US President Obama continues cracking down the whip on offshoring firms. "For years, our tax code has given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries, I want to change that," Obama said in a speech at Ohio. And then goes on to add: "I'm proposing a more generous, permanent extension of the tax credit that goes to companies for all the research and innovation they do right here in Ohio, right here in the United States of America."
Obama has certainly exhibited exemplary political courage to take the bull by the horn. Sooner or later, the G-8 country leadership will understand the importance and long-term impact of President Obama's initiative. I am sure they will have to follow suite, once they realise the folly of financial jugglery that goes on in the name of economic growth.
At the same time, global leadership has to come to grips with the grave and disastrous consequences that awaits ahead from another dastardly offshore outsourcing that is going on with impunity. Yes, you guess it right. I am talking of the farmland grab that goes on unchecked. President Obama needs to focus his attention on the 're-colonisation' that is taking place. I know you will think why should President Obama meddle in the affairs of other countries. I agree, but at least he can stop the American agribiz and finance companies from indulging in offshore farmland grab.
A delegation of Punjab farmers led by India's Agriculture Minister Sharad Pawar is currently (from Sept 3-13) on a visit to Brazil and Argentina looking for buying or leasing large tracts of land. According to news reports, Sukhbir Singh Badal deputy chief minister of Punjab is also part of the delegation. A farmer, who is cultivating over 30,000 hectares in Argentina, has already given a presentation to the members of the delegation.
Ironically, a recent report by the International Institute for Environment and Development (IIED) has brought out how small farmers in Brazil, for instance, are abandoning farming and swarming in to the urban centres. So on the one hand Brazil is driving away its own farmers, on the other it is inviting Indian farmers to come and cultivate the land left behind. What a flawed model of development? Your own farmers go landless while you handover farming to imported farmers.
Africa too is aggressively promoting farm land grab. With the support of the African governments, Indian farmers are likely to grab extensive tracts of land. Africa therefore has become an easy target. I draw your attention to one of my earlier blog posting on land grab in Africa (http://devinder-sharma.blogspot.com/2009/06/food-pirates-are-extending-their-reach.html).
In another news report 'Indian firms gung ho on LatAm agri biz', the Economic Times (Sept 8, 2010) says: "Indian company Shree Renuka Sugars recently made it to the club of top five sugar producers in Brazil, South America’s largest country and the world’s biggest sugarcane producer." This is happening in a country which has recently decided to turn back foreign investors in agriculture. I am sure when President Lula's nominee wins the October elections, this rule will be all but forgotten. That's what a lot of people fear.
When I mentioned this to an economic journalist in New Delhi, I was told that Agriculture Minister Sharad Pawar has stakes in Renuka Sugar, and that makes the jigsaw puzzle simple knowing the interest the minister has been taking to protect the sugar industry. I have no way of verifying Sharad Pawar's involvement with Renuka Sugar, but I think the journalist is better informed than me. Many believe his travel to Brazil is actually to draw tie-ups with Brazilian sugar companies in the light of his proposed de-control of sugar sector in India.
Meanwhile, here is the IANS news report from the Economic Times:
Indian firms gung ho on LatAm agri biz
IANS, New Delhi
INDIAN companies are increasingly getting a foothold into South America, acquiring assets and land not just to get entry into its lucrative agricultural market but also to export commodities such as sugar, pulses and edible oils back to India.
According to Latin American diplomats serving here, Indian company Shree Renuka Sugars recently made it to the club of top five sugar producers in Brazil, South America’s largest country and the world’s biggest sugarcane producer.
India’s largest sugar refiner, Shree Renuka Sugars, had first bought a sugar and ethanol producer, Vale Do Ivai S.A. Acucar E Alcool, in November 2009 for $240 million, including its 18,000 hectares of land and cane crushing capacity of 3.1 million tonnes annually. A few months later, in February, it invested another $329 million for a 51% stake in Equipav SA Acucar e Alcool, that owns two sugar mills with 10.5 million tonnes annual capacity, as well as, 115,000 hectares of cane growing land in southeastern Brazil. The diplomats said other Indian companies are also vying to get into the lucrative sugar industry. These include a consortium led by state-run Bharat Petroleum Corp, as well as private sugar companies like Rajashree and Godavari.
Mumbai-based Bajaj Hindusthan already has a subsidiary in Brazil, Bajaj Internacional Participators Ltd, to scout for investment opportunities in the country. But, it’s not just sugar and Brazil, which are attracting Indian corporate groups.
“It is a natural synergy for Indian companies to look at South America for agriculture. Cultivable land is at a premium in India and growing food overseas to import it back to the country is winwin for both sides,” said a senior diplomat, requesting anonymity. “Frankly, there is also not much sensitivity about the issue of land in South America due to the low population, unlike, say, in Africa where it is often a political hot potato,” the diplomat added.
Interests in sugar and ethanol aside, Sterling Group has a 2,000 hectare olive farm in Argentina, while Solvent Extractors Associations of India — made up of 16 member companies — plans to invest $50 million to grow oilseeds in Uruguay.
Similarly, Olam, a company owned by a non-resident Indian with headquarters in Brazil, cultivates 30,000 hectares of peanut production in Argentina. Indian companies are also increasingly looking for farm assets in Latin America for import of pulses, edible oils and sugar. In 2009, India imported over $1 billion worth of edible oils from Brazil.
Showing posts with label Outsourcing. Show all posts
Showing posts with label Outsourcing. Show all posts
For once, Obama administration is right. Offshore outsourcing of jobs must stop.
This is a good beginning. I am talking of the US State of Ohio's ban on offshoring of information technology (IT) projects. The Indian IT industry has to cry foul after Ohio order, but I strongly feel it does not make any economic sense for any country to allow foreign companies to profit by taking away local jobs.
I know it hurts young Indians whose sole aspiration is to make more money, but remember just like you are feeling hurt there are millions in America who are depressed because they have lost their job for no fault of theirs. You can call it as a fall out of recession -- recession is when someone else loses his/her job -- but tell me if I am wrong that the jobless Americans are faced not with recession, but depression --depression happens when you lose your job.
The Hindustan Times (Sept 9, 2010) says: The Ohio government's decision comes shortly after the US Senate last month approved a hefty rise in IT-related visa fees. US accounts for 61 per cent of India's $ 37 billion (nearly Rs 1.74 lakh crore) IT exports." According to the Economic Times (Sept 9, 2010) the Indian government has lodged a formal protest with the US Trade Representative, saying Ohio governor Ted Strickland's decision violates the commitment made by G-20 countries to fight protectionism.
With the US unemployment rate nearing 10 per cent, the Obama administration is perfectly right in banning outsourcing of jobs. The Obama administration must ensure that other States also adopt similar measures.
In agriculture, where a majority of the population finds gainful employment, globalisation is slowly but steadily taking away their livelihoods. We justify this in the name of 'comparative advantage' simply because it is not our livelihood that is at the chopping block. At the same time, while the production capacity is being destroyed by shifting the focus on industrialisation, many countries are buying lands in Africa, Asia and Latin America to produce food to be shipped back home.
When the Africa and Latin American countries are themselves putting their land on sale inviting prospective buyers, I am happy that at least one country is now beginning to understand the mistake it made. Reports say Brazil’s president, Luiz Inacio Lula da Silva, has put the brakes on a wave of foreign investment in the country’s farmland, estimated by Brazil’s central bank at $2.4 billion between 2002 and 2008, by approving a rule that restricts the ownership by foreigners.
Well, I am not sure whether this is simply a pre-election posturing before the October elections, or a real move to cancel all farmland acquisitions since 1988. The same is being said about Obama administration's move to ban outsourcing, with many terming it as "electoral rhetoric" considering that Congressional elections are due in November.
If it turns out be only an 'election rhetoric', it will be a sad reflection on the lack of Statesmanship among today's political leadership. It requires courage of conviction to stand up against the violent economics that the growth paradigm actually entails.
Like in the case of the IT industry, where it is now possible to find cheaper technical manpower to replace the little expensive domestic skilled labour force that serves the Service sector, globalization means that food companies can also shop around, and source cheaper food from places like India, Malawi or the Philippines. As a result of which fewer farmers can find industrial buyers willing to pay them as much as it costs to produce fruit, vegetables, milk and meat. This happened in Europe, and if you have read one of my earlier blogs on how the beautiful farms in India and France are dying (http://devinder-sharma.blogspot.com/2010/07/france-and-india-beautiful-farms-are.htmlFSome) you will get a sense of what I mean. Accordingly, French farmers prefer to give their produce away - or dump it in protest. For many, the choice is now a stark one: find some new way to make ends meet, or risk being a victim to a farm sector that's at the verge of a collapse.
It didn't happen only in France. World over, farmers are being squeezed out of farming. I call this as The Great Trade Robbery (http://www.indiatogether.org/2003/sep/dsh-robbery.htm).
This has to change. Every country needs to become food self-sufficient, and every country must be able to find or create employment for its people. I know it is not going to be easy, because the global media, the mainline economists and the corporate lobbyists are likely to create a fear in the minds of the people (as well as political leaders) of the impending down slide in economic growth. I only hope President Obama stands his ground and does not care even if the Republicans (and the economists) think that he is behaving like a dog.
I also hope that the G-20 learns a lesson or two from President Obama.
I know it hurts young Indians whose sole aspiration is to make more money, but remember just like you are feeling hurt there are millions in America who are depressed because they have lost their job for no fault of theirs. You can call it as a fall out of recession -- recession is when someone else loses his/her job -- but tell me if I am wrong that the jobless Americans are faced not with recession, but depression --depression happens when you lose your job.
The Hindustan Times (Sept 9, 2010) says: The Ohio government's decision comes shortly after the US Senate last month approved a hefty rise in IT-related visa fees. US accounts for 61 per cent of India's $ 37 billion (nearly Rs 1.74 lakh crore) IT exports." According to the Economic Times (Sept 9, 2010) the Indian government has lodged a formal protest with the US Trade Representative, saying Ohio governor Ted Strickland's decision violates the commitment made by G-20 countries to fight protectionism.
With the US unemployment rate nearing 10 per cent, the Obama administration is perfectly right in banning outsourcing of jobs. The Obama administration must ensure that other States also adopt similar measures.
In agriculture, where a majority of the population finds gainful employment, globalisation is slowly but steadily taking away their livelihoods. We justify this in the name of 'comparative advantage' simply because it is not our livelihood that is at the chopping block. At the same time, while the production capacity is being destroyed by shifting the focus on industrialisation, many countries are buying lands in Africa, Asia and Latin America to produce food to be shipped back home.
When the Africa and Latin American countries are themselves putting their land on sale inviting prospective buyers, I am happy that at least one country is now beginning to understand the mistake it made. Reports say Brazil’s president, Luiz Inacio Lula da Silva, has put the brakes on a wave of foreign investment in the country’s farmland, estimated by Brazil’s central bank at $2.4 billion between 2002 and 2008, by approving a rule that restricts the ownership by foreigners.
Well, I am not sure whether this is simply a pre-election posturing before the October elections, or a real move to cancel all farmland acquisitions since 1988. The same is being said about Obama administration's move to ban outsourcing, with many terming it as "electoral rhetoric" considering that Congressional elections are due in November.
If it turns out be only an 'election rhetoric', it will be a sad reflection on the lack of Statesmanship among today's political leadership. It requires courage of conviction to stand up against the violent economics that the growth paradigm actually entails.
Like in the case of the IT industry, where it is now possible to find cheaper technical manpower to replace the little expensive domestic skilled labour force that serves the Service sector, globalization means that food companies can also shop around, and source cheaper food from places like India, Malawi or the Philippines. As a result of which fewer farmers can find industrial buyers willing to pay them as much as it costs to produce fruit, vegetables, milk and meat. This happened in Europe, and if you have read one of my earlier blogs on how the beautiful farms in India and France are dying (http://devinder-sharma.blogspot.com/2010/07/france-and-india-beautiful-farms-are.htmlFSome) you will get a sense of what I mean. Accordingly, French farmers prefer to give their produce away - or dump it in protest. For many, the choice is now a stark one: find some new way to make ends meet, or risk being a victim to a farm sector that's at the verge of a collapse.
It didn't happen only in France. World over, farmers are being squeezed out of farming. I call this as The Great Trade Robbery (http://www.indiatogether.org/2003/sep/dsh-robbery.htm).
This has to change. Every country needs to become food self-sufficient, and every country must be able to find or create employment for its people. I know it is not going to be easy, because the global media, the mainline economists and the corporate lobbyists are likely to create a fear in the minds of the people (as well as political leaders) of the impending down slide in economic growth. I only hope President Obama stands his ground and does not care even if the Republicans (and the economists) think that he is behaving like a dog.
I also hope that the G-20 learns a lesson or two from President Obama.
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