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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: RealMuLan who wrote (23968)	2/19/2005 10:50:24 PM
From: RealMuLan	Read Replies (3) of 116555

Look into the crystal ball – Outsourcing from India in 2010 Babu Ghanta Feb. 17, 2005 India’s outsourcing scenario in 2010 will be quite different from what it is today. The picture can be easily projected from looking at the progression pattern of Indian Engineers who migrated to America in the last fifteen years. The growth of Chinese and Indian economies in the next five years will be so high compared to that of Japan, Euro zone and America, neither India nor China will be interested in providing cheap labor force against a depleting Western currency values. . The oil price and cost of energy as a whole will be the most critical factor. Eighty percent of the dynamic non-deflationary part of World Economy will get distributed between India, China, Brazil and South Africa (with possible inclusion of Russia). The cost of getting services performed in India will almost equal that of doing the same in the West because of the cost of energy and much higher standard of living of the Indians and the Chinese in 2010. . India and China will join hands to create a massive Asian Free Trade zone. Influence of World Trade Organization and United Nations will be reduced considerably. The BRICS (Brazil, Russia, India, China South Africa) will dominate with a lot of cold trade and geopolitical tension with the West. . America will recover from the current addiction to cheap foreign goods and services. American exports will exceed that of the imports. America will reduce budget deficit and dollar will appreciate compared to Euro and Yen but heavily depreciate against Asian currencies. . India and China will have profound influence on the Asian economies including that of the Middle East. The world will look towards India and China for providing the mega growth needed for higher standard of living. . Indian companies will be more innovative and will market their innovative products and services .directly at a premium price. India will become more like Japan. The biggest problem for Japan is smaller domestic demand compared to export needed for growth. India and China does not have that problem. Their domestic demand is so high that export dependency will reduce very heavily. . China’s need for outsourcing from India will exceed that from the West. Chinese and Indian demand for manufactured goods will exceed the demand from Euro zone, Japan and America. . Russia is a wild card. It is possible, smelling success in Indian and Chinese economic models, Russia will join the India-China trade block with promise of reliable source of energy to the block. indiadaily.com

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