Investors Own Country

Updated: Jan 21 2003, 05:30am hrs
The Kerala government has organised a Global Investor Meet (GIM), designed to persuade domestic and foreign investors to venture into Gods Own Country, a country that ideology, labour militancy and an unfavourable business environment have ensured they stay away from. Had that not been the case, with its head-start in social sectors, Kerala would have been far ahead of other southern states like Tamilnadu, Karnataka or Andhra Pradesh (AP) and the Kerala model of development would have encompassed more than literacy. Yet, Keralas economy cannot be built on remittances alone and the recent success in marketing tourism illustrates that favourable government policies and a facilitating environment can yield dividends, especially if there is some hard-sell. National Geographic identified Kerala as one of the 50 global tourist hot spots, not to forget Indias first privatised airport in Kochi. Keralas economy hasnt done that badly in the nineties and it is one of the states where growth in state domestic product accelerated compared to the eighties, up from an average of 2 per cent to an average of 5.7 per cent. This increase cuts across agriculture, industry and services. While the tourism initiative is some years old, the A K Antony governments recent attempts (broadly in the administrative reforms area) have often not received the attention they deserve, compared to relative hype about Karnataka or AP. The GIM in Kochi helps to correct this and Memoranda of Understanding worth Rs 7,000 crore were signed, including several infotech (IT) projects for Kochi.

This change in perceptions about Kerala is also reflected in a survey administered by this paper to GIM participants. Eighty six per cent perceived Kerala to be a good investment decision, 82 per cent were likely to invest in Kerala and 84 per cent rated the Antony governments approach to private investments as good. However, the sectoral composition indicates that caveats are in order. Survey respondents identified IT and tourism, reservations about conventional manufacturing due to inadequate infrastructure and perceptions of labour militancy. Barring food processing, zinc, edible oils and rubber, signed MoUs also reflect this IT and service sector focus, with marked preference for education, tourism and medical services in the latter. Keralas rehabilitation as Manufacturers Own Country will take some more doing and this is essential if the problem of educated unemployment is to be addressed. And there is a further caveat in differences between MOUs or approvals and actual inflows. It is indeed welcome that differences across political parties were buried for GIM, and one hopes this political economy message continues beyond the meet, particularly when liberalisation extends to sectors other than administrative reforms. The North versus South dichotomy in the context of state-level reform has been commented upon and will be further strengthened, now that Kerala joins the Karnataka, Tamilnadu and AP league. There is a moral in this for the other two Left bastions of West Bengal and Tripura.