E-Commerce and the Digital Economy Services

The Services Sector, COVID-19, and Digitalization: Implications for Select South and Southeast Asian Countries

This note examines the rise of digital services from the perspective of Seven South & South-east Asian Countries. It provides a brief overview of each country’s respective services sectors, with a particular focus on services exports. The note then analyses the impact of digitalisation on services, namely the rise of the platform economy and acceleration of digitalisation due to COVID-19. Finally, the note provides several recommendations for these countries to pursue at the WTO and through domestic policy to harness the potential of digital services.

Over the past 30 years services have come to dominate the value generation of the domestic economies with their share of GDP having grown from 61% to 75% in developed countries, and from 42% to 55% in developing economies over this period . Services now account for over 66% of global output and more than 44% of global employment , while in South Asia services have grown by more than 15 percentage points as a share of GDP since 1990. Moreover, the service sector is particularly important for LDCs: although the sector is usually the smallest by value, it has grown an average of 12% annually in LDCs compared to 8% and 6% in developing and developed countries respectively . Given these impressive statistics, a growing body of literature is recognizing the importance and potential of services-led growth for developing and LDC countries, particularly in light of the acceleration of digitalization due to COVID-19.

This note aims to examine this digital transformation from the perspective of several South & South-East Asian countries. It does so over three sections. First, it provides an overview of the services sectors of Bangladesh, Cambodia, Lao PDR, Nepal, Pakistan, Sri Lanka, and Vietnam, with a specific focus on the impact of COVID-19 on the sector and the primary services exports of these countries. Second, it explores the intersection between digitalization and services, particularly the impact of COVID-19 on digital service provision and the rise of the ‘platform economy’. Finally, it concludes with several WTO and the domestic level recommendations which delegates from these countries may wish to consider.