Monday, February 16, 2009

Gulf slowdown sets alarm bells ringing in Kerala


AS people who have lost their jobs in the Gulf states are trickling in, about two million Kerala families whose breadwinners work in that region are wondering what the future holds for them.

Since the oil boom started transforming the region's economy more than three decades ago, it has been the dream destination of the state's job-seekers. It is there that nearly 60 per cent of 3.35 million Keralites, who left home seeking means of livelihood, found employment.

According to media reports, 100 to 150 persons are returning jobless from the Gulf region each week. This is a small number, but there is reason to worry as the outlook for the immediate future is not rosy.

Observers of Gulf developments are of the view that there may be a steep rise in loss of Gulf jobs as the year 2009 progresses. The International Monetary Fund's forecast that plummeting oil prices will bring down the region's economic growth rate, which stood at 6.8 per cent last year, to 3.5 per cent this year reinforces local fears.

India is today the largest beneficiary of expatriate remittances. The Gulf region accounts for only about a quarter of the country's remittance income. However, remittances from the region are the mainstay of Kerala's economy. Ninety per cent of all Keralites working abroad are in this region.

Experts do not share the anxieties of expatriates' families. "There is no cause for worry," says an economist. "There is nothing to indicate that the Gulf job market is shrinking. All Gulf-bound flights from Kerala are going full."

According to Gulf-watchers, while employment opportunities are dwindling in some sectors, other sectors are still attracting job-seekers. They point out that all Gulf states are not equally affected by the economic slowdown. There are also noticeable differences in the way the different countries are responding to the situation. While Kuwait has said it will cut spending by 36 per cent this year, the United Arab Emirates (UAE) has announced plans to increase public spending by as much as 42 per cent. UAE and Saudi Arabia are the countries with the largest number of Keralites.

In the last few years, the state has been witnessing return migration simultaneously with outward migration. According to official sources, about 890,000 non-resident Keralites returned home last year. There was, however, no fall in remittances. This was partly due to the continued outward migration and partly due to the rise in the value of the Gulf currencies in relation to the rupee.

Return migration figures for 2008 are yet to be compiled. However, officials are the view that more people might have returned than in the previous year.

Apparently the phenomenon of outward migration offsetting the effects of return migration still continues. If some people are losing jobs and returning home from the Gulf, others are finding jobs and going there. This, of course, is poor consolation for the families of those who have lost jobs or stand in risk of losing them. They are waiting to see if the central budget, to be presented on Monday and the state budget, to be presented on Friday, will offer them any relief.

Both the centre and the state initiated steps last year to create institutional mechanisms to help migrants returning from abroad. However, these mechanisms are yet to become functional.

Under the central scheme, the Ministry of Overseas Indian Affairs has set up an Indian Community Welfare Fund, which will allocate money to Indian missions to help workers who have gone abroad after obtaining emigration clearance. Obviously the scope of the scheme is extremely limited.

In last year's budget, Kerala Finance Minister TM Thomas Isaac made a provision of Rs30 million to set up an NRK welfare fund. The state assembly later enacted legislation to create the fund, designed to assist not only those working abroad but also those employed in other states of India.

The law envisages a voluntary scheme which NRKs can join. The monthly subscription will be Rs300 for a person working abroad and Rs100 for one working in other parts of India.
A person who has been member for a minimum period of five years will be entitled to a pension after attaining the age of 60. If the member dies before that age, the family will get the pension.

Unless developments in the ruling party force a change in his plans, Chief Minister VS Achuthanandan is expected to visit Dubai shortly to launch a drive to collect funds under the scheme. –Gulf Today, Sharjah, February 16, 2009.

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