No other Indian state is as devastated by the Gulf crisis as Kerala: About 50 lakh families in the state depend on the money that the migrants send home.

By Srinivasa Prasad

A recently-released, much-acclaimed Malayalam film Pathemari (dhow) portrays the travails of a man who takes a boat ride to the Gulf — it is set 50 years in the past — to make a living. Homesick, he later returns with a suitcase full of gifts for the family, but is forced to go back to make ends meet.

Even as the movie was running to full houses in Kerala and UAE in October-November 2015, many Malayalees began to pack up and return to Kerala, not with goodies for their dear ones but with pink slips.

A recession brought on by the oil price crash has been forcing companies in the Gulf to cut costs – and jobs. Some 60 lakh Indians work in West Asia, about a third of them from Kerala. There have been lay-offs since the second half of 2015 when the crude price dipped lower and lower. And by December 2015, when the price crashed to an 11-year low, the bad news turned worse.

No other Indian state is as devastated by the Gulf crisis as Kerala: Around 50 lakh families in the state depend on the money that the migrants send home. And Gulf remittances – besides tourism, sale of liquor and cash crops like rubber and spices — drive the state’s economy.

The precise number of Malayalees losing jobs there is hard to get. But reports trickling in from UAE, Saudi Arabia, Kuwait, Qatar, Oman and Bahrain indicate that the number is on the rise. Many who lost jobs are looking for alternatives wherever they are, even for less pay and reduced perks. Without waiting for pink slips, many Malayalees are scouting for opportunities in Kerala and elsewhere. Many have sent their families home, expecting to be made redundant soon. And head-hunting agencies in Kerala are reporting drastically reduced levels of recruitments.

Job losses in West Asia will mean reduced remittances to Kerala, which grew to approximately Rs 1 lakh crore last year, amounting to about a third of the state’s GDP. Reduced cash inflows can dampen the real estate and consumer durables market and so on in the state. And questions are once again being asked about the wisdom of a state excessively relying on migrants to keep its economy going.

That leads to the inevitable question: Why doesn’t Kerala have enough jobs? The inevitable answer: The CPM-led Left Democratic Front (LDF) and the Congress-led United Democratic Front (UDF), which take turns in ruling Kerala, are the obvious culprits.

Over the last few decades, the CPI(M)’s bizarre version of communism in Kerala and the Congress party’s own regressive policies together created an environment that was hostile to job-generating industries. This drove Malayalees to virtually every nook of India, West Asia and other parts of the world for employment; though some delude themselves by romanticising it as the Malayalee’s penchant for “wanderlust”.

Despite Kerala’s impressive Human Development Index, laudable performance in health and literacy and a per capita income that is more than the national average, the state’s unemployment rate is 7.4 percent. This is thrice the national level, and only Nagaland and Tripura have higher unemployment rates than Kerala, according to the state government’s Economic Survey released last week.

For Malayalees, the Gulf has been a favourite hunting ground for jobs. The Centre for Development Studies (CDS) estimates there are some 21 lakh people from Kerala working there. UAE and Saudi Arabia together employ about 65 percent of them. The state government’s Non-Resident Keralites Affairs (Norka) department says drivers, salesmen and nurses make up a third of the Malayalee workforce in West Asia. Other jobs they take up range from healthcare and engineering to plumbing and housekeeping. The CDS estimates that, on average, three people migrate overseas from every ten families in Kerala.

Now the recession has put not only white-collar Gulf jobs on the line but even the blue-collar ones. And it’s not just the oil companies, but even the construction sector, a big employer for expatriates, and other firms are laying off staff in a big way. Even marketing jobs are disappearing.

Malayalees’ migration to the Gulf had its origins in the 1930s when oil reserves were first discovered there. The relatively more educated Christians were among the first to get wind of the job opportunities there and grab them, though in small numbers. By the 1950s, large-scale commercial extraction of oil had begun and Muslims from north Kerala started to go there – illegally on Arab merchant vessels to begin with and by legal means later. About 40 percent of all emigrants are Muslims. They found jobs as mechanics, drivers, electricians, plumbers and masons. Then followed Hindus.

The trickle turned into an exodus in the 1970s when oil price peaked and Arab nations used their “petro wealth” to turn the desert’s sand dunes into buzzing cities, leading to a construction boom and a bonanza of jobs for expatriates. Many Malayalees, as did Indians from other states in smaller numbers, began to take up even white-collar jobs there.

But the “Gulf money” did nothing to boost Kerala’s economy the way it was expected to. It led to general lethargy among dependent families and stagnation of agriculture and industry. This was partly because the money was channelled in wrong directions, quite a bit of it being lavished on ostentatious living and gadgets.

A unique 1989 study by Prema Ann Kurien, an India-born professor of sociology at Maxwell School of Syracuse University at New York, said that the way migrants spent their money depended, among other things, on the “values” of their communities. Her study indicated that:

–“Status spending and public generosity” were common among all migrants.

–Muslim migrants tended to spend money on community and religious activities and offered high-interest loans back home.

–Backward Hindu caste Ezhavas were prone to gift-giving and entertaining.

–Christians, on the other hand, confined the gains of migration largely to their immediate families. They spent a little on religious causes but saved most of their money for their children.

But even if the migrants wanted to put their money in productive ventures, the state was anything but investor-friendly.

For some time now, warning bells have been ringing about a “remittance economy” – some called it a “money order economy” – not being a sustainable one. Its sustainability came into question when many Malayalees returned home during the Gulf War of 1990, when debt crisis hit Dubai in 2008 and when Saudi Arabia imposed job reservations for locals in 2011.

The CDS warned in its latest survey released five months ago that the situation this time could be different as the lower oil price regime could last a long time. “The obvious need for diversification (of education, employment, skill-training and policy options)...cannot be understated.”

The Economist said in a recent report on Kerala: “Some believe there might be a future in medical tourism: perhaps Gulf Arabs have become so accustomed to Keralites that they will travel to the state for treatment.”

So Kerala’s people are bracing for an economic disaster; but Kerala’s government is not. The ruling UDF and the opposition LDF are busy gearing up for the coming Assembly elections instead. And the BJP, busy fashioning itself into a “third force”, lacks leaders with economic acumen. If the BJP has an alternative economic agenda for Kerala, it has kept it as a secret.