Gulf dreams turn nightmare: remittance-fuelled model in jeopardy

Written by M Sarita Varma | Thiruvananthapuram | Updated: Mar 1 2009, 06:30am hrs
Madhavan Sureshkumar, shouldering the responsibility of his sisters wedding in Vilappilsala, a village near Keralas capital Thiruvananthapuram, had prepared his kin that his Dubai-based employer may not spare him leaves to attend the function. So, surprise did not bloom to broad smiles in January, when the brother busybody-in-Gulf turned up to bless the couple. Sureshkumar, a 39-year old who always lacked time to get married, can now heartily look for a bride willing to partner a jobless Gulf returnee. With the global slowdown knocking on the doors, his Arab boss, a consumer durables dealer, was only too quick to grab the leave request opportunity to give the assistant manager a goodbye from the deserted Flat TV sales floor.

My only comfort is the reasonable pile of earnings from 19 years in assorted jobs in Gulf. But many friends, who came recently for construction jobs and were laid off, are in trouble, says Sureshkumar. Matchmakers, earlier queuing up to offer Sureshkumar a bride, now seem to have vanished into thin air.

Sureshkumars case is not a sporadic one. His story is becoming common as the heat of recession is spreading all over the world, including Gulf countries.

Today, there is no more gloating over 15 lakh-odd expats carving out a new Kerala like what Chinese expats in Hong Kong did in terms of development in their home country. Instead, there is fear that with oil prices crashing to $35 per barrel, cash flows for construction projects in Gulf will dry up.

Eventually, manpower exports could amount to import of distress, according to Economic Review-2008, brought out by Kerala State Planning Board. The board, headed by JNU professor Prabhat Patnaik, says the situation in Gulf will dry up the remittance inflows and accelerate reverse migration.

Even an estimate by Kerala Manpower Exporters Association puts the returnee dimension in next few months to five lakh workers.

The remittances-fuelled Kerala development model, which was once a much-debated subject at many United Nations development forums, is in jeopardy today. The state, which once contributed Rs 35,000-crore, almost half of Indias remittances, and where one in every five household has a close relative working abroad, is gearing up to face the situation.

Kerala finance minister TM Thomas Isaac, whose kin are spread around the globe, is all eyes on the return-stream of migrants, in more ways than one. The state government has fenced up a Rs 100-crore corpus through its industrial credit outfit to walk those displaced from Gulf jobs up the homeward entrepreneur path.

One, the speeding remittances could take a sudden brake, after a time-lag. Two, the demand shrink on the state economy due to the collapse in Gulf money-led consumption appetite is a challenge, says Isaac.

However, Centre for Development Studies (CDS), which is coming out with a report next week, suggests that the `exodus is overstated. The Arabian nightmare is probably one that isnt, says S Irudayarajan, head, migration research, CDS, Thiruvananthapuram. The financial crisis in Gulf could even out in about six months, if you look at the previous history of such Gulf meltdowns, he adds.

After a survey among 15,000 households at 300 locations in Kerala between June and December 2008, CDS projects that from an annual reverse migration of six lakh in 1993 and eight lakh in 2008, the reverse migration in 2009 could end up at nine lakh, which is dubbed `moderate.

A moderate rate of reverse migration is healthy for any labour-short economy, says Irudayarajan. Kerala had also been running scarce of able-bodied youth for manning her paddy fields, pepper vines and cardomom hills, because of the opportunity-window in six Gulf countries.

A scribe, employed in a West Asian newspaper says on condition of anonymity, that unskilled workers are fast falling out of work in Gulf shores, since big construction projects have petered out. Sea-reclamation projects in Dubai is held in abeyance and as many as 1,000 Indian village divers working on the Dubais sea-reclamation projects are already back, cooling their heels at the fishing village in Shaktikulangara, near the Kollam town.

A spurt in admission inquiries in schools in Kerala does indicate the anxiety of middle-class breadwinners to send their families back home to safety. The unprecedented avalanche of Gulf remittances to Kerala banks in recent times could also be indicative of the fear psychosis . SLBC statistics point to NRI deposits in Kerala banks fermenting to Rs 35,000 crore, up by Rs 6,000 crore, over March 2008. The CDS study projects that this will touch Rs 38,492 by 2009-end.

Reverse migration

Economic Review-2008 says manpower exports could amount to import of distress

CDS projects that the reverse migration in 2009 could end up at nine lakh

1,000 Kerala village divers working on Dubais sea-reclamation projects are already back

The Dubai govt had been gradually tightening immigration laws and thinning down salaries