Facts and Myths in Globalization Debate

It is becoming increasingly important for nations to build knowledge-based economies to effectively compete and win in a globalized world. Here is a presentation by Vivek Wadhwa, a Duke professor, discussing facts and myths in the globalization debate:



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Comments

debate popular said…
Excellent report, well done and understandable.
Riaz Haq said…
US and EU farm subsidies to their cotton growers are hurting Africa's poor. Here's a report on it:

West Africa rises up to end $31.4 bn rich world cotton subsidies

Dakar, 10 February 2011 – High-level West African political leaders are joining forces with a broad coalition of African and South American smallholder and global farmer organisations to launch a huge new offensive demanding the phasing out and elimination of rich world trade distorting subsidies in cotton.

The release this week (Wednesday 9th February) at the World Social Forum of a new updated version of the Great Cotton Stitch-Up report by Fairtrade reveals that in the nine years since the Doha Development Round was launched in 2001, the United States and the European Union paid out a staggering USD 31.4 BILLION in subsidies to its farmers so squeezing out 10 million West African cotton farmers from trading their way out of poverty.

In addition, the West African Economic and Monetary Union (UEMOA) is also prioritising and upgrading the cotton subsidy issue and will shortly be unveiling its own offensive in Brussels as the European Parliament prepare to vote on the €55 billion Common Agricultural Policy reform in June.

2011 is a crucial year for the global trading system. This summer the European Parliament will begin reform of the €55 billion Common Agricultural Policy subsidy regime, the US Congress begin work in framing a new Farm Bill while attempts to revive the stalled Doha Development Round culminate in a World Trade Organisation Ministerial, expected in November.

Kwame Banson, Fairtrade Africa Regional Coordinator for West Africa, comments:

‘This is the crunch year for rich-world subsidies, with the EU and US at a genuine crossroad. One way leads to more misery for African farmers, the other to fairer way of doing trade. This coalition demands that they take the right path because African farmers can no longer be the casualties of the politics of the North.’

Moussa Doubia, Small-hold Malian Cotton Farmer, speaking of the impact of competing against subsidised cotton, adds:

‘Sometimes I can’t sleep. Sometimes it’s hard and unbearable… The cotton price is not enough for farmers to cover our needs including school fees and health.’

The report’s launch comes as Mali Minister of Industry, Investment and Commerce, Ahmadou Abdoulaye Diallo confirmed his country is seriously considering taking the US to the WTO Disputes Panel Settlement over its USD 24.45 billion subsidies, potentially leading to retaliatory action against the US by suspending protection of US intellectual property. He also states Mali will veto the entire Doha Trade deal over the issue so further reigniting what is the most vivid example of trade injustice.
Riaz Haq said…
Here's a Wall Street Journal story titled "India Graduates Millions, But Too Few Are Fit to Hire":

BANGALORE, India—Call-center company 24/7 Customer Pvt. Ltd. is desperate to find new recruits who can answer questions by phone and email. It wants to hire 3,000 people this year. Yet in this country of 1.2 billion people, that is beginning to look like an impossible goal.

So few of the high school and college graduates who come through the door can communicate effectively in English, and so many lack a grasp of educational basics such as reading comprehension, that the company can hire just three out of every 100 applicants.

India projects an image of a nation churning out hundreds of thousands of students every year who are well educated, a looming threat to the better-paid middle-class workers of the West. Their abilities in math have been cited by President Barack Obama as a reason why the U.S. is facing competitive challenges.

Yet 24/7 Customer's experience tells a very different story. Its increasing difficulty finding competent employees in India has forced the company to expand its search to the Philippines and Nicaragua. Most of its 8,000 employees are now based outside of India.

In the nation that made offshoring a household word, 24/7 finds itself so short of talent that it is having to offshore.

"With India's population size, it should be so much easier to find employees," says S. Nagarajan, founder of the company. "Instead, we're scouring every nook and cranny."

India's economic expansion was supposed to create opportunities for millions to rise out of poverty, get an education and land good jobs. But as India liberalized its economy starting in 1991 after decades of socialism, it failed to reform its heavily regulated education system.

Business executives say schools are hampered by overbearing bureaucracy and a focus on rote learning rather than critical thinking and comprehension. Government keeps tuition low, which makes schools accessible to more students, but also keeps teacher salaries and budgets low. What's more, say educators and business leaders, the curriculum in most places is outdated and disconnected from the real world.

"If you pay peanuts, you get monkeys," says Vijay Thadani, chief executive of New Delhi-based NIIT Ltd. India, a recruitment firm that also runs job-training programs for college graduates lacking the skills to land good jobs.

Muddying the picture is that on the surface, India appears to have met the demand for more educated workers with a quantum leap in graduates. Engineering colleges in India now have seats for 1.5 million students, nearly four times the 390,000 available in 2000, according to the National Association of Software and Services Companies, a trade group.

But 75% of technical graduates and more than 85% of general graduates are unemployable by India's high-growth global industries, including information technology and call centers, according to results from assessment tests administered by the group.

Another survey, conducted annually by Pratham, a nongovernmental organization that aims to improve education for the poor, looked at grade-school performance at 13,000 schools across India. It found that about half of the country's fifth graders can't read at a second-grade level.
Riaz Haq said…
The jobs stolen by Indian and other foreign IT firms to hire code coolies in their country have cost the US middle class many many trillions of dollars and decimated their std of living in America.

Even Andy Grove, former Intel CEO, believes outsourcing has been a disaster for America:

Such evidence stares at us from the performance of several Asian countries in the past few decades. These countries seem to understand that job creation must be the No. 1 objective of state economic policy. The government plays a strategic role in setting the priorities and arraying the forces and organization necessary to achieve this goal. The rapid development of the Asian economies provides numerous illustrations. In a thorough study of the industrial development of East Asia, Robert Wade of the London School of Economics found that these economies turned in precedent-shattering economic performances over the '70s and '80s in large part because of the effective involvement of the government in targeting the growth of manufacturing industries.

And:


However, our pursuit of our individual businesses, which often involves transferring manufacturing and a great deal of engineering out of the country, has hindered our ability to bring innovations to scale at home. Without scaling, we don't just lose jobs -- we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.


http://www.drudge.com/archive/136003/intel-exec-outsourcing-national-suicide
Riaz Haq said…
Here's a Guardian Op Ed on disappearing middle class jobs in America and Europe:

...."Knowledge work", supposedly the west's salvation, is now being exported like manual work. A global mass market in unskilled labour is being quickly succeeded by a market in middle-class work, particularly for industries, such as electronics, in which so much hope of employment opportunities and high wages was invested. As supply increases, employers inevitably go to the cheapest source. A chip designer in India costs 10 times less than a US one. The neoliberals forgot to read (or re-read) Marx. "As capital accumulates the situation of the worker, be his payment high or low, must grow worse."

We are familiar with the outsourcing of routine white-collar "back office" jobs such as data inputting. But now the middle office is going too. Analysing X-rays, drawing up legal contracts, processing tax returns, researching bank clients, and even designing industrial systems are examples of skilled jobs going offshore. Even teaching is not immune: last year a north London primary school hired mathematicians in India to provide one-to-one tutoring over the internet. Microsoft, Siemens, General Motors and Philips are among big firms that now do at least some of their research in China. The pace will quicken. The export of "knowledge work" requires only the transmission of electronic information, not factories and machinery. Alan Blinder, a former vice-chairman of the US Federal Reserve, has estimated that a quarter of all American service sector jobs could go overseas.

Western neoliberal "flat earthers" (after Thomas Friedman's book) believed jobs would migrate overseas in an orderly fashion. Some skilled work might eventually leave but, they argued, it would make space for new industries, requiring yet higher skills and paying better wages. Only highly educated westerners would be capable of the necessary originality and adaptability. Developing countries would obligingly wait for us to innovate in new areas before trying to compete.

But why shouldn't developing countries leapfrog the west? Asia now produces more scientists and engineers than the EU and the US put together. By 2012, on current trends, the Chinese will patent more inventions than any other nation. As a new book – The Global Auction (by sociologists Phillip Brown, Hugh Lauder and David Ashton) – argues, the next generation of innovative companies may not be American or British and, even if they are, they may not employ American or British workers.

It suggests neoliberals made a second, perhaps more important error. They assumed "knowledge work" would always entail the personal autonomy, creativity and job satisfaction to which the middle classes were accustomed. They did not understand that, as the industrial revolution allowed manual work to be routinised, so in the electronic revolution the same fate would overtake many professional jobs. Many "knowledge skills" will go the way of craft skills. They are being chopped up, codified and digitised. Every high street once had bank managers who used their discretion and local knowledge to decide which customers should receive loans. Now software does the job. Human judgment is reduced to a minimum, which explains why loan applicants are often denied because of some tiny, long-forgotten overdue payment.

Brown, Lauder and Ashton call this "digital Taylorism"....

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