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Establishing Coalitions of Service Industries in Developing Countries
Some Proposals on Cooperation between UNCTAD and the CSIs
Dr W.K. Chan (Hong Kong)
Dr Rodolfo Martinez (Argentina)
Mr Roberto Alfaro (Panama)
January 1997

Background

  1. Following the conclusion of the 11th Conference of the Coalitions of Service Industries held in Geneva on 9-11 July, a committee has been set up by the Coalitions to pursue closer cooperation with UNCTAD. The committee comprise the following:

    Dr W.K. Chan, Hong Kong Coalition of Service Industries (Convenor)
    Dr Rodolfo Martinez, Union Argentina de Entidades de Servicios
    Mr Roberto Alfaro, Camara de Comercio Industrias y Agricultura de Panama

  2. This was in follow-up to a keynote luncheon speech given by Dr Rubens Ricupero, Director-General of UNCTAD, to the CSIs on 10 July. During the luncheon reference was made to the importance of assisting developing countries in the formation of CSIs or of similar bodies, as a means of enhancing their capacity both in developing their own service industries and in creating export opportunities.

  3. The collective view of the CSIs is that UNCTAD and the CSIs are in complete agreement over the developing countries' interests in the GATS. Indeed, the strengthening of the CSI network is one of the major tasks the international CSIs have set themselves upon.

  4. This purpose of this paper is to offer, from the CSIs' point of view, some suggestions for the way forward. The paper is organised into the following sections:

The Current CSI movement

  1. The "Coalitions of Service Industries" is a loose, informal network of private-sector business organisations which share a common interest over the development of service industries worldwide.

  2. There is no formal membership structure for the world's Coalitions of Service Industries. By tradition, the CSIs meet about once a year in a "CSI Conference". The Coalitions have adopted a very open practice with no particular requirement over participation in these conferences. There is, therefore, no formal "register" of CSIs. In practice, there is consistently a core group of participants in these conferences. However, the core group of participants in these conferences represent the sole business national organisations able to interact in the CSI's World Conference and therefore legitimise the participation of other national organisations by invitation.

  3. Despite its informal nature, the CSIs have been acknowledged as playing a significant, some would even say a key, role both in the launch of the negotiations on trade in services of the GATT and in providing the impetus for continual monitoring of the ongoing services negotiations under the WTO.

  4. The CSI's World Conference is composed by the following national business organisations:
  5. Besides, the CSIs are also loosely related to other international bodies with an interest in service industries which are of an academic and policy nature, such as the following:
  6. Although predominantly a private-sector driven movement, due to their policy-oriented nature the CSIs almost always involve also government officials in their discussions. Apart from officials of individual economies, the CSIs often also relate closely to multilateral bodies notably the WTO, OECD and UNCTAD.

The CSI agenda

  1. Collectively the CSIs' agenda often has a trade-policy focus, particularly on the General Agreement on Trade in Services. There is also a constant concern for improvement of statistical measurements of service's contributions to GDP. At the same time, the CSIs cooperate on information exchange in general service industries matters. Where joint effort is exercised it is usually to lobby for some development in international trade policy, such as in liberalisation of service sectors or on the development of services statistics. Outside of the CSI Conference, the CSIs maintain regular contacts through informal exchange and occasional bilateral cooperation.

  2. Domestically, each CSI may have its own national agenda such as on quality, productivity, business facilitation and promotion.

The CSI Conference

  1. In the absence of a formal structure, the CSI Conference has become the major institutional link among the CSIs. There have been 11 such conferences. The common theme running through these conferences has been global liberalisation of services.

  2. Normally the CSIs take turn to host these conferences in their own territories although sometimes the conference may be held offshore from the organiser's home country (such as when it is held in Geneva which does not have a CSI). Where the conference is held in the host's country, the host organiser will have an opportunity to also build into the conference agenda a programme which relate to the concerns of its domestic constituencies, often with support from its own government. The WTO secretariat has been highly supportive of all CSI conferences.

  3. Many of the CSI conferences result in some form of joint statements on the development of services liberalisation, mostly addressed to the WTO. In addition, it is not unusual for the CSIs to discuss and agree on additional statements during the year by consultation through correspondence.

  4. Most CSI conferences consist of a session for a "CSI Directors' meeting" which provides an opportunity for the CSIs to report on their work, discuss the way forward and to decide on future agenda as well as appoint an organiser for the next conference.

  5. A summary of the main features of the most recent CSI conferences are as follows.
    7th Conference, Hong Kong, 1991
    Host : HKCSI
    Participants : 93
    No. of CSIs : Nine
    Theme : Liberalisation and Growth post-Uruguay Round
    8th Conference, Buenos Aires, 1992
    Host : UDES (Union Argentina de Entidades de Servicios)
    Participants : 160
    No of CSIs : Six
    Theme : Various themes on liberalisation and trade in services, held concurrently with the Second National Congress of the Argentine Union of Services Entities.
    9th Conference, Auckland, 1993
    Host : New Zealand CSI
    Participants : 54
    No. of CSIs : Six
    Theme : Expanding Global Business through Trade in Services
    10th Conference, Dublin, 1995
    Host : Irish CSI
    Participants : 47
    No. of CSIs : Seven
    Theme : Services to the Year 2000
    11th Conference, Geneva, 1996
    Host : USCSI
    Participants : 82
    No. of CSIs : Nine
    Theme : The Global Agenda for Services Trade Liberalisation

The stake of the developing countries

  1. One result of the Uruguay Round is the recognition that a good potential exists for many developing countries to increase their export of services. To that end there are already provisions within the GATS on the developing countries' stake in services. Specifically, Article IV of GATS provides for increasing participation of developing countries through technology transfer, access to distribution channels and information networks, and liberalisation in sectors of export interest to them. The advantage of multilateral negotiations on a concensus basis for developing countries is an achievement of the GATT and the WTO that could be protected and enhanced through the active participation of new Coalitions from developing countries lobbying their governments in future rounds.

  2. In addition, service industries of developing countries will receive a boost from the anticipated growth in trade in goods arising from the Uruguay Round. As an UNCTAD report observes: "Developing countries which have experienced the fastest growth in their manufactured goods exports are those which have emerged as relatively strong in their services trade" (Expansion of Trading Opportunities to the Year 2000 for Asia-Pacific Developing Countries: National Strategies and Institutional Frameworks for Export Expansion, UNCTAD 1995 p.75).

  3. As a result of the increasingly globalising nature of many of the service industries, a good potential exists for many developing countries to enhance the capacity of their service exports. The potential is big but developing countries may need to make adjustments in order to realise it. It is possible, for instance, that they possess a certain comparative advantage and yet lack the ability to promote themselves and compete in overseas markets. Or they may be prevented from maximising their domestic capacity and international competitiveness due to lack of supporting infrastructure.

  4. There is already considerable international effort in enhancing the infrastructure of developing countries. From the point of view of the globalising economy, what is equally important is the development of a business orientation, the "softer" side of the infrastructure which is pertinent to global businesses. The creation of a business culture is the best means of ensuring that the benefits of hardware infrastructure is fully utilised. It also helps ensure that multilateral economy policymaking in the context of the WTO benefits from the participation of the key stakeholders of global trade, namely, the private sector businesses.
  5. A truly global business orientation can only be cultivated through practical contact and constant exchange of experience among business practitioners. From the experience of the Coalitions of Service Industries, bodies such as the CSIs have played a useful role in focusing attention and coordinating among various agencies domestically, as well as facilitating the strategic development and promotion of service industries both locally and internationally.

  6. The Coalitions of Service Industries have therefore set itself the task of strengthening the CSI network through encouraging the development of bodies within developing countries to act as counterparts to the CSIs.

Proposals for the way forward

  1. We propose that UNCTAD and the CSIs should cooperate in assisting the development of CSIs or similar bodies within developing countries.

  2. The exact institutional form of the CSI counterparts to be established in developing countries will, of course, depend on the specific circumstances of individual economies. Although those agencies are expected to have both a service-orientation and a private sector focus, there is no necessity for them to be known as a "coalition of service industries" or to be totally constituted by the private-sector. They do not even have to be newly instituted bodies. One possibility, for instance, is for a "CSI" to be established as a branch or committee of an existing institution, or a committee of businessmen sponsored by the government.

  3. Before making specific recommendations for action, we believe a number of principles should be laid down to provide guidance to any concrete projects that may be developed. These principles should, in our view, be as follows.
    1. The UNCTAD/CSI initiative should, as far as possible, be developed through harnessing the developing countries' own resources, including those of the public sector, the private sector and transnational corporations. The key is to encourage developing countries to help themselves, rather than to impose "assistance" from the outside.
    2. The emphasis should be on institution building rather than actual business promotion.
    3. Projects should be designed and implemented in a cost-effective manner.

  4. In light of the above, we have developed the following six proposals as our initial recommendations, as follows.
    1. Development of a source book on current CSIs.
      • This would serve as a reference for developing countries in forming national CSIs according to their own needs. A recent paper being produced by ITSP for UNCTAD entitled "Forming and Running a National Coalition of Service Industries" may serve as a useful starting point for such a source book.
      • Production of the sourcebook could be undertaken by UNCTAD itself or through commissioning an academic institution, a current CSI or individual consultants who are well connected with the CSI movement.
      • A comprehensive research will entail visits to a number of the current CSIs but in view of the high cost of travelling, this is not recommended. Instead the project should be a desk-based research.
      • The target completion date should be end of 1997.
      • The sourcebook should be disseminated as widely as possible to developing countries.

    2. Establishing a focal point for contacts with the CSIs
      • There should be a central point of contact for the CSIs. The most convenient way to do this is through establishing a Homepage on the Internet which developing countries can access to.
      • On the part of the CSIs, they will need to appoint a coordinator to act as host to the Homepage.
      • Some developing countries may benefit from assistance in the form of simple overheads, such as provision of computer hardware/software and Internet training.

    3. Encouraging developing country participation in CSI forums
      • This should include current CSI conferences as well as CSI-related forums such as SWF and PROGRES.
      • Assistance should be offered in the form of subsidised participation (travelling and accommodation) limited initially to a small number of particpants to be determined jointly by UNCTAD and the CSIs.
      • The first batch should be aimed for the next Geneva Conference of the CSIs in June 1997, on a trial basis. Initially, we suggest the subsidy should be for five countries with no more than two representatives from each (thus limiting the maximum to 10 participants).

    4. Sponsorship of seminar/roundtable/conference in developing countries
      • A seminar or conference on the service industries will provide a good focal point to galvanise public and private sector attention. Such an event could be presented in the form of a joint government-private sector effort with sponsorship from UNCTAD. The exact nature of sponsorship will depend on individual circumstances.
      • The CSIs could also assist by providing speakers to these events. The priority should be to engage the more experienced CSI practitioners to attend on a voluntary basis. Where this is not possible, sponsored participation (e.g. through subsidised travel) may be considered.

    5. Sponsoring the organisation of a CSI conference to be held in a developing country
      • This is to extend the scope of the seminar/conference to an international CSI Conference. For practical reasons, this cannot be done too often but one possibility is to encourage a developing country to host it in the year 1998/99 either after, or together with, the launch of a CSI in that country.
      • Such a conference will be on a bigger scale internationally than a locally based event and the host organiser may require more assistance in the conference organising.

    6. Conducting case studies of service export sectors of developing countries
      • Most negotiation targets from developed countries have been proposed from business to government. In developing countries since the services exports are less mature or articulate the situation is normally the opposite generating insufficient interest for active participation from business to influence their governments. For countries interested in establishing a CSI, this is a good reason to do research and analysis of their service export cases to enhance understanding of their export potential.

  5. We invite UNCTAD to consider and if through appropriate agree to the broad principles we suggested. Many of the proposals are subject to more detailed design and budgetting which UNCTAD will be in a much better position to consider. The CSIs are however more than happy to provide any necessary input in the formulation of concrete programmes.

  6. We would stress that the above are initial proposals and we remain open to further discussion of other possible programmes in assisting the formation of CSIs in developing countries.

  7. Some of the above recommendations will, however, require a more imminent decision in view of the short time. In particular, a decision needs to be made in respect of the next CSI Conference.


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