ABSTRACT
This chapter examines whether the service sector can play a role in the growth of the East and Southeast Asian developing countries similar to that played by light manufactured exports. Services such as financial and legal services which are commonly provided by foreign subsidiaries or affiliates are a result of direct foreign investment in services. The chapter describes service trade in the region, beginning with a definition of services, including how trade in services differs from trade in goods. The flying geese pattern of development in the region has been observed primarily in the manufacturing sector. In some industries that require a large number of relatively skilled workers, such as software development and keypunching, the Association of South East Asian Nations countries have also made significant inroads. Service industries in the Asian Newly Industrialized Economies can acquire advanced technology from the more developed countries, and through the catching-up process they can eventually become competitive in world markets.
