What
is suggested in this blog is the only way Americans, or British, or Canadian,
or French, or Brazilian, or Russian, or Malaysian etc. can ensure jobs remain
in their respective countries.
Globalisation as
practised till now has failed to bring cheer to the people of this world. No
two countries are identical. Pressure to satisfy stock markets has forced
management of many companies to shift production to any country that can aid it
to maintain its profit. Seen in this context globalisation is a facade or
euphemism for protecting corporate profits.
It's a no brainer.
Loss of jobs by outsourcing production is a loss to the economy that is never rectified.
For example, any company that shifts production say from USA will not generate
demand for any capital equipment. Hence, there will be no incentive for an
investor to set up a capital equipment plant. Absence of capital equipment
means no requirement for maintenance and spare parts. Job losses are obvious. So,
what is the way forward?
For example if a
Chinese or Japanese company wants to export to USA or India, they should set up
local manufacturing. This step will neutralise to some extent incomparable
conditions say between USA and China or China and India.
To
avoid balance of payment crisis an exporter from China who exports to India
will get paid in Indian Currency. An exporter from India who exports to China
will get paid in Chinese Currency. Trade will balance.
