FILE PHOTO: A participant stands near a logo of World Bank at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS/Johannes P. Christo/File Photo
KUALA LUMPUR: East Asia and Pacific (EAP) countries must pursue both liberalisation and regulation to unleash the virtuous cycle between opportunity and capacity as well as to ensure inclusive and sustainable services development, the World Bank Group said.
In its EAP regional report titled ‘Services Unbound: Digital Technologies and Policy Reform in East Asia and the Pacific’, the World Bank Group said advancing the liberalisation agenda requires addressing policy restrictions on entry and competition in EAP services markets, ranging from discretionary and opaque licensing to limits on foreign ownership.
“In parallel, countries need to institute a regulatory framework that addresses old and new market distortions, including the concentration and data misuse that can arise in markets dominated by digital platforms,” it said in the report.
Secondly, the World Bank Group said governments need to work with the private sector to build the infrastructure and skills needed to take advantage of emerging opportunities.
“Over the past decades, the democratisation of access to mobile telephony provided by competing private firms seemed to have obviated the need for the fixed-line networks created by plodding public sector monopolies.
“However, the digital benefits of access to high-speed broadband have revived the question of how the state can ensure adequate access for the poor and remote populations,” it said.
Moreover, the World Bank Group said competitively allocated subsidies to private providers may help bridge the gaps, as the experience with universal access funds for basic telecommunications shows.
“Countries must also wrestle with the question of how far the market and private institutions can be relied on to deliver the skills needed by the digital services economy,” it said.
At the very least, the organisation said governments could remedy inadequacy and inequality in access to finance for education, ensure the quality of educational institutions without impeding competition and address coordination failures by ensuring coherence in policies and providing information to individuals and firms on the evolution of economic opportunities as well as human capacities.
It also emphasised that EAP and other countries must complement unilateral domestic reform with cooperative international action to address services market failures that have a transborder dimension.
In a press release, World Bank vice-president for EAP Manuela V Ferro said that East Asia is already known as a manufacturing powerhouse, and today, new digital technologies are a source of innovation, jobs and growth.
“Governments can do more to unleash the power of services. For instance, they can encourage digitalisation of small and medium-sized firms to increase productivity,” he said.
Looking ahead, the World Bank Group said it would be important for countries in the EAP region to pursue development strategies attuned to the interplay between opportunity and capacity.
“A virtuous cycle that powers development can only be achieved by pursuing balanced policies, in which the enhancement of endowments shapes comparative advantage and the evolution of comparative advantage incentivises the enhancement of endowments,” it added. - Bernama
