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September 26, 2010

Page: 31/46

Home > 2010 Issues > September 26, 2010


American Capitalism Upside Down

By Dr Pravin Togadia

DURING a very high profile and high cost election campaign American Presidential candidate Barak Hussein Obama roared - No jobs from America will be allowed to be outsourced to India. (Why India ONLY? He never mentioned Korea, where half of Hollywood animation films are being outsourced for processing for cheaper costs! He never mentioned Indonesia, where from Nike to Reebok many shoe companies of America get their shoes made due to cheap labour costs ) America was already reeling under economic slump then and its roaring was populist. Most such political leaders have a knack to make populist statements for votes. He was right. (Though now he is behaving worse than the Left, he was right in his judgement that he would gain votes for India bashing.)

He became America’s Prez. There were many firsts about him becoming Prez there. America thought that his youthfulness will bring economic boom. But when youthfulness has no positivity and the beginning is itself on the negativity - then there are no booms; there are dooms. He took charge and the first thing he did was to hurt American corporation’s CEOs in America. He blamed them for the economic slump and capped their salaries. The people, who slogged to make American economy stand up and glow, were made to feel guilty for their hard earned money! Then Prez Obama’s axe fell on Indians. He was conspicuously silent about Indian students who go to America on F1 student visa and are made to pay almost double the fees than their American counterparts. Meaning, Indian students almost subsidise American student’s education as students from Japan, China, Malaysia, Indonesia, Kenya, etc are never in a position to do so. Prez Obama asked Indian companies in IT sector (Americans call them High Tech Cos there) to stop outsourcing. He also made Indian and American companies there to stop hiring Indians on H1B (work) visa unless those companies pay double the tax. This was when American employment was all time low and his action was again quite popular there. But he got so enthused by his own stupid decisions (most egotist politicos have this problem world over. They make flimsy decisions painting them as important decisions and make further mistakes.) Prez Obama then did something that a politico from even the smallest country would never do! He picked on our IT hub Bengaluru. His target was Infosys - the pioneers in IT revolution in India and in America! Barak Hussein Obama again had a memory loss! He forgot that it was an Indian Sabeer Bhatia whose Hotmail made American Microsoft so big and Bill Gates the richest in the world and America the booming economy. If in 2000-2001 American IT and dot com balloon burst badly, it was due to America’s mismanagement and not because of Indians! The worst slap to India, we thought was from Ohio Governor who stopped outsourcing all government work to Indian companies. He straight targeted the only Indian company in Ohio - TCS. And after that Prez Obama again tried to roar (he, these days tries to roar but sounds like barking to many in his own country- that is America; not Kenya) - Tax cuts will be given only to those companies who give jobs to local Americans.

Well, well, Prez! On the same grounds many American companies sneaked into India past 30 years and got American Expat CEOs, CFOs, Marketing Directors and what not! Ask local people from Goa’s Fonda area where American Company Procter and Gamble set up a plant to make their sanitary napkins (as if Indian companies can not make such basic products) They got all facilities there because they were to give jobs to locals.

But forget jobs, they did not even give painting contracts to the locals. When locals got angry, they offered to make a crematorium there in lieu of jobs! When locals got further hurt they claimed that they had automated machines and did not need technicians. They also claimed that they had to ‘import’ Christian secretaries from other areas of Goa and not from where the plant was because the locals can not handle English! There are umpteen number of such examples where many American companies got booties of tax rebates, electricity and water costs rebates from Indian governments on the false promise of giving jobs to locals. It is a matter of survey as to what they really did. American companies also set up plants here for 75 per cent exports. Why? Cheap labour! So when they make money due to our cheap labour, it is ok? Who outsourced jobs to India from America? American companies like banks and service sectors. Indian call centres - BPOs as they are known - helped them handle their customers at a lower cost and American companies made profits! And now Barak Hussein Obama, being an ungrateful man as he has to be, tries to scuttle Indian companies with unusual vengeance.

Prez Obama’s ego, his childhood ‘samskars(?) that obviously taught him to hate all others than what he is and memory loss are his enemies. He forgot that there are over 10 American companies in Indian consumer and Pharma sectors who grew 1,000 per cent past 30 years on Indian middle class’s money whose children are now paying higher for visas! These companies got vulgar tax rebates, water and electricity facilities from Indian government. These companies like Coke, Colgate, Procter and Gamble (Head and Shoulders, Pantene shampoos, Whisper sanitary napkins, Vicks etc), Johnson and Johnson, Pfizer must put pressure on Prez Obama not to be so revengeful to India and Indians. Indian government may remain silent, but their bread and butter Indian consumers will boycott their products. We really do not need America to give us toothpastes of Colgate, P&G’s Head and Shoulders and Pantene and Vicks. As a surgeon I know well how J&J pushes doctors and nurses in India to use their catguts in surgery. Can’t an Indian company make it? Give me a month, I will get it developed and much better in India by a poor scientist! If American companies operating in India do not want to suffer severe losses through mass consumer boycott, then they should now stand up and tell their Prez Obama to steer clear from hurting Indian sentiments at once.

When in 1977 George Fernandes packed off all foreign companies like Coke and Colgate, America had made a big hue and cry about ‘Indian Protectionism’. Coke ran away completely from Bharat, Colgate divested their majority stakes to the Indian public and companies like UK’s Lever Brothers (who make soaps like Lux, etc) put on the Indian sounding name Hindustan Lever to camouflage their foreign identity from at least the then consumers. Later on post 1990 with the so called economic reforms initiated by Narasimha Rao, a few foreign companies were allowed in but with much reduced stakes. In 1992 when these reforms reached that time’s peak, again a few foreign companies were allowed in with 51 per cent stakes while the Indian shareholders and FIs were holding 49 per cent. Then the limit was raised for the foreign companies to 75 per cent and companies like Colgate were so euphoric that they even shouted from the roof top ‘The 25 million dollar smile’. American cheating that time was evident in Colgate’s parent company getting Indian shares in much lower rate to buy the earlier divested shares than those to Indian share holders.

Firebrand journalist Sucheta Dalal (who had exposed Harshad Mehta’s stock market coups), and a few analysts had written very strongly against the discrimination done by the American company with the Indian shareholders. America’s ghettoism was seen clearly in such behavioural patterns more later on as well.

Then came the time when the foreign companies were allowed to be in Bharat 100 per cent. Pharma cum Baby products company Johnson and Johnson to another FMCG company Procter and Gamble (makers of shampoos like Head and Shoulders and detergents like Ariel etc.) immediately jumped the bandwagon and entered Bharat to later on completely sweep the markets. They were not the only ones! Car maker GM and Boeing to Pharma companies like Abbott to Pfizer and banking companies like CitiBank to American Express - all took advantage of the open Indian Economy.

No! Please, do not ever think that Dr Togadia is advertising for these American companies! You know I will never do so and even these companies will shiver if I do so! I am drawing your attention to the fact that all these American companies came into Bharat with such aggression not because they wanted to give some quality products to Bharat’s consumers! They came into Bharat because their own markets were saturated then and they wanted to capitalise on the ‘India’s Middle Class Consumerism Boom’ that time. When Bharat’s families were happy enjoying their breakfasts of idli-dosa in south; samosa, pudi, paratha in north, gathia bhajia, poha in west and sandesh in east, Kellogg’s - the American company making Corn Flex came into Bharat bragging that they were not in a hurry to make profits and they had envisaged gestation period of 13 years from their entry.

They dumped their Corn Flex in Bharat aggressively in 1995 and took up a campaign to prove how traditional Indian breakfast was bad, unhealthy and how their rotten corns were full of iron! They even claimed that they will be changing Bharat’s eating habits. All these companies had started making huge losses and if not losses then their profits were at a plateau in America and rest of the world. So they eyed a big lucrative middle class market in Bharat (And in China and in Vietnam). Their big advertising agencies set up shops in Bharat to support their middle class wooing campaigns. That time what they earned and now what they have been earning since then is a great eye opener to any economist. All on Bharat’s middle class money these American companies grew fatter and fatter; in the name of FDI (Foreign Direct Investment) Indian governments gave them tax rebates, free water and electricity if they appointed the locals as mazdoors in their factories.

Indian governments may bend before America’s corporate and economic bullying despite their own intelligent minister Kamal Nath’s warning - Indian farmer is not competing with American farmer; he is fighting with American treasury! It is true. Yet Prez Obama does not stop such corporate jihad against Bharat. Why should we not stop buying Colgate toothpaste, Head and Shoulders, Pantene shampoos, J&J baby soaps, Kellogg’s corn flex, Stay Free and Whisper sanitary napkins, Whirlpool washing machines, Compaq and Dell computers, Microsoft Windows, sit in airline that use Airbus and not Boeing, stop using Nike or Reebok shoes-who wants Rahul baba and Sachin Tendulkar to advertise for them when US Prez is abusing India!

(The writer is a renowned Cancer Surgeon and International Secretary General of VHP. Contact:

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