Smart interviewing helps filter-out bad engineers. I don't know the situation in other countries. At my work (India), 3 days of back-to-back interviews typically yield one or two employable engineers. And our code is on-par with code from other branches of our MNC, as evidenced by global reviews and testing. The upper management sees this and steady increases our head-count.

It's as silly blaming "Indian" coders, as saying Indians are poor, don't eat cows, are Hindus, etc. We are a diverse lot. Perhaps more diverse than those in the west are used to, but that's how things are here.

One systemic problem I see in most companies that I have worked for is that the companies get structured to promote even those with about 5 years of work experience into management positions. That certainly isn't enough time to develop deep competence in some of the complicated technical fields. That's been changing slowly in the last few years though.