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Unformatted text preview: CNDI 2018 – H1B Visas Affirmative 1AC 1AC---Adv---India
Plan: The United States federal government should substantially increase access and
availability of H-1B visas in the United States.
New visa restrictions reverse Indian labor mobility---that will destroy their economy
and it spills over
Neogy 17 (Pubali, Reporter @ Yahoo, citing Consulting firm Deloitte Touche Tohmatsu, a UK-incorporated
multinational professional services network, "Is India Inc. ready for a reverse brain drain triggered by
stricter visa norms in developed nations?" )
Long-simmering frustrations among natives of developed economies over qualified non-natives usurping
their jobs, has eventually snowballed into a strong wave of nationalism. As a result, their governments
are tightening the screws on immigrants by framing stricter visa laws.
This sure is bad news for the highly skilled Indian professionals, who have for decades made their way to
the US, the UK, Singapore, Australia, and elsewhere in the west, in search of guaranteed greener
pastures – high paying jobs, many avenues to grow professionally and a smooth life replete with state-ofthe-art amenities in a first world.
So much so, three-fourth of the doctors in the UK are of Indian origin and about half the engineers in
Silicon Valley are Indians. As per a report by National Science Foundation, the highest scientific body in
the US, in the past 10 years, the number of engineers and scientists migrating to the US has risen by
almost 85 percent.
But thanks to Trump planning on doubling the minimum salary for H1B visa and similar moves by
governments elsewhere in the developed countries, so as to better protect native job seekers who often
lose out to Indians and other nationals hired at comparatively lower salaries, that trend is about to
Consulting firm Deloitte Touche Tohmatsu uncovered that since Trump’s election, there has been a
tenfold increase in the number of Indians based in the US looking for jobs back home. Colleges also say
that they are seeing a considerable decrease in the number of applicants from India and China – the
top sources for international students.
This possibility of a reverse brain drain, however, is a reason for cheer for India, which since
independence has been grappling with the problem of outflow of highly educated citizens, who could be
a tremendous asset for the nation with their wealth of knowledge and acumen – they could build new
technologies, companies, better healthcare system and even superior infrastructure.
The question now is – is India Inc. ready for them? Will it be able to offer them salaries that are on a par
with what they draw overseas? Will it be able to provide them room enough to prosper professionally
and subsequently contribute to the nation’s economic growth?
The answer is “no.” And reasons are many.
Insufficient high paying jobs and avenues for growth In an economy that is struggling to add jobs, let alone well-paying ones, to bring down the
unemployment level that seems to be climbing every month, it may not be easy for homeward-bound
techies, scientists, finance professionals, doctors and professors.
An Indian management professional in the US, for example, who is an H1B visa holder will earn three
times less in India. Similarly, an IT professional will draw half the salary he is drawing in the US and an
academic will make almost six times less.
According to the Payscale website, again, an Indian fresher with zero to five years’ of experience in IT in
the UK, makes an impressive Rs.27 lakh per annum and those with an experience between five to 10
years make Rs.32.5 lakh per annum. While this is definitely lower than what natives make (in fact, lower
cost of hiring equally competent and qualified Indian professionals has resulted in their demand), it is
much higher than their counterparts in India.
Besides, automation is already threatening jobs everywhere with programming machines supplanting
entry-level programmers and cloud computing reducing the need for manpower. Hence entry-level
programmers, who form the bulk of H1B holders, may find it difficult to even retain a job both in the US
and in India, thanks to artificial intelligence and other sophisticated technologies.
Dearth of quality higher education facilities and research centres
Quality of higher education, another cause of brain drain, also needs improvement to enable the best
minds to innovate and disrupt on the home soil. From superior research facilities, decent scholarship
amounts and even competent and dedicated teaching staff, universities need to work on, well, almost
everything. Our IITs and IIMs, which we are so proud of, do not even feature in the top 200 universities
of the world! New Visa restrictions will destroy the Indian tech sector---the impact is huge
Bundhun 18 (Rebecca, Reporter @ the National, citing Forbes and Ajay Kolla, chief executive and
founder of Wisdomjobs, 3/3, "India's IT industry feels the impact of Trump's visa reforms,"
The crackdown on the visa program is already impacting job opportunities for Indians in the US - a vital
market for the Asian nation’s $150 billion a year IT industry - and driving up costs for US-based
Last month, the Trump administration announced a new policy which tightens procedures and means
companies may need to provide more documents for hiring someone on an H1B visa. There have been
further proposed changes to the visa regime, including doubling the minimum salary requirement for
these visas to $130,000 a year from $60,000 a year.
“It's a bit concerning for Indian technology organisations,” says Srividya Kannan, the founder and director
of Avaali Solutions, a consulting services firm based in Bangalore, often referred to as the Silicon Valley of
India because of its large number of IT firms.
“With the new policies, costs and documentation procedures are going to become more cumbersome.
This may also add to some red tape.” Under the Trump administration's visa policy changes announced last month, firms will have to provide
much more supporting evidence and work harder to prove that its H1B employees at third-party
workplaces qualify for the visas.
Ms Kannan says that moving Indian employees between companies or projects in the US is going to
become much more challenging for businesses.
“Hiring of local talent in the US is likely to again impact costs,” she says. “Indian companies have
already slashed their applications.”
Such moves comes at a time when India's IT sector is grappling with a range of challenges, including the
rise of automation and artificial intelligence, and competition from other markets including China.
Global economic weakness has not helped, while Brexit poses some uncertainty to Indian IT firms’
operations and expansion plans for the UK and the rest of Europe.
About 70 per cent of America's H1B visas are issued to Indian nationals. Six of the top ten companies
which use the visa program are Indian outsourcing firms, including Infosys and Tata Consultancy Services,
according to Forbes.
US firms including Amazon and IBM are also among the main companies that use the visa program to
hire workers from overseas. Such firms will also be impacted by Trump's proposed policies. The costs of
hiring Americans is significantly higher than Indians, with Employability Bridge, an Indian recruitment
firm, estimating an American software engineer will cost about 40 per cent more to hire than recruiting
directly from India.
Trump’s stance has already had a significant impact on the recruitment of Indian IT workers in the US,
according to Ajay Kolla, the chief executive and founder of Wisdomjobs, a recruitment firm based in
“After Trump came to power, the jobs got affected, going down by about 15 to 20 per cent,” he says. International remittances are mana from heaven for the Indian economy---decline is
Liang et al 16 (Tan Swee, Associate Professor of Economics (Practice), Singapore Management University,
10/24, "REMITTANCES WITHOUT BORDERS," Industry Watch, Volume 2, Issue 2,
One out of every 28 people lives in a country that they were not born in. As migrants, they are estimated
by The World Bank to send home US$636 billion in 2017, with three-quarters remitted to developing
countries.1 These remittances form a significant percentage of the Gross Domestic Product (GDP) of
many of these developing countries. Given their magnitude and contribution to national economies,
even a small reduction in remittance cost adds billions to these local economies. Mobile-to-mobile
cross border remittances have recently shown that not only can the remittance costs be significantly
brought down, but the money can also be delivered virtually in the hands of the beneficiary. We propose
that with six of the top 10 remittance receiving countries of the world located in Asia, it is time to set up
a Pan-Asian Mobile Remittance Platform that would enable migrants to remit money home at low cost
using their mobile phones. According to The World Bank’s ‘Migration and Development Brief’ report in April 2015, the number of
international migrants is expected to exceed 250 million in 2015, some three million more than two
years ago.2 As a result of the strong flow of migrants, total remittances in 2014 rose to US$583 billion, a
six-fold increase over the last two decades (refer to Figure 1). India and China were the top recipients of
these remittances at US$70 billion and US$64 billion, respectively, followed by the Philippines at US$28
A comparison of OECD and World Bank statistics shows that international remittances received by
developing countries–US$418 billion in 2013–were three times greater than their official development
assistance. In countries like Bangladesh and the Philippines, the share of remittances to GDP is around
ten percent, while in other smaller nations like Nepal the share is as high as 25 to 30 percent of GDP,
with remittances received by Tajikistan standing at a whopping 49 percent of GDP.
The impact of remittances is noticeable even at a country level within recipient states. Illustrating the
case of Kerala, a southern state of India, The Economist pointed out that “2.4 million Keralites were
living and working overseas in 2014. The money they send home is equivalent to a full 36 percent of the
state’s domestic product...It is now about 50 percent wealthier per head than the national
average.”3 [FOOTNOTE 3 BEGINS] 3. The Economist, “Like manna from heaven: How a torrent of money from
workers abroad reshapes an economy”, September 5, 2015. [FOOTNOTE 3 ENDS] To put this in perspective, with its
GDP of about US$77.5 billion, the state received US$28 billion in remittances.
In 2013, international migrants from developing countries held about US$497 billion of savings in their
International remittances received by developing countries–uS$418 billion in 2013–were three times
greater than their official development assistance.
Cost of remittances to be brought down
According to estimates provided by The World Bank, the global average cost of remittance has been
trending downwards over the last six years. Currently, the cost of sending remittances to sub-Saharan
Africa is about 9.7 percent of the amount remitted–which is among the highest in the world and about
two percentage points higher than the world average. The average cost of remitting to China is also high
at 9.8 percent, due to the lack of competition in its remittance market. By comparison, the average cost
of remitting to most nations in South Asia is around 5.7 percent.5
According to the same report, “The cost to consumers of these remittance transactions is expensive
relative to the often low incomes of migrant workers, the amounts sent, and the income of remittance
recipients. Therefore, any reduction in remittance transfer price would result in a significant increase in
money remaining in the pockets of migrants and their families, and would have a significant effect on the
income levels of remittance families.” It further stated that “if the cost of sending remittances could be
reduced by five percentage points relative to the value sent, recipients in developing countries would
receive over US$16 billion dollars more each year than they do now. This added income could then
provide recipients more opportunity for consumption, savings, and investment in local economies.”
What is the cost of remittance from Singapore to a major remittance destination like India? Total costs
typically comprise the transfer fees and foreign exchange margins. This remittance corridor is one where
the rates are lower compared to the global rate of 7.7 percent. According to The World Bank, for remittances equivalent to S$280 (US$200), the total costs charged by money transfer operators (MTOs)
and banks are, on average, 4.1 percent and 3.4 percent of the amount remitted, respectively. Indeed, the
entrance of new technology-driven players and the move from cash to e-money have generated
innovative business models that can lower the cost of remittance services. These internet-based players
earn from foreign exchange margins only, and do not charge service fees. The online remittances
company, Remitguru, and online remittance portals of banks in Singapore, such as the State Bank of
India, follow this business model. The best empirical data confirms remittances are a central driver of developing growth
Myer et al 16 (Dietmar, Department of Economics, Faculty of Economics and Social Sciences, Budapest
University of Technology and Economics, Hungary, "The impact of remittances on economic growth: An
econometric model," Page 1-4)
Remittances are a new financial phenomena and one of the main important sources of incomes based
on it seize and economic impact in the world. Data from (World Bank, 2014) indicates that global
remittance is $430 billion dollar in 2011 and remittance is 0.31% of global GDP in 2009. The impact of
remittance on economy system is more profound in developing countries because, they receive $307.1
billion of the total N416 billion inward remittances, which is about 74 percent. Remittance is also 27
percent of the GDP of developing countries. According to the World Bank, remittances flows to the
developing world have reached USD 414 billion in 2013 (up 6.3 percent over 2012), and are now, behind
foreign direct investment, the second largest source of external financial flows to developing countries.
Given the 232 million international migrants and the almost 70 million internal migrants, the earnings
generated and transferred by migrants are projected to reach USD 540 billion by 2016. Importance of
remittances is increasing potentially and they are becoming one of main important sources of foreign
financial flows, especially in developing countries, both in size and growth rate. The true size of
remittances as well as unrecorded flows through formal and Q4 informal channels is believed to be
significantly large (Gammeltoft, 2002; Ratha, 2007) (Fig. 1 and Graphs 1–3).
Recorded remittances are more than twice as large as official aid and nearly two-thirds of foreign direct
investment (FDI) flows to developing countries. The enormous upward movement in remittances
payments may be attributed largely to two factors, namely; immigration between developing and
developed countries has increased dramatically in the past 20 years (World Bank 2007) and decline in
transaction costs as technological improvements have allowed for faster, lower cost mechanisms for the
international transfer of payments between individuals (Guiliano and RuizArranz, 2006). Remittance is
different from other external capital inflow like foreign direct investment, foreign loans and aids due to
its stable nature, (Kapur, 2006; Shahbaz et al., 2008).
The purpose of this paper is to examine whether remittances has a positive effect or negative effect in
the increase in GDP per capita in the developing countries. By using empirical method in six developing
countries in Europe, the region with countries of high receiving ratio in remittances to GDP, the impact of
remittances is to be observed.
2. Empirical literature review Many economists and analysts have realized several large empirical studies
on various aspect of remittance, such as motivation of remittance senders, impact of remittance on
economic growth, cost of remittance, etc. There are diverse opinions on the impact of remittances on
economic growth. 2.1. Positive impact There is empirical evidence that remittances contribute to economic growth,
through their positive impact on consumption, savings, or investment.
In this regard, several studies report supporting evidence on the positive impact of remittances in
accelerating investment in Morocco, India and Pakistan (Lucas, 2005) and in Mediterranean countries
Adams and Page (2005); Acosta et al. (2008) and World Bank (2008) argued that migrant remittances
impact positively on the balance of payments in many developing countries as well as enhance
economic growth, via their direct implications for savings and investment in human and physical capital
and, indirect effects through consumption.
Ratha (2003) concludes that remittances increase the consumption level of rural households, which
might have substantial multiplier effects, because they are more likely to be spent on domestically
Giuliano and Ruiz-Arranz (2005) had worked on data set of more than 100 developing countries from
years 1975–2002 and found that remittances can enhance economic growth only in less financially
The positive developmental effects of remittances focuses on the multiplier effects of consumption
(Stahl and Arnold, 1986), development of the financial institutions that handle remittance payments
(Aggarwal et al., 2006), use of remittances asforeign exchange (Ratha, 2005), and the role of remittances
as an alternative to debt that helps alleviate individuals credit constraints in countries where microfinancing is not widely available (Guilamo and Ruiz-Arranz, 2006).
Barajas et al.(2009) explained that remittances are likely to expand the quantity of funds flowing through
the banking system. This in turn may lead to enhanced financial development and thus to high economic
growth through one or both of two channels: (1) increased economies of scale in financial
intermediation, or (2) a political economy effect, whereby a larger constituency (depositors) is able to
pressure the government into undertaking beneficial financial reform.
Remittances provide the catalyst for financial market and monetary policy development in developing
countries. Guilano and Arranz (2005) study found that remittances improve credit constraints on the
poor, improve the allocation of capital, substitute for the lack of financial development and thus
accelerate economic growth. H1B decline alone triggers the internal link
BT 17 (Business Today, citing the World Bank, 4/26, "Indian IT sector stares at layoffs amid visa curbs and
rising rupee, says Assocham," )
With the US tightening the norms for H-1B visas under the President Donald Trump's 'Buy American,
Hire American' campaign, the Indian IT companies are bound to face disruptions by way of higher costs
and even some laying off work force back home, as the rising rupee is aggravating the situation further
for the technology export firms, an ASSOCHAM paper warned on Wednesday. "Aggravated by rising rupee leading to lower realizations for software exports, the Indian IT firms may be
forced to displace work force. In that case, the chances of layoffs are real," ASSOCHAM Secretary
General D S Rawat said.
Nearly 86% of the H-1B visas issued for workers in the IT sector go to Indians and this figure is now sure
to be scaled down to about 60% or even less, the report said.
Cautioning against a huge decline in remittances from US, Assocham paper said the US visa move could
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