectives from
Thailand
Krirk-Krai Jirapaet........................................................................................ 23
Reform and Liberalisation of Financial Services in Korea
Moon Soo Chung........................................................................................... 43
New Opportunities for Services Trade in China
Miaomiao Shi................................................................................................. 59
Postal Reform in the United Kingdom
Stuart Sweetman............................................................................................ 63
Opening Up of Asia’s Insurance Markets: A European Company’s View
Fabrice Lorillon............................................................................................. 69
Financial Sector Reform in Slovenia
Milan Cvikl..................................................................................................... 73
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PART TWO
ANALYTICAL REPORTS
Liberalisation and Competition in the Service Sectors: Experiences from Europe
and Asia
Bernard Chane-Kune, Kiichiro Fukasaku, Jean-Christophe Maur
and Ramkishen S. Rajan ............................................................................... 79
Financial Opening under the WTO Agreement in Selected Asian Countries:
Progress and Issues
Yun-Hwan Kim .............................................................................................195
Programme .......................................................................................................................225
List of Authors and Participants .....................................................................................229
6
Preface
In 1985, the member states of the European Community took a major step
forward to liberalising the service industry by launching their highly ambitious “EC 92”
programme. The principal motivation behind this initiative was simple and
straightforward: it was judged that introducing a competitive single market in the
European service industry would stimulate investment and innovation and would lead
to substantial improvements in efficiency and product quality. As a result, economic
growth would receive a substantial boost and consumer welfare would be enhanced.
This European initiative was instrumental in putting services on the agenda of a
new round of multilateral trade negotiations when the GATT Contracting Parties
convened their Ministerial Council meeting in Punta del Este in 1986. Eight years
later, the successful conclusion of the Uruguay Round led to the creation of the General
Agreement on Trade in Services (GATS) which provides a multilateral framework
for a progressive liberalisation of trade in services. Since then, the liberalisation of
services has continued, albeit at varying speeds, at the unilateral, regional and
multilateral levels. Most notably, it has become an essential component of the regional
trade agreements that have been flourishing in many parts of the world. Asia is no
exception to this trend.
It was against this background that the Asian Development Bank and the OECD
Development Centre chose “Asia & Europe: Services Liberalisation” as the topic of
their eighth International Forum on Asian Perspectives, which was held in Paris in
2002. The Forum provided senior government officials, academic experts and
representatives from the business community and civil society from both Asian and
OECD member countries with the opportunity to exchange their views on the two
regions’ recent experiences of liberalisation and regulatory reform. As the importance
of services in Asia’s economy has increased significantly over the past two decades,
the Forum sought in particular to draw pertinent policy lessons for the region. In
order to assist in this endeavour, two analytical papers were prepared for the Forum.
These papers are presented in Part Two of this volume following a summary, in Part
One, of the speeches and presentations delivered by invited panellists.
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While the economic argument behind services liberalisation is simple and
straightforward, carrying it out is not: the process is typically faced with high political
hurdles. In the case of Europe, for example, until very recently service industries such
as telecommunications, electricity, postal and transport services were generally
dominated by state monopolies which were administered directly by the ministry
responsible for the particular sector. More often than not, employees of the state-
owned companies enjoyed civil-servant status. Under the banner of universal service
obligations, broad social or equity considerations played a major role in the formulation
of pricing policy. These similar obstacles aside, the unique characteristics of the services
provided in the different member states and the divergences in the individual sectors’
market structures have resulted in liberalisation proceeding in very distinct ways in
almost every service industry. As a result, the extent to which the service industries
have been liberalised in each European country has varied considerably, despite the
fact that technological and economic forces driving globalisation have led to a major
turnaround in the policy approach to what were once vertically integrated service
industries.
The European experience highlights the virtue of taking an integrated and well-
sequenced approach that combines institution building, domestic regulation and external
liberalisation. At the same time, for the aforementioned reasons, Europe has also
adopted a gradualist approach to liberalising services. As was pointed out in the course
of the Forum, this gradualist approach carries the risk that momentum may be lost. In
Asia, since the 1997-98 financial crisis, there has been growing recognition that the
orderly development of modern service industries is a prerequisite for the region’s
sustainable development. Further liberalisation in a progressive manner has been called
for with a view to achieving the objectives of the GATS, as stipulated in the Doha
Ministerial Declaration. Indeed, as exemplified by the recent opening up of China’s
insurance market, the increased liberalisation of services will boost foreign direct
investment into the region and provide an excellent opportunity for closer inter-firm
co-operation between Asia and Europe. Enhancing, through policy dialogue, the
understanding of the economic and social impact of services liberalisation is therefore
of common interest to both regions.
Jorge Braga de Macedo Tadao Chino
President President
OECD Development Centre Asian Development Bank
Paris Manila
February 2003
8
Introduction and Overview
Kiichiro Fukasaku and John Simpson
The service sector has become the most important provider of output and jobs
for industrial countries: it accounts for 60-70 per cent of gross domestic product
(GDP) and over 70 per cent of total employment in many OECD countries1. In addition,
this sector has become the most important source of new employment for these
economies. In the developing region of Asia, too, the service sector has grown rapidly
over the past decade. Despite the temporary setback caused by the 1997-98 financial
crisis, the real annual growth rate of GDP in services was close to 7 per cent during
the 1990s (Jha, 2002). From the policy perspective, rather than being one of the
results of development, the adequate provision of services is now recognised as one of
the preconditions for it. For instance, inadequate infrastructure services, such as poor
telecommunication and transport networks or a weak financial system, are perceived
as a critical bottleneck for development. Distribution, trade finance, insurance,
marketing and other business services are complementary to the healthy growth of
industrial activity.
The aim of the 2002 International Forum on Asian Perspectives was to discuss
both European and Asian experiences of services liberalisation and draw some policy
lessons on what Asia might have to gain from more competition in services. The
Forum brought together policy makers, academic experts and representatives from
business communities and civil society from the two regions. This volume has two
parts. Part One recapitulates the key points made by panellists invited to the public
conference held on the second day in the Pierre Mendès Conference Centre of the
French Ministry of Economy, Finance and Industry. Part Two presents two chapters,
one of which is based on the analytical report that was prepared on behalf of the Asian
Development Bank (ADB) and the Development Centre to assist general discussions
at the meeting. This report assesses the outcomes of the liberalisation of services in
Europe with a focus on several specific sectors and reviews the current state of services
liberalisation in Asia. Part Two also includes one more chapter that presents the ADB’s
on-going work in this area. The rest of this chapter sets out the contexts in which
services liberalisation has become one of the key policy challenges in both Asia and
Europe and then summarises some of main policy discussions arising from the Forum.
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