A model problemhttps://indianexpress.com/article/opinion/editorials/a-model-problem-gulf-kerala-migrants-5632805/

A model problem

Fall in emigration, and reverse migration from the Gulf, challenge Kerala’s welfare model. The state must find a way

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The rising dollar-rupee exchange rate has prevented a fall in foreign remittances to Kerala, but the return of a large number of migrants, many of them blue collar workers, could squeeze employment and impact consumption and retail trade.

Migration trends indicate that the Gulf, which had long funded the Kerala development story, may soon turn out to be a headache if not a nightmare. Economic slowdown in the Gulf countries, state policies favouring replacement of migrants with local labour, influx of workers from Africa and countries such as the Philippines, are forcing a reverse migration that has serious repercussions for Kerala’s economy and society.

Fortunately, the rising dollar-rupee exchange rate has prevented a fall in foreign remittances to Kerala, but the return of a large number of migrants, many of them blue collar workers, could squeeze employment and impact consumption and retail trade.

According to the Kerala Migration Survey, 2018, by the Centre for Development Studies, Thiruvananthapuram, overall migration from the state has been showing a negative trend in the last five years. In fact, over the past decade, the number of people migrating to the Gulf has fallen (it stands at 1.89 million in 2018, down from 1.94 million in 2008 after peaking at 20.7 million in 2013) whereas the number of reverse migrants has gone up in the same period. The prolonged slowdown in the Gulf economies since 2008 and visions of a post-oil economy influenced many of these countries to embark on policies such as Nitaqat in Saudi Arabia, which encouraged employment of local labour over migrants.

The welfare society built by the Kerala model of development and higher wages, both partly facilitated by remittances, has also worked against migration: Higher wages have turned Kerala labour non-competitive in the Gulf countries and demographic changes, especially population reduction in the migration prone age-group, militate against migration. The state government realises the implications of this trend and has been introducing policies to cushion the impact of the reverse migration.

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The state budget in February has proposed new pension, savings and loan schemes for expatriates. Loans, technical advice to start businesses, have been offered to integrate the returning migrants in the local economy. It is too early to say if these steps are sufficient to address the looming crisis.

For instance, nearly a quarter of the households in Kerala have a migrant — and 90 per cent of migrants from the state are in Gulf countries — who sends money home. Any large-scale change in the numbers are sure to influence spending patterns at home, and thereby, Kerala’s service economy.

Kerala’s outward migration has co-existed with inward migration of labour from northern and eastern India. Studies indicate that nearly 2.5 million migrants, mainly from West Bengal, Odisha, UP, Bihar, are a part of the workforce in Kerala, mostly doing relatively low-paying jobs. Kerala’s way out of the reverse migration crisis may hinge on the economy expanding to absorb the returnees in the workforce and for the low-skilled among them to compete with the non-Malayali internal migrants.