value added in services is as important for poor as for richer countries. The value‐added share compared to the gross value share is average for Russia and can be compared to South Africa. Brazil, China, and India are much better placed to capture value added in services than Russia.

The role of services as inputs is less important for the upper‐middle‐income group of countries in Europe to which Russia belongs.<sup>14</sup> Figure 16 **Error! Reference source not found.** shows the share of services in total exports (goods and services)<sup>15</sup> for different income groups. The general value added of services in total trade is more or less similar for different upper‐ and lower‐middle‐income groups. First, the share of services in total exports, in gross terms, varies between income groups (Figure 16, panel A). High‐ income countries show a 25 percent share and European upper‐middle‐income countries are not far behind at about 19 percent. Other middle‐income groups, such as those in Asia, are much lower at about 11 percent. The trend is similar when the share of direct value added of services in total exports is considered, excluding any forward linkages. When forward linkages are included, together with the direct measure of value added exports, the share percentages for each income group do not differ much. However, the gap between the direct measure (dark grey bar) and the direct measure when forward linkages (light grey bar) are included is greatest for Latin‐American and Asian upper‐middle‐ income countries and smallest for high‐income countries generally and for upper‐middle‐income countries in Europe like Russia. Finally, Figure 16, Panel B, shows that within Russia’s BRICS comparators, there is huge variance between these two measures. The gap between the direct measure and the measure with forward linkages included becomes more important. This suggests again that for Russia forward linkages play an important role compared to the direct value‐added levels.

Forward linkages are gradually becoming increasingly important in Russia. Figure 17 shows the ratio of the direct value‐added exports share including forward linkages to the share of gross exports; a value greater than 1 indicates that total value‐added exports are larger than gross exports. The fact that services exports in value‐added terms tend to be greater than gross exports was shown in Figure 17 **Error! Reference source not found.** for business services, but it may differ within income groups and across time. Figure 17 shows that forward linkages for all services together have a relatively larger role in Russia than in other countries, such as India. The increase in Russia’s position indicates some dynamism, yet it probably shows that backward linkages are still relatively important for the Russian services sector. The same value for manufacturing is below 1, signifying that this sector uses inputs from other sectors of the economy or imports them. Thus, it would generally be expected that backward linkages would be stronger than forward in manufacturing, particularly for Russia, which places lowest (see also Table 4).

In Russia, creation of value added is more important for the domestic market than for exports. This is usual for the BRICS, except for India. The trend is clear in **Error! Reference source not found.** , which presents sectoral contributions to total value added considering both direct and forward linkages, for both domestic and external markets (exports). Services are allocated to one of nine subsectors. Together with most of its comparators, Russia shows that, after considering forward linkages, the share

> 14 The data are for 2011.

> 15 There are three measures of this share: (1) The “Gross” value or as reported in the balance of payment statistics; (2) the “Direct” measure of services in terms of value added, and finally (3) the “Total” contribution of services measured in terms of value added. This last measure includes the direct contribution of services to total exports measured in terms of both their value-added content and their indirect contribution as measured by forward linkages to other export activities. This recognizes that services are inputs to other exports of goods and services, and shows which sectors contribute to the value added of final exports.

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