Today, about 132 million students across the globe have enrolled in higher education. The figure was just a mere 13 million five decades ago. Along with the enrolment, there is a sharp rise in movement of international students across countries. It has been forecast that the number of students seeking international education will touch 7.2 million in 2005 from 1.8 million in 2000. These new developments, on one hand, provide enormous opportunities in services trade, and, also generate several challenges, on the other.
Education services seem to be the least committed sector in World Trade Organisation (WTO). As of August 2007, 48 countries had made a commitment to the education sector in WTO. Within the education services, the rapid changes are most spectacular in the area of higher education, which normally refers to post-secondary education at sub-degree and university-degree levels.
As a consequence, 39 countries till August 2007 had made a commitment under the WTO to liberalise access to the higher education services. BRIC countries are no exception. China has extended its commitments to liberalise access in all five sub-sectors of education services, whereas India has made commitment only in higher education.
As per WTO definition, education services across the world are traded through following four modes: cross-border trade (Mode 1), where the service itself crosses the border but consumer and provider do not move ?for example, an Indian university opening a virtual education institution; consumption abroad (Mode 2), where the consumer travels to the country where the service is supplied?such as an Indian student going to China to study; commercial presence (Mode 3), where the service provider establishes a commercial presence abroad?like a Chinese university opening a branch in India.
Meanwhile, movement of natural persons (Mode 4), where the provider of the service moves temporarily to the territory of another country to supply a service as when an Indian professor goes to China for few months to take classes at a Chinese university.
Given that the education services are traded predominantly through student mobility across borders (Mode 2?consumption abroad), nonetheless, a host of problems persist particularly in developing countries and least developed countries (LDCs) in opening up their education services, in raising their standards of education services, in recognising each others? standards (mutual recognition), and in removing the barriers to trade in education services.
Derecognition of Chinese medical degrees by the Medical Council of India (MCI) is a typical mutual recognition agreement (MRA) which is very common in services trade, prohibiting the trade in education services to grow in BRIC in general and between India and China in particular.
Barriers to trade in services (mutual recognition) are not like tariffs. They are typically regulatory barriers, rather than explicit taxes. As with trade in goods, restrictions on trade in services reduce welfare because they create a wedge between domestic and foreign prices, leading to a loss to consumer surplus.
The Balance of Payments (BoP) data of RBI shows that India?s import (payments) under trade in education services in 2003-04 was about $2.37 million, which increased to $317 million in 2004-05, contributed about 3% of country?s total payments towards services imports. This is a huge payment that India imports Mode 2 services in education.
At present, about 10,000 Indian students are studying medical courses in China. Indian students go to China to pursue medical courses primarily for following three reasons. As a matter of fact, medical courses are much cheaper in China. The average tuition for a Chinese medical university is between $2,000 and $3000 a year, plus another $1,000 to cover boarding and lodging. In comparison, in India it is about Rs 20 lakh-Rs 30 lakh, just for the donation. The Tianjin Medical University (TMU) in China has become the hub of Indian medical students. At present, about 230 Indian students are studying MBBS in TMU.
Barriers between the two countries not only make the careers of medical students uncertain and but also waste foreign exchange and precious time.
India should attract Chinese students to study in India and earn foreign exchange. India has added advantages on new generation of information technologies, which are changing the landscape of world trade in education.
?The author is fellow, Research and Information System for Developing Countries (RIS), New Delhi. Views expressed by author are his personal. Email: prabirde@ris.org.in