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We will unveil plans to compete with India: Blair –His plans will never work - the unfair currency differential is the cause not what he says publicly
Tony Blair is wrong again! Becoming competitive with additional skill set is what Tony Blair believes will make UK defeat India in the game of outsourcing. He is wrong. UK and US cannot compete with India not because there is lack of skillsets in UK or US. As a matter of fact, US and UK work force is far more capable than that of average Indians. Where the problem lies in the unfair differential in currency levels, which makes India advantageous. Indian currency Rupees is not a freely floating currency. Like in China, Indian currency is pegged to set of currencies. That is providing an unfair competition in which UK and US is losing. For the same reason China is beating the hell out of European and US manufacturing.
Just increasing the level of skill sets will not help. UK and US companies are going to India to save money and enjoy the currency differentials. An Indian call center operator can be five times less productive due to lack of exposures to Western cultures and customs, but if you have to pay 10 times less, then the Indian worker becomes twice as productive in real sense.
But Tony Blair is firing a different shotgun. According to sources in UK, Britain plans to boost job skills and entrepreneurship to help the country compete effectively with India, China and other nations, Prime Minister Tony Blair said on Thursday. Unveiling the ruling Labour Party's manifesto for the May 5th general elections at a press conference, Blair said, if voted to power, his party would set up a "manufacturing skills academy as part of plans to help thousands of firms over the next five years and to increase the number of apprenticeships across Britain to 300,000."
Blair, who was accompanied by Chancellor Gordon Brown and Industry Secretary Patricia Hewitt, said Britain had never worked so productively, created so much wealth and generated so many jobs. But he warned that the world was changing rapidly and countries such as India and China were now competing with Britain on skills as well as costs. "Between them, these two countries produce 125,000 computer science graduates every year - more than twice the whole of the European Union," he said. The Prime Minister said British businesses could compete internationally and his government would work to ensure economic stability was maintained. Describing Brown as the best Chancellor for decades, the Prime Minister said he would try to maintain a competitive tax regime and reduce the burden of regulation. Replying to a question on Britain's entry into a European single currency, Blair said prior to that the economic tests had to be met.
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