Indian IT Sweatshops Exploiting Cyber Coolies?

India's IT sector business is essentially driven by low-cost call centers, first-line tech support, simple repetitive code writing, and execution of pre-defined test suites. A typical Indian IT worker is increasingly being called a "cyber coolie" or sometimes a "code coolie", the former term having been coined by an astute Indian columnist Praful Bidwai back in 2003.

India has become the world’s top provider of business-process-outsourcing (BPO) call centers, with revenues nearing $50 billion a year by selling cheap back-office services. The call center revenue constitutes the bulk of India's IT exports.

Harish Trivedi of Delhi University has characterized India's call centers as "brutally exploitative" and its employees as "cyber coolies of our global age, working not on sugar plantations but on flickering screens, and lashed into submission through vigilant and punitive monitoring, each slip in accent or lapse in pretence meaning a cut in wages."

An Indian blogger Siddarth Singh says that "one cannot dispute the fact that our IT industry is at best a glorified labor provider, and our feted “IT Giants” have failed to provide even a single proprietary product which could create waves in the global IT industry (perhaps except Finacle, a banking and finance solution by Infosys, and which is used by a number of MNC banks around the globe).

Siddarth asks the question, "So, what does Indian industry actually excel at?" Then he offers the following answer: "Well, we are the leaders in the so called IT Enabled Services, or ITES. These are basically services such as BPOs, call centers, KPOs etc, which extensively use IT to provide backend and customer services to primarily overseas customers. That our ITES industry is hugely dependent on foreign clients is also not a secret anymore, with hardly any Indian company enlisting the services of such companies".

A recent letter from a Bangalore based Indian IT worker addressed to the editors "The Hindu" newspaper read as follows:

This is how people in the West have started referring to people in developing nations. In the old days, of course, we Indians were referred to as "coolies" because we provided cheap labour. Nowadays, we are being called "cyber coolies".

Why? Because most software companies find it cheaper to get their job done in countries like India and other developing nations. There are many people in the U. S. and Britain who raise a hue and cry when jobs get exported to countries like India — especially jobs related to call centres and the software industry.

The fact that they refer to us as coolies shows that they haven't lost their imperialist outlook....

People and the media are often misled by "R&D" in the name of some of the western companies' locations in Bangalore.

In reality, Bangalore appears to be the code coolie capital of the world...it's not about tech, it's about cheap labor performing low-level tasks at rock-bottom wages. It's just cost arbitrage in the service sector.

I have no doubt there are some smart techies in India doing leading edge high-technology work, but these are exceptions. The overwhelming majority of the so-called IT work in India is call centers or low-level routine software tech support, maintenance, testing, etc. which is widely described as code coolie work. It's mostly about cost arbitrage, not advanced tech.



The call center business in India is unregulated by government, exposing workers to working in small spaces for long hours, close monitoring, and harsh working conditions. This is of considerable concern to some of the call center workers in light of the Bhopal tragedy and its aftermath which are symptomatic of how little Indian democracy cares for its people...be they industrial workers or cyber coolies in bondage who are exploited, held back and their lives totally controlled by foreigners under the "high-tech" and "IT" labels.

Even the identities of call center workers are changed in the same way as were those of the African slaves in the West. They are forced to take on western names and put on fake accents to please their customers in the West for a few bucks. The sad part is that, after over 60 years of independence from the British, some of the Indians still crave western approval and boast about the polls showing high approval ratings of India in the US. It shows that Indians' mental slavery after "globalization" is much more powerful than the physical slavery they endured for over a thousand years.

There are reports that some of the cyber coolies of India are beginning to revolt, according to the Times of London. They are creating “e-unions” and are planning to target British and American clients in a campaign to improve their working conditions.

Some of them are now protesting over low pay and aggressive management that will not negotiate with traditional trade unions, according to the Times story.

Instead of appealing to the deaf ears of Indian government or unresponsive managements of Indian-owned BPO firms, their strategy is to approach their British and American clients for support. Those who refuse may face a sabotage campaign by the same workers who have helped cut their costs.

Here is a pre-view of the upcoming NBC serial "Outsourced" about call centers in India selling to Americans:



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India-based Debt Collection Business Soars

With the U.S. economy slipping into a potentially deep and prolonged recession, and increasing number of Americans unable to pay their debts, the debt collection call-center business in India is soaring.

According to a report in The Washington Post, India handles an estimated $16 billion -- or about 5 percent -- of delinquent U.S. accounts. More complicated health insurance bills and mortgage payments are still largely handled inside the United States, industry executives say. The debt collection business is expected to continue to grow as debt rises and companies look to cut costs, industry experts said. Aegis call center in New Delhi, which handles nearly a fourth of debt collection outsourced from the United States, is experiencing rapid growth. The company is setting up a second office building for 5,000 employees, many of them to be hired over the next few years. Most employees are college-educated and in their 20s. They earn about $5,000 a year, a competitive starting salary in India, but less than a quarter of what their counterparts in America make.

The International Herald Tribune has recently reported on Encore Capital Group, another debt-collection call center in India. "India will be the only place we grow this year," said J. Brandon Black, the CEO of Encore, collection company based in San Diego. India is Encore's largest operating area, with about half the company's collection force of more than 300.

Although the stereotype of a collector may be "some guy with chains and a cut-off shirt," Black is quoted by IHT, collectors in India are "very polite, very respectful, and they don't raise their voice." "People respond to that," he added.

There is almost a cult following of America among call center workers, a fantasy where hopes and dreams are easily achieved by people who live in a wonderland of well-paid jobs, big homes and expensive vacations. This perception seems to be changing, at least among the Indian debt collectors who regularly listen to sob stories of trouble in paradise.

U.S. household debt has increased from about 50% of GDP in 1980 to a peak of 100% in 2006, according to Harvard Business Professor Nial Ferguson who recently wrote a column for Time Magazine. In other words, households now owe as much as the entire U.S. economy can produce in a year. Much of the increase in debt was used to invest in real estate. The result was a bubble; at its peak, average U.S. house prices were rising at 20% a year. Then — as bubbles always do — it burst.

Professor Ferguson believes that U.S. banks and other financial institutions are in an even worse position: their debts are accumulating even faster. By 2007 the financial sector's debt was equivalent to 116% of GDP, compared with a mere 21% in 1980. And the assets the banks loaded up on have fallen even further in value than the average home — by as much as 55% in the case of BBB-rated mortgage-backed securities.

The heavy debt and deflating asset prices are now forcing "deleveraging", the sales of assets in a down market to pay debt that is contributing to an even greater drop in the value of stocks, bonds and real estate. With the banks trying to build up their capital reserves, they are not lending to even the most credit worthy customers, or to each other. Such caution is resulting in heavy job losses at businesses unable to borrow to meet their business needs. This climate has caused a significant loss of confidence among consumers, businesses and investors making matters worse. It is becoming a vicious cycle that the US Treasury and the Federal Reserve are trying to break by pumping over a trillion dollars into the banking system. However, the banks' continuing reluctance to lend is forcing a change in strategy by Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke. Both leaders are now buying stakes in the banks to try and change their behavior to relieve the continuing credit crunch.

The massive consumer and corporate debt and the unprecedented debt-addiction has brought the U.S. into this crisis. Ironically, it is the sudden withdrawal of debt that is making the situation worse. The contagion has now spread to the rest of the industrialized world. We are in uncharted waters now. Let us hope the captains of U.S. economy can navigate us out of the severe storm with as little damage as possible. Meanwhile, it is an opportunity for debt collectors in India to see the seamy side of the life in US while they make a few extra bucks to improve their own lives.

Atiq Raza Pays $3m Fine, Settles Insider Trading Charges

Saiyed Atiq Raza, prominent Silicon Valley Pakistani-American and venture investor, agreed to pay $3m in fine to settle SEC charges of insider trading, according to the US Securities and Exchange Commission.
The charges against Saiyed Atiq Raza, 58 years old, a former president and chief operating officer of chip maker Advanced Micro Devices Inc., stemmed from trades he made in 2006 while serving as a director of San Francisco orthodontic device maker OrthoClear Holdings Inc. Under the terms of the agreement, Mr. Raza was also barred from serving as an officer or director of a public company for five years, and he was permanently enjoined from future violations of the federal securities laws.
The SEC alleged that Mr. Raza in September 2006 was informed by OrthoClear's chief executive Zia Chishti that the company had agreed to cease competing with rival Align Technology Inc., of Santa Clara, Calif. The agreement, which effectively put OrthoClear out of business, followed a long-running intellectual-property rights dispute between the transparent teeth-aligner market competitors.
According to the SEC, Mr. Raza within two days of learning about the settlement began making large purchases of Align call options -- which would increase in value if the company's share price rose -- before the litigation settlement agreement became public. When the OrthoClear settlement was publicly announced several days later, the price of Align stock shot up 48% and Mr. Raza netted a profit of $1,450,900, the SEC said.
Zia Chishti is a Pakistani-American founder of both Align and OrthoClear. Zia is also the founder of The Resource Group, a company with call centers in Pakistan serving clients in the United States.