The news that Jet Airways may lay off all its expatriate pilots, while sparing Indian pilots, should be given a closer look. Obviously, companies need to cut costs, but Indian companies and the government should manage the signalling effect. For example, if the argument is that expat pilots are paid more, then can the first-step solution be to cut their pay, instead of laying all of them off? And if pilots have to be laid off, may not principles of merit and performance applied across the board make the exercise seemingly less nationality-driven?
Similarly, it was wrong of India to ban the import of toys from China for a six-month period. The move is allegedly in public interest but nobody has bothered to elaborate on that term. For the moment, it would seem that the interests of local toy producers are being protected. Chinese toys exported to the US were indeed found to have toxic lead paint. But that was in 2007. India?s action came in January 2009, coincidentally bang in the midst of a slowdown.
These kind of questions are important because India has important questions about other countries? and non-Indian companies? actions. When Delhi talks of possible reduction in H-1B visas to the US, or complains about sundry US Senators calling for the retrenchment of Indian software workers so that Americans can be employed in American companies, it?s own government and corporate policy should ideally be not vulnerable to similar scrutiny.
Okay, so protectionism is often politically popular and is used to mollify certain key interest groups within a country. But politicians and corporate captains in India must take a lead in resisting it. It is only then that we can press other countries to do the same and not put up new barriers to trade and the movement of people.
There is admittedly a lot we still don?t know about the ongoing global economic crisis. Policy in different parts of the world, often through a process of trial and error, is attempting to get a grip on the deteriorating state of the global economy. But if there is one thing though we do know for sure, it is that protectionism of any kind will exacerbate the damage.
?dhiraj.nayyar@expressindia.com
