An article of mine in the Financial Express this week highlighted the issue of Indian firms employing Chinese workers due to paucity of suitable skilled workers in India.
The government has 'fixed' the problem by insisting that all foreigners enter only on business visas—there are no visas to be given for unskilled/low-skill work, for which Indians are available—the problem actually lies in how ‘skill’ has been defined. Skills are defined typically as occupational skills where workers have the requisite training/qualification for a particular job description. If we look at the problem from the employer’s point of view, it is not a question any more of whether there are Indian electricians or welders, etc in abundance. As an Indian company executive employing Chinese labour noted, the Chinese would complete the job in 15 months while the Indians would take 8 years. The minute the time dimension enters, and therefore cost overruns loom, skill takes on a different meaning. Of course there is the added aspect of quality of output. In short, efficiency and productivity are not a part of the skill sets defined. The sad reality is that even while on paper many Indian workers have the requisite skills, they are just not employable.
My article spoke of the problem of employability in the Indian workforce:
Skill deficits have heavy social and political consequences, which are already being reflected every day on the news.As the India Labour Report 2007 , authored by TeamLease Services and Indicus Analytics, put it, “We believe that the skill deficit is more dangerous than the infrastructure deficit because it not only reinforces inequality but also amplifies it.” The longer it takes for the government to get its act together, the worse the situation will become.
I had not spoken about the migration of skilled labour from the country, given the constraints of the length of the article. The rate at which the country has lost quality work force is a function of the lack of opportunities within the country. This has been changing in recent times with many Indians returning to take part in the 'Indian growth story'., even as other parts of the world seem less attractive. The latest : the fallout of the Dubai crisis has meant that skilled workers that India had 'exported' are now returning, at a time when the country needs them badly.
The ongoing crisis in Dubai may just prove to be a boon for the Indian infrastructure sector that is on a hiring spree and scouring the world for top and middle-level talent. The infrastructure sector, which includes construction of roads, highways, ports, airports, real estate, transportation, mining, steel, power and telecom, is witnessing a manpower shortage. “The infrastructure sector in India is in dire need of people who can manage projects and ensure their timely implementation. Such skill sets are hard to find here,” said Sanjiv Sachar, partner at Egon Zehnder International.
However, for the Indian government, this does not detract from the responsibility of creating an environment where employability of the Indian labour force is raised across the board, in all regions.
03 December 2009
02 December 2009
Messages from Dubai
Two articles about the lessons from the Dubai debt issue stand out here:
The first by Anantha Nageswaran talks of the underlying problem - a mindset that demands instant gratification - and its implications for the developing world.
Amid all the hand-wringing over Dubai, what is being forgotten is that what has happened in Dubai over the last several years is only a manifestation of a global phenomenon. That is the problem of instant gratification. This affliction lies behind the global financial crisis. ....
Cities cannot be built in half a decade. Cities are not about tall concrete, steel and glass structures. They are breathing, living organisms with culture. Culture is historical. It takes time. Similarly, economic growth has to occur at a sustainable pace. Debt seduces us into thinking that we can have more of it than what is good for us.
If the hubris about breaking speed limits to growth and the achievement of permanent great moderation in economic cycles has brought the severest test yet of the US’ global supremacy, the prevalence of the same mindset in the developing world does not augur well for the great decoupling that some have taken for granted and some await with bated breath.
Hence, to be generous to today’s wannabe leaders in the developing world, the 21st century might ultimately be viewed as the period of transition for the hitherto poor nations but, on current evidence, it may not be the century of their arrival.
All this might be good for op-eds. But investors would be questioning its relevance for their actions. The answer is the same. Mind the risk and mind the price one pays for assets, and those are the equivalent of accepting delayed gratification in life.
On behalf of all of us, praying for a year of learning to accept delayed gratification.
The second article by Simon Johnson 'Does Dubai matter?Ask Ireland' highlights not just the interconnectedness of the world in the matter of flows of activity, but also the impact of responses taken by certain regions to combat crises in other parts of the world:
The thinking is that a partial bailout – with creditor losses – for Dubai from Abu Dhabi implies something about how Ireland will be treated within the European Union (and the same reasoning is also more vaguely in the air for Greece). ...
Both these articles point to greater issues of unsustainable/unwarranted debt levels, but both appear to be pessimistic over the question whether better sense will prevail.
The first by Anantha Nageswaran talks of the underlying problem - a mindset that demands instant gratification - and its implications for the developing world.
Amid all the hand-wringing over Dubai, what is being forgotten is that what has happened in Dubai over the last several years is only a manifestation of a global phenomenon. That is the problem of instant gratification. This affliction lies behind the global financial crisis. ....
Cities cannot be built in half a decade. Cities are not about tall concrete, steel and glass structures. They are breathing, living organisms with culture. Culture is historical. It takes time. Similarly, economic growth has to occur at a sustainable pace. Debt seduces us into thinking that we can have more of it than what is good for us.
If the hubris about breaking speed limits to growth and the achievement of permanent great moderation in economic cycles has brought the severest test yet of the US’ global supremacy, the prevalence of the same mindset in the developing world does not augur well for the great decoupling that some have taken for granted and some await with bated breath.
Hence, to be generous to today’s wannabe leaders in the developing world, the 21st century might ultimately be viewed as the period of transition for the hitherto poor nations but, on current evidence, it may not be the century of their arrival.
All this might be good for op-eds. But investors would be questioning its relevance for their actions. The answer is the same. Mind the risk and mind the price one pays for assets, and those are the equivalent of accepting delayed gratification in life.
On behalf of all of us, praying for a year of learning to accept delayed gratification.
The second article by Simon Johnson 'Does Dubai matter?Ask Ireland' highlights not just the interconnectedness of the world in the matter of flows of activity, but also the impact of responses taken by certain regions to combat crises in other parts of the world:
The thinking is that a partial bailout – with creditor losses – for Dubai from Abu Dhabi implies something about how Ireland will be treated within the European Union (and the same reasoning is also more vaguely in the air for Greece). ...
The main effect will be to strengthen the hand of Ben Bernanke in Fed policymaking discussions – so US interest rates will stay low for a long while. If financial intermediaries draw the appropriate lessons from Dubai, Ireland, and Greece (and Iceland, the Baltics, Hungary, etc), they will be more careful about extending credit to places that are becoming overexuberant – even when it is cheap to increase debt levels.
But an outbreak of caution and care on the part of our biggest banks (and other investment managers) does not seem likely.
Both these articles point to greater issues of unsustainable/unwarranted debt levels, but both appear to be pessimistic over the question whether better sense will prevail.
