When times were good, the U.S. technology industry was famous for attracting some of the best and brightest minds in India. But now that the industry has slumped and jobs in the U.S. are scarce, an uproar is growing in America over work being outsourced to India. %people1% comments.

For months now, it's been popular in the United States to whack China for its trade and currency policies. But India could soon become the next political whipping boy because it has been snaring U.S. hi-tech jobs. Recently unemployed computer professionals, labour unions and politicians have become alarmed that U.S. companies are moving growing numbers of information-technology jobs to India.

The Politics of Unemployment

Joblessness among tech workers in the U.S. is stubbornly high. Meanwhile, U.S. firms are exporting tech jobs to low-cost India. As an election nears, American politicians see votes in complaining about offshore outsourcing. In mid-September, technology workers staged a protest at a San Francisco conference promoting offshore outsourcing of service jobs to countries like India. The protesters were backed by a unit of one of America's most powerful unions, the Communications Workers of America. The unit, called the Washington Alliance of Technology Workers, or WashTech, was set up to fight the exodus of jobs overseas. The protesters carried such signs as "Chip in, don't chip out." A new group of unemployed computer specialists calling itself the Organization for the Rights of American Workers, or Toraw, protested at a similar job outsourcing conference in New York in July.

These sentiments were bolstered in mid-October when Intel Chairman Andy Grove warned at a software conference that a huge number of IT jobs could move from America to countries like India and China in the next decade. The hi-tech pioneer added that his California-based semiconductor manufacturing firm had "no choice" but to continue sending work offshore because of rising costs and the pressure to increase productivity.

It would be one thing if the protests and dire warnings stayed confined to angst-ridden words, but now American legislators are getting involved. Faced with an election next year, many smell a populist, potentially vote-attracting issue. On October 20, the House of Representatives' small-business committee held a hearing on the exodus of white-collar jobs. "At what point will we send so many jobs overseas that we won't have any jobs here to buy the products, regardless of where they're made?" asked the committee's chairman, Donald Manzullo of Illinois.

One of those who testified was California engineer Natasha Humphries, who was laid off in August by hand-held computing-device provider Palm Inc. several months after she was sent to India to train Indian engineers to perform her job. Humphries, who joined TechsUnited.org, a group created to protest against the departure of U.S. hi-tech jobs, believes that "offshoring has created a devastating economic climate."

There is an irony in Humphries' words that goes beyond her travelling to India to train the people who may have taken her job. Only a few years ago, American technology companies were accused of stealing some of the best and brightest engineering and scientific minds from India to meet a severe talent shortage. But now that the global economy has struggled for many months, technology unemployment in the U.S. is high and the jobs are moving to India.

Some industry insiders blame at least part of the unemployment problem on the U.S. programme of granting temporary work visas to hi-tech workers from India. Ron Hira of the Institute of Electrical and Electronics Engineers told the October 20 hearing that many of those who come to the U.S. under this visa scheme go home to set up or work for companies that compete with American companies. He called the visas for these workers "a subsidy promoting the movement of American jobs overseas."

This concern has prompted legislators in at least nine states to join the fight to slow job migration. New Jersey took the lead in drafting legislation after lawmakers learned that a company hired to help welfare recipients had moved its help-centre jobs to Mumbai. Legislation requiring state government contractors to use U.S.-based employees is still stuck in various committees. But the threat of the new law was enough to persuade the welfare-help contractor, eFunds Corp., to move the jobs back to New Jersey.

A flurry of comparable bills in several states has prompted India's National Association of Software and Service Companies, an umbrella grouping of some 850 companies, to hire high-powered lobbying firm Hill & Knowlton. "India is being made to look like the enemy in some parts of the media," says Nasscom's president, Kiran Karnik. "The popular mood is reinforced by politicians, and those statements make customers wary. They're concerned, as are we."

So far, none of the state-level bills have become law. If they did, however, "purely on a business plane, it wouldn't matter at all," says Karnik, since the bulk of India's outsourcing comes from private-sector customers, not from government contracts.

Cheap, Tech-Savvy Workers

Seeking to cut costs, U.S. multinationals such as General Electric, Honeywell and Citigroup have for years moved jobs to India, seeking to capitalize on the country's inexpensive but technology-savvy, English-speaking workforce. Nasscom estimates that job outsourcing to India saved U.S. companies $10 billion-11 billion in 2001 and was accompanied by a $3 billion increase in American exports to India that year.

The migration of these jobs wasn't a big issue when the U.S. economy was roaring and companies had a hard time filling job openings. But that attitude changed abruptly with the dotcom bust in 2000 and subsequent recession in the industry. Today, despite a tentative recovery, U.S. technology jobs remain scarce.

The exact number of jobs that have moved to India isn't known. The Communications Workers of America estimates that 400,000 white-collar jobs have already been lost, particularly to India, and projects that a good proportion of 3 million more expected to migrate offshore by 2012 will go to India as well. "This is not about protectionism," says Marcus Courtney of WashTech, the union affiliate that organized the San Francisco protest. "We have to find a way to engage in globalization so that it doesn't come at the expense of our best workers."

More of Courtney's anger is directed at U.S. companies than at India. "This is an issue about how companies want to increase profits at the expense of highly-skilled American employees," he says.

Others believe the figures cited by labour unions are exaggerated. Economist Rafiq Dossani of Stanford University cites Nasscom statistics estimating that India had 171,500 "business processes" jobs by March 2003, up from 106,000 a year earlier. And that number is expected to grow annually by about 45% over the next five years to be nearly 1 million by 2008. But even that heady growth is substantially less alarmist than what labour unions warn will be India's job-grab from America.

"Am I concerned that the U.S. information-technology industry will end up in India over the next year?" asks Harris Miller, who heads the Information Technology Association of America that includes America's leading multinationals. "That's rubbish. Only about 6%-8% of the all information-technology outsourcing will move offshore. Now it's only 2%."

Miller argues that the best way to protect U.S. jobs is to promote free trade. He believes that there are steps the U.S. government could take to bolster job growth, including such measures as establishing a tax credit for companies that engage in research and development. Miller also says that the current surplus of hi-tech workers in the U.S. will dissipate as the baby-boomer generation retires.

Others add that sending work offshore leads to important benefits to the U.S. John Chen, who heads Sybase, the software giant, argues that "when we spend $1 in India and China, 65 cents comes back" in the form of orders for hi-tech equipment.

Still, the new breed of hi-tech activists can boast of at least one recent success. They helped persuade a majority in the U.S. Congress to let lapse on September 30 a measure that had temporarily tripled the number of foreign professional workers, many from India, admitted to work in the U.S.--to 195,000 a year up from the usual 65,000.

But this victory may be short-lived. Utah Senator Orrin Hatch, the influential chairman of the Senate Judiciary Committee, is in the early stages of floating a proposal that would introduce a variety of exemptions that would effectively circumvent the 65,000-visa limit. If the proposal succeeds--and that's not assured--the number of hi-tech workers admitted into the U.S., many from India, could again top 100,000 a year.

Any moves to expand the number of visas for foreign hi-tech workers will likely be opposed by groups such as Toraw, the one founded last December by recently unemployed information-technology workers. These are people like John Bauman, a computer expert who lost his job in Connecticut a year ago. Toraw is lobbying Connecticut and other state governments to pass legislation making it illegal for a company in the U.S. to bring in a foreign worker and lay off an American employee within six months. "We'd like to see tax incentives for companies that don't offshore work and tax penalties for every job offshored," says Bauman. "I'm going to tell my kids to go into [car] repair so they can't be offshored," he adds.

If tech jobs in the U.S. remain scarce, the biggest uncertainty as to whether the U.S. ultimately takes action on the issue of outsourced jobs is the U.S. election coming up in November 2004. "It's anyone's guess as to which way the political roulette wheel will spin," says Vivek Paul, vice-chairman of Wipro, one of India's largest software firms. "We will definitely see more posturing, but the question is: Will we see regulatory action?"

Still, even if outsourcing opponents are big election winners, analysts doubt that India will face the strident critiques that China is likely to experience in the months ahead.

"There's no constituency for bashing India," says James Steinberg, a foreign-policy analyst in the Brookings Institution think-tank. Steinberg, who served as No. 2 in the Clinton administration's National Security Council, points out that it's politically easier in the U.S. to attack Beijing's communist government than the world's largest democracy. On top of that, American politicians raise a lot of money from Indian Americans. Says Steinberg: "There are only two countries that get an applause line when they're bashed [in the U.S.]: China and France."

APARC Professor Donald K. Emmerson, together with IIS Director Coit D. Blacker and Hoover Institution Fellow Larry Diamond (both of CDDRL), discussed "Democracy vs. Liberty" on the television program "Uncommon Knowledge."

Is democracy - that is, free elections - to be desired at all times for all nations? Or are nations more successful when they establish the rule of law, property rights, and other constitutional liberties first? For the United States, this is no longer an academic question. America is deeply involved in nation-building in Afghanistan and Iraq. Should the establishment of democracy in these countries be the first priority for the United States, or is securing public order and the rule of law more important?

August was a bloody month. There was barely time to mourn between the exploding bombs: first at the Marriott hotel in Jakarta on Aug. 5, at U.N. headquarters in Baghdad and on a bus in Jerusalem on Aug. 19, then the two in Bombay on Monday. These were the latest sites in a chronology of carnage running from Casablanca through Riyadh and Bali to Manhattan's crumbling towers.

Each atrocity involved local actors and local motives. Each was perceived differently by the local populace, and the local repercussions of each terrorist act varied widely. Yet all were attributed to a single global menace: jihad. For three years now, acts of violence done in Allah's name have made terrorism and Islam almost synonymous, not just in Westerners' vocabularies but around the world.

From this blight, who will rescue Islam?

The nearly reflexive association of Islam and terrorism is not simply the creation of rush-to-judgment pundits and politicians. Not when the terrorists proudly proclaim religious inspiration for their acts. Both Jerry Falwell and Osama bin Laden have maligned Islam. But it is, above all, the jihadists who have distilled their faith to sacred hatred - of Americans, Christians, Jews and the millions upon millions of moderate or secular Muslims who disdain this perversion from within.

Muslims respond in different ways to Islamist violence. In Jakarta a few days after 11 Indonesians and a Dutchman were killed in the blast at the Marriott, I met up with two Muslim friends. They were brimming with conspiracy theories. Why, they asked, had 20 Americans reportedly canceled their reservations before the bomb went off? Could these no-shows have known in advance of the attack? Why was the severed head of the alleged perpetrator later found on the hotel's fifth floor? Had the CIA planted it there? Why were arrests made so soon? Could the U.S., or perhaps the Indonesian military, have staged the event?

Behind their questions lay an unspoken one: How could Muslims have done such a thing?

It would be convenient if my two friends despised Americans and were products of Islamist schools. But both men hold advanced degrees from top universities in the U.S. and exhibit no obvious animosity toward Americans. That two such people could give voice to such dark misgivings about U.S. intentions shows that Islam is not alone in its association with violence.

The flip side of denial is demonization. For some in the West, the enemy is not jihadists but all Islamists. Never mind that the vast majority of Muslims who promote their faith do so peacefully. The PowerPoint charts of counter-terrorism experts that ignore Muslim diversity and feature the evil genius Bin Laden reinforce a distorted, top-down view of Islam.

Al Qaeda's responsibility is all too real. But local context matters. For jihad to succeed, an outside agitator needs inside sympathizers, and their receptivity to recruitment will depend on local circumstances. Recognizing that Muslim societies are autonomous and heterogeneous is a necessary first step to realizing that Bin Laden and his version of Islam aren't absolute control.

Defenders of Islam in the West stress the fact that most of its billion-plus adherents are moderates who reject violence. Such reassurance is far preferable to demonization. But understanding is not served by exaggerations - that Islam or Muslims are always peaceful, or that jihadists entirely lack sympathy in the Muslim world. In Muslim communities, extremist and mainstream views intersect in many places, including schools, mosques and organizations. It is in these myriad local settings that Islam's connection to violence will or won't be broken.

Regrettably, reassurance sometimes lapses into denial. In Indonesia recently, several leading Muslim figures urged journalists to stop using the words "Islam" and "Muslim" in their coverage of the Marriott bombing. I've even heard Muslims object to the phrase "moderate Muslims" because it implies the existence of immoderate ones. Islam will never be rescued by language inspectors who would substitute deflection for introspection.

Can reform rescue Islam? In principle, yes, but in practice, not necessarily. There are at least a few individuals and groups in every Muslim society striving to make the practice of their faith more tolerant of difference and dissent, less restrictive toward women, more compatible with secular democracy and less preoccupied with imposing Islamic law. Liberal American observers tend to celebrate these reformers as rescuers of Islam.

Yet the sheer diversity of Muslim societies suggests that efforts to liberalize Islamic doctrine will face varying prospects of success. Before assuming that liberals and jihadists have nothing in common, one should remember that both advocate far-reaching changes that threaten the conservative views and habits of many mainstream Muslims. Reformers deserve American support. But preventing the status quo from getting worse may be a more realistic goal of such help than winning "hearts and minds" for humanism, let alone making the Muslim world look as secular and democratic as, say, Turkey.

Is America responsible for Islam's predicament? Some U.S. actions have fueled jihad. The American presence in Iraq could become a magnet for holy warriors comparable to the Soviet occupation of Afghanistan. Muslims pressed by Washington to oppose the hijacking of Islam by jihadists may instead decry the hijacking of U.S. foreign policy by hard- liners around President Bush.

But jihadists were fighting enemies long before the United States was born. The drive to create Islamist states is more than an attempt to check American hegemony. Different U.S. policies might shrink Muslim hostility toward U.S. actions. But intransigent theocrats will not be assuaged by the compromises necessary to resolve the Israeli- Palestinian conflict. Nor will either the failure or success of U.S.-led reconstruction of Iraq remove the reasons for Islamist violence in other Muslim societies.

Also shaky is the notion that "they hate us for our values." The democracy Americans espouse remains popular in the Muslim world. American notions of equal treatment for women are less welcome. But a woman's opportunities vary among Muslim-majority countries, including those in Asia that preceded the U.S. in having female heads of state.

Americans are disproportionally responsible for a modern world most Muslims feel they never made. Extremists have used such alienation to justify jihad. But it is not up to Americans to rescue Islam.

Non-Muslims can avoid unnecessary provocations and false reassurances. They can facilitate liberal reform. But it is Muslims, acting in diverse local circumstances, who will or won't break the cycle of jihadist demonization and naive denial that is ruining the image of their religion. Whether to rescue their faith is a choice only they can make.