Report

160 QUANTIFICATION OF BENEFITS FROM ECONOMIC COOPERATION IN SOUTH ASIA
holds true for the other SAARC countries also given
the liberal FDI regime. This has however not yet
translated into flow of investments within the SAARC
region for setting up hospitals. There is no factual data
on how much cross-border intra-SAARC investments
have been made in the health sector, however, there
have been news reports regarding both the government
and private companies from India setting up hospitals
in Sri Lanka and the Maldives. Private investment in
health services in the SAARC region is constrained by
several other factors, some of which are discussed
briefly below.
Operational Constraints on Foreign Investment in
the Health Sector in SAARC Countries
There are studies that have generally mapped the
investment climate in the SAARC countries. The
principal findings from the same are summarised below.
• A World Bank study with regard to ease of doing
business in South Asia points out that all South
Asian countries rank quite poorly in the World
Bank’s assessment of ease of doing business. 52 The
World Bank report used indicators such as ease of
obtaining clearances and permits in relation to land
acquisition, labour requirements, taxation requirements,
obtaining credit, contract enforcement and
trade regulations. The report also notes regional
and local variations within the same country,
especially countries with federal systems like India.
The South Asian rankings among 162 countries of
the world are as follows 53 :
Worldwide Ranking
Country
53 Maldives
74 Pakistan
88 Bangladesh
89 Sri Lanka
100 Nepal
134 India
• The World Bank notes that all South Asian countries
need to address contract enforcement and
labour and trade regulations as a matter of priority
in order to facilitate greater investments.
• Attractiveness for foreign investment in the health
sector also depends on a web of other inter-related
aspects, such as standards in respect of hospitals
and health centres, accreditation and registration
guidelines, and benchmarks for service delivery. 54
None of these aspects are addressed in the legal
framework in any of the SAARC countries. There
are also no independent regulatory bodies for
maintaining standards and conducting regular
audits of hospitals and nursing homes. In India,
only a few states have laws relating to regulation
of clinical establishments. The government is
presently considering a Clinical Establishments
(Registration and Regulation) Bill, to register, regulate
and set standards for clinical establishments.
Such an effort could be considered at the SAARC
level as well in order to attract higher investments
in health services.
Mode 2 Access: Constraints on Service Delivery
As discussed none of the SAARC countries impose restrictions
on entry of foreign patients for availing medical
services. Movement of patients across borders, especially
from all the SAARC countries to India as a destination
of specialised health services in the region, exists.
A study in 2001 estimated that approximately
50,000 patients come from Bangladesh each year
seeking treatment in Calcutta and other Indian cities. 55
The study also estimated that in the border areas of
Bangladesh and India, there are agents who facilitate
the process of obtaining medical services in India, and
that several medical institutions in India have made
arrangements with Bangladeshi clients, including
special counters to deal with Bangladeshi patients,
speedy treatment, concessional rates, and contacts
between doctors in the two countries. 56 The same study
also notes the migration of patients from Sri Lanka,
Maldives, Nepal and Bhutan to India.
Despite such statistics, a major limitation which is
true of most SAARC countries is the fact that there is a
limited ‘paying’ consumer base who can afford highend
health services. Accessibility to health care both
within a country, and access through Mode 2
52
World Bank, Doing Business in South Asia, 2007
53
World Bank, Doing Business in South Asia, 2007, Table 1.1
54
Rupa Chanda, Foreign Investment in Hospitals in India: Status and Implications, Study for WHO and the WTO-Cell,
Ministry of Health and Family Welfare, 2007, page 35.
55
Rupa Chanda, Trade in Health Services, Working Paper No.70, ICRIER, November 2001, available at www.icrier.org/pdf/
WP-RUPA.pdf.
56
Ibid.