Report

130 QUANTIFICATION OF BENEFITS FROM ECONOMIC COOPERATION IN SOUTH ASIA
tourism studies was established at the Institute of
Higher Education to develop trainees for the tourism
industry.
According to the World Bank, Maldivian workers
follow extensive training programmes, since there is a
perception that quality of service is important. The
industry is addressing quality in several ways. First,
the faculty of hospitality and tourism studies in the
Maldives College of Higher Education, in partnership
with the Birmingham College of Food, Tourism and
Creative Studies, is working hard to improve training
for the industry. In turn, the EdExcel Foundation in
the United Kingdom approves standards.
The World Bank further adds that the resort chains
in the Maldives are also sponsoring training in the
country as well as overseas. The companies consider
human resource development critical. There is a high
level of training, with more than half of the staff having
received training on the job. External training is
particularly high and, indeed, many firms do send their
employees overseas for training (often to Singapore).
Unskilled employees, however, receive less training and
this is probably where more emphasis should be given.
The tourism industry relies heavily on foreign labour;
some 45% of workers are expatriates.
In order to overcome the obstacle relating to the
shortage of skilled labour the Maldives should
undertake commitments under Mode 4 both in tourism
and education services. While foreign-skilled labour in
the tourism industry can help sustain the high growth
rate, in the long run it should develop its education
system in such a way that it produces sufficient skilled
labour for its tourism industry. Thus liberalisation of
these two sectors – tourism and education – for the
movement of various categories of persons seems crucial
for the Maldivian economy. In tourism education there
is an urgent need to develop collaborative arrangements
between the Maldives and other South Asian countries
for providing education and training to tourism
professionals. Moreover, at a lower skill level, workers
employed in the Maldivian tourism industry need
training which could also be provided by South Asian
countries. Thus it could be suggested that the Maldives
should undertake commitments in all sub-sectors of the
tourism sector. This will help in meeting its demand
and also enable it to sustain the high growth rate. As it
currently lacks the required capacity to deal with WTO
negotiations, it may find it easier to be engaged in
regional negotiatioins that will also help it
multilateralise its regional commitments if it so desired
in due course of time.
Summary of Restrictions in the Maldivian
Tourism Sector
• No commitments in the tourism sector- neither
sectoral nor horizontal
• Access to finance
• High cost of finance
• Access to land
• Shortage of skilled labour
• All non-Maldivian citizens (unless holding a
resident permit) staying in registered tourist resorts,
hotels, guesthouses, and tourist-accommodating
vessels pay the bed tax may be considered a nontariff
barrier. In addition, it is a flat rate, the ad
valorem incidence of the levy, which depends upon
the room rate, falls more heavily on the cheapest
resorts.
Bhutan
In its offer on services as part of accession negotiations
Bhutan has proposed to undertake commitments in only
one of the four sub-sectors of tourism – hotel and
restaurant services. Thus its proposed commitments
cover hotels and restaurants (excluding nightclubs)
(CPC 641), food serving services (CPC 642), and beverage
serving services for consumption on the premises
(CPC 643). In the committed sub-sector under Market
Access column, Bhutan has no restrictions under Modes
1 and 2 and under Mode 3 establishment would be
limited to hotels with maximum capacity of 50 rooms
in urban areas and a maximum capacity of 15 rooms
in rural areas. Mode 4 is unbound and refers to the
horizontal section. In the National Treatment column
Modes 1, 2, and 3 are without any restrictions and
Mode 4 is unbound except as in the horizontal section.
In the horizontal section under Mode 3 Bhutan has
allowed FDI with minimum size of foreign investment
of $0.5 million and foreign equity limited to 70%. Also
the business has to be incorporated in Bhutan. In the
National Treatment column foreign investors are
required to foster transfer of technology, introduction
of management skills and provide training and employ
Bhutanese nationals at all levels in the enterprise. In
addition, the shares held by foreign nationals and
juridical persons in locally incorporated companies are
not transferable without permission by the government
of Bhutan.
From the analysis of the Bhutanese offer in services
it appears that its commitments are limited to just one
sub-sector of the tourism sector. In the committed sub-