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148 QUANTIFICATION OF BENEFITS FROM ECONOMIC COOPERATION IN SOUTH ASIA<br />
persons in locally incorporated companies are not transferable<br />
without prior permission by the government of<br />
Bhutan.<br />
Although for a country of Bhutan’s size undertaking<br />
commitments in education should be appreciated, these<br />
commitments have to be critically analysed from the<br />
point of view of a foreign services provider. In view of<br />
this, the Bhutanese commitments do not seem to be<br />
liberal. The first and foremost problem with these<br />
commitments is that there are too many restrictions in<br />
the sectoral as well as horizontal commitments. In fact,<br />
question could be asked why would any foreign investor<br />
decide to invest in Bhutan when there are so many<br />
barriers. These barriers are also equally relevant in the<br />
case of South Asia and it is interesting to note that India<br />
and to a limited extent Bangladesh are already involved<br />
in providing education services to the Bhutanese<br />
students. In fact, South Asian countries could be major<br />
investors in Bhutan’s education services. Bhutan should<br />
remove some of the Mode 3 restrictions particularly<br />
mentioned in the horizontal section. Similarly, it is hard<br />
to understand why Bhutan has inscribed unbound<br />
under Modes 1, 2 and 3 in its sectoral commitments in<br />
the National Treatment column. Mode 1 would be of<br />
much interest to the other South Asian countries and<br />
hence Bhutan needs to take full commitment in the<br />
National Treatment column of its sectoral<br />
commitments.<br />
Summary of Restrictions in the Sector<br />
• No commitments under Mode 1<br />
• A number of restrictions under Mode 3 such as<br />
foreign equity cap of 51%, services can be provided<br />
jointly with local educationists, etc.<br />
• No commitments under Mode 4.<br />
CONCLUSION AND SUGGESTIONS<br />
From South Asia India, Pakistan, Nepal, Sri Lanka,<br />
and Bhutan have so far either undertaken commitments<br />
or have offered to do so in education services as part<br />
of the ongoing services negotiations. However,<br />
Bangladesh and the Maldives are the two South Asian<br />
countries which have not shown any willingness to<br />
bind-in their autonomous liberalisation undertaken in<br />
the sector. While there is a study suggesting that<br />
Bangladesh has strong import interests in education<br />
services and hence should undertake commitments,<br />
there does not seem to be any such study on the<br />
Maldives suggesting about its possible move under the<br />
GATS. The World Bank and others have strongly<br />
argued that the Maldives lacks skilled labour force and<br />
only a handful of its students have the opportunity of<br />
studying at higher education level. There is also<br />
evidence that Maldivian students going abroad is a<br />
trend for seeking higher education. There are plausible<br />
reasons for the Maldives to make commitments under<br />
the GATS.<br />
At the South Asian level there is a dearth of educational<br />
institutions providing higher education particularly<br />
in management, engineering, medical and other<br />
technical education. The excess of demand is manifested<br />
in the region-wide trend of students going abroad<br />
especially to Western countries for education. A liberal<br />
Mode 3 regime in these countries would certainly play<br />
the role of import substitution by providing far cheaper<br />
education as compared to what the Western institutions<br />
provide.<br />
Similarly, lack of qualified teachers at higher education<br />
level affecting the quality of education seems to be<br />
a regional characteristic. It could be suggested that apart<br />
from allowing teachers to move freely across the region,<br />
training teachers at regular intervals in better institutions<br />
will help tackle the problem. Not surprisingly<br />
teacher training is one of the areas selected by SAARC<br />
to work on.<br />
There is already trade in education taking place in<br />
South Asia and India is clearly the leading exporter of<br />
education at the regional level. Several thousand<br />
students from Bangladesh, Nepal and Sri Lanka come<br />
to India every year for education. Under the SAARC<br />
arrangement India is providing some concessions to<br />
the students from this region studying in select governmental<br />
institutions. In the possible regional agreement<br />
some mechanism could be developed to give concessions<br />
to South Asian students studying even in private<br />
institutes too. This will make the South Asian education<br />
more attractive for students.<br />
There is immense scope for delivery of education<br />
via Mode 1. As already discussed, this can take many<br />
forms. However, distance education and education<br />
particularly via internet are of great significance to the<br />
region. In fact, this has special developmental perspective<br />
as education via this route is found to be several<br />
times less expensive than through conventional mode.<br />
It has been suggested that quality and accreditation<br />
are at the heart of this debate (Knight 2002). The<br />
importance of frameworks for licensing, accreditation,<br />
qualification recognition and quality assurance are<br />
important for all countries whether they are importing<br />
and exporting education services. Developing countries<br />
have expressed concern about their capacity to have