BPO Is Legitimate, Says Unctad Chief

New Delhi, Feb 20: | Updated: Feb 21 2004, 05:30am hrs
Expressing its support towards outsourcing of services, the United Nations Conference on Trade & Development (Unctad) has said offshoring is a legitimate part of global trade liberalisation and the fears of job loss is misplaced.

In a statement at the eighth session of the commission on trade in goods & services and commodities in Geneva last week, Unctad secretary-general Rubens Ricupero had said outsourcing enabled developing countries to leverage their comparative advantages in the area of its abundant, competitive labour and low-cost environment.

Alluding to the US ban on government outsourcing, Mr Ricupero said, despite some attempts at provoking government measures, I do not think that this process is amenable to government control and will be driven by market forces.

He said these services are already covered in the general agreement on trade in services (GATS). To ensure predictability, the developing countries should, as part of the GATS negotiations, actively seek binding multilateral commitments in this mode so that they can pre-empt or render invalid any protectionist action, he pointed out.

The global outsourcing spend is estimated to be $320 billion last year, $585 billion during 2005 which will go up to about $827 billion during 2008. Mr Ricupero pointed out that despite much excitement about the significance of offshoring to the North-South trade, the share even of frontline countries like India was small (3 per cent of global IT spend) and fears of a big wave of offshoring and the resultant swallowing up of the rich countries high skill jobs by the poor appeared misplaced.