U.S. Suspends Controversial Outsourcing Program in Philippines

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[author: Steve Semerdjian]
At the urging of Reps. Timothy Bishop (D-N.Y.) and Walter Jones (D-N.C.), the U.S. Agency for International Development (USAID) has suspended funding for a program under which Filipino students trained to work in various industries, including offshore call centers serving U.S. companies. The program, known as the Job Enabling English Proficiency (JEEP) program, provides English-language training to students in the Mindanao region of the Philippines, which has been troubled by civil unrest as a result of the activities of Muslim rebels. As part of a larger USAID initiative in the Philippines over the last 16 years, known as Growth and Equity in Mindanao (GEM), the JEEP program is a two-year program aimed at improving the English-language proficiency of university students in the region. The program focuses on general English language proficiency in the first year and English for Specific Purposes (ESP) in the second year. The ESP course, which teaches specialized English skills required by employers in industries including nursing and allied healthcare, maritime services; travel and tourism services, business process outsourcing (BPO), and other areas of local employment, is what Reps. Bishop and Jones found “shocking.”

In an April 19, 2012 letter to USAID administrator Rajiv Shah, the legislators criticized the program as posing a threat to American call center workers and demanded that the agency end the program – which is set to expire at the end of 2012 – immediately. Noting that more than 500,000 call center jobs had been outsourced since 2007, the letter charged that: “To essentially underwrite our international competitors is short-sighted public policy and a direct threat to our economic competitiveness. Call centers represent a substantial portion of the U.S. economy and currently provide economic stability and the promise of a middle-class income to over 4.5 million working families in the United States." The letter also charged that the program “elevated the risk to the security of sensitive consumer data and the privacy of millions of American consumers[,]” citing recent reports of off-shore call center employees from India and the Philippines attempting to sell credit card information, medical records and loan information. The representatives threatened that they would use “every legislative option available to permanently prohibit USAID from engaging in such practices in the future," if the agency failed to halt the program.

In response, USAID suspended its participation in the JEEP program, pending further review. In a letter to Reps. Bishop and Jones, deputy administrator Barbara Feinstein also promised a “a high-level taskforce to review these matters." According to Feinstein, the aim of the JEEP program originally was to help students in the region “make productive contributions to society, and to reduce alienation and marginalization that may make them vulnerable to the influence of terrorism and extremism – not to support employment in any particular sector."

This is the second time Rep. Bishop has acted to stop USAID involvement in an international development program that he asserts is detrimental to American workers and the U.S. economy. In 2010, Rep. Bishop objected to USAID’s proposal for a high-tech skills training program in Sri Lanka.

In a statement, Rep. Bishop responded to USAID actions. “Regardless how well intentioned, this program has the potential to harm the US economy and must be stopped. I will closely monitor USAID's response to ensure that America's international economic development efforts in no way contribute to shipping our jobs overseas," Bishop said. "We do not need a task force to tell us that outsourcing is a job killer and American taxpayers should not be supporting it in any fashion.”

Published In: Administrative Agency Updates, General Business Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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