The H-1B Visa fee hike and the ban imposed on outsourcing by the state of Ohio are the latest of the US protectionist measures unveiling once again the protectionist policies of the US Government. The U.S. teaches the entire world to follow free market economic principles. It does so even at G7 meetings to the so-called most developed countries of the world.
The US started GATT negotiations asking the world nations to “accept or reject” the agreement, as if there were no other alternative. They’ve ultimately established WTO, completed Uruguay Round and are pushing to complete Doha Round trade negotiations for further liberalization, privatization and globalization (LPG).
While the GATT negotiations of the Uruguay Round were underway, US television transmitted a news item showing an Indian garment catching fire instantly, telling viewers not to buy Indian garments, as there was imminent danger of their easily catching fire. This was during the second half of the 90s, and US garment manufacturers were alleged to be behind the news item. High tariffs imposed on Chinese tires in the name of anti-dumping duties is another such case. This is nothing but covert protectionism. As conditions for IMF and World Bank loans, the US stipulates strictures such as reducing or abolishing subsidies to agricultural sectors, selling every service – hospital user charges, water charges by metering the consumption even by farmers, and so on – to Third World countries. The US, aka its companies, wants people of all countries buying its agricultural products and inputs. Every country in the world should buy the America-produced grains, wheat, burgers, pizzas and what not?
Actually, the matured capitalist economies like the US, the EU and Japan are increasingly facing crisis after crisis from which recovery is becoming more and more difficult. Japan’s painful and decade-long recession from the 90s into 21st Century and the present deflation and dead-slow growth, the dotcom bubble’s burst at the beginning of the millennium, the ongoing world financial crisis, the EU’s debt crisis, which is still threatening, and renewed fears of double-dip recession for the US are only a few examples of these ongoing crises. Driven by the necessity of coming out of these crises, the developed countries have laid out a unanimous plan, giving birth to the LPG policies. They are beneficial to the developed countries, but devastating to the developing and least- underdeveloped countries. It is actually economic terrorism, launched by the developed economies with the help of the World Bank and International Monitory Fund.
Even after successfully completing the Uruguay Round, the developed countries could not achieve the desired objective of unobstructed access to the economies of Third World countries for naked loot and plundering. The ruling classes of the third world signed the agreement with the looters, but not the people. The peasants, workers, unorganized labor, middle class employees and various sections of intellectuals and activist groups resisted these policies, though not up to the mark. They changed the governments, agitated and protested against the policies regularly to defend their livelihoods. It is an established fact that the never ending series of crises of the capitalist imperialism is an innate characteristic of the capitalist system. One cannot move the hill with a single piece of hair, however long it may be.
Outsourcing is itself a Protectionist Measure
The fee hike for H-1B and L1 visas and the ban of outsourcing will definitely reduce the business opportunities for Indian IT companies. But it seems that the governments forgot how the outsourcing evolved. The outsourcing of business practices (OBP) came into existence to evade taxes at home, to escape from stringent laws of environment at home, to avoid high salary levels at home and to avail themselves of cheap labor at the outsourcing target countries. Evading taxes, escaping laws and avoiding salaries at home; and availing themselves of cheap labor abroad are nothing less than protectionist measures practiced by the companies. Outsourcing evolved for the benefit of the companies who are outsourcing their businesses. Getting employment from outsourced business practices is an effect of the OBP, but not the cause. The outsourcing companies are accumulating enormous profits by evading taxes, by avoiding stringent laws and by avoiding high salaries.
The US government works for the benefit of corporate houses but not for the people of America. Outsourcing of the IT industry is mainly concentrated in China and India. Other countries are also outsourcing. New Zealand has outsourced its chartered accountancy to India. Analysts expect India’s $51 billion IT industry would adversely be impacted by protectgionist measures. Last week, US President Barack Obama also raised the outsourcing issue, stressing that he would end “tax breaks” for companies that “create jobs and profits in other countries.” Indian IT companies like Infosys Technologies, Wipro, HCL Technologies and TCS get 60% of their export revenue from the US. Among others, the apex body of Indian IT industry Nasscom also expressed its concerns over Ohio’s ban on outsourcing.
One should not forget that this is election time. With the November congressional elections around the corner, politicians are wooing voters with various gimmicks. Why did only Ohio ban outsourcing? It did it because the elections for Ohio governorship are also due in November. It was a political gimmick and moreover a temporary sentiment. An analyst commented with Reuters that, in addition to IT companies, MNC’s like IBM and Accenture were more exposed to the fears of a ban.
So, people of America! Don’t get fooled by political gimmicks. You can demand your government not to outsource. And you should also demand not to launch aggressive wars against independent countries as part of an imperial design. Though I am an Indian, I stand with people of every country who sweat to produce a thing that has a “use value” (not an exchange or market value – a thing possesses an exchange value, if and only if it has a use value.)