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T RADE IN SERVICES AND SOUTH ASIA: AN OVERVIEW 103<br />
their services markets, instead their commitments fell<br />
far short of the prevailing level of liberalisation. This<br />
was true for both developed as well as developing countries<br />
though developing countries made lower level of<br />
commitments and in fewer services sectors. South Asia<br />
was not an exception to this trend. Hence during the<br />
Uruguay Round and spill-over negotiations on financial<br />
and telecommunication services India made commitments<br />
in only 36 out of 161 sub sectors. Similarly, Pakistan,<br />
Sri Lanka, Bangladesh, and the Maldives made<br />
commitments in only a few sectors while Nepal and<br />
Bhutan were not part of the multilateral trading system.<br />
The ongoing round of negotiations – the Doha<br />
Round – is certainly different, particularly for the<br />
developing countries because apart from import<br />
interests in services they now have export interests in<br />
some of the services sectors as well. Nevertheless, the<br />
number of such countries which have a proven<br />
comparative advantage in services trade and are willing<br />
to undertake commitments in more and more sectors<br />
is not too many. This scenario is best reflected in the<br />
case of South Asia. Out of the seven countries only<br />
India and to a limited extent Pakistan have shown their<br />
willingness to lock-in their autonomous liberalisation<br />
undertaken in services. Sri Lanka, which made commitments<br />
in just three sectors during the Uruguay Round<br />
and thereafter and has submitted initial offer, has not<br />
shown any willingness to undertake additional commitments.<br />
Likewise, neither Bangladesh nor Maldives has<br />
offered to improve their original commitments. In fact,<br />
Nepal seems to be the only South Asian country that<br />
undertook relatively high level of commitments in a<br />
large number of services sectors during its accession<br />
negotiation (70 out of 161 sub sectors nearly double<br />
of what India committed during and after the Uruguay<br />
Round). Like Nepal, Bhutan is also likely to undertake<br />
liberal commitments in a number of services sectors<br />
during its accession negotiation.<br />
The study argues that given the faster growth in<br />
services in almost all South Asian countries, they have<br />
an opportunity to come closer to reap the benefits of<br />
liberalisation in the sector. Education and health being<br />
part of social infrastructure and construction and<br />
telecommunication being part of basic infrastructure<br />
are fundamental to their overall growth. In light of this,<br />
it seems imperative that these sectors are given their<br />
due importance. While the state of development in these<br />
sectors is certainly at different stages in different countries,<br />
what is interesting is that there is some amount<br />
of complementarity among these countries warranting<br />
rapid integration in services. The Maldives has a lot to<br />
offer in tourism as its services are of world class. Nepal,<br />
Sri Lanka, and Bhutan have a clear advantage in tourism<br />
and can always attract a huge number of tourists<br />
from the region. Pakistan has quite a few academic<br />
institutions from which other South Asian countries<br />
can gain. India has some advantages in construction,<br />
health and education services from which other counties<br />
can gain. At the regional level, it is surprisingly true<br />
that a lot of formal and informal movement of service<br />
providers is already taking place. Maldives is clearly a<br />
case in this regard as it receives thousands of workers<br />
form India, Sri Lanka and Bangladesh particularly to<br />
work in the tourism sector. Likewise, thousands of<br />
Indian nationals are working in Bhutan. If workers from<br />
Bangladesh and Nepal come to India seeking work,<br />
along with them also come students and patients who<br />
pay for the services they receive.<br />
In view of these complementarities, the study<br />
strongly argues that SAFTA member countries urgently<br />
need to expand the scope of SAFTA by including at<br />
least these identified five services sectors. As the study<br />
is limited to five sectors, similar complementarities have<br />
to be found in other services sectors in order to recommend<br />
for their inclusion. Moreover, these countries<br />
ought to make wider and deeper commitments than<br />
they would be doing under the GATS if they want to<br />
gain more from the regional integration.<br />
The subsequent chapters discuss individual services<br />
sectors and sub-sectors – construction and related<br />
engineering services, tourism and travel related services,<br />
higher education services, telecommunication services<br />
and health services, respectively. The discussion in these<br />
chapters begins with the analysis of original<br />
commitments (initial, and revised offers). An attempt<br />
is made to identify the restrictions on trade in these<br />
services in each of the member countries. With respect<br />
to the construction services sector, due to its close links<br />
with professional services such as engineering and<br />
integrated engineering services architectural and urban<br />
and landscape services, the chapter discusses the<br />
restrictions in these services as well to show the state<br />
of liberalisation in the full range of services which affect<br />
the transaction of construction services. Similarly, the<br />
chapter on tourism, wherever feasible, also discusses<br />
the liberalisation undertaken under the GATS regime<br />
in the area of air transport which is so closely linked to<br />
international tourism. Finally, an attempt is made to<br />
identify the sub-sectors where there is a possibility of<br />
MRAs to facilitate trade.