Monday, August 9

Protectionism on rise in the United States

The strength of America is the infrastructure it provides, which enables more research to happen there, more creation. But in a fast-changing and globalizing world, America by taking more and more protectionist measures is going back on everything its post-independence heritage stood for: it is now becoming a closed economy, which does not reward talent, does not provide equal opportunity, does not even claim to do so.

Imposing heavy duties on imports from China wasn't just a one-off measure from the Obama administration. This has continued, and the latest is a bid to increase the fees for H1-B visas (meant for skilled worker entry and working permit) by some astronomical amount - so that, as the senators present the new proposal to the American public in an attempt to win their votes, firms from China, India, and other countries hire American workers instead of sending their nationals for temporary periods of time. How stupid!

The implications are manifold. One, and the most immediately self-defeating, is that once you put these hikes in place, the price of services increases. That is to say, a firm like Infosys would of course have to ask more for its services from the American company which had contracted some work to it. This would mean greater costs for that American company, and where would be the most reasonable place to save on expenses? Cut some more local jobs!

Two, which is more hurting in the long run, faced with increasing costs of work done onshore, more work that was being done onshore will now move offshore: rather than asking skilled people to come and work in America, that work is contracted to be done elsewhere. This will not be something just short-term: you're giving a chance to the people of other countries to develop those infrastructures which they have been neglecting all along, to do more top-draw stuff and come out of their shells. It's of course good for the so-called developing countries, but that's strange to find something good from America in the interests of any other country, even if blindly.

In times of reversal of economic momentum in the West, and an equally steady growth in the economy supported by a young demographics for the future in the East, it is imperative for America to realize its existing weaknesses and rather work on curbing the consumerism which had acted like a bubble and which it used brilliantly to make itself the most powerful nation in the world, but which had to burst: and take a different tack, keeping the economy open. Otherwise, time does not forgive: it will fall by the wayside for newer powers to emerge.

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