U.S. Suspends Controversial Outsourcing Training Program

Paul McDougall
Information Week

Funding stopped for USAID program that trained students in the Philippines to work in offshore, English language call centers serving U.S. companies.

The U.S. Agency for International Development has suspended funding for a program under which Filipino nationals were trained to work in offshore, English language call centers that serve U.S. companies. The program, first reported by InformationWeek, drew heavy criticism from lawmakers who said it posed a threat to American call center workers.

"In response to the concerns you have raised, the Agency is suspending its participation in the English language training project in Mindanao pending further review of the facts," said USAID deputy assistant administrator Barbara Feinstein, in a letter Monday to Congressman Tim Bishop (D-N.Y.). "Furthermore, the Agency has established a high-level taskforce to review these matters."

Bishop and fellow Congressman Walter Jones (R-N.C.) on Friday wrote to USAID administrator Rajiv Shah to complain about the program, known as JEEP (Job Enabling English Proficiency). JEEP used USAID funds to train students in the Philippines troubled Mindanao region, which has seen unrest by Muslim activists, to work in call centers and other industries.

Feinstein said JEEP was initially conceived as a way to help students in the region integrate into Filipino society. "The intent of the program is to enable these youth to make productive contributions to society, and to reduce alienation and marginalization that may make them vulnerable to the influence of terrorism and extremism."

But Bishop said that USAID needs to find ways to assist developing regions without compromising the jobs of U.S. call center workers, many of whom have lost employment after their jobs were outsourced to the Philippines. "We have foreign policy imperatives, we have international development imperatives. But our number one imperative has to be the protection and creation of jobs here in this country," Bishop said in an interview last week.

"We have a serious jobs deficit in this country and the fact that we would spend U.S. taxpayer dollars to prepare foreign nationals to take over jobs that can easily be done by Americans is shocking" he said. AT&T, Expedia, and JPMorgan Chase are among the U.S. companies to have outsourced call center operations to the Philippines. Bishop said more than 500,000 call center jobs have moved offshore in the past five years.

USAID terminated a similar program in Sri Lanka less than two years ago, following a report by InformationWeek.

JEEP is part of a larger USAID initiative in the Philippines, known as Growth and Equity in Mindanao (GEM), on which the agency is spending about $100 million per year, according to an audit last year by the USAID Office of Inspector General.

A JEEP document published by USAID notes that the program "is classroom based, and focuses on the specialized English skills required by employers in areas such as: nursing and allied healthcare; maritime services; travel and tourism services; business process outsourcing (BPO); and other areas of international employment."

There are about 23,000 Filipino students currently enrolled in the program, which requires 400 hours of training over two years.