E.E.Semenova, Candidate of Engineering Sciences,

T.N.Makarova, Candidate of Economic Sciences

Oryol State Institute of Economy and Trade, Russia

DEVELOPMENT OF INTERNATIONAL TRADE IN SERVICES

In the development of postindustrial society international trade in services starts playing more important part in the developed countries. Under the impact of technological progress its structure is changing and new kinds of services are appearing.

Today concept “service” is defined by the group of such science intensive branches as transport, telecommunication systems, financial, credit and bank services, electronic, computer and information services, public health and education services.

In the world market trade in services develops much more intensively and outstrips the growth rates of trade in commodities. A number of factors of economic development influences the development dynamics of international trade in services. Technological progress is one of such factors which not only changes the role of services in the economy, but the traditional idea about this sphere [5].

Modern services are science intensive branches of the economy using high information technologies.

Rapid development of the world market of services was observed in the end of 20^th century. According to the WTO Secretariat, world export of services in 1990-2008 grew from 385 billion dollars to 3.9 trillion dollars. In 2009 the world economic crisis resulted in reduction of world export of services to 3,5 trillion dollars. But, by 2012 the world export of services had grown almost by 12 % against the previous years [3].

Developed countries occupy the leading place in the world trade in services. Their share is over 80 % of world export and about 70 % of world import of services. Ten leading exporters and importers of services are such countries as: the USA, Great Britain, Germany, France, China, India, Japan, Spain, Singapore and the Netherlands. Russia occupies only the 22^nd place in export, that makes up 1,4 % of the world export and the 14^th place in import, 2,5 % of the world import.

In the world market of services Russia is a net-importer, constantly having negative trade balance in services. It can be explained by several reasons. Firstly, it is underdevelopment of transport and tourist structures in our country, and, secondly, it is weakness of financial, consulting and auditing organizations that limits the possibilities of providing corresponding services to foreign consumers.

In August, 22nd, 2012 Russia became the full member of the World Trade Organization (WTO). Within the framework of this organization there is a General agreement on trade in services (GATS) which presents a multilateral code of principles and rules of international trade in services, the observance of which is obligatory for all WTO member countries. The basic documents necessary for Russia's entry into the World Trade Organization were: the report of the Working group on the block of rights and obligations which the country should execute after joining, the List of specific obligations on services and the List of withdrawals from Most Favored Nation Treatment.

Russia’s obligations are a guarantee that the access mode to the Russian market of services is not strict for foreign suppliers. Now Russia accepts obligations on 116 services sectors (from 155 provided by WTO classification).

According to the obligations of the WTO one half of the market will belong to Russian capital, and the second half will be the territory of competitive struggle between Russian and foreign companies [3].

Participation of foreign companies will be possible only in the form of banks establishing with foreign investments on the territory of the Russian Federation or purchase of the existing Russian banks. Activity of foreign banks branches in Russia is not allowed.

Creating the project of the List of Russian obligations there was an aim which could create natural competitive environment in the national market of services and attract foreign investments. Besides, it could provide the level of protection for Russian service providers who are in unequal position in comparison with foreign competitors.

More than almost half of the world export of services takes place by commercial presence. Commercial presence is sale of services of the enterprises operating abroad with foreign participation.

In Russia the way of commercial presence has not been considerably developed. It is connected with the fact that services provision to the world market is directly connected with the movement of direct foreign investments. Transport services and the services connected business trips and tourism have the greatest unit weight in Russian trade in services. In Russian export the share of these services was 49,1 % in 2013, and in import the share was 55,6 % (see Table 1) [5].

Proceeding from the data of Table 1, it is possible to make the conclusion that transport, construction, tourist and other business services had the greatest unit weight in export and import in 2011 and 2013. They had more than a half. In 2013 export on maintenance service and processing of goods decreased in comparison with 2011 by 200 million dollars.

In 2013 import of financial services exceeded export more than 2 times. Import of telecommunication, computer and information services grew by 1760 million dollars in comparison with 2011. It is connected with the fact that the need of population in new information technologies grew. Let’s look at freight, tourist, constuction and other business services delivered by Russia on the world market in detail.

The active balance on transport services in Russia is achieved because the country possesses geographically favourable position and use the vehicles intensively, but not at the expense of competitiveness of domestic carriers. In 2013 export share of freight traffic was 34,3 %, passenger traffic - 37,2 %, auxiliary and additional transport services - 28,7 %, and in import - 51 %, 32 % and 19 % accordingly [1].

The major problem of transport system in Russia is technical and technological backlog from the most developed countries.

Table 1. Structure of Russian export and import of services in 2011 and 2013. (million dollars, %)

Kinds of Services	Export				Import
	2011		2013		2011		2013
	Млн долл.	%	Млн долл.	%	Млн долл.	%	Млн долл.	%
Total	49160	100	62687	100	75280	100	108895	100
on Goods Processing Belonging to Other Parties	2325	4,8	2167	3,6	203	0,4	213	0,3
Services on Goods Maintenance and Repair	1827	3,8	1783	2,9	731	1,1	1528	1,5
Freight Services	14873	30,4	19162у	30,7	11902	15,9	16444	15,2
Trips	8831	18,1	11188	17,9	26694	35,6	42799	39,4
Construction	3488	7,2	4751	7,7	4603	6,2	7425	6,9
Insurance and Services of Non-State Pension Funds	430	1,0	330	0,6	1012	1,4	1289	1,3
Financial Services	1054	2,2	1312	2,2	2657	3,6	2758	2,6
Charge for Using Intellectual Property	387	0,9	665	1,2	4843	6,5	7630	7,1
Telecommunication,, Computer anf Information Services	2625	5,4	3495	5,7	3956	5,4	5716	5,3
Other Business Services	12343	25,2	16411	26,3	15636	20,9	19876	18,4
Services to Individuals and Culture and Recreation Services	475	1,1	557	1,0	999	1,4	1118	1,1
Public Goods and Services not Rated among Other Categories	516	1,1	876	1,5	2054	2,8	2110	2,0

There is a tendency of ageing of fixed capital and its inefficient use in all branches of transport complex. Depreciation of fixed capital on certain groups makes up approximately 55-70 % and continues to grow. Analysts consider that it is not ready for universal use of modern technologies.

One more major problem is insufficient level of competitiveness of domestic companies. For effective functioning of transportation market in the country there should be uniform national transport policy and uniform rules which regulate the work of commercial enterprises participating in cargo transportation. Therefore there must be a government program of development of transit cargo transportation in Russia. [1]

With Russia's entry into the World Trade Organization certain changes which are aimed at segmentation and integration are expected in the market of logistical services. Therefore there are concerns, that expansion of the western companies in the market is expected in logistics, as well as in other spheres of the Russian economy [3].

For the present moment the quality and technological level of transport infrastructure, that is, roads, bridges, air and water ports, do not promote increase in throughput of transport arteries but limit passenger and cargo transportations. Thus, transport infrastructure becomes one of the key factors of modernization of regions’ economy and their further integration. Modernization of transport infrastructure should be aimed at increase of geographical and economic accessibility and quality of transport services, and throughput of transport systems and decrease of transport costs of the users.

To provide transport services several problems should be solved. Firstly, to expand construction of railway lines in order to organize speed and high-speed passenger traffic and to update the fleet of passenger cars. Secondly, to form a uniform road network of all-the-year-round accessibility. Thirdly, to provide growth of passenger and cargo transportations by sea. Fourthly, to develop airport network and maintain transport safety.

As a result of these activities the Russian Federation can have qualitatively new level providing innovative scenario of social-economic development of the country. Thus, strengthening of Russian transport system in the world market of transport services and steady increase of transit potential level of the country will be provided [1].

Besides transport services tourist services are also of great value in international trade. They are a large source of currency earnings not only for developed and developing countries, but also for the countries with transitive economies.

In 2012 the first ten most visited countries were the following: France, the USA, China, Spain, Italy, Turkey, Great Britain, Germany, Malaysia and Mexico. But according to the incomes from tourism the order is different: the USA (116,4 bn US dollars), Spain (60 bn US dollars), France (53,9 bn US dollars), China (48,7 bn US dollars), Italy (43,1 bn US dollars), Germany (38,9 bn US dollars), Great Britain (36,1 bn US dollars) and Australia (31,5 bn US dollars) [4].

In 2012 Russia received 11,5 bn US dollars for tourist services. Consumer expenses on international tourism made up 32,5 bn US dollars, that is by 6 bn US dollars more than in 2011. Therefore according to this parametre Russia occupied the 7th place in the world. Germany, the USA, China, Great Britain, France and Canada were before Russia, and Italy, Japan and Australia were after it. In regional export structure far abroad countries, and especially the EU countries, have the greatest unit weight according to the item “travel”.

Despite positive dynamics of tourist services development, there still remain considerable barriers to development of tourist business.

The World Economic Forum (WEF) devoted to the problems of countries competitiveness in the sphere of tourism and travel was held in 2011. According to the rating of this forum the Russian Federation occupied the 59th position out of 139, thus yielding to China and Korea. Besides, the list of countries favouring the development of this sector was announced. This list included such countries as, Switzerland, Germany and France. The first ten included Sweden, the USA, Great Britain, Spain, Canada and Singapore [4].

According to Rosturism, Russia possesses both competitive advantages on internal and entrance directions, and disadvantages. The advantages are: political stability, national currency stability, the richest cultural and natural resources, new tourist products satisfying the requirements in travel to the most remote and little-known places, and growth of citizens’ incomes per capita.

As it was mentioned by Rosturism, besides increase of tourist hotels, these hotels should correspond to the modern level, namely information technologies at their operation. More than that, it is necessary to supervise the services quality provided by the hotels in tourist business and their prices.

Item “other business services” is one more relatively large item of the world trade in services the unit weight of which was 26, 3 % in export and 18,4 % in import in 2013. Export of services of business, professional and technical character grows most dynamically among all types of services. [5]

To realize their potential Russian exporters of services must expand the types of delivered services, directly orienting to new and science intensive kinds, raise competitiveness of traditional services, namely transport and tourist; penetrate into perspective markets of services for creation affiliated companies and branches there more actively. The importance of services sector for Russian economy is growing, but export share in the country’s cumulative export remains practically invariable and makes up 11-12 %, that is much lower than the average world level of 19 % [4].

In the nearest future growth of services can become the major direction of Russian export diversification and decrease in the share of raw materials component at the absolute state support which is practically not observed now. The state support can neutralize the negatives of the existing investment and economic climate at the expense of taxation rates decrease and crediting with favourable interest rate.

According to the legislation of the Russian Federation such support can also be provided to foreign producers who have invested capital in corresponding sectors of Russian services.

Bibliogrphy

1. Alabyan, S.S. Russia in International Trade in Services [Text] / S.S.Alabyan, O.V.Morozenkova// Russian External Economic Bulletin. - 2013. - № 10. - p. 5-32.

2. Birjukova, O.V. The Main Directions of Provision of Russian Exporters’ Concerns in World Trade in Services [Text] / O.V.Birjukova// Russian External Economic Bulletin. - 2013. - № 6. - p. 88-102.

3. Dautova, Z.H. Consequences of Russia's Entry into the World Trade Organization [Text] / Z.H.Dautova// Young Scientist. - 2013. № 8. - p. 26-28.

4. Zadvorny, JU.V. Transport Infrastructure of Regions and Economy Modernization [Text] / J.V.Zadvorny// Russian Business. - 2012. - № 12. - p. 158-163.

5. Semenova, Е.Е., Makarova Т.N, Development Tendencies of the Services Sphere and Clusters Formation Prospects [Text] / E.E.Semenova, Т.N,Makarova, Scientific Information-Analytical Journal "InVestRegion", Voronezh - 2015. - № 3.