Monday, August 9, 2010

Obama Admin's IT Outsourcing Assistance to Sri Lanka, Armenia Gets Little Press Notice

By Tom Blumer

On August 3 ("U.S. To Train 3,000 Offshore IT Workers"),'s Paul McDougall reported that the U.S. Agency for International Development is operating at cross purposes with the Obama administration's stated goal to keep high-tech jobs in the U.S.

USAID has since attempted to do some backing and filling about the assistance it is providing in Sri Lanka, but its arguments may ring hollow, given McDougall's report two days later that the agency is also helping to fund IT outsourcing efforts in Armenia.

Here are the first four paragraphs of McDougall's original August 3 report:
Despite President Obama's pledge to retain more hi-tech jobs in the U.S., a federal agency run by a hand-picked Obama appointee has launched a $36 million program to train workers, including 3,000 specialists in IT and related functions, in South Asia.

Following their training, the tech workers will be placed with outsourcing vendors in the region that provide offshore IT and business services to American companies looking to take advantage of the Asian subcontinent's low labor costs.

Under director Rajiv Shah, the United States Agency for International Development will partner with private outsourcers in Sri Lanka to teach workers there advanced IT skills like Enterprise Java (Java EE) programming, as well as skills in business process outsourcing and call center support. USAID will also help the trainees brush up on their English language proficiency.

USAID is contributing about $10 million to the effort, while its private partners are investing roughly $26 million.
A short time later, Patrick Thibodeau at Computerworld ("Basic skills, not enterprise Java, in Sri Lanka"), relayed USAID's contention that relevance of java to the Sri Lankan effort would only be in whatever coffee might be used to keep students awake and alert (that's my "clever" interpretation, not his). He also offered a humanitarian justification for the effort:
The U.S. Agency for International Development (USAID), which is helping to fund development of Sri Lanka's offshore outsourcing industry, says it made a mistake in announcing that it would provide training on enterprise Java as part of a basic IT work skills program, an agency spokeswoman said today.

... The inclusion of enterprise Java was curious because the USAID also said, in a subsequent follow-up blog post about this training, that the population in this area has “not been exposed to even basic IT technology.”

... A USAID spokesman wrote this: "USAID's partner in the project, a Sri Lankan company, initially requested to teach Enterprise Java to students that may qualify. However, after conducting due diligence, the partner found that the training programs must focus on fundamental computer skills, as the majority of prospective trainees lacked even basic experience with computers."

... The Northern area of Sri Lanka has seen much killing, including massacres. The war has been particularly brutal, with as many as 100,000 people killed over the course of the war and this in a country with a total population of just over 21 million. The war was settled last year and now the government is trying to stabilize this area with some economic development assistance.
A correct translation of the bolded paragraph would be: They really wanted to do it, but they couldn't.

Even if the effort in Sri Lanka isn't harmful to U.S. economic interests, the same probably can't be said of what McDougall reported on August 5 ("Now It's Armenia: USAID Funds IT In Eurasia") about USAID's involvement in Armenia:
Even as controversy mounts over its funding of IT outsourcers in South Asia, the U.S. Agency for International Development has announced a program under which it will partner with the government of Armenia—a nation anxious to lure computer work from American shores--to promote the development of the country's information technology industry.

Jonathan Hale, USAID deputy assistant administrator for Europe & Eurasia, is on a four-day trip to Armenia to meet with government and private industry leaders in the country. On his agenda is a meeting with Armenian economic minister Nerses Yeritsyan.

"We look forward to partnering with USAID on the IT sector, which has great potential as Armenia has an advantage in this sector," Yeritsyan said in a statement released by USAID. "We want companies to come to Armenia and create their innovative environments," Yeritsyan said.

Among other things, Armenia is looking to establish itself as a center for low-cost IT and engineering work outsourced from the U.S. and other Western countries.

... USAID, a taxpayer-funded federal agency, did not disclose how much it's contributing to Armenia's efforts to become a global IT competitor. Among the U.S. companies participating in the project is Oracle's Sun Microsystems unit.
Apart from what the Obama administration appears to be doing to ruin it, the more recent trend has been to pull call center work, much of which is related to IT support, back from overseas installations. I noted in a May 30 post industry reports that the call centers actually grew during the worst of the 2008-2009 recession as normal people define it. More tangible evidence of this trend is found at this link. Though it goes back to March of 2009, it cites eight specific and significant instances of companies each deciding to "onshore" hundreds of jobs in the U.S. that either had been outsourced overseas, or would have been in previous years. In the AT&T case cited at the link, thousands of jobs are involved.

Though there have been stories in other tech publications about the Sri Lankan and Armenian situations since McDougall's reports, the U.S. establishment press appears to be disinterested. A Google News search on "Sri Lanka outsourcing" (not in quotes) comes up with few results. A deeper dig into those results shows no U.S. establishment newspaper coverage. There is a mention at a blog post at the Seattle Post-Intelligencer, but it turns out to be from a commenter. Associated Press searches on "Sri Lanka" and "Armenia" (neither in quotes) return nothing relevant.

Given "how American jobs disppearing overseas" was a popular establishment and sometimes valid media and Democratic Party theme during the Bush 43 years, it's a little hard to handle any journalistic contention that a clearly proactive, government-sponsored effort to do just that isn't sufficiently newsworthy.

Cross-posted at

—Tom Blumer is president of a training and development company in Mason, Ohio