The Hindu Business Line : `Outsourcing good for US economy in long run'

OUTSOURCING IS NOT ALL POLITICS: Ms Carla A Hills, Chairman & CEO, Hills & Company of the US, flanked by Mr Anand Mahindra, President, CII, Mr Nicholas Platt, President, The Asia Society, Mr. Phiroz Vandrevala, Executive Vice-President, Tata Consultancy Services, and Mr Norman J. Ornstein, Resident Scholar, American Enterprise Institute for Public Policy Research, USA, during a `Debate on outsourcing' in the Capital on Monday. — Ramesh Sharma

New Delhi , April 5

THE outsourcing backlash in the US is not all about politics and India should recognise the need to give more time to Americans to see the merits of outsourcing. At the same time, it should open its economy, according to experts at a debate on outsourcing organised by the Confederation of Indian Industry (CII) here.

The former US Trade Representative and Chairperson of Hills and Company, Ms Carla Hills, said that outsourcing could lead to economic disruption in the short run, but it was generally accepted that it was good for the economy in the long run.

She said that a necessary condition for outsourcing must be a reduction in tariff and gradual opening of the Indian market to ensure a level playing field.

"The US has a strong sense of fairness and equity, and when we have opened our market on the average tariff of 2 per cent, another large country (India) keeping its market closed is not fair. I think the remedy is to gradually open the markets," Ms Hills said.

Mr Norman J. Ornstein, Resident Scholar at the American Enterprise Institute, said that there was a great sense of insecurity among the white collared working class in the US, an issue that could not be ignored by the politicians in an election season.

"For a long time, the people were told that if they work hard and educate themselves, nothing could go wrong. But for the first time since President (Herbert) Hoover's term, we have seen a jobless recovery. There has been no net growth of jobs in the manufacturing sector. The 5.7 per cent unemployment rate may not be very dramatic, but it has caused a great deal of insecurity," Mr Ornstein said.

He also pointed out that in the recent years, companies have been pushing their employees to accept part time or consultancy jobs, which carry no social benefits. "The trend is worrying the average white collar worker," he added.

CII President Mr Anand Mahindra said that India should project the benefits of outsourcing and educate the world community about the country's progress in tariff reductions. At the same time, the US should realise that "pushing too much to open up will prove counter-productive".

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