There was a social media advisory sent out by a Gulf-based organisation recently targeting the families of non-resident Keralite workers based in the Gulf countries.
It was against the backdrop of the creeping economic slowdown in India.
What was the advisory?
The highlights of advisory - Drop the plan to buy a new car. Avoid eating out. Only buy things you absolutely need. Make do with public transport. Go to government hospitals.
Another advice on the list was that those who were employed in the Gulf should never give up their jobs, even if they didn’t get paid on time.
This advice was given stating that there are not many jobs to go around back home because of the economic slowdown.
The advisory was interesting for two reasons:
A fact that the diaspora community had sensed, ahead of most people in India, that a slowdown in the Indian economy was imminent.
The delayed realisation that non-resident Keralite families must curb certain consumerist habits that were a result of the massive amounts of remittance money they were receiving.
How Kerala is a Consumerist economy?
Roughly a tenth of Kerala’s population works abroad — a huge majority of them in the Gulf countries.
For decades, Kerala’s economy is a consumerist one that has been propped up by the massive remittances from non-resident Keralites.
An estimate says that non-resident Keralites pump close to ₹200 crore daily into the State.
Kerala gets roughly a fifth of all NRI remittances to India.
What is the impact of remittance money?
For all its natural resources, impressive literacy and highly evolved State welfare system, Kerala produces very little of its daily needs.
Manufacturing and Agriculture contributes less than 10% and a little above 10% to the State’s GDP.
The unemployment rate is very high.
Yet, Kerala’s per capita income is above the national average.
Modern mansions can be seen dotting both sides of the road across many parts of Kerala.
High-end cars and boutique jewellers’ shops are also common. These are because of remittance money.
Ever since the labour migration to the Gulf started in the 1960s, enormous sums of money have flowed into Kerala.
Estimate - Since the beginning of the 21st century, some ₹10 trillion has arrived in the State, including from the UAE, Saudi Arabia, Kuwait, Qatar, and Oman.
But almost all this money has gone into consumption and unproductive investments in land, real estate and gold.
There are many reasons for this, including systemic rigidities, trade union overkill, lack of imaginative investment avenues, and the absence of a visionary policy framework.
Is the advisory right?
The social media advisory might have appeared counterintuitive.
Macroeconomists say that curtailing consumption will accelerate the slowdown.
However, Kerala has enough mansions, cars and jewellery to last another generation.
It lacks jobs for residents of the State who are unemployed and for non-resident ones who cyclically lose their Gulf jobs and are forced to return home.
The non-resident Keralites should put their hard-earned money into productive ventures.
If they had invested 1% of the massive amount they pumped into Kerala over the past two decades in job-generating ventures, the next generation would have been spared the need to hunt for jobs in the Gulf.
