Actually, here's how I'd put it. If you are not competitive (in your terms, drive down the salary) OR produce something great at prices others can. Then jobs and companies will go overseas. Not only will there be jobs will lower salaries but there will be fewer jobs, period. Now that will be problem for entire country.

Having more programmers will not be a problem for the country, they will only be a problem to those who want to maintain their salaries turning their eyes away from reality of globalization.