ISLAMABAD, Sept 9: Along with other developing countries Pakistan should take care in giving access to foreign services suppliers since the liberalization in the services sector has already showed a decline in quality standards of services and increased the prices, says a senior research scholar in the services sector.

International standards would be imposed under general agreements on trade in services (GATS), and will create an uneven play field for local service providers and huge laying off jobs would occur, besides closing down their business, Mukhtar Ahmed Ali, a researcher in services sector has said.

Talking to Dawn about GATS implications especially for Pakistan, he said the agreement did not involve public participation in decision-making whose life was to affect and who were to be victimised due to substandard services following the liberalization.

Developed countries have already provided due protection to their consumers by enacting consumers protection laws in their countries through which they could easily monitor the services of foreign countries.

However, in Pakistan’s case except for two draft laws — one for Islamabad Capital Territory (ICT) and other for NWFP — were enacted which were yet to be implemented.

Mr Ali said in the absence of any protection, it was not advisable for Pakistan to open their services sector for foreign investment, which would have adverse implications for the poor, dispossessed sections of society and marginalize the community.

The liberalization in the services sector in under developed regions would also result in phasing out of services in those areas, he said.

The major concern for developing countries in the liberalization of their service sector is that consumers may become vulnerable to the whims of the private concern and confront problems like those of equity and access, high tariffs, arbitrary price increase, non-availability of goods and services in certain conditions and deteriorating quality of goods and services.

The government should first take into consideration all these issues and then make offers to international investors for investment in the services sector.

Foreign investment in the services sectors like banking, insurance and health sectors would be good from consumer point of view as quality of service would improve, but there should be some regulation that they should provide service to all consumers.

The liberalization in the telecom sector was successful to a large extent on average term the rates of charges reduced on the calls. While the liberalization in the power sector resulted in total failure due to which the electricity charges increased manifold.

According to a report, under the government commitment with the IMF and the World Bank the privatization and deregulations in the services sectors tariffs of services like electricity, natural gas and oil has increased many fold and those who were hard hit by these rising tariffs primarily constitute the poor.

Moreover, during the proposed move of corporatization of postal services not only a large number of post offices in remote and rural areas have been closed down in 2000, but also charges of ordinary inland mail have been doubled from Rs2 to Rs4.

He warned the government not to offer any investment in the water and education sectors, which he said would resulted in price hike. He said that state institutions, which were supposed to regulate services, were severely impacted through the GATS negotiations and the state should create transparent and accountable processes to take them on board in the negotiations.