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From the executive editor

The explosive combination of Obama and the global financial crisis can create more jobs in India over the next few years. So, despite the fact that you are at risk now, expect some good times ahead.

Alam Srinivas        Print Edition: November 27, 2008

"This campaign is about you. Your jobs. Your health care. Your retirement. Your children’s future."
—Barack Obama

His election message was simple. His policies would be for the people. And to be able to implement them, he needed their votes. In the end, he managed it. Barack Hussein Obama will be the 44th US President and the first African-American in the White House. But the morning after the victory parties, it was time to get down to business. The days of the rhetoric were over. It was time for a reality check.

Obama made two critical promises of change. The first was a change in taxes to reward the “American workers ... who deserve it”, and not the wealthy. The second was a change that would ensure that Americans competed for jobs with Americans, not with Indians and Chinese due to the unstoppable wave of outsourcing. “It’s about whether we’ll watch the Chinas and the Indias of the world move past us, or whether we’ll decide that ... the home of innovation and discovery and progress will still be the US.”

Both these objectives are difficult to achieve. If he taxes the rich and incentivises the poor, he will run against roadblocks. The Republicans will oppose the move, dubbing it leftist. His Democrat colleagues may want Obama to protect the local jobs by giving a helping hand to large corporations. It may result in a Catch-22 situation: if he stops the tax breaks to large firms, they may shut shop, which will impact the livelihoods of the middle class he promised to protect.

No one can reverse the outsourcing trend. If someone does it, he would only make his country uncompetitive. It will allow corporations in India, China, Japan and Europe to steal a march over those in the US. This will impact the American jobs. Indian BPO vendors will try to retain clients by cutting margins to compensate the US companies for the losses due to the removal of incentives to those who ship jobs abroad. Indian IT/ITES firms will offer more bang for the clients’ bucks.

Either way, the explosive combination of Obama and the global financial crisis can create more jobs in India over the next few years. So, despite the fact that you are at risk now, expect some good times ahead. Till then, read this issue to cope with your current risks.

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