This transcript was automatically created with transcription software.
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Speaker 1
Hey. Welcome to our brand new podcast, The Dip. If you want money stories, that cross borders, you are in the right place. We're going to be connecting the US to the world and the world to the US. I'm Kassandra.
00:00:17:02 - 00:00:24:15
Speaker 2
And I'm her beautiful assistant, Daniel. And you won't believe how many months it took to get this podcast off the ground. And we're finally here. We're doing it.
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Speaker 1
We did it. Yeah.
00:00:25:22 - 00:00:38:19
Speaker 2
So, coming up today, Argentine president Javier Miller's radical economic experiment is faltering. And now the US is weighing a $20 billion lifeline to stop a full blown crisis that could ripple through global markets.
00:00:38:19 - 00:00:56:02
Speaker 1
But of course, you're going to have already heard that President Donald Trump is jacking up the price of H-1b visas to $100,000. So that's the visa that a worker needs if they want to work certain kinds of jobs in the United States. But, Daniel, how is that going to work?
00:00:56:05 - 00:01:18:08
Speaker 2
So basically, a company will need to pay the government one time $100,000 fee per employee that they hire under this visa. And if you have one of those visas already, then don't worry because this doesn't apply to you. But if you were hoping to work in the US under this particular visa scheme, well, this will probably discourage all but the richest companies and those with big backers from hiring from abroad.
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Speaker 2
So let's dig into this now with Ron here. He's a Howard University professor who focuses on labor policy and has testified to Congress as an expert on high skilled immigration and Sharia chargebacks. He's a co-founder of the San Francisco based startup metta view. Thank you very much for joining us both. Shari, I'd like to start with you first.
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Speaker 2
Thanks for taking the time for us today. I know you're very busy. You're in Florence today speaking to investors and this kind of thing. I think that's fantastic. Globe trotting. You're clearly a very busy guy. You run a startup that seeks to give companies an AI boost to their recruiting processes. But what did you think when you first heard the news of this $100,000 fee?
00:01:59:02 - 00:02:20:01
Speaker 3
The, I first heard the news at 5:32 a.m. when I woke up and, had an email from the lawyers in my inbox. My first thought was, we have a small number of people that are not H-1b, H-1b, and how can we make sure they feel good about it? And they continue to feel, you know, safe.
00:02:20:03 - 00:02:39:22
Speaker 3
At the time, it was not clear that, if you already have an H-1b, this does not apply to you. But my immediate thought was, you know, where do we pay? What is the link? Where do you go to pay? Because obviously, the members of our team are the most valuable asset to our company. The success or failure of any organization is a function of those people.
00:02:39:24 - 00:03:04:01
Speaker 3
And so that's what I thought. I messaged, some of the folks and saying, don't worry about it. And we'll just, you know, we just have to cough up $100,000. And of course, there was more clarity. Over the days, but that doesn't change our stance. In the future, we will continue sponsoring H-1b. And, again, $100,000 is a rounding error relative to the value that our coworkers will create for us in the future.
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Speaker 3
So.
00:03:04:24 - 00:03:20:07
Speaker 1
Sharia, you said that the first thing you asked was, you know, where do we pay? But I know one of the other things that you did, maybe the second thing was write a LinkedIn post about it. And I don't want to stereotype you as a typical startup founder, but tell us, what did that message say?
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Speaker 3
The message was about the fact that I do consider this to be a rounding error, and I'm not one to write lots of LinkedIn posts. But, what I saw was on LinkedIn, many other founders jumping on a bit of a bandwagon of saying, look at the US. It now has this, barrier for, hiring talent.
00:03:38:01 - 00:04:06:16
Speaker 3
Why don't you come work in our other country that we have our company and I, I personally found that distasteful. I think the best minds of the world that want to go to the US, the epicenter of AI, to do great work, are worth a lot more than $100,000. And I actually just got, my LinkedIn post was then I got annoyed about the fact that before using this as an opportunity to say, well, come to our country.
00:04:06:18 - 00:04:22:09
Speaker 3
And so I thought I'd better express what seemed to be a contrarian opinion, which is, no, we're in San Francisco. We also have an office in London, by the way. So, you know, I could have done that. But we are in San Francisco. We are hiring exceptional people. We need the exceptional people to build the future.
00:04:22:11 - 00:04:43:00
Speaker 3
And if America has now decided the best thing for the country is to charge $100,000 for it, then that is the price of world class talent. And of course, we can talk about that in more depth as well. There are, certain instances where this won't apply. This people won't apply if it relates to national interest, etc..
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Speaker 3
Which, I think will probably make the whole thing sound a lot more reasonable than equal first reactions. Okay, but the LinkedIn post did go viral.
00:04:51:24 - 00:05:09:13
Speaker 2
Yeah, it was covered by. So. Yeah. I have a question for you, about your story. So, you, when it comes to the US as an immigrant there, what's been your journey so far? And you're you're kind of kind of in the middle of the process, aren't you? At the moment?
00:05:09:13 - 00:05:32:01
Speaker 3
Yeah. I'm a I'm a double immigrant. I was born and raised in Iran. I moved to the UK about 17 years ago, and now I'm transitioning to the US. And I'm going through a fairly typical, process as well. And I'm currently mid process. It is not through the H-1b process. Mine is called the Ebony, which is for extra extraordinary talent.
00:05:32:03 - 00:05:46:00
Speaker 3
But nevertheless, the process started last November and, I've, you know, I've been going through the different approvals and there's, one, one, one last step left, before it's all done and dusted. But yeah, going going through the process like, like everyone else.
00:05:46:16 - 00:05:59:05
Speaker 1
Run. I want to bring you into this conversation because we've heard a little bit about this case. Right. But stepping back, do you think this is a good policy by the Trump administration to maybe rebalance the labor market?
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Speaker 4
Well, so let's start with the fact that the H-1b program is a guest worker program and it's scandal plagued. It's very poorly regulated in the US. It allows firms, to underpay, and then also indenture and control those workers. So it's been exploited very widely. The case that was just, discussed, the two cases, the, the, the new immigrant, going through Ebony and, and then as a startup founder as well as, the hiring and paying the fees, that's not the typical H-1b worker.
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Speaker 4
The typical H-1b worker is is working in, outsourcing IT staffing in the back office of some, bank, earning about 30 or 40% less than the market wages. And so that's probably about 65 to 70% of the program. And that's really what's being targeted in terms of not just a $100,000 fee, but there are a number of other steps the Trump administration is doing, to try to fix the program so that it does skew, towards the gentleman's, company and the types of talent that we're talking about, because right now the selection process is really poor.
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Speaker 4
It's done by random, lottery. And that lottery is actually gained by some of these large, mostly offshore outsourcing firms, firms that are trying to transfer work, to my cousins in India, which is great for them, but not so good for America. And certainly, contradicts what the purpose of the program is, which is to fill, market gaps, skills gaps that are there and to bring exceptionally talented people.
00:07:36:23 - 00:08:05:23
Speaker 4
Most of the people here on H-1b visas are really ordinary skilled. They can't start companies, and they're underpaid and indentured. So there's a lot of good steps. And by the way, this is not a Partizan issue. This is not Trump. Senator Durbin, who's the number two Democrat in the Senate, has been fighting for reform for for decades now, as well as Bernie Sanders, who's probably the most progressive, of the Democratic or independent senators, in the US.
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Speaker 4
She's been fighting also on the same side of this.
00:08:08:07 - 00:08:25:15
Speaker 2
Yeah. So, Ron, you mentioned the, the, the Indian aspect there and, just for, our listeners, you'll be able to hear us kind of dig into that more in a few minutes time. Well, we'll, we'll talk about India quite in depth there. But I know that you say it's not a Partizan issue. You don't necessarily support just everything that Trump says.
00:08:25:15 - 00:08:44:02
Speaker 2
Perhaps the implementation here was problematic. I mean, we heard from Macharia that, you know, he was looking around, seeing, okay, is this something that we're going to have to then pay out for our current employees, rush everyone back? That that was a reaction that a lot of companies had. What would have been a better way to to implement this?
00:08:44:02 - 00:08:48:15
Speaker 2
And would you have changed anything about this particular policy itself?
00:08:49:03 - 00:09:11:01
Speaker 4
Yeah. So the proclamation has a number of different things. The fee, is still not clear or what? Almost, you know, eight, nine days out from the fee being announced in the proclamation coming out, and nobody really knows how the fee will be implemented. And they had mixed messages, so clearly they weren't, on the same page in terms of the message and they weren't prepared.
00:09:11:03 - 00:09:33:09
Speaker 4
And part of that, I think, is this fee idea is a new one. It's not one, you know, these ideas don't come from nowhere. Usually they're bounded about, by people like me, policy analyst within, the policy, community, thinking and vetting ideas. It's a variation of something that's been talked about by economists over the years and analysts of doing an auction.
00:09:33:09 - 00:10:05:07
Speaker 4
So giving it to the highest bidder, instead of having equal weighting, you know, $60,000 a year, underpaid IT worker as the same odds is up 4 or $500,000 a year. I specialist. That makes no sense, right. And so the idea here was to use a fee, but they're doing a number of other things that I think really make a lot of sense, and things that I've been advocating raising the wages for H-1b so that they're not underpaid, that they're fairly treated, and that they're not undercutting American workers wages and job opportunities.
00:10:05:09 - 00:10:27:12
Speaker 4
They're also trying to replace the random lottery with a weighted, wage based system that, skews towards higher skills. So there's a lot of good things in there. I know the $100,000 fee is the shiny object everybody's looking at, but we really don't know how that's going to operate and who it will apply to. There's all kinds of exemptions that they apparently haven't even decided what to do.
00:10:27:24 - 00:10:38:05
Speaker 2
Okay. Sharia and why? Why hire foreign workers at all? Why can't you find this top tech talent, amongst Americans.
00:10:38:05 - 00:11:15:22
Speaker 3
I think there is a global shortage of supply of tech talent, across every country, but also the US. And so there simply isn't enough people in any single country to to always get to make AI progress as fast as it needs to. And, and so I think that's just the reality of it. There just isn't enough. And to solve that problem, it's a multi-decade problem of like how do you go to the root of the academic system and, you know, produce more, more people that, can do that, but that's a, that's country.
00:11:16:02 - 00:11:38:22
Speaker 3
That's the problem in every country. There simply isn't enough people in America that have, or are able to have the impact required for that. And there also aren't enough people in India or any individual country. So I think you really got to come together as a as a big global unit. And, naturally, you need a place to settle and put everyone together and, and do serendipity.
00:11:38:22 - 00:11:43:15
Speaker 3
And I think America is the best place for that. But, there's just not enough time.
00:11:45:08 - 00:12:04:02
Speaker 1
Ron, the U.S tech sector has long claimed that H-1b visas are essential for filling shortages. You say that you have said that. How many of these hires are ordinary? So how do you reconcile your view with the skill of US companies that are actually lobbying to keep the program open?
00:12:04:18 - 00:12:22:10
Speaker 4
Well, if there is no shortage and if there were a shortage, a broad based shortage, there may be a shortage in very specific types of talent. That, Shari is trying to hire and that the H-1b program should be used and we should be, bringing in, talent. We should really try to bring them in as immigrants.
00:12:22:10 - 00:12:46:19
Speaker 4
Remember, they're coming in. It's nonimmigrant as guest workers are only guests, here for a short period of time. And instead, we should be really rethinking our whole immigration system. But there's no requirement in the H-1b program that, for firms to demonstrate that there's any shortage. In fact, there's many cases where, American workers have been forced to train their H-1b replacements.
00:12:46:21 - 00:13:06:19
Speaker 4
So you're not bringing in super skilled people. Most of the people coming in are ordinary, and employers are bringing them in because they're cheaper and they're controllable. They control the visa, they hold the visa and the work status of those workers. They're indentured and controllable. So of course the industry is going to lobby for this because it's super profitable.
00:13:06:23 - 00:13:28:18
Speaker 4
Why hire at market rates? Hire American workers when you can hire someone who's indentured to you, at a lower rate. And the government is giving them this subsidy, these profits are extra profits to those companies. They're going to keep going after it, just like they go for tax breaks. They're going after cheap labor. But this is not a victimless crime, right?
00:13:28:18 - 00:13:52:22
Speaker 4
I mean, this is an act where you're you're really distorting the labor market. You're undercutting your own citizens, American workers wages and working conditions. You know, there's, you know, 6 million Stem workers in the U.S. their shortage is in very narrow areas, small areas. The H-1b program, you U is wide open. It's anybody in any kind of white collar profession.
00:13:52:22 - 00:14:12:03
Speaker 4
So journalism, accounting and all kinds of computing areas, most of the areas in computing are not in shortage. Wages have been flat or declining. That's how we would measure if there was a shortage like there were shortages of eggs here in the US. Prices went up. Wages have not gone up in the tech sector. They have in narrow areas in AI.
00:14:12:04 - 00:14:38:17
Speaker 4
So we have to be really careful about how we target this. And the H-1b program is not targeted. It's broad based. Anybody can go for it. And there is really no controls over ensuring that that these are actually filling shortages. So the $100,000 fee, the other, actions by the Trump administration of raising wages, and selecting will move the program closer to its intention of filling shortages.
00:14:38:20 - 00:14:43:20
Speaker 4
It still doesn't really solve the problem completely, but it's a heck of a lot better than what we've got right now.
00:14:44:09 - 00:14:57:03
Speaker 1
Surya, you know, we're a couple days out from the real epicenter of of this, this announcement. And I'm wondering, what do you think startups like yours could learn from what's happened here?
00:14:57:16 - 00:15:20:16
Speaker 3
I think, I think I guess I'm repeating what I said before, but the success or failure of any organization is a function of his people. We are, just to be clear, we are parts of that very small, cohort of companies that are working on a in an area where there is a shortage in shortage in talent.
00:15:20:16 - 00:15:51:15
Speaker 3
We need highly technical AI talent. It is critical for the future of both humanity but also the political landscape. And so. You know, if you think about your company today as a premium on the past versus a discount on the future, then you won't value people. But if you look at your mission and what you're trying to create and what you're trying to create is $1 trillion company that has huge impacts on in on the world.
00:15:51:15 - 00:16:10:23
Speaker 3
And, in changing people's lives. Then. Any amount you pay people is just a small discount on the future. And so I just think everyone within my bubble should focus on, hiring the best people and, building the crews, creating the future that they want.
00:16:11:00 - 00:16:20:02
Speaker 2
Yeah. And that makes a lot of sense for me. Of you, for your. For your startup. But, why bring them to the San Francisco office and not the London office? For example?
00:16:20:04 - 00:16:56:03
Speaker 3
They are more than welcome to come to any office. The I, the the the kind of meta point here is that $100,000 is not going to stop us from wanting to work with the best colleagues on the planet. There are clear benefits to San Francisco and the Bay area as the epicenter of progress as it pertains to AI in particular, but technology in general, that like density of ideas result in serendipity in a way that is hard to describe.
00:16:56:05 - 00:17:19:15
Speaker 3
And that is starting to happen in places like London and other places, too. But, you know, I don't think the de area is overnight going to lose. Its the magic that it has in producing, incredible things. And so people can go wherever they want. We will sponsor them to come to London. We will also sponsor them to go to us.
00:17:19:17 - 00:17:21:10
Speaker 3
And we have no problem with the fees.
00:17:22:02 - 00:17:34:21
Speaker 1
Ron, you have emphasized weak enforcement in the current system, but isn't a fee just a really blunt instrument that actually doesn't fix enforcement? Possibly just pricing some people or some companies out?
00:17:35:04 - 00:18:00:18
Speaker 4
Yeah. So you're missing all of the variety of things that the the Trump administration is doing. So the Department of Labor has, for the first time, the Secretary of Labor is actually going to investigate fraud and abuse. So there are enforcement actions that are going on. These things have to be done together for to work a $100,000 fee, essentially is targeted at the employers themselves to say, to call their bluff because most of them are bluffing, right?
00:18:00:18 - 00:18:19:00
Speaker 4
They could find American workers if they want. They just want to pay less to the H-1b worker and control them. And so it's it's calling their bluff. Are these workers really that valuable to you? Well, you should pay for them. And and that's what the fee does. But you're missing all of the other things that are critical.
00:18:19:02 - 00:18:44:14
Speaker 4
And by the way, right now, recent graduates, we're right. We're graduating record numbers of engineers and computer scientists. At the bachelor's level, almost all our U.S. citizens and permanent residents, and they're at record levels of unemployment. They can't find jobs. So the and the big tech companies are laying off tens of thousands of, of workers at the same time, they're simultaneously hiring tens of thousands of H-1b workers.
00:18:44:20 - 00:19:06:18
Speaker 4
You know, the shortage argument is a red herring. It's just false. If you want to target it, these are the ways to target shortages is by raising the wages, raising the stakes so that instead of indiscriminately hiring tens of thousands of H-1b, the companies are much more careful and saying, these are really the valuable H-1b that we want.
00:19:06:22 - 00:19:21:07
Speaker 2
I mean, certainly is going to be interesting over the next few weeks and months to see how this shakes out and how the labor market changes as a result of it. Ronnie O'Hara of Howard University and Sharia, touchback of much of you. Thank you very much for joining us on that today.
00:19:21:10 - 00:19:22:06
Speaker 1
Thank you both.
00:19:22:06 - 00:19:24:23
00:19:24:23 - 00:19:49:23
Speaker 1
So, Daniel, we've talked about the business side of things, but of course, there's the employees that these companies are hiring or hope to hire. And the H-1b visa program has long been, almost like a golden ticket for a lot of Indian I.T professionals and students would be professionals. Right. So I'm wondering really what what this means if, if this is going to translate into new opportunities for some of these.
00:19:49:24 - 00:20:10:17
Speaker 2
Yeah, it was a big topic in the in the interview we just heard. Right. Because Indians do make a, a large amount of these, people who are applying for this particular visa. So I thought, who better to ask than our colleague from Delhi Bureau, Adalbert, who's been, digging into this story, this week. So I did thank you very much for taking the time for us today.
00:20:10:17 - 00:20:17:03
Speaker 2
What has been the reaction from Indians in the tech sector? Who have you spoken to?
00:20:17:05 - 00:20:44:14
Speaker 5
Yes. Like, I mean, like, you know, on the streets of Delhi trying to reach out, find people, you know, usually Indian tech use, the reaction from the Indian techies is they're pretty shocked about this news. But then the other side, I tried to go to one of the most prestigious universities in Delhi. It's known as it's Indian Institute Technology, where like most of the brilliant minds, they know, they graduate, from there they do their, undergrad in engineering.
00:20:44:16 - 00:21:02:13
Speaker 5
And these are the people who take H-1b visas and then they go to us. So I happen to go there and meet the students to understand what's the impact of this H-1b visa on them. So I got to know the mix of reactions. There is one section of students who feel like, you know, those who had this American dream.
00:21:02:13 - 00:21:21:18
Speaker 5
They wanted to, like, go to the US on H-1b visa. They're pretty anxious, and the American dream has been shattered. Then you have other section of people, the young students who think they are not bothered at all. They don't care about it when visas anymore because they think that there are enough opportunities in India. We have tech companies that they would like to work in India.
00:21:21:18 - 00:21:39:19
Speaker 5
And one of the student who told me, like he's discouraged to go to the United States because of the political violence, what's happening in United States. So you see these kind of reactions that you have one set of people who wanted to go to the United States for a masters post to M.Tech and then get on, on this H-1b visa to pursue American Dream work there.
00:21:39:24 - 00:21:58:14
Speaker 5
But then you have a section of people who said, we don't bother at all. There are other places where they would like to go. They want to like, you know, join, you know, Google companies, they have offices in Singapore, in London or like in Hong Kong. So they they're trying to diversify, like, rather than keeping an eye only for United States.
00:21:58:19 - 00:22:28:18
Speaker 5
So that's been the reaction. But one of the most depressing thing that I heard from the students, they had friends who are currently. Yeah. On F-1 visa. On student visa, they have paid like $100,000 for their masters. Now, because of this new fee hike, increased fee on an H-1b visa. Their dreams are like they're very anxious. They seem like we put so much of money, and the idea was to go to the United States, get into these colleges, pursue a masters in computer science, and work for these big companies.
00:22:28:20 - 00:22:42:22
Speaker 5
Now they feel they have to come back. And how do I mean those anxieties you have from the from these student? They're from select quite anxious about that. Those things that's what they've been telling me on the, on the campuses and other places as well.
00:22:42:24 - 00:23:01:08
Speaker 2
And Indians have a lot of role models to look up to in Silicon Valley, don't they? There are many, tech leaders who came originally from India to the US and have made a big contribution, and it seems as well that it's not just something that, you know, a kid in university, they decide, okay, I'm going to go for the US.
00:23:01:08 - 00:23:07:06
Speaker 2
It's, it's it can for some families be a dream that starts very, very young.
00:23:07:08 - 00:23:27:17
Speaker 5
Definitely. I completely agree. We have like, these, big companies like alphabet. It's headed from there. I use an Indian from it. We have certain Adeola another like, you know, who's heading Microsoft. He's from Hyderabad, south of the India, who graduated from an engineering college in South India. So they kind of like, you know, they are their role models.
00:23:27:17 - 00:23:49:04
Speaker 5
You go to it's they talk about these role models and they want to pursue the similar kind of path. And they thought the the way to going forward is graduate from Indian engineering colleges, go to the United States, get into these and take courses like in computer science, and then get on H-1b visas. That was their way to pursue the American dream.
00:23:49:06 - 00:24:14:22
Speaker 5
Now, like we see that anxiety kind of creeping up a I'm these students. They feel like that their dreams have been snatched, you know, with this new policy. So we see these anxieties like, of course you have families. They have put so much of money like imagine. Well, I'm giving you an example. When one of the student was sharing that, his friend went on this M.S. program in computer science in an American university.
00:24:14:24 - 00:24:37:09
Speaker 5
They took $70,000 loan. And if he doesn't get a job, imagine he has to come back and pay that loan. It might take years to, you know, you know, give it back to banks so that that's that human aspect is very important to kind of think it can have a devastating impact on those students or help put the money kind of for these degrees and to pursue these dreams.
00:24:37:11 - 00:24:43:00
Speaker 5
So that's the kind of huge story in India that they feel their American dream has been shattered.
00:24:43:02 - 00:25:06:05
Speaker 2
And this is a kind of complex, business relationship with U.S. businesses, in India, because there's a lot of American businesses who shifted large amounts of their back office functions to India. So like Target or Goldman Sachs or Victoria's Secret, even, big, big companies shifting more and more jobs to India. So you could think that actually some of these American companies.
00:25:06:05 - 00:25:33:21
Speaker 2
Right. So might say we won't spend this $100,000, we'll just shift the function to where the talent is in India. So my my question I'm getting to here is, do you think that this could end up having a positive effect for Indian businesses because they could keep the talent there? These global, capability centers that hire a lot of these people, could expand, hire some of this talent, or is it a net negative for India in general?
00:25:33:23 - 00:25:52:17
Speaker 5
So that's the optimism here right now. If you hear from experts, entrepreneurs here, some of them will actually be celebrating this, saying that it's a huge loss for the United States. And it's a big win for India. One, they will try to retain all the talent because Indians have been complaining for a long time that they had this massive brain drain.
00:25:52:19 - 00:26:12:23
Speaker 5
So all these talented, really talented engineers, they leave the country, go to the United States and like, build like, you know, these big companies now, what we the reaction that we saw, we saw these a lot of, you know, you know, startup founder founders kind of celebrating this. Trump did a really good job by kind of stopping H-1b visa.
00:26:13:00 - 00:26:30:20
Speaker 5
They're like hoping they would capitalize on this and they will try to retain these, talented engineers from India. And they would like to, you know, kind of, open more startups like, you know, because they believe they will come up with innovative ideas so that they can invest on that. So that's the hope in India right now.
00:26:30:20 - 00:26:52:19
Speaker 5
And of course, then other what you also mentioned, they're also believing that the American companies will shift to India, and there will be a scope that they might hire a lot of people here from India locally. So that's the obvious optimism that you hear from experts, you hear from entrepreneurs. So it's not kind of, kind of a very depressing, scenario, that phase.
00:26:52:19 - 00:26:57:08
Speaker 5
So one side is actually think it's a good thing or good news for them.
00:26:57:10 - 00:27:20:02
Speaker 1
You know, you mentioned some of these really moving stories of people who have invested so much time and money in this education with this one goal in mind of potentially moving to the US. And but I'm wondering if you can, braid some of these a little bit more in terms of what alternatives are people looking at besides the US now and what's attracting them?
00:27:20:02 - 00:27:31:19
Speaker 1
So I would imagine that possibly for some Indians, that this news is actually just the cherry on top of the Sunday when it comes to some of the branding of the United States within India.
00:27:31:21 - 00:27:51:01
Speaker 5
Well, after like, you know, speaking with these students, group of students who aspire usually to go on H-1b visa, they're not thinking of that was flying. So a group of students told me, like they would like to go to Canada. Is there one option they wanted to go to? Germany is another destination where they would like to pursue, you know, and already we have a reaction from, German ambassador here.
00:27:51:01 - 00:28:13:02
Speaker 5
He's saying we really welcome Indian, you know, Indian skilled labor. And they would like to, you know, employ them because they believe that they can give them the right opportunity. So we already have reactions coming from different countries. This thing, they these Indian students from these top engineering colleges with extraordinary abilities and talent, they can come and join them.
00:28:13:04 - 00:28:17:14
Speaker 5
So, that's the reaction we hear from the people right now.
00:28:17:16 - 00:28:33:03
Speaker 2
All right. Well, and what I wanted to say was, thank you so much for taking the time to speak to us about this. And good luck with the rest of your reporting. I know you're putting together a kind of a complex package for the news. So good luck with all of that. And you stayed up a bit late for us, today.
00:28:33:03 - 00:28:35:01
Speaker 2
So thank you very much for that. We really appreciate it.
00:28:35:01 - 00:28:36:01
Speaker 1
Thank you.
00:28:36:01 - 00:28:37:09
00:28:37:16 - 00:28:43:12
Speaker 2
So now, Cassandra, I'm going to put you in the hot seat, because one of the stories that you've been tracking this week is Argentina, right?
00:28:43:12 - 00:29:04:09
Speaker 1
Yeah. This is a country that I have to say, I knew it had been having a rough go of things economically, but when you get into some of these numbers, it becomes really clear how dire the economic situation is in Argentina right now. And it was a big reason that two years ago they elected this, outsider TV kind of personality.
00:29:04:09 - 00:29:12:18
Speaker 1
Sound familiar? To the presidency, right. Javier Melaye but and one big fan of his is US President Donald Trump.
00:29:12:20 - 00:29:28:18
Speaker 2
So, Trump has lent his support to Melaye and, in the past, but also as part of the the meeting on the sidelines of the UN General Assembly. So why is Trump getting involved with the Argentine economy and Melaye.
00:29:28:21 - 00:29:47:18
Speaker 1
So what happened just this week was that the US president met with his Argentine counterpart on the on the sidelines and in New York City of the United Nations General Assembly. And really, what this is about is about extending a lifeline to Argentina to help keep their economy afloat, Trump said. You know, we're going to help bail them out.
00:29:47:21 - 00:30:17:03
Speaker 1
We're going to help them. But I don't think they need a bailout of a little slip of the tongue there for me, because there has been so much help going towards Argentina. And the timing here is really interesting for both, actually, because the Argentine leader is really one of Trump's only allies in South America. I President Trump is not making a lot of friends there right now, and support for Melaye and his party have within Argentina domestically taken a hit recently because of the slumping, value of the peso.
00:30:17:03 - 00:30:38:06
Speaker 1
There's this idea that two years on, this really like there's this classic photo of Melaye, right where he's got this chainsaw and that's him, like cutting bureaucracy and spending right. But two years on, there's this idea that, okay, maybe it's not really working and this kind of, lack of support or weakening of support for Malay, is right before a midterm election, in October.
00:30:38:06 - 00:30:41:17
Speaker 1
So the timing here is not so good for for the Argentine president.
00:30:41:19 - 00:30:45:00
Speaker 2
Yeah. So it looked like he was getting some successes. And then.
00:30:45:00 - 00:30:45:12
Speaker 1
Right.
00:30:45:13 - 00:30:58:03
Speaker 2
With the peso recently. Right. He's had to change tact a bit. And that's why he's gone to to to Trump essentially by the sounds of it. Yeah. But what concrete support is the Trump government going to give Argentina.
00:30:58:03 - 00:31:19:09
Speaker 1
Yeah. So the details are still being worked out. But it all seems to be orbiting this $20 billion swap line with Argentina's central bank and the U.S.. Treasury Secretary Scott Person has said that the US stands ready to go with what is needed to support that country. And earlier this week, he laid out on, x we're not calling it Twitter any more.
00:31:19:15 - 00:31:43:08
Speaker 1
X this menu of options, right. He said that support could include but it's not limited to swap lines, direct currency purchases, and the purchases of U.S. dollar denominated government debt from the Treasurys Exchange Stabilization Fund. I'm going to underline that exchange stabilization fund for a moment. We'll come back to it. And he finished this long like multi post ex post tweet with Argentina.
00:31:43:08 - 00:32:03:23
Speaker 1
Will be great again. Right. And while this US offering of this kind of support of another country's currency that is pretty rare, there is precedent for it. And it was via this, the stabilization fund, this exchange stabilization fund that I mentioned earlier. And that happened under the Clinton administration when the Mexican peso was it was a little bit weaker.
00:32:03:23 - 00:32:08:14
Speaker 1
So all of this is connected. But yeah, that's that's what's happening right now.
00:32:08:14 - 00:32:21:12
Speaker 2
I mean, it could be partly because they're in ideological alignment, right? Because I think Trump, took inspiration from Melaye. And so, in fact, if you look at Elon Musk blast from the past, when he took former bro.
00:32:21:14 - 00:32:22:20
Speaker 1
This is the new bromance.
00:32:22:20 - 00:32:42:09
Speaker 2
Exactly. Because, Elon Musk was saying, well, if Melaye can take a chainsaw to, to public expenditure, then I'm going to do the same. I tried the same in the US and then, bumped into to Trump, of course. But this whole news around Melaye, it's it's also, you know, coming at the time of where the world Bank is, pushing forward.
00:32:42:09 - 00:32:55:10
Speaker 2
It's for $1 billion in, these private, public, investment investments that it was putting into Argentina. What signal is that sending that now that that world Bank is really pushing these?
00:32:55:10 - 00:33:28:24
Speaker 1
Yeah. So this $4 billion, pot of money is from a bigger pot of money that the world Bank had already approved, which was valued at $12 billion. And this part that is now being accelerated, that's supposed to help the sectors that need it most, things like mining, energy, tourism. But what jumped out to me when we start to think about support from the outside is just how much debt Argentina is carrying right now, not only from the world Bank, but also from, the IMF, the International Monetary Fund, the IMF number one country with credit outstanding is Argentina.
00:33:28:24 - 00:33:53:15
Speaker 1
And it's not even close. Argentina's got about $42 billion in debt. The next closest country, number two, is Ukraine, who is, of course at fighting an active war right now. And that's only about 10.5 billion. So what that should tell you is how much debt we're really talking about here. And I spoke to, a really interesting economist earlier this week, Alicia Garcia Herrera.
00:33:53:20 - 00:34:08:11
Speaker 1
She's currently with Natixis, but previously she covered Argentina, Argentina for the IMF. And what I asked her about all of this is what risk this poses to Argentina, specifically when we're talking about the IMF. And this is what she had to say.
00:34:08:11 - 00:35:26:22
00:35:27:02 - 00:35:31:22
Speaker 1
And if you want more from my interview with Alicia, you can find a link to that interview in the show notes.
00:35:31:22 - 00:35:48:23
Speaker 2
And it was a fantastic interview by the way. So check it out. Also on YouTube is where you could find the comment section. You know where that is. So underneath this video, if you're watching on YouTube, leave your comments and questions and we'll put them to the experts and our correspondents in our Question and Answers edition. That's every Tuesday.
00:35:49:01 - 00:35:58:00
Speaker 2
In our next episode, you'll hear us answering the questions. You'll hear the experts, the correspondents. So just leave them in the comments and we'll put it to them.
00:35:58:02 - 00:36:02:20
Speaker 1
So don't forget to check that out on Tuesday as well. Until then, thanks for joining the dip.
00:36:02:21 - 00:36:05:07
Speaker 2
That's the dip. Bye bye.