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June 19, 2000
The Rediff Business Special/George Iype
Lack of jobs in Gulf states hits Kerala's economy
Kerala's economy is in a state of unprecedented tumult. The petro-dollars are fast drying up. The Gulf nations are about to slam doors in the face of immigrant workers, allowing only a small trickle as opposed to the torrent they earlier accommodated. For those solely dependent on Gulf money, the dream is metamorphosing into a nightmare.
The Gulf-centric 'money order economy' of Kerala is in for a shake-up thanks to the tightening of emigration laws in Saudi Arabia where nearly one million fortune seekers from the state are presently engaged in a variety of professional, unskilled and semi-skilled jobs.
The Saudi government has announced that it will deport a large number of illegal Indian immigrants by July 3. Since a sizeable portion of the Indian immigrants overstaying in the oil kingdom is from Kerala, the state government and hundreds of families are worried that their passage back home will adversely affect the state's economy.
Officials said the state government's department for Non-Resident Keralites Affairs, or NORKA, is in touch with the Indian Embassy in Riyadh to find out how many Indians will actually be deported from Saudi Arabia by July 3.
"We have yet to receive the exact number of expatriates who be will sent back home. But we have been told that there are a large number of illegal expatriates from Kerala in Saudi Arabia who have been told to leave the country by July 3 or face punishment," a senior NORKA official told rediff.com.
He said that already the state is in a state of soci-economic turmoil as a thousands of Gulf-bound Keralites have been returning in the past few years due to various reasons. "If Saudi Arabia deports a large number of our workforce by July 3, it will add up to the rising social and economic pressures in the state," the official added.
Officials say many Keralites reach Saudi Arabia through a 35-day visiting visa, which the oil kingdom issues liberally every year to all to perform the Muslim rites of Umrah. But as soon as they reach Saudi Arabia, they go underground and start working as illegal immigrants by taking up odd jobs.
Though the Saudi government jails a large number of Umrah dodgers and sends them back every year, many Keralites are said to have been sent back this year because of the depleting employment opportunities in the Gulf states.
Countries like Saudi Arabia, Kuwait and the United Arab Emirates have been taking strict measures to increase the local workforce as the Gulf Cooperation Council estimated that the unemployment rate of the Gulf citizens will be 9.5 per cent by the year 2005.
But experts argue that deportation of a large number of illegal immigrants and the unprecedented return of Keralites due to plummeting job opportunities will speed up the end of the Gulf boom in God's Own Country, Kerala.
For years, Gulf countries have been the haven of hope and survival for millions of households across Kerala. But the unprecedented exodus of Malayalees from the Gulf countries has badly affected a people whose consumption pattern has largely been guided by Gulf remittances.
According to official statistics with NORKA, nearly 600,000 Indians managed to get jobs in the Gulf in 1997. In 1998, the figure dwindled to less than 2,00,000. Last year, it did not even touch the 1,50,000 mark.
But compare this with the official figures of the number of non-resident Indians who chucked their jobs or were chucked out of their jobs and returned home. Nearly 107,000 people returned in 1996, 127,000 in 1997 and 126,867 in 1998.
The increasing visa restrictions by the most sought after Indian destinations like Saudi Arabia and the United Arab Emirates, falling wages and 'Arabisation' are said to be the major reasons for the large-scale exodus of Keralites from the Gulf.
The Gulf-settled Indians these days are facing increasing survival threats. The largest chunk of Indians working in the Gulf is Keralites, at a staggering 2.6 million.
In the last decade, the unemployment rate in the oil kingdom has been skyrocketing even as 20,000 Saudis walked out of universities every year. Thus Saudi Arabia has launched an indigenisation move to employ its own nationals. The results: in 1993, some 7.3 million Saudi nationals were holding jobs. By May, 1999 some 9.5 million young Saudis were in the job market considerably diminishing the employment prospects of Indians.
Many believe it is not the indigenisation or the Arabisation move alone that is responsible for the exodus. The economic recession in the Gulf due to the oil price fluctuations is said to be one major reason that is forcing many Arab countries to impose additional wage cuts.
In 1998 and during the first six months of 1999, the price of oil in the global market had gone down by 25.7 mainly because of the recession in some South-East Asian countries. The fall in oil prices has compelled many Gulf nations reduce dependence on migrant workers and train their own workforce.
Economist Professor B A Prakash says the exodus of Gulf-settled Keralites has led to a recessionary trend in the state's economic life. "If return of the Kerala workforce in the Gulf countries increases, it will certainly lead to an economic depression in the state," he told rediff.com.
Adding to the misery of the Gulf returnees will be the unavailability of job and business opportunities in the industry-starved Kerala, said Prakash. "The industrial and agricultural scenes in Kerala are not very encouraging. So the exodus from the Gulf will lead the state to grave social and economic trouble because it has depended only on 'money order economy' for too long," he added.
But not all agree with the doomsday scenario. According to the Kerala State Planning Commission vice-chairman Dr I S Gulati, it is a wrong notion to spread that the state economy is dependent only on the NRI deposits from the Gulf.
"Kerala's agricultural economy is very vibrant compared to many other states. Moreover, the state government is planning to launch a series of schemes and projects for the welfare of the Gulf returnees," Gulati told rediff.com.
One of the projects that the government is considering seriously is the initiation of the Gulf returnees into the information technology sector. As per the programme, the government is planning to encourage the Gulf-returned youth to open cyber kiosks across the state with subsidised bank loans.
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