ZIMBABWE’S services industry is contributing more than 50 percent to the country’s Gross Domestic Product (GDP) and has potential to contribute even more.
Industry and Commerce Deputy Minister Raj Modi said this yesterday while addressing delegates at the 5th Global Exhibition on Services Conference that is underway in India.
“It is important to note that the service sector is the most important sector for most developing countries like Zimbabwe and it is the largest contributor to GDP and employment,” he said.
“Zimbabwe’s trade in services potential is quite substantial in light of the fact that the services’ sector contributes more than 50 percent to Zimbabwe’s GDP but less than 10 percent total export earnings, with tourism being the major import.”
Deputy Minister Modi said apart from tourism, potential was also there for Zimbabwe to generate more foreign currency through exporting services such as financial services, medical services, construction and engineering, among others.
He said the services sector was the major ingredient for global economic development.
“The economic and trade performance of an economy is dependent on the efficiency of its service sector.
“There is a greater potential for cooperation between developing and developed world in trade in services especially with regards to movement in human capital,” said Deputy Minister Modi.
“Developed countries have a comparative advantage in the supply of expert services like engineering, health and architectural designing while the developing nations have cheap, low and semi-skilled labour, which is the major input in the construction and tourism industry.”
For instance, he said Zimbabwe’s major imports from India are health and education services. Deputy Minister Modi also said Indian pharmaceutical and health care companies have made a significant mark in the Zimbabwean market by providing access to life-saving medicines at affordable prices.
However, Deputy Minister Modi said it was regrettable to note that the realisation of full trade in services has been negatively affected by other services costs and barriers associated with the cross-border movement of people such as airfares and visas.
He noted that there was a great potential for increasing trade in services in sectors like health and education by ensuring physical and commercial presence of Indian companies in the Zimbabwean market.
This, he said, could be through the establishment of Indian medical centres and foreign campus for major Indian tertiary institutions in Zimbabwe.
“Indian financial firms can also take advantage of Zimbabwe’s critical need for industrial financing to export its financial services.
“With well-known expertise in machinery, appropriate technology in agro-processing and value addition, India occupies unique and strategic position as both a potential market for Zimbabwe goods and services as well as a source of investment and technology transfer,” said Deputy Minister Modi.
He said liberalisation of the services sector will enable the world to realise the full potential for trade in services.
“Against this backdrop, interactions and exchange of ideas between policy makers and captains of industry and commerce is important if the countries are to explore ways to alleviate the negative effects of barriers associated with trade in services,” he said. —–Chronicle.co.zw