March 3, 2006

Bush defends India job outsourcing

By Tabassum Zakaria and Palash Kumar

HYDERABAD, India (Reuters) - President George W. Bush on
Friday defended job outsourcing to India during a whistlestop
tour of an Indian technology city as Muslims clashed with
Hindus and police in protests against his visit.

Bush's five-hour trip to the southern city of Hyderabad
came a day after he sealed a landmark civilian atomic
cooperation deal with New Delhi that recognizes India's status
as a responsible nuclear power.

"People do lose jobs as a result of globalization. And it's
painful for those who lose jobs," Bush told an entrepreneur
during a discussion at Hyderabad's Indian School of Business.

The United States would counter it by educating people with
the skills needed to be employed in jobs emerging in the 21st
century rather than discouraging outsourcing, he said.

"The United States will reject protectionism. We won't fear
competition. We welcome competition, but we won't fear the
future either because we intend to shape it through good
policies," Bush said

"People in America should, I hope, maintain their
confidence about the future," said Bush, whose job approval
ratings have been tumbling in part because of concerns about
the U.S. economy.

Outsourcing and software exports are forecast to earn India
more than $20 billion in the fiscal year ending March, with
about 60 percent of that coming from U.S. companies.

As Bush spoke, hundreds of Muslim youths fought pitched
battles with policemen outside a mosque about 16 km (10 miles)
away in the city's old quarters, throwing stones and bricks as
they protested against his visit.

Four people including two policemen were injured as police
caned the demonstrators, an officer said.

A Muslim man was shot dead in the northern Indian city of
Lucknow as protests spun out of control and triggered communal
clashes with Hindus, police said.

The trouble started when Hindus refused to heed a call by
Muslim demonstrators to close shops, leading to riots in which
stones were hurled at shops, vehicle windscreens smashed and
property burned, they said.


Traffic was very sparse in the usually choked streets and
bylanes of Hyderabad's old quarters as markets and businesses
shut down in protest.

"Osama is our ideal, we can die for Osama," shouted some
Muslim engineering students as they marched through the streets
carrying posters of al Qaeda leader bin Laden.

"He is a freedom fighter. He is our leader. We love him
more than our parents," said Mohtassin, a 19-year-old student
who gave only one name.

Protests were also staged in the capital New Delhi, the
northern city of Lucknow and Srinagar, the summer capital of
Jammu and Kashmir state, India's only Muslim-majority state.

Earlier, Bush visited an agriculture university and toured
the seed research area where women in sarees bent and tended to
green patches where peanuts and soybeans had been planted.

The university began collaborating with Cornell University
of the United States in 2004 to develop Indian agriculture.

Bush was also shown a huge, black Indian buffalo and
university officials wanted a farmer couple to milk the animal
with their hands in front of the visitor but the U.S. president
was apparently not keen to see it, officials said later.

Security for Bush in the region has been stepped up.

In Pakistan, the president's next stop, a suicide bomber
killed an American diplomat and two others outside the U.S.
consulate in Karachi on Thursday.

Bush said terrorists would not stop his Pakistan visit,
where he is due to hold talks on Saturday.

The nuclear deal, which would make U.S. nuclear fuel and
technology available to New Delhi despite concerns in the
United States, put the seal on Bush's India visit.

But it still needs to be endorsed by the U.S. Congress and,
in an indication of possible rough water ahead, a leading
Democrat called the pact a "historic failure."

(Additional reporting by S. Radha Kumar in HYDERABAD,
Sharat Pradhan in LUCKNOW and Steve Holland and Kamil Zaheer in