Intro: Aaditya Mattoo is Chief Economist of the East Asia and Pacific Region of the World Bank.  He specializes in development, trade and international cooperation, and provides policy advice to governments.  He is also Co-Director of the World Development Report 2020 on Global Value Chains.  Prior to this he was the Research Manager, Trade and Integration, at the World Bank. Before he joined the Bank, Mr. Mattoo was Economic Counsellor at the World Trade Organization and taught economics at the University of Sussex and Churchill College, Cambridge University. He has published on development, trade, trade in services, and international trade agreements in academic and other journals and his work has been cited in the Economist, Financial Times, New York Times, and Time Magazine.

Alessandro Barattieri joined the World Bank in June 2023 as Senior Economist in the Office of the Chief Economist for East Asia and Pacific. He is also professor at the ESG-UQAM in Montreal. His research interests include international economics, macroeconomics, and finance. He studied the impact of asymmetries in the trade liberalizations for goods versus services on global imbalances, the macroeconomic effects of protectionism, the relation between banks interconnectivity and leverage cycles, and the employment effects of natural disasters. More recently, he has been interested also in production networks. His articles have been published in journals such as the American Economic Journal: Macroeconomics, the Journal of International Economics, and the Journal of Financial Economics. 


Abstract: Services will be central to East Asia and Pacific’s transition to a high-income region. Finance, communication, transport, retail, health, and education already generate more than half the output and employment in the region’s economies. But 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. New evidence reveals the transformative impact of the dramatic diffusion of digital technologies and partial reform of policies. The result is higher productivity in services, as well as in the manufacturing sectors that use these services. The new technologies are also creating increased demand for sophisticated skills. At the same time, the improved access to education, health, and finance, made possible by reforms and digitalization, is equipping people to take advantage of these new opportunities. The report argues that deeper reforms could unleash a virtuous cycle of increasing economic opportunity and enhanced human capacity, that would power development in the region.