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Idea: "Country-in-a-country" special economic zone

The reason for outsourcing is usually cheaper labour costs.But the people who are doing this work are actually having a good quality of life. Because in real terms even though their wages are lower ( eg: in Bengaluru, India) compared to a developed country ( eg:USA), the cost of living is lower as well. At same time jobs are lost in USA. If americans unemployed due to outsourcing can go and work in India they have beter quality of life. But this is always not possible ,due to family commitments , distance etc.

My proposal is special economic zone similar to Charter city , but in reverse. This will be in a developed county ( Say USA). To start with set aside a few thousand hectares of land in say florida for this economic zone - call it CIC ( country in country). It will be a replica of eg: Bengaluru. It will have offices, houses,schools, health care , shopping , entertainment , banks etc. The crucial issue it will have indian rupee as currency. With all these similar to the Indian city , the cost of living and working should be on par with Bengaluru. Now companies can establish call centres in these CIC zones. The pay for call centre operatives will be same as in Bengaluru and paid in indian rupees. So from the company's point of view this call centre on american land costs the same as if it were to be in India.

But the people employed here will be americans who chose to move to this mini India in USA. They have jobs, relatively good earnings as cost of living is less with all amenities. Most people would stay and work in this CIC zone say for one or two years and then move on to jobs in america.
It is bringing american jobs to america while maintaining standard of living and cutting through the barriers of currency exchange rate etc.

It appears to be a win win situation.

But I have a feeling that there must be a fundamental flaw in this idea. I hope somebody who knows these things will be able to point it out.

Topics: economics society

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  • Nov 13 2012: i understand your premise, and it sounds nice on the surface, but it couldn't possibly work. to achieve a good standard of living on low wages, the goods must also be low. they couldn't be 'imported' into the area because they'd be too expensive, and if they were produced inside the area at low cost, they'd get bought out by the people outside the area on higher wages.

    outsourcing really is bad for all but a few execs. they say they are making things cheaper for their customers, but people who are well employed don't need things to be cheaper - they only need cheap stuff because their jobs have gone. they say they are providing jobs to developing countries, but really they are just exploiting them. india is a good example - many indians are producing an american salary's worth of goods or services, but receive only an average indian salary, and everything they have made likewise goes overseas meaning their country gets nothing.

    tax outsourcing so rich countries can't benefit from cheap labour (make them pay the difference in labour cost), and ban outsourcing in developing countries too. have them work for the better of their own country, not their rich masters!

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