Why higher education in India must not bow to the market

Written by Madhu Prasad | Published on: December 14, 2015
/> Finally, GATS includes principles that are not subject to negotiation. This includes general obligations and disciplines, such as the Most Favored Nation (MNF) (article II) and Transparency (article III). The Most Favored Nation rule stipulates that each member will immediately and unconditionally assign service suppliers of a foreign country a treatment “no less favorable” than that given to service suppliers of any other member country. The transparency obligation requires that a country guarantees that service suppliers will be provided with access to information related to trade in services (laws, regulations, rules, etc.) This obligation ensures that foreign service providers exert significant influence even over domestic regulation.

On paper, GATS only obliges member countries to participate in negotiations on trade liberalisation; it does not oblige them to liberalise their services during negotiations. Negotiations are based on the method of demand-offer. Member countries demand of other countries that they liberalise those sectors where they have exportation interests. In response, other member countries present offers of liberalisation that can be modified depending on the evolution of the negotiation process itself. Irrespective of the development of the negotiations underway, countries can introduce new offers on their lists. The round is completed when all members present a definitive list of offers that will be integrated in the GATS as a part of the new liberalization commitments of the member countries. However, GATS places hurdles to withdrawal from commitments which have already been established (article XXI). As a result, the development of GATS constantly enlarges the scope of the liberalization regime and prevents reworking of even those trade agreements that may prove to be detrimental to a country’s and its peoples' interest.



GATS identifies “the existence of government monopolies” as the biggest barrier to trade. The assumption is that when government monopolizes a would-be `market’ where the services could be provided by the private sector, such services should be either outsourced or privatised. However, this is particularly damaging to essential services like education and health and represents the means by which these sectors are being rapidly privatised in India and across the world.

The GATS liberalisation agenda does threaten the universal or equitable provision of basic services. This is why critics of the WTO-GATS regime focus their objections on the role of international "market" players/corporations in restraining and limiting the role of nation-states as providers and regulators of crucial services like education and health for their citizens. Corporations, domestic or foreign, seek profits out of the sale of education, health, water, power etc. As a result those who lack purchasing power lose out. There is also a real threat to national regulatory and legislative sovereignty when decisions relating to how basic services are to be organised and delivered are effectively removed from the public sphere of social and political institutions and are left in the domain of trade agreements and investor rule-making. Citizens would no longer have the democratic right to decide how services, crucial to their well-being, are to be regulated.

The democratic deficit further deepens as a system of trade governance serving the interests of powerful corporations drastically reduces the space for debate, dissent and resistance in determining choices that affect society as a whole. The sheer physical range of the WTO-GATS trade regime (currently 161 countries) favours an increase in the power of huge multi-national corporations (MNCs) that are dominantly from the developed world. While drastic reductions are demanded in the regulatory powers of national governments the regulatory power of the MNC’s are becoming virtually unlimited. Trade pacts/commitments are designed to deter countries from changing trade policies, even when their people unequivocally want to withdraw from a policy having negative impact. The Greek referendum, with 61% of the people opposing "austerity measures" but to no avail, is a prominent example.

In India’s higher education sector GATS regulations threaten the constitutional policy of reservation for Scheduled Castes and Tribes who have been oppressed and discriminated against for centuries as a result of religious and social sanction. An important form of affirmative action, reservation would be considered as a `discriminatory’ practice in a regulatory framework determined purely by commercial interests and trade in