Sunday, April 23, 2017

Panama Verdict; US-India H1B Dispute; Trump NSA in South Asia

What are the implications of the split Pakistan Supreme Court verdict recently announced in Panama Case filed against Prime Minister Nawaz Sharif by PTI Chief Imran Khan, JI Chief Siraj ul Haq and AML chief Shaikh Rasheed? Why did 3 out of 5 judges not vote to disqualify Mr. Sharif from holding office under Articles 62 and 63 of the Pakistan constitution? Has the Prime Minister not committed perjury, a felony in Pakistani law, by offering multiple conflicting explanations for the source of funds used to buy London flats? Does the Joint Investigation Team (JIT) appointed by the Supreme Court have the independence and the skill set to find credible evidence of wrongdoing by Mr. Sharif? Will Nawaz Sharif survive the JIT and serve out his term scheduled to end in mid-2018?


Why has President Donald J. Trump tightened H1B temporary work visa requirements with an executive order calling for "Buy American, Hire American"? How will it impact India, the biggest beneficiary of the lion's share of the 85,000 US H1B visas issued each year? Are these visas being abused to bring in lower paid foreign workers to replace American workers? How will India respond? Will the Indian government retaliate against US products/services imported by India as suggested by the Indian trade minister Nirmala Sitharaman? How will India deal with similar other restrictions on temporary work visas recently announced by Australia, New Zealand and other industrialized nations?

What took President Trump's National Security Advisor General H.R. McMaster to Afghanistan, India and Pakistan? Why did Mr. Trump announce his request for increased US aid to Pakistan just prior to General McMaster's South Asia trip? Did General McMaster threaten Pakistan to "cooperate or else" as being reported by the Afghan and the Indian media?

Viewpoint From Overseas host Misbah Azam discusses these questions with panelists Ali H. Cemendtaur and Riaz Haq (www.riazhaq.com)

https://youtu.be/HR8JYfPgFOI




Related Links:

Haq's Musings

Panama Leaks: Did Musharraf Steal People's Money?

India Files H1B Visa Complaint Against US to WTO Amid Falling Exports

H1B Visa Abuse by Indian Body Shops

Gen H.R. McMaster's Appointment as NSA

Impact of Trump Appointment on US Domestic and Foreign Policy

Talk4Pak Youtube Channel

3 comments:

Riaz Haq said...

Indian IT industry’s past sins threaten its future
The inability of India’s IT services exporters, like TCS, Infosys and Wipro among others, to upscale their skills and their wares has led up to the current crisis

http://www.livemint.com/Opinion/iidSwdvmOyJNlkLS0gbA3L/Indian-IT-industrys-past-sins-threaten-its-future.html

India’s beleaguered $150 billion IT services industry is facing an existential crisis following its discovery that US president Donald Trump did mean to go through with his pre-election threats to review a critical tool of its trade, H1B visas. This comes on top of the erosion of its competitive edge by automation and robotics. Already, the layoffs have started as projects get trimmed and margins take a hit.

Predictably, India’s software services exporters are in a state of paralysis in the face of these threats. Lacking a well-honed, long-term strategy to cope with the political and economic forces aligned against it, the industry has responded timidly—petitioning and invoking contributions to the US economy and producing numbers to state its case. This hasn’t cut much ice with the Trump administration, which has gone through with an executive order even while promising more draconian measures to protect American jobs. Contrast that with his kids-glove treatment of China. All his threats of naming the country as a currency manipulator before the elections seem to have been silenced once the reality of possible Chinese retaliation hit home.

The Indian software services industry is a custodian not merely of its own fortunes but that of the future of an entire nation. Even as industry leaders Tata Consultancy Services Ltd, Infosys Ltd and Wipro Ltd examine the impact of these recent setbacks on their bottom lines, concluding mostly that it will be marginal, there is a far bigger issue at stake. India’s success in software services exports has given it a unique competitive strength. In an increasingly digital world, India has the manpower and the head-start needed to build the kind of global position that, for instance, Germany has in engineering or before that Britain built with its naval fleet.

But as management guru Michael Porter warned, the competitive advantage of nations isn’t an inheritance on which a country has a perpetual lien. It is something a country needs to keep working on through innovation. In his original piece in 1990 for the Harvard Business Review, The Competitive Advantage of Nations, Porter wrote: “Ultimately, the only way to sustain a competitive advantage is to upgrade it—to move to more sophisticated types.”

By sitting back and continuing to rely on its cost-based arbitrage model for over two decades, the software industry has placed in jeopardy not merely its own fortunes but that of India too. Those who think that Trump’s executive order notwithstanding, it will be business as usual in the hallways of business processing offices in Bengaluru and Gurugram, might want to take a look at the recent and not-so-recent past.


The fate of India’s auto components industry, once touted as a potential world beater, is a good reminder. Despite its promising beginnings, India’s share in global exports has remained stuck below 1% over the last decade, as component makers failed to scale up and deal with the realities of a changing market. As a consequence, the value of auto component exports increased from $5.1 billion in FY09 to $10.8 billion in FY16 (according to data from the India Brand Equity Foundation), way below the sector’s Vision 2015 target of $33 billion set by the Auto Component Manufacturers’ Association back in 2003-04.

Riaz Haq said...

#India's #IT giants are laying off employees. And the worst is yet to come. #H1B #Wipro #Infosys #TCS http://www.dailyo.in/politics/it-sector-unemployment-layoffs-cognizant-wipro/story/1/17146.html … via @dailyo_

The $150-billion Indian IT sector has not just been an important contributor to the country's GDP and global exports, but has also been at the vanguard of white-collar job creation in an otherwise jobless growth of the past two decades.

For years, campuses across India have relied on the mass hiring by the likes of Infosys, Tech Mahindra, Cognizant, etc as the placement hub for India's large crop of engineers. But, of late, the sun has stopped shining on the sector. Major recruiters like Wipro, Infosys, Cognizant have been seen significant reduction in their workforce. The bad news though is that the worst is yet to come.

For various reasons, we may see massive layoffs in the IT sector. Here's why:

1. The rise of automation

Over the past few years, automation has gathered pace and, in the coming time, it promises to replace many jobs, especially of repetitive and mundane nature.

The competitive advantage in favour of automation has been increasing with technological advancement reducing cost, improving performance and wider applicability becoming possible. The Indian IT sector faces a serious challenge from automation as the nature of most jobs here is "mundane". Besides, human discretion and intelligence are low enough to be easily replaced by automation.

2. 'Freeze' on hiring Indians abroad

India's abundant labour force had made it less expensive to hire Indian expats for projects abroad. But the tide has turned against this trend with US proposing to raise the minimum income requirement for H1B visa to $130,000 from existing $60,000. Australia, Singapore and many other popular lucrative markets too have introduced procedural changes making life difficult for Indians. Getting a work visa has been made both time-consuming and costly.

This will affect one of the most lucrative opportunities that our IT workforce enjoyed, and make it more difficult to employ middle-level employees whose higher salary expectations are difficult to fulfil within India in an industry, where mass hiring at the bottom (to keep the cost low) is the norm.

3. Rises of protectionist politics in US, Europe

The rise of protectionist politics in advanced economies has increased the pressure on companies there to outsource contracts to local companies, instead of firms in India. This is making growth prospect more difficult for Indian IT companies.

The proposed reduction in corporation taxation in the US as well as France will also further incentivise more of the IT big shots to shift back some, if not a major portion, operation back to the US. All this again doesn't bode well for jobs in the Indian IT sector.

4. Corporate governance and Indian IT brands

Indian IT's fabled rise was built on the foundation of outstanding corporates who won the trust and respect of their stakeholders at home and abroad through admirable corporate governance.

But even as the industry needs the goodwill in these difficult times, the Indian IT bellwether have had a rather tough time negotiating corporate governance troubles.

While TCS has seen Tata Sons being mired in a dirty and ugly boardroom struggle, Infosys, after years of being led by unsatisfactory successors to its founders, found a decent performer in Vishal Sikka. But the respite seems short-lived as the current leadership has been engaged in a power-cum-perception struggle against Infosys old guard, notably Narayana Murthy, who has levelled and repeated some serious charges against the present leadership.


5. Sluggish global economy and low demand

As such, the big ticket projects are far fewer in number now with the global economy slowing compared to the initial decade of the millennium when Indian IT sector came of age.

Riaz Haq said...

#India's tech sector downsizes heavily as #Trump’s #H1B temp worker visa policy creates uncertainty

http://www.cnbc.com/2017/05/23/indian-tech-sector-downsizes-heavily-as-trumps-h-1b-policy-creates-uncertainty.html

Technology companies in India are in the midst of a massive restructuring drive that has both employees and industry analysts worried over the future of the sector.

Information Technology companies like Infosys, Cognizant and Tech Mahindra have announced redundancies this year and some analysts have said that this string of layoffs are expected to continue for the next two years.

A recent report from McKinsey India says that at least 200,000 software engineers in India will lose their jobs each year over the next three years.

According to local media reports, tech giant Infosys had earlier announced its plans to lay off about 1,000 employees at senior levels based on performance-based processes, the company also then announced its plans to hire 10,000 Americans over the next two years – a move many analysts have said will please U.S. President Donald Trump. Following this move, other companies such as Cognizant announced their plans to cut 6,000 jobs.

"With the majority of their business coming from US-based clients, it seems like a natural step for Indian IT companies to expand and strengthen their client offering in a market that promises sustained growth. This will undoubtedly benefit U.S. workers and sing to the tune of Trump's America First strategy," Af Malhotra, co-founder of Bangalore-based IT firm GrowthEnabler, told CNBC via email.

U.S. President Donald Trump's "America First" agenda and focus on curbing immigration especially around the much-sought-after H-1B visa policy may hurt India's massive information technology sector that forms a strong base for the country's economy.

Data from Goldman Sachs estimates that Indians accounted for nearly 195,257, or 70.1 percent, of all beneficiaries of the H-1B visa program in 2015. And hence, President Trump's decision to steer his policies towards "America First" is clearly going to hurt these professionals as well as Indian software companies. But there are divergent views on whether the redundancies in India by major IT companies have anything to do with Trump's policies.

"It does not seem like Indian companies are laying off in India so they can hire in the US," an IT-professional based in the U.S. told CNBC on the condition of anonymity due to the sensitive nature of the topic. "The IT sector has been struggling, these companies have been having poor disappointing earnings/lower guidance for a few quarters now and that is probably the primary driver."