The State support paradox

Whilst I am not in favour of protectionism, it is interesting that the ‘emerging economies’ attending the G20 are seeking help to protect their economies with international funding. Whilst this is a great idea in principle, it needs to be equitable. As noted in the USA by Warren Buffet, there have been weaker companies that have been given Government guarantees that have made them stronger than organisations that were AAA rated through their own sensible management! At the moment, it is much better to be a ‘financial cripple’ with a ‘government guarantee’ than a ‘Gibraltar Rock’ without one…this cannot be fair either locally or internationally! Outsourcing has been largely motivated by cheap labour and one of the things that companies should do is to look at the legacy processes that they did outsource and see if they can be made more efficient in home territory or in the new territory – perhaps, but not necessarily, this can be helped by more effective and efficient use of technology.