Edited by Sultan Hafeez Rahman, Sridhar Khatri and Hans-Peter Brunner
Chapter 6: Liberalization of Trade in Services under SAFTA: Prospects and Challenges for Pakistan
6. Liberalization of trade in services under SAFTA: prospects and challenges for Pakistan Safdar Sohail, Noorulain Hanif and Maliha Quddus INTRODUCTION The service sector has emerged as an important sector in the world economy and contributes significantly to global gross domestic product (GDP), constituting around 60 per cent of global output and 30 per cent of global employment. In many developing countries, services account for 50 per cent or more of GDP, with agriculture and industry each accounting for less than 30 per cent of total production. Like other South Asian nations, Pakistan too has witnessed a major transformation in its economic structure, with the share of the service sector in the economy reaching 53.3 per cent in fiscal year 2010–2011. The service sector has been an important contributor to Pakistan’s economic growth and grew at an average rate of 5.5 per cent annually in the years 2000–2011 as compared to the commodity-producing sector (agriculture and manufacturing) which grew by an average of 4.5 per cent in the same period. The continuing trend, though less buoyant now – while growth in the industrial sector has been negative – implies that the service sector in Pakistan has been relatively insulated from the global financial crisis. The rapid growth of the service sector during the past few years notwithstanding, globally, Pakistan ranks very low in terms of exports (83rd) and imports (54th) and continues to experience a service trade deficit as shown in Tables 6.1 and 6.2.1 An examination of commercial service...
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