Bush backs outsourcing
One particular paragraph from Chapter 12 of the Economic Report of the President, for the year 2004, reads,
One facet of increased services trade is the increased use of offshore outsourcing in which a company relocates labor-intensive service industry functions to another country. For example, a U.S. firm might use a call-center in India to handle customer service-related questions. The principal novelty of outsourcing services is the means by which foreign purchases are delivered. Whereas imported goods might arrive by ship, outsourced services are often delivered using telephone lines or the Internet. The basic economic forces behind the transactions are the same, however. When a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically.This report was presented by President Bush to the Congress on Monday 9th February.
This is good news for India because it means that the US administration has thrown its weight behind the concept of offshore outsourcing, something that has been vilified in recent times by most of the sections of the media and the Democrats looking for popular support.
But it remains to be seen how this would affect Bush's ratings with the election approaching because this is clearly a decision that would not go down well with the multitudes of people in the US who have lost their jobs due to outsourcing!