Interesting take on jobs moving to India

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  1. #1

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    Interesting take on jobs moving to India

    The flight to India

    The jobs Britain stole from the Asian subcontinent 200 years ago are now being returned

    George Monbiot
    Tuesday October 21, 2003
    The Guardian

    If you live in a rich nation in the English-speaking world, and most of your work involves a computer or a telephone, don't expect to have a job in five years' time. Almost every large company which relies upon remote transactions is starting to dump its workers and hire a cheaper labour force overseas. All those concerned about economic justice and the distribution of wealth at home should despair. All those concerned about global justice and the distribution of wealth around the world should rejoice. As we are, by and large, the same people, we have a problem.
    Britain's industrialisation was secured by destroying the manufacturing capacity of India. In 1699, the British government banned the import of woollen cloth from Ireland, and in 1700 the import of cotton cloth (or calico) from India. Both products were forbidden because they were superior to our own. As the industrial revolution was built on the textiles industry, we could not have achieved our global economic dominance if we had let them in. Throughout the late 18th and 19th centuries, India was forced to supply raw materials to Britain's manufacturers, but forbidden to produce competing finished products. We are rich because the Indians are poor.

    Now the jobs we stole 200 years ago are returning to India. Last week the Guardian revealed that the National Rail Enquiries service is likely to move to Bangalore, in south-west India. Two days later, the HSBC bank announced that it was cutting 4,000 customer service jobs in Britain and shifting them to Asia. BT, British Airways, Lloyds TSB, Prudential, Standard Chartered, Norwich Union, Bupa, Reuters, Abbey National and Powergen have already begun to move their call centres to India. The British workers at the end of the line are approaching the end of the line.

    There is a profound historical irony here. Indian workers can outcompete British workers today because Britain smashed their ability to compete in the past. Having destroyed India's own industries, the East India Company and the colonial authorities obliged its people to speak our language, adopt our working practices and surrender their labour to multinational corporations. Workers in call centres in Germany and Holland are less vulnerable than ours, as Germany and Holland were less successful colonists, with the result that fewer people in the poor world now speak their languages.

    The impact on British workers will be devastating. Service jobs of the kind now being exported were supposed to make up for the loss of employment in the manufacturing industries which disappeared overseas in the 1980s and 1990s. The government handed out grants for cybersweatshops in places whose industrial workforce had been crushed by the closure of mines, shipyards and steelworks. But the companies running the call centres appear to have been testing their systems at government expense before exporting them somewhere cheaper.

    It is not hard to see why most of them have chosen India. The wages of workers in the service and technology industries there are roughly one tenth of those of workers in the same sectors over here. Standards of education are high, and almost all educated Indians speak English. While British workers will take call-centre jobs only when they have no choice, Indian workers see them as glamorous. One technical support company in Bangalore recently advertised 800 jobs. It received 87,000 applications. British call centres moving to India can choose the most charming, patient, biddable, intelligent workers the labour market has to offer.

    There is nothing new about multinational corporations forcing workers in distant parts of the world to undercut each other. What is new is the extent to which the labour forces of the poor nations are also beginning to threaten the security of our middle classes. In August, the Evening Standard came across some leaked consultancy documents suggesting that at least 30,000 executive positions in Britain's finance and insurance industries are likely to be transferred to India over the next five years. In the same month, the American consultants Forrester Research predicted that the US will lose 3.3 million white-collar jobs between now and 2015. Most of them will go to India.

    Just over half of these are menial "back office" jobs, such as taking calls and typing up data. The rest belong to managers, accountants, underwriters, computer programmers, IT consultants, biotechnicians, architects, designers and corporate lawyers. For the first time in history, the professional classes of Britain and America find themselves in direct competition with the professional classes of another nation. Over the next few years, we can expect to encounter a lot less enthusiasm for free trade and globalisation in the parties and the newspapers which represent them. Free trade is fine, as long as it affects someone else's job.

    So a historical restitution appears to be taking place, as hundreds of thousands of jobs, many of them good ones, flee to the economy we ruined. Low as the wages for these positions are by comparison to our own, they are generally much higher than those offered by domestic employers. A new middle class is developing in cities previously dominated by caste. Its spending will stimulate the economy, which in turn may lead to higher wages and improved conditions of employment. The corporations, of course, will then flee to a cheaper country, but not before they have left some of their money behind. According to the consultants Nasscom and McKinsey, India - which is always short of foreign exchange - will be earning some $17bn a year from outsourced jobs by 2008.

    On the other hand, the most vulnerable communities in Britain are losing the jobs which were supposed to have rescued them. Almost two-thirds of call-centre workers are women, so the disadvantaged sex will slip still further behind. As jobs become less secure, multinational corporations will be able to demand ever harsher conditions of employment in an industry which is already one of the most exploitative in Britain. At the same time, extending the practices of their colonial predecessors, they will oblige their Indian workers to mimic not only our working methods, but also our accents, our tastes and our enthusiasms, in order to persuade customers in Britain that they are talking to someone down the road. The most marketable skill in India today is the ability to abandon your identity and slip into someone else's.

    So is the flight to India a good thing or a bad thing? The only reasonable answer is both. The benefits do not cancel out the harm. They exist, and have to exist, side by side. This is the reality of the world order Britain established, and which is sustained by the heirs to the East India Company, the multinational corporations. The corporations operate only in their own interests. Sometimes these interests will coincide with those of a disadvantaged group, but only by disadvantaging another.

    For centuries, we have permitted ourselves to ignore the extent to which our welfare is dependent on the denial of other people's. We begin to understand the implications of the system we have created only when it turns against ourselves.

    www.monbiot.com


  2. #2

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    Its about time it happened. A lot of people are wondering why Indians are "so poor". Well, you have your answer now. At least, we don't have to dwell on our relative "poverty". We are a rising force to contend with. We have the ability to succeed as much as any other nation has. I'm proud of fact that we have achieved so much in relatively so little time.

    This also exposes the double-standards of the western "industrialised" nations. They continuously push for free trade agreements and regulations (a la WTO), while they continue to coddle and appease their own industries. And they expect us to give up our achievements and make more concessions! I'm glad what happened in Cancun. I wish we would continue this resistance and force the US, UK, EU, etc...to recognize what a fundamentally flawed treaty the WTO actually is in its current form.

    To the people, who are complaining about their jobs being taken away from them, I say 'too bad'. You lost your chances..... As the article so rightly put it, the present UK workforce are possibly........ paying for the sins of their fathers and grandfathers.

    My how the mighty have fallen,.........Revenge is Sweet.


  3. #3

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    Until our politicians turn honest we have little hope of becoming and economic power.

    Keep in mind .. we have a billion odd people to feed and only a million or two are going to end up in the "new economy" jobs. We also have the Phillipines and China to compete with in several white collar sectors (China in about 10 years time).

    Our financial and legal systems are in woeful states along with our political system. There is no uniform civil code in India. Huge state owned banks with unknown bad-debts and none or little governance or reporting standards.

    I'd highly recommend reading Stupid White Men by Michael Moore.. gives you an interesting insight into the mindset of corporate America (our new colonial powers).


  4. #4

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    Ok, dude, I'll admit. We ain't perfect. But hey, at least we're tryin'! That alone should be commended. Let's try focusing on the positives.


  5. #5

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    To answer the skeptic KnowitAll

    from various articles in MSNBC, Yahoo etc
    .............
    “Expect that by 2020 the market could be as big as 500 million educated consumers,” said Sarvsh Sarup, head of consumer banking for Citigroup India.
    “There’s a lot happening, there’s lots of choice, growth brings its own prosperity,” said Gupte. “And I think if you look all around here, things are happening. [I] think its one of the few growth stories worldwide.

    .............
    The numbers are staggering. Those working in the information technology or software sector with disposable incomes are helping to fuel the world’s fastest-growing telecom market, with an estimated one million new mobile phone subscriptions sold every month. And to help these workers get around, some 10,000 motorcycles are sold every day.


    ...............
    India now has a $500 million trade surplus with China, and Indian companies increasingly see China less as a threat than an opportunity
    ..................

    Ratul Puri, the executive director of Moser Baer India, which has become the world's third largest producer of recordable media like DVD's and CD's, said his company had recently built the world's largest production site for such devices 1.5 million square feet in Noida, another Delhi satellite city, in just six and a half months.


    The other side of course ( we have been hearing this for decaeds, but just to give a balance)
    .............
    Of course, truisms about what holds India back have not disappeared. The shortfalls in infrastructure, particularly power and education, are staggering. Twenty-six percent of Indians still live in poverty, and data suggest inequality is widening even as the poverty rate falls. Overall employment is essentially stagnating.

    The heavy dependence on agriculture, which still accounts for 25 percent of gross domestic product and 70 percent of employment, means that a bad monsoon, like the one last year, can hobble the economy.

    The country remains politically dependent on subsidies that have helped swell fiscal deficits that limit growth and investment in education and health. A recent Supreme Court ruling suspending the sale of shares in significant state-owned industries prompted concerns about the slowing of economic reforms, as do continuing red tape and corruption.


  6. #6

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    It is going to be a slow process, but an eventual one. The major obstacles of course as Knowitall mentioned are politicians, lack of consistent regulation from state to state, and the lack of a uniform tax structure, which makes it much less appealing for multinationals to move beyond isolated operations in bangalore, chennai or bombay. Having said that, take a look at the new generation and it's hard to argue that there hasn't been a steady stream of improvement. We'll also have one of the largest young, educated workforces in the world and I feel that with increasing amounts of attention being placed on efficiency, process reengineering that is already evident that it's on the right path.. but will take a matter of time.

    shanx - the WTO might be flawed in many ways and is far from a perfect system, but is a necessary one. We've gained a great deal from it, and must keep in mind that protectionism is a natural mechanism. India has been doing it for quite some time, and foreign direct investment regulations have only recently been relaxed. Take a look at where we've come from necessary joint ventures like Maruti Suzuki, and Coke's withdrawal from the market.