Bleeding Hearts Inc

Sir — First the World Social Forum and now, the Mumbai Marathon. Of late, Mumbai seems to have become a meeting place for do-gooders with fat wallets, a bleeding heart and an insatiable appetite for publicity. The “cause” could be anything — poor children, HIV, spastics — all the organizers ask for is that it attracts as many of the rich and beautiful people as there are. In a sense, these so-called charity events have taken the place of the high-society dos that were the staple of the Page 3 people until the other day — after all, conscience makes the best fashion accessory. Some may say that this trivializes serious issues, but who cares? Not those who buy newspapers and magazines, at any rate. But as the news report, “Marathon to test star stamina” (Feb 7), shows, our celebrities are generous, but only upto a point. Or how does one explain the fact that an event involving Anil Ambani, whose Reliance is worth tens of thousands of crores, hopes to net a paltry Rs 50 lakh in charity?

Yours faithfully,
J. Ghosh, Calcutta

Trespassers not allowed

Sir — Prior to the senate passing a law against outsourcing of federal government work, several states in the United States of America had moved to halt this “labour arbitrage” (“Job’s comfort”, Jan 28). Lawmakers in New Jersey proposed a bill to stop firms using foreign workers to fulfil state contracts. In November last year, Indiana withdrew from a $15 million contract with an Indian information technology outsourcing firm. Besides, there was a tightening up on the granting of visas. The annual quota for H-1B visas used up by Indian software programmers fell in October 2003 to 65,000 from 195,000 a year ago. The fall-out of the recent US legislation is likely to be marginal. Government work in the US accounts for only 30 per cent of the market — the rest comes from the private sector.

Off-shore locations have so far captured just 3-4 per cent of all American companies’ outsourcing — the bulk remains on-shore. According to Mckinsey, off-shoring benefits both countries involved in it. India, despite the law, will remain the most attractive off-shore destination compared to its main competitors — China and Malaysia. The cost of operations in India is currently much lower. The advantages are derived not only from lower wages but also from improvement in the quality and price of telecommunications. IT professionals with 3 to 5 years’ programming experience earn $ 96,000 in Britain, $ 75,000 in the US, and only $ 26,000 in India. The American private sector is aware that outsourcing promises to diminish the effects of the demographic crunch that the US is facing, when it would require an extra 8.6 million workers. Apart from the political compulsion of this year’s presidential election, the fear of loss of control implicit in outsourcing might have influenced the senate. But business strategists say that substituting a single supplier for back-office functions requiring many employees allows a company more control and discipline over operations. It frees it to think about strategy so that it can be more efficient — deliver better services at lower prices to customers everywhere.

Yours faithfully,
Debaki Nandan Mandal, Calcutta

Sir — It is hypocritical of Frank Pallone to oppose outsourcing to India (“Politicians, corporates split over outsourcing”, Jan 25). Like a typical politician, Pallone tilts whichever way the wind is blowing. But you can’t do that for too long. What was Pallone doing when the bulk of outsourcing work went to China, Philippines and Ireland? But Pallone did not speak out against them, he chose to complain only against the Indians. Pallone has enjoyed the hospitality of the Indian people living in the US and also Indians in India, Indian corporations and the government. Now that his local constituents are losing jobs, he is quick to blame the same Indians. What has Pallone ever done for Indians? Could he pass any meaningful legislation in congress that helped either the Indian community in America or the government of India in its struggles against terrorism? He was a part of the Clinton administration and the Democrats had a majority for eight long years, while he headed the India caucus. He could at least have passed a legislation branding Pakistan a terrorist state.

Yours faithfully,
Sylvester Fernandez, New Jersey, US

Sir — There is an outcry in the US and the United Kingdom against outsourcing in the knowledge industry and research and development to India; and manufacturing jobs to China. It is an election year in the US and emotions are being whipped up.

In the US, about a century ago, 40 per cent of the labour force worked on farms to feed a population of 90 million. Today, after the advent of technology and modern farm practices, it takes just 2 per cent of the number to feed a population which is three times as large. Likewise, the switchboard operators of the earlier is a vanished tribe with digitization and automated telephone communications. Such jobs losses continue to occur in countries which are modernizing. Today, however, jobs are lost to other countries as a result of “globalization”. There is no point shedding tears over it. Constant retraining of the labour force to equip them to handle the new technology-oriented jobs is one way to tackle this problem.

India too is not free of anxiety about the effects of outsourcing of jobs to countries like China. For instance, some Indian manufacturers of quartz clocks have shifted their entire manufacturing operations to China as it is perceived to provide more disciplined labour at lower costs. Indian labour unions should ponder over this in the context of the high unemployment rate of 8 per cent.

Yours faithfully,
Kangayam R. Rangaswamy, Madison, US

Sir — Dipankar Dasgupta’s views on outsourcing in the article, “Philosopher’s dreams” (Feb 5), are apt. A company’s in-sourcing and out-sourcing plans complement each other. Correctly understood, outsourcing is the stepping-stone to the true globalization of business and economy. In an era of globalization of brands and products, the localization of process, mostly non-core, doesn’t really fit in. In fact, outsourcing happens to be an ancient philosophy. In 1776, Adam Smith, in The Wealth of Nations wrote: “If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.” In recent years, outsourcing has come to be regarded as a strategic tool that can spectacularly enhance economic sustainability. It’s time to end the debate on outsourcing, to stop treating it as a passing phenomenon and accept it as inevitable.

Yours faithfully,
Suresh Behera, Ranchi

Sir — The law banning outsourcing from India makes George W. Bush’s “strategic partnership” with India meaningless.

Yours faithfully,
Shankar Mohapatra, Bhubaneshwar