Publication:
Liberalizing Basic Telecommunications : The Asian Experience

Loading...
Thumbnail Image
Files in English
English PDF (2 MB)
292 downloads
English Text (92.95 KB)
188 downloads
Date
2001-11
ISSN
Published
2001-11
Editor(s)
Abstract
The authors examine the liberalization of the basic telecommunications sector in Asian countries with a view to identifying good policy and determining how multilateral negotiations can promote it. They find that most Asian governments, despite the move away from traditional public monopolies, are still unwilling to allow unrestricted entry, eliminate limits on private and foreign ownership, and establish strong, independent regulators. But where comprehensive reform has been undertaken-including privatization, competition, and regulation-the availability of main lines, the quality of service, and the productivity of labor are significantly higher. Somewhat surprisingly, little unilateral liberalization has occurred since the last round of telecommunications negotiations under the General Agreement on Trade in Services (GATS). The new round therefore faces the challenge of not merely harvesting unilateral liberalization, as in the past, but of negotiating away existing restrictions. Since quantitative restrictions on the number of telecommunications service suppliers are pervasive, deepened GATS rules could help ensure transparent and nondiscriminatory allocation of licenses. There may also be a need to sharpen the regulatory principles established in the last round and to create rules that safeguard not only the rights of foreign suppliers but also those of consumers.
Link to Data Set
Citation
Fink, Carsten; Mattoo, Aaditya; Rathindran, Randeep. 2001. Liberalizing Basic Telecommunications : The Asian Experience. Policy Research Working Paper;No. 2718. © http://hdl.handle.net/10986/19442 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Report Series
Other publications in this report series
  • Publication
    Intergenerational Income Mobility around the World
    (Washington, DC: World Bank, 2025-07-09) Munoz, Ercio; Van der Weide, Roy
    This paper introduces a new global database with estimates of intergenerational income mobility for 87 countries, covering 84 percent of the world’s population. This marks a notable expansion of the cross-country evidence base on income mobility, particularly among low- and middle-income countries. The estimates indicate that the negative association between income mobility and inequality (known as the Great Gatsby Curve) continues to hold across this wider range of countries. The database also reveals a positive association between income mobility and national income per capita, suggesting that countries achieve higher levels of intergenerational mobility as they grow richer.
  • Publication
    Engineering Ukraine’s Wirtschaftswunder
    (Washington, DC: World Bank, 2025-07-29) Akcigit, Ufuk; Kilic, Furkan; Lall, Somik; Shpak, Solomiya
    As Ukraine emerges from the devastation of war, it faces a historic opportunity to engineer its own Wirtschaftswunder—a productivity-driven economic transformation akin to post-war West Germany. While investment-led growth may offer quick wins, it is efficiency, innovation, and institutional reform that will determine Ukraine’s long-term economic trajectory. Drawing on rich micro-level firm data spanning 25 years, this paper uncovers deep structural distortions that have suppressed creative destruction and productivity in Ukraine. It finds that business dynamism is on the decline, alongside rising market concentration among incumbent businesses, including low productivity state owned enterprises. To inform priorities for reviving business dynamism, this study develops a model of creative destruction drawing on Acemoglu et al. (2018) and Akcigit et al. (2021). The quantitative assessment highlights that policies that discipline entrenched incumbents are the bedrock for reviving business dynamism and engineer Ukraine’s Wirtschaftswunder. Policies targeting specific types of firms have limited efficacy when incumbents run wild.
  • Publication
    Fiscal Multipliers in Resource-Rich Economies: Evidence from the Gulf Countries
    (Washington, DC: World Bank, 2025-08-21) Chattha, Muhammad Khudadad; Kawalec, Tobias
    This paper utilizes the unique dynamics of fiscal budgeting in countries with a large hydro-carbon sector to estimate fiscal multipliers. The main identifying assumption rests on the idea that exogenously identified global hydrocarbon demand shocks can be considered plausible instruments for the fiscal space of countries in which that space is significantly dictated by hydrocarbon income, with such shocks being uncorrelated with non-hydrocarbon output at the same time. Using a local projection-instrumental variables (LP-IV) framework, the paper estimates that short-run fiscal expenditure multipliers to be in the ballpark of 0.1–0.4. In addition, the findings show that multipliers are at the upper end of this interval during recessions, indicating that fiscal policy in the Gulf countries is particularly effective during economic downturns.
  • Publication
    Stress Testing Survey to Survey Imputation: Understanding When Poverty Predictions Can Fail
    (Washington, DC: World Bank, 2025-08-21) Corral, Paul; Ham, Andres; Lanjouw, Peter; Lucchetti, Leonardo; Stemmler, Henry
    Accurate and timely poverty measurement is central to development policy, yet the availability of up-to-date high-quality household survey data remains limited—particularly in countries where poverty is most concentrated. Survey-to-survey imputation has emerged as a practical response to this challenge, allowing practitioners to update poverty estimates using recent surveys that lack direct welfare measures by borrowing information from other comprehensive surveys. A critical review of the method is provided, revisiting its statistical underpinnings and testing its limitations through extensive model-based simulations. Through these simulations, the analysis demonstrates how violations of parameter stability, omitted variable bias, and shifts in survey design can introduce substantial errors—particularly when imputing across time or under economic and structural change. Results show that standard corrections such as re-weighting or covariate standardization may fail to eliminate these biases, especially when imputing across time or under structural change. The performance of alternative model specifications is also evaluated under various methods, including performance under heteroskedastic errors, non-normality. The findings offer practical guidance for practitioners on when survey-to-survey imputation is likely to succeed, when it should be reconsidered, and how to communicate its limitations transparently in the context of poverty monitoring and policy design.
  • Publication
    The Future of Poverty
    (Washington, DC: World Bank, 2025-07-15) Fajardo-Gonzalez, Johanna; Nguyen, Minh C.; Corral, Paul
    Climate change is increasingly acknowledged as a critical issue with far-reaching socioeconomic implications that extend well beyond environmental concerns. Among the most pressing challenges is its impact on global poverty. This paper projects the potential impacts of unmitigated climate change on global poverty rates between 2023 and 2050. Building on a study that provided a detailed analysis of how temperature changes affect economic productivity, this paper integrates those findings with binned data from 217 countries, sourced from the World Bank’s Poverty and Inequality Platform. By simulating poverty rates and the number of poor under two climate change scenarios, the paper uncovers some alarming trends. One of the primary findings is that the number of people living in extreme poverty worldwide could be nearly doubled due to climate change. In all scenarios, Sub-Saharan Africa is projected to bear the brunt, contributing the largest number of poor people, with estimates ranging between 40.5 million and 73.5 million by 2050. Another significant finding is the disproportionate impact of inequality on poverty. Even small increases in inequality can lead to substantial rises in poverty levels. For instance, if every country’s Gini coefficient increases by just 1 percent between 2022 and 2050, an additional 8.8 million people could be pushed below the international poverty line by 2050. In a more extreme scenario, where every country’s Gini coefficient increases by 10 percent between 2022 and 2050, the number of people falling into poverty could rise by an additional 148.8 million relative to the baseline scenario. These findings underscore the urgent need for comprehensive climate policies that not only mitigate environmental impacts but also address socioeconomic vulnerabilities.
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    An Assessment of Telecommunications Reform in Developing Countries
    (World Bank, Washington, DC, 2002-10) Fink, Carsten; Mattoo, Aaditya; Rathindran, Randeep
    The authors analyze the effect of policy reform in basic telecommunications on sectoral performance using a new panel data set for 86 developing countries across Africa, Asia, the Middle East, and Latin America and the Caribbean over the period 1985 to 1999. The authors address three questions: 1) What impact do specific policy changes-relating to ownership and competition-have on sectoral performance? 2) How is the impact of change in any one policy affected by the implementation of the other, and by the overall regulatory framework? 3) Does the sequence in which reforms are implemented affect performance? The authors find that both privatization and competition lead to significant improvements in performance. But a comprehensive reform program, involving both policies and the support of an independent regulator, produced the largest gains-an 8 percent higher level of mainlines and a 21 percent higher level of productivity compared to years of partial and no reform. Interestingly, the sequence of reform matters: mainline penetration is lower if competition is introduced after privatization, rather than at the same time. The authors also find that autonomous factors, such as technological progress, have a strong influence on telecommunications performance, accounting for an increase of 5 percent a year in teledensity and 9 percent in productivity over the period 1985 to 1999.
  • Publication
    Shaping Future GATS Rules for Trade in Services
    (World Bank, Washington, DC, 2001-04) Mattoo, Aaditya
    The new round of negotiations has begun with a mechanical sense of "since we said we would, therefore we must," says the author. To make the General Agreement on Trade in Services (GATS) more effective ay liberalization, the author suggests improving the agreement's rules, countries' specific commitments, and the negotiating methodology: 1) Wasteful regulations, and entry restrictions pervade trade in services. Unlike the GATT, the GATS has created no hierarchy of instruments of protection. It may be possible to create a legal presumption in favor of instruments (such as fiscal measures) that provide protection more efficiently. 2) Many countries have taken advantage of the GATS to create a more secure trading environment, by making legally binding commitments to market access. The credibility of reform would increase with wider commitments to maintain current levels of openness, or to increase access in the future. 3) Multilateral rules on domestic regulations can help promote, and consolidate domestic regulatory reform, even when the rules are designed primarily to prevent the erosion of market access for foreign providers. The pro-competitive principles developed for basic communications, could be extended to other network-based services sectors, such as transport (terminals and infrastructure), and energy services (distribution networks). The "necessity test" instituted for accounting services, could be applied to instruments in other sectors (so that doctors judged competent in one jurisdiction, wouldn't have to be retrained for another, for example). 4) Anticompetitive practices that fall outside the jurisdiction of national competition law, may be important in such sectors as maritime, air transport, and communications services. Strengthened multilateral rules are needed to reassure small countries with weak enforcement capacity, that the gains from liberalization will not be appropriated by international cartels. 5) Explicit departures from the most-favored-nation rule matter most in such sectors as maritime transport, audiovisual services, and air transport services - which have been excluded from key GATS disciplines. Implicit discrimination can be prevented by developing rules to ensure the non-discriminatory allocation of quotas, and maintaining the desirable openness of the GATS provision on mutual recognition agreements. 6) Reciprocity must play a greater role in negotiations, if the GATS is to advance liberalization beyond measures taken independently.
  • Publication
    Does Services Liberalization Benefit Manufacturing Firms? Evidence from the Czech Republic
    (World Bank, Washington, DC, 2007-01) Arnold, Jens; Javorcik, Beata S.; Mattoo, Aaditya
    While there is considerable empirical evidence on the impact of liberalizing trade in goods, the effects of services liberalization have not been empirically established. Using firm-level data from the Czech Republic for the period 1998-2003, this study examines the link between services sector reforms and the productivity of domestic firms in downstream manufacturing. Several aspects of services reform are considered and measured, namely, the increased presence of foreign providers, privatization, and enhanced competition. The manufacturing-services linkage is measured using information on the degree to which manufacturing firms in a particular industry rely on intermediate inputs from specific services sectors. The econometric results lead to two conclusions. First, the study finds that services policy matters for the productivity of manufacturing firms relying on services inputs. This finding is robust to several econometric specifications, including controlling for unobservable firm heterogeneity and for other aspects of openness. Second, it finds evidence that opening services sectors to foreign providers is a key channel through which services liberalization contributes to improved performance of downstream manufacturing sectors. This finding is robust to instrumenting for the extent of foreign presence in services industries. As most barriers to foreign investment today are not in goods but in services sectors, the findings may strengthen the argument for reform in this area.
  • Publication
    Services Trade Liberalization and Regulatory Reform : Re-invigorating International Cooperation
    (2011-01-01) Hoekman, Bernard; Mattoo, Aaditya
    Trade and investment in services are inhibited by a range of policy restrictions, but the best offers so far in the Doha negotiations are on average twice as restrictive as actual policy. They will generate no additional market opening. Regulatory concerns help explain the limited progress. This paper develops two proposals to enhance the prospects for both liberalization of services trade and regulatory reform. The first is for governments to create mechanisms ("services knowledge platforms") to bring together regulators, trade officials, and stakeholders to discuss services regulatory reform. Such mechanisms could identify reform priorities and opportunities for utilization of "aid for trade" resources, thereby putting in place the preconditions for future market opening. The second proposal is for a new approach to negotiations in the World Trade Organization, with a critical mass of countries that account for the bulk of services production agreeing to lock-in applied levels of protection and pre-committing to reform of policies affecting foreign direct investment and international movement for individual service providers -- two areas where current policy is most restrictive and potential benefits from liberalization are greatest. If these proposals cannot be fully implemented in the Doha time frame, then any Doha agreement could at least lay the basis for a forward-looking program of international cooperation along the proposed lines.
  • Publication
    Measuring Services Trade Liberalization and Its Impact on Economic Growth : An Illustration
    (World Bank, Washington, DC, 2001-08) Mattoo, Aaditya; Rathindran, Randeep; Subramanian, Arvind
    The authors explain how the output growth effect from liberalizing the service sectors differs from the effect from liberalizing trade in goods. They also suggest using a policy-based rather than outcome-based measure of the openness of a country's service regime. They construct such openness measures for two key service sectors' basic telecommunications and financial services. Finally, the authors provide some econometric evidence--relatively strong for the financial sector and less strong, but nevertheless statistically significant, for the telecommunications sector--that openness in services influences long-run growth performance. Their estimates suggest that growth rates in countries with fully open telecommunications and financial services sectors are up to 1.5 percentage points higher than those in other countries.

Users also downloaded

Showing related downloaded files

  • Publication
    Services Unbound
    (Washington, DC: World Bank, 2024-12-09) World Bank
    Services are a new force for innovation, trade, and growth in East Asia and Pacific. The dramatic diffusion of digital technologies and partial policy reforms in services--from finance, communication, and transport to retail, health, and education--is transforming these economies. The result is higher productivity and changing jobs in the services sector, as well as in the manufacturing sectors that use these services. A region that has thrived through openness to trade and investment in manufacturing still maintains innovation-inhibiting barriers to entry and competition in key services sectors. 'Services Unbound: Digital Technologies and Policy Reform in East Asia and Pacific' makes the case for deeper domestic reforms and greater international cooperation to unleash a virtuous cycle of increased economic opportunity and enhanced human capacity that would power development in the region.
  • Publication
    Global Economic Prospects, June 2025
    (Washington, DC: World Bank, 2025-06-10) World Bank
    The global economy is facing another substantial headwind, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the ability to boost job creation and reduce extreme poverty has declined. Key downside risks include a further escalation of trade barriers and continued policy uncertainty. These challenges are exacerbated by subdued foreign direct investment into EMDEs. Global cooperation is needed to restore a more stable international trade environment and scale up support for vulnerable countries grappling with conflict, debt burdens, and climate change. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience. To accelerate job creation and long-term growth, structural reforms must focus on raising institutional quality, attracting private investment, and strengthening human capital and labor markets. Countries in fragile and conflict situations face daunting development challenges that will require tailored domestic policy reforms and well-coordinated multilateral support.
  • Publication
    Business Ready 2024
    (Washington, DC: World Bank, 2024-10-03) World Bank
    Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.
  • Publication
    Kenya Country Economic Memorandum
    (Washington, DC: World Bank, 2023-07-31) World Bank
    Kenya’s economy has been growing solidly but maintaining and increasing growth will depend on increasing private investment and productivity. Between 2010 and 2019, Kenya maintained a steady annual growth rate of 5 percent and the economy was able to rebound relatively rapidly from the COVID-19 pandemic. However, productivity growth did not make much of a contribution to output growth, and growth has been lower than that of some other, fast-growing middle-income countries. This points to the potential for Kenya to increase growth via productivity gains, by expanding the role of the private sector and, especially, accelerating private investment. Doing this has become more urgent as the Government's fiscal space to invest has shrunk, making it crucial also for the sustainability of growth to identify new opportunities for the private sector to contribute. This Country Economic Memorandum (CEM) focuses on the question of how seizing opportunities in Kenya’s services sector can contribute more effectively to long-term economic growth. This report argues that growing the services sector should not be seen as an alternative to industrialization, but rather as an enabler of economy-wide growth, including in manufacturing, and in agriculture too. It focuses on five channels through which services contribute to jobs, economic transformation and inclusion: (i) the need to SHIFT the services sector to higher value-added activities; (ii) how to LINK services better to other economic activities to grow its enabling role; (iii) how to BOOST the productivity of the sector through technology and increasing competition; (iv) how to TRADE more services through removing regulatory barriers to trade and investment; and finally (v) how to SECURE people’s economic livelihoods better, especially those working in lower-skilled and economically more vulnerable services subsectors. Growing the contribution of services will require a program of structural reforms and complementary efforts.
  • Publication
    Global Economic Prospects, January 2025
    (Washington, DC: World Bank, 2025-01-16) World Bank
    Global growth is expected to hold steady at 2.7 percent in 2025-26. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters. Against this backdrop, emerging market and developing economies are set to enter the second quarter of the twenty-first century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced. Without course corrections, most low-income countries are unlikely to graduate to middle-income status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.