Sep 9, 2010

For once, Obama administration is right. Offshore outsourcing of jobs must stop.

This is a good beginning. I am talking of the US State of Ohio's ban on offshoring of information technology (IT) projects. The Indian IT industry has to cry foul after Ohio order, but I strongly feel it does not make any economic sense for any country to allow foreign companies to profit by taking away local jobs.

I know it hurts young Indians whose sole aspiration is to make more money, but remember just like you are feeling hurt there are millions in America who are depressed because they have lost their job for no fault of theirs. You can call it as a fall out of recession -- recession is when someone else loses his/her job -- but tell me if I am wrong that the jobless Americans are faced not with recession, but depression --depression happens when you lose your job.     

The Hindustan Times (Sept 9, 2010) says: The Ohio government's decision comes shortly after the US Senate last month approved a hefty rise in IT-related visa fees. US accounts for 61 per cent of India's $ 37 billion (nearly Rs 1.74 lakh crore) IT exports." According to the Economic Times (Sept 9, 2010) the Indian government has lodged a formal protest with the US Trade Representative, saying Ohio governor Ted Strickland's decision violates the commitment made by G-20 countries to fight protectionism.

With the US unemployment rate nearing 10 per cent, the Obama administration is perfectly right in banning outsourcing of jobs. The Obama administration must ensure that other States also adopt similar measures.

In agriculture, where a majority of the population finds gainful employment, globalisation is slowly but steadily taking away their livelihoods. We justify this in the name of 'comparative advantage' simply because it is not our livelihood that is at the chopping block. At the same time, while the production capacity is being destroyed by shifting the focus on industrialisation, many countries are buying lands in Africa, Asia and Latin America to produce food to be shipped back home.

When the Africa and Latin American countries are themselves putting their land on sale inviting prospective buyers, I am happy that at least one country is now beginning to understand the mistake it made. Reports say Brazil’s president, Luiz Inacio Lula da Silva, has put the brakes on a wave of foreign investment in the country’s farmland, estimated by Brazil’s central bank at $2.4 billion between 2002 and 2008, by approving a rule that restricts the ownership by foreigners.

Well, I am not sure whether this is simply a pre-election posturing before the October elections, or a real move to cancel all farmland acquisitions since 1988. The same is being said about Obama administration's move to ban outsourcing, with many terming it as "electoral rhetoric" considering that Congressional elections are due in November.

If it turns out be only an 'election rhetoric', it will be a sad reflection on the lack of Statesmanship among today's political leadership. It requires courage of conviction to stand up against the violent economics that the growth paradigm actually entails.

Like in the case of the IT industry, where it is now possible to find cheaper technical manpower to replace the little expensive domestic skilled labour force that serves the Service sector, globalization means that food companies can also shop around, and source cheaper food from places like India, Malawi or the Philippines. As a result of which fewer farmers can find industrial buyers willing to pay them as much as it costs to produce fruit, vegetables, milk and meat. This happened in Europe, and if you have read one of my earlier blogs on how the beautiful farms in India and France are dying (http://devinder-sharma.blogspot.com/2010/07/france-and-india-beautiful-farms-are.htmlFSome) you will get a sense of what I mean. Accordingly, French farmers prefer to give their produce away - or dump it in protest. For many, the choice is now a stark one: find some new way to make ends meet, or risk being a victim to a farm sector that's at the verge of a collapse.

It didn't happen only in France. World over, farmers are being squeezed out of farming. I call this as The Great Trade Robbery (http://www.indiatogether.org/2003/sep/dsh-robbery.htm).

This has to change. Every country needs to become food self-sufficient, and every country must be able to find or create employment for its people. I know it is not going to be easy, because the global media, the mainline economists and the corporate lobbyists are likely to create a fear in the minds of the people (as well as political leaders) of the impending down slide in economic growth. I only hope President Obama stands his ground and does not care even if the Republicans (and the economists) think that he is behaving like a dog.

I also hope that the G-20 learns a lesson or two from President Obama.

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