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Outsourcing moves closer to home

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"The US private sector will no doubt continue to look to China and India," says Mr. Jacobstein. "This is a phenomenon that cannot be stopped." But, he adds, "geography does matter," and, combined with locked-in trade preferences via CAFTA, greater nearsourcing "is bound to occur," he says.

Like India and the Philippines before them, CAFTA nations - Nicaragua, Panama, El Salvador, Honduras, Costa Rica, and the Dominican Republic - are embracing the trend with business-friendly policies and heavy marketing.

ProNicaragua, a public-private agency working to attract foreign direct investment to Nicaragua has, for example, put together a database of English speakers (with more than 4,500 names so far) and is working with the government to establish programs to upgrade the English skills in the country.

These workers will fill what Juan Carlos Pereira, executive director of ProNicaragua, estimates will be approximately 4,000 new call-center and service-center jobs in the next three to four years.

"Paradoxically, the turmoil of the 1980s has now become one of our great selling points for the call-center industry," says Mr. Pereira. "Over 400,000 of our people who fled the conflicts of the 1980s moved to the US and Canada. Many, including myself, have now returned to the country with good education and English skills."

The leader in Central America in terms of attracting outsourcing business is Costa Rica, where 24,500 call-center and information-technology (IT) jobs have been created in the past few years. That number is expected to double in the next two years, according to the nonprofit Costa Rican Chamber of Information and Communication Technology.

In Latin America as a whole, the number of call-center workstations will hit 730,000 in 2008, up from 336,000 in 2004, reports Datamonitor, a market-research firm.

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