Himalayan News Service

New York, July 8:

When it comes to offshoring of jobs to countries such as China, India and the Philippines, the response generally falls into two camps. There is ‘the sky is falling’ crowd. They are consumed by the dark fear that jobs, and along with them living standards, are being snatched away for ever by rapacious foreigners. Then there are the ‘what me worry?’ types. The problem of job loss is exaggerated and whatever jobs do go offshore will soon be replaced, they say. Reality lies somewhere in between these two dangerously simple views. Increasingly, however, the public dialogue is dominated by these two ends of the debate. The sense of foreboding about the future shapes the response to the latest news about China National Offshore Oil Corp’s audacious bid to take over the US oil and gas company Unocal.

But this is a trickle compared with the massive flow of capital in the other direction. US companies almost doubled their overseas investment in 2004, jumping to $252 billion,

according to the Organisation for Economic Cooperation and Development.

China topped the list for foreign direct investment from firms in wealthy countries, a record $55 billion, eagerly searching for lower cost production and an expanding market for their goods. McKinsey Global Institute, reassuringly predicted that service industry jobs will not follow manufacturing employment out of the door. But at a Stanford conference in June on globalization of services, felt, “Anything that does not require face-to-face interaction with the customer can be done anywhere on the globe.” Rafiq Dossani, a Stanford scholar disagrees. For example, stockbroking was considered a business that could only be done face to face. Now a major Wall Street firm has begun to move its research to India where analysts

interact with clients by voice or e-mail. Once every few months, the analyst flies to the US for meetings. The Indian analyst costs the firm $100,000 a year, Dossani said, a third of what the same person in the US would get.