December 2003 96th Issue

Dr Jazz to play at two of Hua Hin's finest restaurants

Thierry, proprietor of both Brasserie de Paris and the newly opened Matisse Grill is very pleased to announce that Dr. Jazz will be playing at both outlets, starting in Brasserie this month, and in Matisse from January.
Dr. Jazz will play in Brasserie de Paris on Fridays, and in Matisse on Saturdays.
Jazz music compliments the atmosphere in both restaurants, conjouring up thoughts of soulful Parisian nights.
Brasserie de Paris is everything you would expect from a top class restaurant, complete with sea views from the upper floor. This is a place where you can linger and really savour your food.
Positioned down by the fishing pier it is within easy reach of the town’s major hotels. This restaurant boasts one of the best selections of fine wines in the region and is a ‘must visit’ choice for visitors to town.
Matisse, on Naresdamri Road (on the left before you reach the Hilton), has been opened just a few months and already is attracting a number of regular diners. With its large outside grill, it’s proving quite a draw when customers can see and more importantly smell the aromas of their meat cooking.
Matisse has a similar wine list to it’s big sister restaurant, so wine buffs will not be disappointed.
Sit outside on the small terrace or inside, upstairs or down, and enjoy the works of one of France’s most famous artists, while you watch the world go by.
The service in both restaurants is very good, with well trained and cheerful staff on hand, while ‘mine host’ Thierry is busy with recommendations as to choice of menu or wine.
Brasserie de Paris has a very special menu for New Year’s Eve, for less than 2,000 Baht new year’s revellers will delight at Thierry’s selection. It is a good idea to book early for this as last year a lot of people were disappointed not to be able to get a table.

For more information or booking at: Brasserie ring 01-826 6814.
Reservations at Matisse ring 032 533 490

Dusit the Thai way of life

DUSIT Hotels & Resorts, which has successfully renegotiated the lease on its flagship hotel, the Dusit Thani in Bangkok, is racing full speed ahead to regain the hotel and group’s premier position.
Chief operating officer, Mr Khampi Suwanarat, said the group was coming up with a new boutique brand. But he declined to elaborate, saying the plans were not yet ready. Commenting on the Dusit Thani’s new lease on life, he said: “We are putting in a major investment, opening a few new outlets, renovating the new building and the main tower. By mid-2004, the hotel will be totally renovated.”
A campaign to reinforce its top positioning and branding – Dusit, the Thai way of life – will be launched later this month, and to differentiate it from the group’s Princess brand. The latter is being positioned as contemporary Thai hotel living throughout Thailand.
Mr Khampi said the group was now ready to expand the Dusit name in Asia and Princess within Thailand.

Dusit Employees Winning Ways

Bhamwiwat Wiwatthawornchai, the artist from Dusit Resort and Polo Club, was acclaimed as Thailand’s Best Ice Carver 2003 at “Salon Culinaire Bangkok”, recently held at BITEC, Bangkok. Seen pictured alongside his winning work.
Aree Kodchasarn, Bartender from Dusit Resort and Polo Club smiles as the victor of the Thailand Bartender Contest. She is seen receiving the trophy from Khun Pinit Usa, The Deputy Governor of Petchaburi

Sasiriya

Sasi Garden Restaurant and the Ariya Group present Sasiriya - Dinner and Thai Performing Arts.
When you first come to Thailand you will probably get an invitation from a tour operator to go to a cultural show, as part of a package you get the chance to see different aspects of Thai life and tradition, this show ususally includes a Khon dance routine and a display of martial art. Well now you get the opportunity to see how it really should be done.
The dancers are top notch, and the costumes are simply amazing.
Sasi Garden Restaurant has created a very good name for itself offering mouthwatering Thai food in a beautiful garden setting. The Ariya Group are gaining a very good reputation through their skilled performances. The two combine to offer a set meal and an exciting show for only 750 Baht.
At Sasi restaurant wihich is on the right as you drive to the Hyatt Regency hotel you can enjoy Khon the classical mask dance depicting the epic battles from the Ramakien. a Batik dance and Thai martial arts with the sparks flying from the swords as they strike and flash above the dancers heads.

For more information contact Sasi Garden Restaurant on 032 512 488, or 01-693 2096 and find out more about the dance from Ariya Group e-mail: ariyagroup@hotmail.com

PROPERTY BOOM IN PRACHUAB AND PETCHABURI

Since the crash of the property market in 1997 prices of real estate in Thailand have dropped dramatically. Many, mainly Thai investors lost their life saving and the banks were hit hard. Still today most banks have more non-performing loans than they can afford.
Things are changing now and prices in our area are skyrocketing again. Large well known international hotel chains were the first to get back their confidence. The investors saw this and concluded that those chains being very well informed about new developments must know well, and carefully followed.
Just in the last year property projects have mushroomed everywhere and there is som much building activity that the cement factories have problems keeping up with the demand.
Can this last? Will the same disaster happen again? Many people seem to think it won’t happen again, because the character of the development is totally different now. The influx of new schools, universities and the future new superhighway from Bangkok to the area are different developments that will affect real estate. Also there are a lot less speculators in the market. Buyers now are buying for their own use and not only for speculation sake. This is far healthier.
Is the development a good thing? Yes, say the local businesspeople. The economy will prosper. Money will go round faster and in higher volumes. The banks will profit, hotels will profit, the authorities will receive more tax and car dealers will sell more cars. No, say the locals who live on a salary. Cost of living will surge, traffic will congest and pollution will rise. Looking at past developments in Pattaya and Phuket, we should fear that local authorities will struggle to cope if the boom is too great.
High quality leadership and good inter governmental communication are essential.

HELP A YOUNG CHILD BY ENJOYING A GREAT EXPERIENCE

Good friend to the local community, Verity, showed our editor a wonderful offer advertised in the Bangkok Post.
You can travel on one of the world’s most famous rail journeys and help a child with facial deformities at the same time.
By enjoying a trip from Bangkok to Chiang Mai and back on The Eastern and Oriental Express at a special price, 7,000 Baht will go towards the cost of an operation to bring back the smiles to young people by repairing cleft lips and palates.
The normal cost of the excursion which includes all meals on board, transfers, tours, one night accommodation in Chiang Mai, and return flight to Bangkok is 900 US$, but this 3 day 2 night special offer is just 790US$.
Sea Tours Co Ltd in conjunction with Operation Smile are running this very special trip on December 26.
For more information contact Bangkok head office on 02-216 5783-93.

TRAVEL TRADE NEWS

STARWOOD Hotels and Resorts has confirmed it will open a 250-room beachside resort hotel in Hua Hin in the early part of 2005. First reported by TTG Asia in July, the resort is set on a 10 hectare plot just north of the town and is part of a mixed development called Blue Lagoon which also includes 108 two-bedroom condominiums.
Starwood’s area managing director for Thailand, Hong Kong & Macau, Mr Peter Thompson, said the resort would have two tennis courts, a spa and a huge free-form lagoon swimming pool which will dwarf other pools in Hua Hin.
“The pool will be a major feature with islands in the centre,” Mr Thompson said, adding that the resort is also being designed to focus on the MICE market.
“The main function area will be 640m2 and there will also be four breakout rooms each measuring about 80m2. We believe Hua Hin has strong potential as a MICE destination,” he said.
BEFORE it has even started operating, Thailand’s new low-cost-carrier AirAsia Aviation is on a collision course with the country’s airport operators over landing charges.
While it is asking for landing charges to be slashed nationwide to facilitate more competitive fares, the Airports of Thailand (AoT) authority has just applied for a whopping 35 per cent increase.
Chief executive officer, Mr Tony Fernandes, told TTG Asia he had asked AoT and the Department of Aviation to restructure their charges and base them on volume. “We’re particularly interested in seeing if they can reduce their charges at Don Muang (Bangkok) but we’d also like to see a different charging structure at airports throughout Thailand,” he said.
AoT acting president, Mr Bancha Pattanaporn, told reporters he had applied to the Civil Aviation Committee (CAA) for the 35 per cent increase in landing fees to start in February 2004. A spokesman for the CAA told TTG Asia this morning landing charges were under discussion and a decision would be made in about two weeks time.

The owners and staff at the Observer take this opportunity to wish His Majesty the King a very Happy Birthday

His Majesty King Bhumibol Adulyadej the Great was born on December 5, 1927 to Prince Mahidol of Songkhla and Mom Sangwan. His Majesty is the ninth King of the Chakri Dynasty and the longest-reigning monarch in the history of Thailand.
On his birthday, which is observed as a National Holiday, all his subjects rejoice in demonstrating once more their affection and loyalty to him. Religious rites are held, houses and buildings are decorated with flags, lights and his portraits. The whole nation prays to the Holy Triple Gem and all the sacred things in the universe to bless His Majesty with good health and happiness and the strength to carry on his many tasks.
December 10 marks the Constitution Day which is held annually to commemorate the advent of the regime of Constitutional Monarchy in Thailand.
Previously, the government of Thailand was an absolute monarchy until June 24, 1932 there was a transition to constitutional monarchy led by a group of young intellectuals educated abroad and inspired by the concept of western democratic procedures. The group which was known as “People’s Party or Khana Rasdr” was led by Luang Pradit Manudharm (Pridi Panomyong). To avoid bloodshed, King Rama VII (King Prajadhipok) had prepared, even before being asked, to hand over his powers to the people.
All Thai constitutions, however, recognise the King as Head of State, head of the Armed Forces, Upholder of All Religions and sacred and inviolable in his person. His Majesty the King’s sovereign power emanates from the people and is exercised in three ways, namely; legislative power through the National Assembly, executive power through the Cabinet and Judicial power through the law courts.
Even though the Revolution of 1932 brought an end to the centuries old absolute monarchy, the reverence of the Thai people towards their kings has not been diminished by this change.
Portraits of Thai kings are prominently displayed throughout the kingdom. On Constitution Day, the entire nation is greeted with festivity. The government offices, private buildings and most high rises are decorated with national flags and bunting and are brightly illuminated. On this day, all Thai citizens jointly express their gratitude to the king who graciously granted them an opportunity to take part in government the country.
A christian holy day held on December 25th in honour of the birth of Jesus though no one knows the exact date of his birthday. The word Christmas comes from Cristes Maesse, an early English phrase that means Mass of Christ. During the Christmas season, christians exchange gifts, decorates their homes with holly, mistletoe and Christmas trees and they prepare special foods and join in a carol singing.
The first Christmas celebrated in A.D. 336. By 1100, Christmas had become the most important religious festival in Europe and Saint Nicholas was the symbol of gift giving but then replaced by Santa Claus in the United States and other countries.
The word Xmas is sometimes used instead of Christmas. X is Christ's first letter in Greek.
For most Christians, the Christmas season begins on the Sunday nearest November 30. The first Sunday of the month of December is the first day of Advent, a four-week period where Christians prepare for the celebration of Christmas. The word ADVENT means a COMING and refers to the coming of Jesus on Christmas day.
During the Christmas season many houses and churches display a creche (Nativity scene). It has figures of Mary and Joseph praying beside the infant Jesus in the stable and figures of the Magi, angels, shephered, and various animals surround the Holy Family.
For many Christians, the Christmas season reaches a climax at midnight mass or other religious services on Christmas Eve. Most churches also hold services on Christmas day. Christmas ends on January 6, Epiphany. Epiphany celebrates the coming of the Wise Men to the Christ child and it falls on the 12th day after Christmas.
The people give each other small presents as part of their year-end and christmas celebrations. This custom probably began in ancient Rome and northern Europe.
Today, Santa Claus brings presents to children in many countries. A number of other countries have their own versions of Santa Claus, such as Father Christmas in the British Isles, Pere Noel in France and Weihnachtsmann in Germany.
The custom of hanging stockings or socks by the fireplace or near their window probably developed when Magi put small gifts in the shoes during the night.
The preparation of special foods became an important part of the Christmas celebration thoughout the world. Many of which lasted for several days.
At the first Christmas feast people roast boars, pigs and peacocks over large open fires. Today, roasted turkey is the most popular main course in the United States, Canada, Australia and New Zealand.
Christmas decorations. The traditional colors of Christmas are green and red. Green represents the continuance of life though the winter and the Christian belief in eternal life through Christ. Red symbolizes the blood that Jesus shed at His Crucifixion. Wreath, holly, mistletoe and Christmas trees feature these colors.
The Christmas tree probably developed in medieval Germany from the "Paradise Tree", a type of evergreen. This tree decorated with red apples used in a popular Christmas play about Adam and Eve.
Holly is an evergreen tree with glossy leaves and bright red berries. It is used in making Christmas wreaths and other decorations. They called it holy tree, and the word holly may have come from this name.
Mistletoe is an evergreen plant with dark leaves and shiny white berries. Ancient Celtic priests considered the plant sacred and gave people sprigs of it to use as charms.
Christmas carols. The word carol came from a Gree dance called a choraulein, which was accompanies with a flute music. Most of the carols sung today were originaly composed in the 1700's and 1800's. They include "O Little Town of Bethlehem" and "Hark! The Herald Angels Sing". The words of the famous carol "Silent Night" were written on Christmas Eve in 1818 by Joseph Mohr, an Australian priest while at the midnight Mass in 1847 "O Holy Night" introduced, another famous carol.
Christmas card. "Merry Christmas and a Happy New Year to you" was the first message on the card created in 1843 by John Calcott Horsley, and English illustrator.

Drama at the Sofitel

Great news for theatre lovers Educating Rita comes to the Sofitel Central. London Theatre Productions, formerly known as Platform Players are acting the play in a three centre tour. Starting in Hua Hin before moving on to Bangkok and then Phuket.
Educating Rita is a funny, heartwarming tale about a working class hairdresser from Liverpool, who enrols in an Open University course because she wants a better life. Her teacher is Frank, an alcoholic, a poet who no longer writes poetry. Rita’s education is to have a profound effect on both their lives.
This comedy drama was penned by Willy Russell, who also wrote Shirley Valentine. It was commissioned by the Royal Shakespeare Company, performed at the National Theatre, and later transferred to London’s West End. In 1983 it was made into a popular movie with Michael Caine and Julie Walters.

Wednesday 3rd December at Sofitel Central Hua Hin Resort.
7.00 pm Cocktail at the Museum
7.30 pm Buffet at Colonial Hall
9.15 pm Show
Price 2,500 net per person. For Information or Reservation, call 032 512 021-38 ext. 640

KNOCKED OUT!

Regulars at Billy’s Bar were knocked out recently when boxing legend Jeff Fenech dropped in for a few games of pool.
Fenech, who is from Australia, was a three time world boxing champion. He held the IBF Bantamweight title (1985-87), WBC Super Bantamweight title (1987-88) and the WBC Featherweight title (1988-89).
He was elected into The Boxing Hall of Fame in 2002.

ASIA TIMES online www.atimes.com

The rich world's disappearing jobs

By John Berthelsen and Indrajit Basu

If the North American Free Trade Act passes, "you will hear a giant sucking sound of jobs going south of the border". - H Ross Perot, 1992
In the developed world and particularly in the United States, the scope of jobs disappearing overseas is widening beyond all imagining, to professions that almost nobody expected to be hit, and with far higher incomes than anybody thought possible as globalization bonds with the law of unintended consequences.
The catalyst is the Internet. As instant communication becomes more ubiquitous, the developed world's white-collar professions, from CAD/CAM (computer-aided design/computer-aided manufacturing) to accounting to medicine to architecture to aircraft design to research and development to engineering to equity research and financial management to knowledge management to revenue-cycle management - a whole panorama of high-income employment - are inexorably going.
The impact on American and European society is inevitably going to be far more profound than almost anyone understands today. It is already responsible for major positive changes in the living standards of the middle class in other parts of the world.
The United States currently accounts for as much as 70 percent of the world's "outsourcing", as it is called, or sometimes offshoring. McKinsey & Co, the international consulting firm, projects that the flight of jobs offshore to developing countries will grow by 30-40 percent a year over the next five years. By the highest estimates, as many as a million jobs have disappeared overseas from the US job market since the current economic slowdown began in 2000 and could represent a major reason for the struggle the US economy is undergoing to right itself.
McKinsey puts the number lost from the United States at a much lower 400,000 today, but expects it to grow to as many as 3.3 million by 2015. The business-consulting firm A T Kearney Inc projects that half a million jobs, or 8 percent of total employment by banks, brokerage houses and insurance companies, will go overseas within five years.
But to show how extensive the phenomenon can be, consider some of the more unlikely developments over the last three months:
India is emerging as the health-care destination of choice for an increasing number of surgery candidates, with more than 60,000 foreign patients from 34 countries treated in its top-flight Apollo Hospitals chain in the past decade. A delegation of Indian doctors was recently invited to London to brief British Prime Minister Tony Blair's medical advisers on flying surgery patients from the United Kingdom to Mumbai and or New Delhi for operative and post-operative care, allowing them to recuperate, and flying them back to the UK far cheaper than treating them at home. Routine cardiac surgery at the best hospitals in India costs about US$35,000, with a success rate of 98.5 percent, compared with about $150,000 in the United States. For more complicated problems that cost far more than that, cost differentials are anywhere from 200 percent to 500 percent to off the chart. And India is not alone; breast implants in Thailand from top-flight cosmetic surgeons cost as little as 50,000 baht ($1,260) compared with a median price of about $5,000 in the United States.
Fifteen global car makers, including General Motors, Ford, DaimlerChrysler, Audi, Isuzu and Nissan, have set up design offices in India with a combined budget of $1.5 billion to outsource auto design. Industry estimates are that the cost of auto design in Europe's exclusive Pininfarina and Bertone design houses run as high as $800 an hour, while low-cost designers in Bangalore can do lower-level design for $60 an hour.
India's government is in the process of liberalizing its accounting rules under continuing World Trade Organization (WTO) negotiations on services. In a move being closely watched by the Big Four accounting firms - PriceWaterhouseCoopers, Ernst and Young, KMPG, and Deloitte Touche and Tomatsu - accounting, bookkeeping and auditing services are to be opened to overseas competition by the end of next year. Indian firms are to be given reciprocal market access abroad. Indian accounting costs are a fraction of those in the United States.
Fashion design is a fast-growing field in Vietnam and India; 350 domestic and international buyers came to Mumbai to look at India's fledgling clothing fashion designs in a glitz-filled week in July. Designer Rophit Bal is working with putative tennis star Anna Kournikova. Ritu Beri is showing in Paris. Tarin Tahiliani has been featured in New York's Fashion Week and is booked for a show in Milan, the heart of Europe's fashion industry.
The US Department of Education estimates that the United States will need an additional 2.2 million teachers over the next decade. The Executive Recruiters Association, the representative body of recruitment agencies in India, is urging the Indian government to appeal to the WTO seeking an end to what they consider to be restrictive trade practices in the teaching professions and allow more Indian teachers into the US. Indian teachers, with excellent English-language skills, would find an annual salary of $35,000 an enormous amount of money. There are already some school districts from Texas said to be recruiting in India.
This article concentrates mainly on India and is only a small specific sample of the developed-world jobs and services that are in the process of disappearing overseas. Canada, Ireland and Israel, with large English-speaking populations, are also particularly attractive to Western firms, primarily because English is widely spoken, and well. But in other countries such as India, the Philippines, South Africa, Ghana and Sri Lanka, English is also widely spoken, and well, and costs are minuscule. Russia, with its well-educated tech professions, is also a destination.
"Anywhere you have social and economic growth, any of the Third World countries are wonderful opportunities to set up services platforms. You can pretty much follow where the British Empire went," Marc Liebman, president of Everest Group, an outsource consulting firm in Dallas, told Asia Times Online. "They left strong business and physical infrastructure behind them."
In a stunningly prophetic article, Frances Cairncross, a senior editor at The Economist, wrote in 1993 that the communications revolution had wrought what she called "the death of distance". In that article, she posited that there had been three profound transport revolutions since the 19th century, the first when the arrival of steam initiated a steep fall in the cost of moving goods. The second came in the 20th century, when the cost of transporting people fell to the point where vast migrations across borders brought tens of millions of immigrants from old Europe to the Americas, and since has resulted in massive movements of economic refugees from the poor countries to the rich ones.
The third revolution, Cairncross wrote, would dominate the first half of the current century. It is the diminishing cost of transporting information. Her vision has come true even faster than she thought. Because of fiber-optic cable, satellites and digital compression, the transport of information can be basically free. The enormous charges for personal calls on telephone lines across the Atlantic or the Pacific are virtually all gravy. Once the satellite or the cable is in place and the capital expenses are paid, there is no expense. Companies with their own transponders on satellites have lowered their costs dramatically.
Thus it is possible, for instance, for Fidelity Investments to put its call centers in Ireland. It is increasingly probable that a call to any repair service or help line will be routed not to the Midwestern United States but overseas to the Philippines, Ireland, India or any one of a half-dozen other locations. Indian schools are training prospective employees to speak in American accents. Back-office processing such as accounts receivable and payable, claims processing, revenue collection and passenger management are not going to be done in the United States anymore.
JP Morgan Chase, the investment-banking firm, said it plans to move some of the work of preparing stock-market research reports to India. The Financial Times of London has more than 100 such analysts in Manila, entering data from company reports all over Asia into computers, so the information can be sold as databases for investment banks at a fraction of the cost the banks would have to pay their own people.
"What we went through 10-15 years ago with manufacturing and blue-collar jobs, we are now about to go through with white-collar jobs," said Michel Jenssen, president of supplier solutions for the Dallas-based Everest offshore consulting group. "It still takes three to six months to ship manufacturing components offshore, less if you can send by air. But with services, with telecommunications technology, movement is now measured in milliseconds. You can move the work around, you can scan images, you can move workflow to India with no more difficulty than you move it from the San Francisco Bay Area to Texas."
It is possible, as Vivek Agrawal, who led a McKinsey team studying the issue of offshoring and wrote a report titled "Offshoring: Is It a Win-Win Game?" said in an interview recently with Asia Times Online, that the departure of these jobs is healthy for American society. It frees up capital and labor for more rewarding, or productive, or effective jobs, Agrawal says. A JP Morgan Chase spokesman told reporters recently that moving market research preparation to India would get rid of number-crunching, freeing its US staff to focus on higher-level financial analysis and spending more time with customers. But it is hard to figure out what jobs are more rewarding or productive or high-end, for instance, than thoracic surgery or architectural design, or what jobs can replace them in the developed world.
Agrawal describes most of the information-technology (IT) jobs headed offshore as relatively low-skilled. If Indians or Pakistanis or other nationalities can do the really high-skilled jobs, he says, it is much more likely that they would obtain visas to move to the United States and do the jobs here - although the US government, on October 1, cut the quota for so-called H1-B visas for skilled workers from 195,000 to 65,000. The effect of that cut is most likely to be that US employers, unable to find people to do the jobs here, will take the jobs to where the workers are - and pay them lots less, thus losing the multiplier effect of their paychecks in the United States (see H1-B visas: US gets it wrong again ).
The loss of these jobs overseas is also probably going to affect developed-world inflation. The investment bank ABN-AMRO, in an October 3 analysis of the US economy, wrote that while a cyclical rebound in economic activity is forecast for late 2003, "this rebound will not produce the typical firming in underlying inflation that influenced monetary-policy decisions and the interest-rate outlook in previous recoveries".
That is at least partly because, while US Federal Reserve chairman Alan Greenspan has been given credit for keeping inflation in check in the United States over the past decade, it is equally likely that it has been due to outsourcing and offshoring. Inflation classically starts to pick up as households increase consumption spending and firms increase investment spending. That tightens the labor market, which in turn means that labor can pick and choose between jobs, and for many jobs there aren't enough workers. Workers had the luxury of going on strike to demand higher pay.
But since manufacturing jobs first began to go offshore with the assembly of consumer products in the 1950s, workers from auto plants to steel mills to the panoply of America's rust-belt industries discovered that going on strike to demand higher pay meant their jobs could disappear, first to Japan, then to South Korea and Taiwan, then to the Southeast Asian countries, and then all over the world.
Now, ominously, that is beginning to happen to the middle class as Cairncross's thesis on the death of distance starts to prove out. What happens if, for instance, US health-insurance providers cotton to the fact that an unwilling Joe Bloggs could be flown to Honduras, say, to have his gall-bladder surgery, and that his airplane fare (charter, of course, to take a planeload of surgery patients at a time) and lodging could cost half or a tenth what it costs at Sinai Mercy Omni-Surgery in Middletown, USA? The insurance company, like the British National Healthcare Service, would contemplate that the out-of-control cost of medical care in the United States is going to stabilize, no matter how much Mr Bloggs would prefer to have his gall bladder incised at home - especially if their pharmaceutical costs descend as well.
And they well could. In August, the multinational pharmaceutical companies struck a deal with the WTO to create a loophole that allows the neediest countries to override patents on expensive drugs and order cheaper copies from generic manufacturers in exchange for a small payment. A combination of AIDS drugs that in the United States costs $14,000 per patient per year can be delivered for a small fraction of that amount.
Indian pharmaceutical companies, for instance, are producing generics for many pharmaceuticals at pennies on the dollar compared with the cost in the United States. Even today, hordes of US consumers go to the Mexican and Canadian borders to buy their prescription drugs.
Americans, and later Europeans, watched with equanimity starting in the 1950s when manufacturing jobs started to disappear into low-cost factories in Asia. Only the workers who had filled these emptying factories and the labor unions who represented them railed against the loss of jobs. Nonetheless, while in 1950 about 35 percent of America's labor force were engaged in manufacturing, that figure has fallen to about 12.5 percent today.
McKinsey analyst Agrawal and the team that wrote the study argue that offshoring is not particularly bad for the United States because at least 70 percent of US jobs are in services that are produced and consumed locally.
"We would argue that not only is the US fully capable of withstanding these changes, as it will be able to create jobs faster than offshoring eliminates them, but that the current debate misses the point entirely." The point is, McKinsey says, that offshoring creates wealth for US companies and consumers and therefore for the US as a whole and is "just one more example of the innovation that keeps US companies at the leading edge of competitiveness across multiple sectors".
Indeed. It's great for companies. McKinsey estimates that management jobs moving offshore will rise from zero in 2000 to 288,281 by 2015. Business jobs will rise from 10,787 to 328,281. Computer jobs going offshore will rise from 27,171 in 2000 to 472,632 in 2015. Office jobs - the back-shop data-entry jobs that consist of keying in data - already projected at nearly 590,000 by 2005, will skyrocket to 1.66 million by 2015.
Ironically, many of the disappearing jobs owe their departure to H Ross Perot, the failed US presidential candidate whose "giant sucking sound" quote started this article and which continues to reverberate across the United States today.
The five biggest outsourcing consulting companies in the US today are in Dallas, Texas. Asked why, Marc Liebman of Everest said, "Because Ross Perot was here." Perot, first with his company EDS and later with Perot Systems Corp, pioneered data transfer and became a worldwide provider of outsourced IT services.
According to BusinessWorld, an Indian publication, Perot Systems in 1999 entered a 50 percent joint venture with HCL Technologies of India to create HCL Perot Systems to handle billing and claims for health care companies in the United States. It is a pioneer in outsourcing data overseas to cheaper labor for major corporations.
(Copyright 2003 Asia Times Online Co, Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)

Dying for a McDonald's in Iraq
By Herbert Docena

MADRID - In London on October 13, an investors' conference entitled "Doing Business in Iraq: Kickstarting the Private Sector" was agog with reports that McDonald's, among other corporations, may begin selling burgers and fries in Iraq by next year. Attracting up to 145 multinational prospectors, the London conference was held less than a month after the United States announced its economic masterplan for Iraq, a blueprint which The Economist heralded as a "capitalist dream" that fulfills the "wish list of international investors".
Whether Ronald McDonald cuts the ribbon in time and makes the dream come true, however, will depend to a large extent on the outcome of a US-convened donor's conference that was scheduled to open in Madrid on Thursday.
As the US struggles against popular resistance in Baghdad, it battles its cash-flow woes in the balmy Spanish capital. Behind closed doors at the Campo de las Naciones, representatives of creditor countries and multilateral financial institutions will meet for two days to determine how and when McDonald's and other multinational corporations will finally be able to open their doors in Iraq.
In exchange for allowing the entry of their corporations to Iraq, rich creditor nations will be pledging hundreds of millions of dollars to finance the occupation in order to make sure that it goes on unhampered - long enough for the Golden Arches to rise by the Tigris and the Euphrates.
Those who will pay the price for the burgers and fries, however, will have no seat at the table.
What's at stake?
In this donors' conference, the US will be asking the "international community" to finance an occupation it can no longer afford on its own.
At first, the US hoped that Iraqi oil revenues and assets, as well as its own taxpayers' money, would be enough. "We are dealing with a country that can really finance its own reconstruction and relatively soon," Defense Undersecretary Paul Wolfowitz confidently told the US Congress before the war, assured that Iraq's oil would be able to rake in as much US$50 billion to $100 billion in the next two years.
Regular sabotage of oil pipelines by the Iraqi resistance as well as the reluctance of a cautious oil industry to start their operations has all but shattered these initial plans by causing severe cash-flow problems and a palpable budget crisis. Edward Chow, a former international executive with Chevron and now an analyst with the Carnegie endowment, predicts: "Costs will far exceed what oil revenues will reap in the short term and the long term."
This has forced the Bush administration to reluctantly turn to US taxpayers with an $87 billion budget request that had to surmount unexpected resistance from the Bush-controlled Congress. When it was finally approved, the funding came out with an embarrassing twist: that the money to be spent will have to be exchanged with IOUs, and not just sweet thank-yous.
Taking all the money from the pockets of the Iraqis and the American taxpayers would have allowed the US to unilaterally determine which corporations would get all the contracts for what. At more than $100 billion and counting, this has been deemed the largest post-war rebuilding business opportunity since World War II. With the disappointing oil revenues dashing expectations and with US taxpayers reluctant to part with their money, however, the US has been forced to give up its exclusive claim over the post-war reconstruction bonanza.
A way to get in on the ground floor
Armed with the latest 15-0 United Nations resolution legitimizing the occupation, the US will be turning to the other rich creditor nations and multilateral lending agencies with one enticement in exchange for their cash: a piece of the action.
"We're telling them that this is not just about writing checks or sending troops, but about having a stake in Iraq so their government agencies and humanitarian groups are involved in a sector when a new government is in power in Iraq," a high ranking US official recently disclosed. "It's a way to get in on the ground floor. That's the selling point."
Indeed, the well-heeled representatives with fat pockets and blank checks who will gather at the Campo will not be pledging their money for nothing. As a recent Financial Times editorial put it, "Washington is in a mess in Iraq, and needs help from its friends. The friends are prepared to assist, but they will demand a price."
The price comes in the form of a long sought-for guarantee giving the donor countries a crack at the multi-billion dollar business opportunities in Iraq - an access to the ground floor where the action is. With the recent announcement of plans to sell all but a few of Iraq's crown jewels for dirt-cheap prices, other countries can't afford to miss the post-war garage sale. If they don't want to be locked out, they better pay the entrance fee to be collected personally by Coalition Provisional Authority head L Paul Bremer and US Secretary of State Colin Powell, who are both in Madrid. Also present is US Treasury Secretary John Snow.
Opponents of the war - in particular, France, Germany and Russia - have made it clear they are not ready to forgive and forget and contribute so readily to Iraqi reconstruction. Delegations from those three nations, as well as many other countries, will be headed by lower-level officials. Only Spain, Italy and Japan - all supporters of the US policy on Iraq - will be represented by their foreign ministers. United Nations Secretary-General Kofi Annan and World Bank President James Wolfensohn will also be in Madrid.
So who pays?
The amounts to be pledged at this conference could, therefore, be seen as an investment with expected returns. How big or small that investment will depend on what each donor thinks the prospects for profits will be. This in turn depends on how big a piece of the pie the US is willing to give up. Those in Madrid will need to report back to their capitals with an answer to the question: was the donation worth every cent?
What they won't be eager to tell the folks back home, however, is where the money they just donated came from and to whom it is being given. Representatives will beat their chests and package their donations as acts of charity towards those poor and war-ravaged Iraqis.
The rhetoric about helping Iraqis rebuild their country will hopefully drown out the fact that the people who will be paying for the occupation will not be the same people who will be profiting from it. The money that participants to this donor's conference will be bringing to the table is not theirs to give away.
Hence, as the conference opens, it will be important to come up with a simple - though perhaps not exhaustive - list of those who will pay for the reconstruction of Iraq, as opposed to those who will gain from it. Those who will be made to pay are often not aware what their money is being used for and - as the opposition to the war by majorities in almost all countries indicate - will most likely object if they only knew. Those who will profit, however, will have the most to gain from keeping the transactions in the dark.
Iraqis: Paying with their future
First, the Iraqis. All of the past and future revenues from the sale of their oil as well as all of their former government's assets deposited anywhere in the world have been turned over to the UN Security Council-created but US-controlled Development Fund for Iraq.
What will be paid to US-chosen contractors such as Halliburton and Bechtel - at a price set by these contractors themselves - will be paid out of this fund. Not only that, the fund will also be used by the US Export and Import Bank for extending credit to any US company that hopes to start business in Iraq or that wishes to buy any of the formerly Iraqi-owned corporations that will be sold off by the US as part of Iraq's massive privatization scheme.
The Iraqis will, therefore, be paying American corporations for rebuilding the bridges, the hospitals, the schools, the irrigation systems, the power grids and almost everything else which the US - as prodded on by these corporations - destroyed. They will also be paying US investors to take over the corporations that the Iraqi people previously collectively owned, but which will now be sold off without their authorization.
Just as they had no say over the bombing of their country, however, so will they have no say over how their money will be spent for bringing the pieces together. When some members of the US-installed Iraqi Governing Council (IGC) tried to make a fuss over what they think were unreasonably priced purchases two weeks ago, for instance, they were promptly reminded about their place in the occupation's pecking order.
"If we had voted [on the spending decisions], we would have rejected it," one IGC member was quoted as saying. He was all too aware, of course, that the IGC members would never have been allowed to vote against those who put them in power.
Those who are hoping for at least a little prudence in the way that the fund will be used can take comfort from what a lawyer for companies hoping to strike gold in Iraq recently said. According to Washington lawyer Robert Kyle, the fund will be "subject to a less formal approach in their allocation than those from USAID [US Agency for International Development] which used [US] taxpayers' money."
By "less formal", the lawyer must have meant spending $6,000 for a mobile phone that normally costs $495 only per set, $33,000 for a pickup truck that normally costs half that, and $55,000 for a prison bed that usually costs only $14,000 - as current details provided in Bush's budget request for Iraq shows when compared with actual market prices of these items.
And it's not just their present income with which the Iraqis are paying the Americans to occupy and reconstruct their country. Even their future is being mortgaged. Just last week, the US Senate voted to convert the $10 billion that will be used on Iraq from grants to loans. Should the World Bank and the International Monetary Fund decide to lend money to Iraq, they will also come with strings attached in the form of the economic conditionalities to be imposed by these banks.
In other words, the Iraqis will be forced to borrow money from the US and international banks without their consent - and at interest rates and with conditions that they did not agree with - in order to spend on things over which they have no say whatsoever.
It's a small price to pay for being liberated.
The taxpayers: Paying with their work
But since the Iraqis' oil and assets are currently insufficient, the US Congress has also just reluctantly passed Bush's request for $87 billion, around 78 percent of which will be spent for military costs alone. Senator Tom Daschle came out of the session stressing that US taxpayers could not "go on shouldering this burden virtually alone".
Meanwhile, each American will now be giving away $300 for the continued control of Iraq. According to independent estimates, this total amount is more than enough to wipe all of the budget deficits now plaguing a number of state governments; enough to pay for all of the country's unemployment benefits for two years; seven times what the US federal government spends for low-income schools and 10 times the total spent for environmental protection.
The donors' conference, however, is really an attempt to shift the burden from American taxpayers to say, Japanese, British, Spanish, French, German, Canadian, Kuwaiti and other rich nations' taxpayers. Japan is said to be donating up to $5 billion to the pot, Britain $835 million, Spain $300 million, the European Union $230 million and Canada about $200 million.
These amounts will not come out of nowhere. Giving these millions to the occupation means squeezing off some health care expenditures there, bumping off some educational items here, maybe cutting away some housing funds there, eliminating some unemployment benefits a little here, etc.
Every cent spent for corporations to do business in Iraq is a cent not spent somewhere else. It's a small price to pay for being protected from terrorists and their weapons of mass destruction.
Soldiers and civilians: Paying with their lives
But while the American and the rich countries' taxpayers are contributing cash, others are paying with their lives. According to various estimates, as many as 10,000 up to 30,000 Iraqi civilians have died; more than 100 American soldiers and scores of allied troops have been killed during the war and pacification.
With no less than the chairman of the US joint chiefs of staff admitting that the US military is now overstretched, the US has been pleading with other countries to pledge non-monetary contributions to Iraq in the form of warm bodies that will attempt to stabilize the occupied country and make it safe for corporations like McDonald's. Once in Iraq, these soldiers and neo-Gurkhas will be moving targets for Iraqis who - for some incomprehensible reason - are mad enough to resent being colonized and mad enough to fight back.
Interestingly, with a few notable exceptions, most of those who are being asked to pack their bags and go to Iraq are those who'd give anything and go anywhere for a job. Over the past few weeks, the US has been courting mostly countries from the south, such as India, Pakistan, Bangladesh, Fiji, the Philippines, Thailand, El Salvador, Honduras, Nicaragua, etc to deploy more troops to Iraq so that their weary soldiers can go home and fight another day - in a different part of the world.
These soldiers are happy to go to Iraq because the per diem there would be so much more than what they'd get staying at home. Domestically, one of the strongest arguments for fielding them in Iraq is the promise of dollar-denominated remittances to be sent home. These gun-strapped and cash-strapped governments are happy to send their boys away in exchange for more military aid from and stronger military ties with the US.
Senator Edward Kennedy has asserted that the US has been bribing foreign governments to induce them to go against domestic popular opinion against the war. He says that up to half of the $4 billion that the US spends monthly on Iraq could not be accounted for by the Congressional Budget Office.
In this occupation, what the US is asking for from different countries interestingly reflects international realities as well: capital from the north, cheap labor from the south. The ultimate price per hour is apparently cheaper in developing countries than in the developed ones.
Who profits?
Smiling McDonald's attendants may start ushering in customers to their branch in Iraq next year - but only after Bechtel had switched back the lights, Halliburton had rebuilt the bridges, Flour had paved the roads, MCI had set up the mobile network system, Research Triangle Institute had trained the managers and bureaucrats, Abt Associates had restored the hospitals, the military-industrial complex and the private armies had restored security, and the multinational force had pacified the resistance.
The Iraqis and the taxpayers who are bankrolling the occupation better not know to whom they're being made to give their checks. Bechtel sold chemical weapons to Saddam Hussein back in the 1980s and had been accused of gross overpricing in Massachusetts and Bolivia. MCI was involved in history's biggest accounting scandal and has totally no experience building cell networks. Halliburton had been accused of inflating costs and had even settled a number of fraud charges. Dyncorp had been accused of covering up sex trafficking. Flour faces a multibillion dollar lawsuit for exploiting black workers and making security guards wear Ku Klux Klan robes to attack their workers.
The business records of the recipients are less than flattering. According to well-documented reports summarizing the histories of those that had been awarded contracts, they are variously riddled with "cost overruns, accounting irregularities, financial dereliction, fraud, bankruptcy, overcharging, price gouging, profiteering, wage-cheating, deception, corruption, health and safety violations, worker and community exploitation, human and labor rights abuses, union-busting, strike-breaking, environmental contamination, ecological irresponsibility, malpractice, criminal prosecutions, civil law suits, privatization of public resources, collusion with dictators, trading with regimes in violation of international sanctions, drug-running, prostitution, excessive executive compensation, and breach of fiduciary duty to shareholders and the public".
Lest those donor countries angling for deals on behalf of their own corporations be misled: This is not the list of requirements for interested contractors and subcontractors hoping to do business in Iraq.
To be discussed in Madrid is the direction that the occupation takes. At stake is the future of the "capitalist dream" of multinational corporations like McDonald's in Iraq. If the money's not enough, the occupation forces might simply pack up in a few months. If the lending nations cough up enough cash, they could only have ensured that they'd get a bang for their buck.
If this happens, then those financing the continued occupation - the Iraqis, the taxpayers, the soldiers, and the civilians - must at least be treated to a complimentary combo meal of Big Mac, cola and fries when the Baghdad franchise opens. They must be dying for a taste of freedom.
(Copyright Herbert Docena)

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