When R. Ravimohan, a columnist for India's Business Standard, reads anything about the American outcry over the outsourcing of jobs to low-wage countries, he blames one root cause: the wide economic disparity between the developed and developing world. "Given the unshakeable viability of the differences in cost structures of different economies," he writes, "it is but natural that with the advent of enabling technology, jobs will fly to lower wage cost centres." This labor market arbitrage is simply the free market at work. But for the United States, outsourcing and cheap imports represent the ugly side of free market forces, according to Ravimohan. "When economics turn against the market giants like the US, it tends to fall back on geo-politics." The United States' global war on terrorism, weakening of its currency, and blatant violations of WTO covenants against domestic protection "can all be linked to desire to maintain economic dominance and superiority in the world," the writer argues. "It is a legitimate objective of the most powerful nation in the world." – YaleGlobal
Restrictive policies are a barrier to harmonious development
Friday, April 16, 2004
Business Standard Ltd.