It is very important that we understand, at the outset, what are exportable services. Very often, transactions that were hitherto not considered as exports should now be classified as such in view of the GATS definition of trade in services.

The GATS agreement introduced the concept of “modes of supply”. This innovation defines services as occurring through four possible “modes”.

Mode 1 : Cross border supply i.e. supply of a service from one country to another country – e.g. selling information through a diskette.

Mode 2 : Consumption abroad i.e. the supply of a service in one country to the service consumer of any other member – e.g. tourism.

Mode 3 : Commercial presence i.e. supply of a service of one country through commercial presence in another country – e.g. establishment of a hospital by a foreign provider.

Mode 4 : Movement of natural persons i.e. temporary cross border movement of service providers – e.g. travelling nurses or doctors.

Understanding the means by which services are supplied is not only a matter of semantics or national accounting. It has serious implications for the way in which operators approach their business, for example, with regard to their marketing policy. A local dentist or doctor who understands the implications of selling his services to foreign visitors or “mode 2” will deploy a specific strategy in terms of communicating with such clientele.

A firm grasp of possible traded services in terms of the “modes of supply” will provide the largest scope of services to consider. To help establish a viable list, exportable services could be classified into three categories : 1) existing and already identified 2) existing but not identified as such 3) potential – as result of new business environment or technological advances.

These categories provide public and private sector representatives a framework to consider strengths and weaknesses of existing and evolving sectors. Together, they may create practical interventions to improve the competitiveness of service firms in any of the three categories. A combined public – private sector approach would concentrate expertise from the government and service firms to strengthen service exports.

●<B>Institutional arrangement</B>

The initial phase in the development of a promotional strategy for the tradable services sector will build awareness. The corresponding structure would therefore be a loose gathering of operators as well as elements of civil society such as consumer protection groups and trade unions. This phase, which is essentially a period of discovery, will include a research component and an educational process.

Academic staff from universities and a think tank would form part of the structure. Under the supervision of a central coordinating body, export committees and working groups would exchange information and research. This phase would clarify the definition of tradable services and establish priorities for each of the categories identified. The leadership of this phase of consultation and discovery will be entrusted to a team of private and public sector officials.

Phase 2 of the project will consist of the formalisation of the structure with the specific mission of promoting trade in services. The formal organisation will again be headed by a public – private partnership. This organisation will constitute a platform for interfacing trade promotion and trade policy (GATS negotiations). Ideally, this interfacing will reflect the best interest of the country in terms of its development objectives.

●<B>Capacity building </B>

When talking of capacity building, there are two basic needs that have to be addressed. One is capacity building at the level of negotiations, a crucial factor which we shall not address here. We shall restrict ourselves to capacity building relating to border-in issues such as the development of basic infrastructure or an appropriate education and training policy responding to the future needs of the services development strategy.

One of the defining characteristics of services industry is that it is knowledge-based and technology determined. The need for capital investment is relatively less important than for manufacturing industries. Developing countries will capture this competitive advantage to the extent that their labour force is educated and skilled enough to seize these opportunities. A large pool of highly educated labour force including large numbers of engineers has undoubtedly fuelled to take off of information technology in India. It is therefore imperative that the right policies for education and training be adopted.

Another important issue concerning border-in capacity building relates to harmonisation of standards and quality. This is closely related to the development of a national policy framework that favours technology transfer, foreign direct investment, and the presence of qualified foreign personnel.

An assessment of domestic policy and its impact on services exports may indicate constraints to trade. The private sector experience grappling with domestic regulatory policy and regulations in its export markets can provide important information to government decision makers.

The successful development of information based and professional services often hinges on domestic regulatory reforms in areas such as telecommunications, air transportation and financial services. A public – private sector dialogue on domestic and foreign regulatory regimes can be helpful in eliminating constraints to trade.

Having said the above, it would be useful to illustrate with a concrete example how an activity can be identified and after consultation with the stakeholders, the right policy framework put in place to support the development of an industry.

This particular case study has been identified for several reasons not least of which is the fact that it has the potential of showing how carefully crafted trade policies can effectively contribute to reduction of poverty. Promotion of “creative industries” represents excellent potential for bringing into mainstream economy a whole gamut of productive activities which have up to now been marginalised and left to itself.

Any close observer of the local scene would have noticed that there has been a surge in creative music and dance over the recent years, coming mostly from the most defavorisées parts of Mauritian society which has been ignored by the mainstream.

Bringing these into the main currents of economic activity, for the benefit, first and foremost of the artists, is a very delicate exercise which needs to be undertaken with due care. This does not however preclude the need to do it for the greater benefit of the burgeoning mozart des cités.

According to a UK definition, “creative industries ” encompass economic activities which have their origin in individual creativity and talent, and possessing a potential for “wealth” and “job” creation through the generation and exploitation of intellectual property.

Another definition of “creative industries” reads as follows:“a group of economic activities that exploit and deploy creativity, skill and intellectual property to produce and distribute products and services of social and cultural meaning – a production system through which the potentials of wealth generation and job creation are realised”.

Such elaborate definitions lead to the idea of a value chain and production system which is crucial in understanding the whole dynamics of the creative sector and the associated concepts of content origination, production inputs as well as reproduction and distribution – in short the basic components of what constitute an industry. They also point out to some of the most critical factors which need to be looked into if this industry is to thrive – namely - protection of intellectual property rights.

Creative activities can be organised along a value chain and into an “industrial” activity through the active participation of the government, private sector and NGOS adopting a multidisciplinary approach when they are recognised as essential attribute of a knowledge based economy. Above all government needs to understand the real meaning and relationship of creativity, knowledge culture and economy especially in the era of information technology.

Of course, creative industries are not limited to music and dance but encompass such activities as creative advertising, direct marketing, graphic design, customised market research, etc. In fact, all activities which hold the attributes described in our above definitions form part of creative industries.

All of these hold potential for development and eventually exports by Mauritian firms. We have endeavoured through this article to show the right approach to identifying potential tradable services. Through our example, we have tried to demonstrate how a systematic approach can create the conditions for wealth generation and job creation for what is now a mostly marginalised group of artists.

(This article is based on a presentation made at Montreux at a conference on public-private sector partnership - 26-29 septembre)

<B>Rajendra Tagore Servansingh

[email protected]</B>