The Hindu : Business : `Outsourcing happens in free markets'

Online edition of India's National Newspaper
Saturday, Apr 24, 2004

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Business

`Outsourcing happens in free markets'

By Sridhar Krishnaswami

WASHINGTON, APRIL 23. The President of the World Bank, James Wolfensohn, has said that outsourcing is a phenomenon that happens in free markets and that the U.S. has benefited from this but it does not come as a surprise to him that the issue is making news in an election year.

"I think outsourcing is something that happens in free markets and I think the U.S. over many years has benefited from freedom in making things where they want, getting services from where they want and then competing,'' the World Bank Chief said at a news conference ahead of this weekend's meeting of the bank and the International Monetary Fund.

"This country has built its scale and its effectiveness by being a good competitor and so it would surprise me if anything dramatic happened on outsourcing. I can understand things happening on tax loopholes, but I would be very surprised in a country that's committed to competition and free trade if you will find any fundamental changes on the question of outsourcing,'' Mr. Wolfensohn remarked.

"But it does not surprise me that, in an election year, when you're having the adjustments in jobs in certain areas, which will take more than a minute to fix that the issue will not come up and that you will not have a lot of people talking about it,'' Mr. Wolfensohn said going on to make the point that the issue of free trade and free sourcing is something that the World Bank supports.

"But what we also support, though, is labour standards and appropriate to each country so that we don't have children producing things or slaves producing it. We want to make sure that there is a competitive market. And I think that the United States...is a country that has benefited enormously from the free flow of production and that it would surprise me if that were to change fundamentally,'' Mr. Wolfensohn said.

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