Globalisation: take it or leave it

In the West, they call it migration of jobs when their own companies outsource products and services from low-cost countries. You and I may ...

In the West, they call it migration of jobs when their own companies outsource products and services from low-cost countries. You and I may call it export of jobs. This is a new form of trade and one that is a direct outcome of globalisation. But things are changing today. Now it is the champions of globalisation who find things frustrating.

In the beginning, people in developing countries such as ours, were naive about the impact of globalisation. We thought it would work only to the benefit of the rich nations, we thought their companies8212;by outsourcing products and services8212;would be able to bring down prices for their consumers. What we could not imagine was the ultimate fall-out of a pattern of trade where companies would be scouting for sources of competitive advantages8212;a process that would benefit us as well.

The prosperous nations, until recently, were having a nice time. People there worked less but earned more. This was not because of their greater productivity but because cheaper goods used to come from low-cost countries that were desperate to promote exports. The pressure on these countries to lower the prices for their products did, at one point of time, damage their macro-economic fundamentals. Those days are gone. Now is the age of outsourcing8212;a process that had engulfed both products and business processes. It has led to unemployment in developed nations.

Today, the young people who work in call centres in India and other developing countries do a variety of jobs for US companies and for the American people, leaving thousands of their counterparts in the US absolutely clueless about their future. A recent article in nytimes.com, 8216;More canI Help You?8217;, is a telling story about how this development is impacting upon many ordinary families.

The piece starts like this: 8220;In the early morning hours of May 1, American welfare recipients reached for their phones, dialing toll-free, to check on their next infusion of funds. On a steamy Indian late afternoon, in her air-conditioned cubicle, Manisha Martin was waiting for them. Without a break, the display panel on her phone lit up. Kansas calling. Arizona. Alabama. Tennessee. 8216;Hi, this is Megan,8217; she said to each caller.8216;How can I help you?8217; They were asking about the balances on their benefit cards. And to one such caller she said 8216;your food stamp balance is 48 cents8217;8221;.

Who are these 8216;Megans8217;? They are located in India and other developing countries. Fine, but who are they? A couple of years ago, they would have been part of the army of the educated unemployed8212;young boys and girls looking to grab any kind of job they can get. They come from cities, small towns and even villages. Now, in the age of call centres, jobs are within reach of these people. All that they are required to do is to undergo some training in an American accent and undergo a name change, whereby the Manishas of India become Megans to American callers.

These youngsters come from modest backgrounds, sometimes even from poor to low-middle income groups. They now earn handsome wages by Indian standards just by maintaining food stamp accounts for American families, preparing tax returns for them and doing many other jobs.

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So successful has this process been that the 8216;Megan-Manishas8217; are perceived as threats to many Americans because they are perceived to be stealing their jobs. Of course this is the tragic dimension of what is, really, a success story. But you cannot get away from it. The corporates have little choice. They are facing the pressure of competition in global markets and if they don8217;t outsource products and services, chances are that they may not survive.

The good news for us is that thanks to WTO and the expanding globalisation of trade in services, more jobs are bound to be created. Globalisation of trade in services is something that the developed countries had asked and the developing countries had opposed. The developed nations could not quite see how liberalisaton of trade in services might give them an unemployment problem. The developing countries, on their part, could not imagine that it would throw up many employment opportunities. Both have been proved wrong. The net gainers from services trade liberalisation have been developing nations like ours.

The writer is senior adviser, policy, Confederation of Indian Industry