Is Eastern Europe the new Asia

In a recent study done by Aeo Hewitt shows that India’s 11.7 percent salary rise in 2010 has outpaced all the other Asia Pacific countries and this high increase rate is going to continue over the next few years.  Together with the India governmental proposal to force companies of a certain size to use 2% of their profits in philanthropic activities this new development could mean a halt or at least a slowdown in the country ability to compete.

While general entry level salaries in Europe and North America have experienced a virtually stop in its growth is the story much different in India. With two digit increases across the board the gap between producing countries and consuming countries have seen a significant decline.  While India is leading the pack there is a general trend in Asia that salaries have increased significantly even when other parts of the world have seen stagnation.

 

It will be interesting to see how this change will impact supply chains across the globe. For Europe it will be more natural and properly cheaper to produce in Eastern Europe and the truck our consumer goods across land. The educational level is relative high and there is a very high unemployment rate especially among young people so if they can get their Governance and corruption issues under control they will have all the opportunities in the world to be the next Asian tiger.

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