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146 QUANTIFICATION OF BENEFITS FROM ECONOMIC COOPERATION IN SOUTH ASIA the global growth of information technology. The government has already formulated an ICT policy, which addresses the need for increased private participation to drive growth in this sector. So far, a good number of foreign training centres have opened branches in various cities; some of them initiated jointly with Bangladeshi entrepreneurs. However, the wide gap between the supply and demand for services, as well as the limited number of quality training centres, reflect the breadth of opportunity for development in this area. Besides computer-related skills training, there is also increased demand for training in graphic design, interior decoration, machine operation, packaging development, global trade issues, etc. At the tertiary level, UGC is responsible for regulating private and public universities, and thus serves as the intermediary between the government and autonomous educational institutes (Raihan and Mahmood 2004). According to the study, the constraints facing the education system in Bangladesh can be categorised under three broad headings, i.e. (1) access and equity; (2) quality of education, and (3) governance and management of education. Similar to other South Asian and LDCs, the growth potential in the education sector in Bangladesh is severely hampered by institutional and regulatory constraints and inadequate resources. The education services are among those social services sectors that have been identified on account of their import interests (Raihan and Mahmood 2004). The GDP share for education services in Bangladesh is only 2.36%. They argue that liberalisation of this sector is likely to attract foreign investment which will facilitate its further growth and will play an import substitution role in the long run (Ibid.). The opening of offshore campuses of foreign universities and the growth of private universities with foreign affiliation creates some sort of import substitution effect. Also, given the low revenue/GDP ratio, the government is largely dependent on external sources for financing its development budget. External aid finances more than 50% of government development expenditure on education. The above analysis of the education sector would strongly suggest that there are good reasons for Bangladesh to undertake commitments in this sector during the current round of services negotiations. In fact, Bangladesh ought to undertake commitments in higher education (CPC 923), adult education (CPC 924), and other education (CPC 929) and in all modes. It is interesting regarding Bangladeshi education that it has already developed a very close relationship with India, Nepal and Bhutan in the region. The WTO commitments will further boost this relationship and Bangladesh may also develop some niche market in the region for export of education. India is clearly in an advantageous position and can supply education to Bangladesh through all modes. The available literature suggests that recognition of foreign qualifications perhaps does not seem to be an explicit problem in Bangladesh. This should be an additional reason why service providers from the region should invest in the sector in Bangladesh. The Maldives Like Bangladesh, the Maldives too has not yet undertaken any commitments in the education sector nor has it proposed any commitments during the ongoing round of negotiations. However, shortage of skilled labour, skills mismatch in the labour force and the high proportion of foreign labour have been highlighted as major obstacles to the economic growth of the Maldives. Although educational attainment in the Maldives has improved over the past several years, other elements for a strong human capital base are missing (World Bank 2006). In 2004, the graduate output was 862, representing certificate, diploma, degree, and foundation study programmes. Despite certain improvements, the lack of local skilled labour continues to be a major problem in the Maldives. Moreover, the quality of education has not kept pace with enrollment. This has led to a dysfunctional labour market that creates high reliance on migrant labour from neighbouring countries. Since there is no statutory minimum wage, cheap labour in the region, especially from India, Sri Lanka, and Bangladesh, further depresses the market. The domestic labour force stood at about 87,442. The labour force participation rate is 47.7%. The local labour force is supplemented by the employment of a significant expatriate labour force. In 2004, 38,413 expatriates were employed in the Maldives, up from 33,765 at the end of 2003. The World Bank suggests that there is no easy and immediate solution to this emerging problem, given the Maldives’ proximity to a large, cheap labour market in India, Sri Lanka, and Bangladesh. Categories in which expatriate labour has been employed mostly include teachers, medical personnel and other professional categories, as well as semi-skilled and unskilled workers such as domestic helpers and construction
H IGHER EDUCATION SERVICES 147 workers (Maldives’ TPR 2002). From the perspective of the industrialists, it is a positive development, but from a long-term economic and social perspective, it poses a major threat that needs to be addressed without affecting industry performance (The World Bank 2006). In view of the lack of educational opportunities at higher level and also due to the over dependence on expatriate labour force it could be suggested that the Maldives should undertake liberal commitments in the three education services – higher, adult and other education services and under all modes. The Maldives has strong import interest in education services. As in Bangladesh, in the Maldives also there does not seem to be any explicit problem with recognition of foreign degrees. In view of the Maldives having the highest per capita income in the region, it offers an attractive market for other South Asian countries. In this regard, India and Sri Lanka seem to be better placed to provide education services to the Maldives due to their geographical proximity and better education facilities. As India already has some educational institutions in Nepal and the Manipal University is planning to start its branch in Sri Lanka, given the demand for higher education, Indian institutions may like to be present in the Maldives. Modes 1 and 2 also appear to be important for supply of education to the Maldives by other South Asian countries. However, currently the demand for qualified teachers is very high in the Maldives and other South Asian countries can fill this gap. There is a general trend in the Maldives that for higher education students go abroad particularly to the Western advanced countries. With the support of other South Asian countries the Maldives can gain immensely by having access to relatively cheap education via Mode 2 and by allowing commercial presence its students can instead study in the country thereby saving a lot of foreign exchange. Due to predominance of the tourism sector in the Maldivian economy, its main emphasis is on tourism related education which could also be provided by other South Asian countries. Bhutan Bhutan, an acceding WTO member country, has submitted its services offer to the WTO which includes education services. Bhutan’s proposed commitments in education services cover higher secondary education services (CPC 9222) and post secondary technical and vocational education services (CPC 9231). CPC 9222 has been defined as general school education services at the second level, second stage. 5 Such education services consist of general education programmes covering a wide variety of subjects involving more specialisation than at the first stage. The programmes aim to qualify pupils for university entrance of higher technical or vocational education without any special subject prerequisite. Similarly, post-secondary technical and vocational education services have been defined as services consisting of a great variety of subject-matter programmes. 6 They emphasise teaching of practical skills, but also involve substantial theoretical background instruction. From the definitions of the two education services in which Bhutan has proposed to make commitments it appears that Bhutan has proposed very wise and practicable commitments as they suit the limited requirements of the small country. Moreover, at higher level and particularly for technical education large Foreign Service providers may not find the Bhutanese market big enough to invest a large amount of capital. While in the Market Access column, Modes 1 and 2 have no restrictions, under Mode 3 services can be provided jointly with local educationists. In addition, foreign investor equity would be limited to a maximum of 51% and except for education services funded from state resources. Mode 4 is unbound except as in the horizontal section. In the National Treatment column Modes 1, 2, and 3 are unbound and Mode 4 is unbound except as in the horizontal section. In the horizontal section, the restrictions are limited to Mode 3. In the Market Access column the first limitation specifies that in order to establish a new commercial presence in Bhutan, minimum size of foreign investment would be $0.5 million and foreign investor’s equity holding limited to 70% and business must also be incorporated in Bhutan. Further, the investment shall be governed by sector specific policies and procedures as established in the sectors included in this schedule. Mode 3 is unbound for measures regulating publicly funded services including with respect to national treatment. In the National Treatment column also there are some limitations. Foreign investors are required to foster transfer of technology, introduction of management skills and provide training and employ Bhutanese national at all levels in the enterprise. Finally, the shares held by foreign nationals and juridical 5 United Nations Statistics Division, Department of Economic and Social Affairs, the United Nations, http://unstats.un.org/ unsd/cr/registry/regcs.asp?Cl=16&Lg=1&Co=92220, last visited on 12 November 2007. 6 Education Services: Background Note by the Secretariat, WTO, S/C/W/49, 23 September 1998.
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QUANTIFICATION OF BENEFITS FROM ECO
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QUANTIFICATION OF BENEFITS FROM ECO
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Preface Our consultations with seni
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viii CONTENTS 7. Revenue and Welfar
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Executive Summary OBJECTIVE This st
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EXECUTIVE SUMMARY xiii Table 1 EAMA
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EXECUTIVE SUMMARY xv India A full S
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EXECUTIVE SUMMARY xvii indicates th
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EXECUTIVE SUMMARY xix ments on basi
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Part I BENEFITS FROM TRADE, INVESTM
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4 QUANTIFICATION OF BENEFITS FROM E
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10 QUANTIFICATION OF BENEFITS FROM
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2 Literature Review and Rationale f
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4 Effective Additional Market Acces
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6 Impact of SAFTA on Member Countri
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7 Revenue and Welfare Implications
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8 Impact of SAFTA on Inward and Out
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9 Quantification of Benefits from T
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Part II BENEFITS FROM DEEPENING INT
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APPENDICES
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Appendix 8 Intra SAARC FDI Collabor
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Appendix 11 Table A11.1 On an Emplo
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Appendix 12 Original Commitments/In
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Appendix 14 Table A14.1 Telecommuni
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Appendix 15 REFERENCE PAPER Scope T
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Bibliography Abelson, P. (1996),
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BIBLIOGRAPHY 241 Cuba (2002), Negot
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BIBLIOGRAPHY 243 (2004), Impacts of
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BIBLIOGRAPHY 245 Silva, Patricia an
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BIBLIOGRAPHY 247 (1998), Tourism Se
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