Ertugrul Ozkok: Bangalore and Dalian

IMF Deputy Chief Anne Krueger said this last month in Istanbul: "The minimum wage in Turkey is too high." It was not a sentiment that anyone actually living in Turkey could accept. Labor unions in particular were incensed. Political parties laid into Krueger. Columnists for different newspapers lambasted her. But what do I think on this subject? Because it's such a delicate subject, I am not able to express my feelings. What I will do is present you with some information on where the world is going right now. And then you can decide.  *** About three weeks ago, while in Seoul, Korea, I was invited for lunch with the New York Times publisher Arthur Sulzberger. At lunch, Sulzberger reccomended a book by a writer for the New York Times, Thomas Freidman. The book is called "The World is Flat." Over the weekend, while in Bodrum, I began to read this book. And I reccomend that all politicians, journalists, business people, and students also read this book. While reading this incredible book, you begin to understand how useless and wasteful it is to spend so much time arguing about Koran courses or the legality of the turban. Instead, you began to realize the world is headed in much different directions. I hope that this book is translated into Turkish very soon, and that everyone will read it.  *** One of the basic rules of economies in the 20th century was this: Money goes to the easiest road. Friedman says "The basic rule of today's economy is this: Work goes to where it fits." now let's check up on your geography. Have you ever heard of "Bangalore" or "Dalian"? The first is a part of India, a section we could call "India's Silicon Valley." It is today one of the world's computer programming centers. In the next 5 to 10 years, India is planning to start exporting 24 billion dollars a year worth of computer programs from Bangalore. But it is not just a computer program writing center. It is also one of the world's largest "call centers." For example, an American living in New York wants to get information about his credit card. He dials the number given to him. Someone on the other end helps him, in English, with his problem. But actually, the person talking to him is 13-14 thousand kilometers away, living in India. Right now, around 240 thousand people in India work at these call centers. They speak excellent English. They are almost all university graduates, in either management or engineering.  *** And their wages? Around $100....Dalian is a Chinese city, about one hour's flight from Beijing. In this city, people speak excellent English and Japanese. Families and businesses wanting to remodel their houses in Japan go to a construction firm in Japan, and say what it is they want done to their houses. The construction business in Japan sends the instructions over the internet to their business in Dalian. There, architects and engineers, all of whom work for cheap, prepare a plan, and send it back over the internet to Japan. In this age, every kind of business is outsourced. Friedman asks the mayor of the Chinese city Dalian: "Have you forgotten that the Japanese invaded your country 70 years ago, and raped your women? Isn't your pride wounded by working with them?" The mayor replies, "We have not forgotten the things which happened. But the economy is one thing, that is another...." *** Now, I ask again. Is the minimum wage in Turkey high or low? Do the rules of a market economy hurt our pride? Turkey is over here, Bangalore and Dalian are over there.....Â