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Asian trip presents tightrope for Bush
President to talk with nuclear-armed foes India and Pakistan about issues of trade and terrorism
By Mark Silva
Washington Bureau
Published February 25, 2006
WASHINGTON -- Six years ago, P.V. Kannan founded 24-hour call centers in Bangalore and Hyderabad where thousands of young, college-educated Indians have become the "help desk" to the world.
His 6,500 employees handle questions on issues from credit cards to computers, providing a service that has been outsourced by companies trying to shave costs.
His workers in India have a starting salary of $250 a month, generous there but paltry by U.S. standards. Kannan has done well for himself and lives in a suburb of San Jose, Calif.
His enterprise is a tidy example of the relentless march of globalization that is reordering the world's economy.
"Our agents tell us that the most common question they get from people is, `Where are you?"' said Kannan, chief executive of 24/7 Customer.
The answer to that question is becoming less important as technology has enabled a ready connection between India and the rest of the world. The transition of these jobs to a low-cost provider holds great promise and peril for the U.S. economy and for the increasingly closer but complicated relationship between the U.S. and India.
"The whole notion of distance is such a mental barrier for people," Kannan said. "A lot of these things bring the two countries face to face."
When President Bush travels to New Delhi next week for a three-day tour that also will take him to Pakistan, the trip will highlight not only the common interests that three nations long at odds have found in a global war against terrorism but also the tensions that remain.
Bush is attempting a delicate balancing act with India, one of the world's burgeoning powers. He is praising an expanding and ultramodern high-tech economy while assuaging the fears of Americans that they are losing some of their better jobs to a land of bountiful cheap labor. At the same time, he is encouraging growth of a countervailing force to China while also assuring official Washington that India can be trusted with nuclear might.
India's future as a peaceful nuclear power, after decades of developing atomic weapons and maintaining a Cold War alliance with the Soviet Union, is the most crucial concern Bush will address in New Delhi, but he also will focus on rapidly expanding economic ties.
Bush travels knowing that the American public is anxious about the outsourcing to India of work that Americans once performed--an anxiety he acknowledged in this year's State of the Union address and at the Asia Society in Washington this week.
"It's true that a number of Americans have lost jobs because companies have shifted operations to India," Bush said this week. "And losing a job is traumatic. . . . It puts a strain on our families."
But rather than responding with protectionist policies, Bush told Americans in January, the U.S. must compete.
In India and Pakistan, Bush's campaign for the spread of democracy likely will prompt questions about the stark contrast between the democratically elected government of Indian Prime Minister Manmohan Singh and the military regime of Pakistani President Pervez Musharraf, an army general.
Bush has placed exceptional confidence in both Asian leaders, with his offer of nuclear technology for India and reliance on the Pakistani president to help the U.S. in its hunt for terrorists, most notably Osama bin Laden.
In India, Bush will tout the technological and agricultural advances of the world's largest democracy and will tour Hyderabad, a center of India's high-tech industry.
Bush also will pursue an agreement he announced last year to provide U.S. support for development of nuclear power generation in a nation that twice has tested atomic bombs but never has signed an international nuclear non-proliferation treaty.
After four decades of "systemically poor relations" with India--which no U.S. president visited in the 22 years between Jimmy Carter's trip in 1978 and Bill Clinton's in 2000--Bush is presiding over "the transition from this 40-year, painful relationship," said Robert Blackwill, who served as Bush's ambassador to India from 2001 to 2003 and now lobbies for India's interests in Washington.
Blackwill cites many reasons for this transition: The mutual interests of the two nations in combating terrorism, the need for both to secure future sources of energy, the rise of China as an economic and military powerhouse in Asia and the evolving international economy that is erasing national boundaries.
Issues in Pakistan
In Pakistan, Bush will address the war on terrorism in a nation that has provided safe harbor and even financial support for terrorists--including refuge for the masterminds of the Sept. 11, 2001, assaults against the U.S.
In both places the president will wade into a long-simmering border dispute that has prompted three wars between India and Pakistan since their independence from Great Britain in 1947 and nearly sparked a showdown between two nuclear powers in 2002. The mistrust between the two could not be more palpable.
"As far as India is concerned, we see Pakistan as the primary source of terrorism across the region, and in terms of international terrorism as well," said Ajai Sahni, executive director of the Institute for Conflict Management in New Delhi.
"The U.S. has taken the position that Musharraf is the best bet," Sahni said. "The other point of view is that Musharraf essentially is part of the problem--and it is pressure on Pakistan, rather than faith in Pakistan, that will dictate the outcome."
The Pakistani leader possesses the right intentions, both in pursuit of terrorists at home and in pursuit of peace with India, yet he is wrongly clinging to military rule, suggested retired Pakistani army Lt. Gen. Talat Masood, known as a moderate.
"His greatest weakness or failing is that he is not understanding or deliberately ignoring the fact that you cannot develop moderation, you cannot develop a normal state, unless you also develop [free] institutions," Masood said. "With such a large country, with 160 million people, it is simply impossible to govern it as a one-man show."
For those reasons, the United States is offering India far more than it is offering Pakistan. Bush is not even close to considering the sort of nuclear cooperation with Pakistan that he wants with India, the president said in an interview with Pakistani reporters last week.
For India, with a swelling, well-educated middle class and economy growing at a swift 8 percent a year, nuclear power is a matter of providing energy for a nation that imports 75 percent of its oil and natural gas.
With one study predicting the export of India's "knowledge economy" will reach $60billion by 2010, the U.S. has contributed to a flood of new commerce in India, both with outsourcing of work once performed in the U.S. and American companies finding new markets in India.
Foreign Secretary Shyam Saran touts Microsoft's plans to invest $1.7 billion in research and development in India, Cisco Systems committing $1.1 billion and Intel another $1 billion. Air India has ordered 68 airliners from Boeing in an $11 billion deal.
The value of U.S. exports to India last year--$7.96 billion--represents a 30 percent increase over the previous year. However, Indian exports to the U.S. last year totaled $18.8 billion, a 22 percent gain over 2004.
Kannan, the call center executive, finds himself at a very profitable intersection of these converging economic trends.
Requiring a college education of all the call staff he hires at 24/7 Customer, Kannan says it costs his company $500 per month to cover the $250 salary, food, transport to and from work and medical insurance for each worker. His recruits, most in their early 20s, make more than their parents make in a nation whose per capita income runs about $530 a year.
Immigrant's success
And Kannan, who also travels widely, manages it all from his office in Los Gatos, Calif.
"I love looking at the historical reasons why India and the U.S. are separated," he said. "In the Cold War, unfortunately, India aligned with Russia. But from the 1970s onward, there has been a very active immigration to the U.S., I am one of them.
"It's still a big problem to crack," he said. "This country is so inward-looking, and India is so far away that people have always had their own perspective about the country or didn't care to think about it. This whole business of off-shoring forces people to understand India directly. It increases understanding on both sides." |
