The Big O and his O ve Stance

Barack Obama is young, intelligent, and has consistently played up his image
of being the outsider, who is out to bring about change in America.

As the favorite to win the presidential election this year, Obamas words
about his intended policy measures are taken more seriously than, say, what the
2004 democratic candidate John Kerry was saying. Kerry was just another
politician, maybe considered a little better among equals by his party at that
point of time. Obama is a symbol by himselfarguably with a lot more appeal than
his party. No one has raised the hopes of Americans the way he has, since JFK.

So, when he made his stance about global outsourcing clear in his acceptance
speech, after officially securing the democratic nomination, it was more than
dj vu for the outsourcing fraternity in India.

I will stop giving tax breaks to companies that ship jobs overseas, and I
will start giving them to companies that create good jobs right here in
America, said Obama. While it drew instant and spontaneous reactions from IT
industry representatives in India, many were guarded in their comment. Some, in
a reaction that could well compete for inclusion in the height of jokes in
optimism category, said probably he meant manufacturing, not services. Nasscom
had a mild reactionit just reiterated the economic reality that outsourcing is
more in the interest of America. In television, commentators dismissed it saying
it was just political rhetoric. The Indian IT industry hopes it is.

Shyamanuja Das

But unfortunately it is not. For one, losing candidates resort to impractical
rhetoric, often as a last resort. Obama is nowhere in that position.

But more than that, Obamas track record shows that even though he tries to
project himself as a liberal, he has consistently been anti-offshoring. His
short sentence about intended tax measures to counter offshoring was taken
straight out of the Patriotic Employers Act he co-sponsored with two more
democratic senators in August 2007. That was just a year back.

It is, hence, not wise to dismiss his proclamation as mere oratory. He would
definitely do something about it when he is elected.

Question is: how far can he go? Apart from the fact that he would face tough
opposition from corporate America, even if he goes ahead with somehow
discouraging companies to create jobs overseas, will that work today?

Alas, 2008 is not 2004. As almost everyone in touch with reality now
understands, in these four years, the power equation has shifted far more in
favor of countries like India and against countries like the United States of
America. However, unbelievable as it may sound, in outsourcing today, America
needs India as much as India needs America. And I am being modest.

Thanks to a weaker dollar, the most common mantra among Indian outsourcing
companies has been reducing their exposure to the US. So, US is just another
marketthough still the biggestfor them. On the other hand, despite frantic
search, there is no place on earth that is anywhere close to India in terms of
capability to do IT, call centers, accounting, engineering, research, content
creationyou name it.

The fact that the clout of US still remains in the new world is because it
has managed to leverage the world-class services of India and the lowest cost
manufacturing of China, more than any other traditional economic powers.

Any effort to change that will hurt American economy severely. In fact, that
will be a misadventure. One that may dwarf the original onethe Iraq
misadventure of president Bush that has put America in a position from which it
cannot get itself out, no matter how much it wants.

What is more, the same powers who were allies in the Iraq misadventure and
did suffer themselves because of their support, will be the biggest
beneficiaries in the anti-offshoring misadventure.