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Blooker Comments -
Authoritarian Nations and the Press
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from Blooker Gomez D'Souzz
Artificial devaluation of currency in these times of recession can lead to only one thing: indirect protection for Chinese companies and exposure of U.S. companies to stiff competition by dumping. While outsourcing had led to retail loss of jobs ... which has now been more or less curtailed by recession with fewer companies going for high-pitch BPO sales (there have been large scale job losses in India in the BPO sector and firms are closing down) ... Chinese dumping is leading to permanent and wholesale loss of jobs by closing down of U.S. companies and jobs possibly forever.
BPO stands for business process outsourcing, which until recently was a booming business in India mainly catering to U.S. clientele. It has now boomeranged on the Indian companies. With recession hitting an all-time high, they are out of business. Maintaining staff (which is the main fixed cost in services sector) without hope of orders is a futile exercise and losing trained staff through layoffs is a big loss. Closing down the enterprise means a huge catastrophe to these companies as they have invested quite heavily in infrastructure, training and offshore tie-ups.
The Indian government can do little or nothing to bail out their crisis, but China has cleverly devalued its currency to maintain the profitability or at least sustainability of its exports to help its industry which is mainly a manufacturing sector unlike India's service sector. Something has to be done to protect U.S. manufacturers, otherwise loss of jobs will lead to lesser buying power and the vicious circle will continue.
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