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It is estimated that the procurement sector encompassing central governments, local governments, organizations of international cooperation, development banks in the world is worth over USD 5.5 trillion annually, which is equivalent to 82.3% of total product and service export profit all over the world. Although gross disbursements include expenditure such as wages and national defense expenditure, wage cannot be exported but are given to domestic people and national defense expenditure is not usually permitted to be exported. Thus, this leads to the fact that only the amount of the net expenditure or the gross disbursements except wages and national defense expenditure is truly competitive.
According to a research by OECD, the net expenditure amounted to USD 2.83 trillion and among the competitive net expenditure, the members of OECD command 86.1% of all, which means that they occupy the majority of the global procurement market share.
The analysis of OECD's gross expenditure by the level of each government shows that the expenditure of the local governments occupies a large percentage of the gross government expenditure. 35% out of OECD's gross expenditure of over USD 4.73 trillion is occupied by central government and subordinate government procurement such as local government and social security fund makes up 65% of all.
Please refer to the table I below for details: |
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| <Table
1 > The value and ratios of government
procurement markets |
USD
Billions and % of GDP (weighted average)
|
|
 |
| Government
Procurement |
 |
OECD |
|
Non
- OECD |
|
World |
|
| |
|
%
GDP |
|
Value |
|
%
GDP |
|
Value |
|
Value |
| GDP
1998(USD billions) and (% of GDP w.a.) |
|
23,716.3 |
|
5,641.4 |
29,357.7 |
| Consumption
expenditure |
|
|
|
|
|
| General
government |
17.09%
|
4053.1
|
14.12% |
796.6
|
4849.7
|
| Less
compensation |
6.31%
|
1496.5
|
4.82% |
271.9
|
1768.4
|
| Less
defence |
14.17%
|
3360.6
|
9.54% |
528.2
|
3898.8
|
Less
compensation
& defence |
4.73%
|
1121.8
|
2.09% |
117.9
|
1239.7
|
| |
|
|
|
|
|
| Total
expenditure(TE) |
|
|
|
|
|
| General
government |
19.96%
|
4733.8
|
14.48% |
816.9
|
5550.6
|
| Central
government |
7.13%
|
1691.0
|
|
|
|
| Local
government |
12.12%
|
2874.4
|
|
|
|
| Social
security funds |
1.22%
|
289.3
|
|
|
|
| |
|
|
|
|
|
| TE
less compensation |
|
|
|
|
|
| General
government |
9.17%
|
2174.8
|
6.89% |
388.7
|
2563.5
|
| Central
government |
3.39%
|
804.0
|
|
|
|
| Local
government |
5.44%
|
1290.2
|
|
|
|
| Social
security funds |
0.51%
|
121.0
|
|
|
|
| |
|
|
|
|
|
TE
less compensation
& defence |
|
|
|
|
|
| General
government |
7.57%
|
179.3
|
5.10% |
287.7
|
20830(7.1%) |
| Central
government |
1.75%
|
415.0
|
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The Size of Government Procurement Markets.(OECD 2002.3)
Source : United Nations (1997) and OECD(1998). |
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