Can Kerala survive a Gulf crisis? – UKMALAYALEE

Can Kerala survive a Gulf crisis?

Friday 2 March 2018 2:47 AM UTC

By Jeevan Vipinachandran
It is a well-known fact that Kerala is hugely dependant on remittances from abroad to keep going. Is this sustainable in the face of rising political tensions in the Middle East?

Kerala has some of the best social indicators in India. Malnutrition is low and women’s rights in the state are among the most developed in the entire subcontinent.
The much vaunted Kerala model of development, long contrasted favourably with the Gujarat model in the run up to Narendra Modi’s rise to power in 2014 has a lot going for it. But it also has a major weakness, which Malayalee politicians are deeply reluctant to address.

An aversion to modern industry, particularly supported by those from the political Left has resulted in the state not having a modern industrial base. There is no manufacturing in Kerala, to the social and economic detriment of its people.
Although the central government is encouraging manufacturing across India, if Kerala does not take the lead and take action it will be at a huge disadvantage.
This has in turn left ‘God’s Own Country’ with a significant unemployment problem, with Malayalee youth often having to go abroad, to the Gulf especially to find work. This has proven to be something of a boon and a curse.

It is a boon because billions of dollars in investment flow in from the Gulf States, particularly in the form of remittances. It is also a curse because the entire system is based on a fragile base. As long as the Gulf was stable, Kerala’s politicians could afford to be optimistic.

For many decades, apart from occasional shenanigans by Saddam Hussein, it was indeed stable. Today however that is not the case and complacent Indian netas can no longer take it for granted that there will not be an economically devastating crisis with unpredictable consequences for Kerala and India.
Tensions between Iran, the Arab world and Israel are spiking. Consider just one possible scenario. An Israeli or Saudi strike on Iran causes Tehran to retaliate with its own strikes on the Arab Gulf states.
The UAE, home to nearly two million NRIs – many of whom are Malayalees – is suddenly at the frontlines. What used to be a beacon of stability and development is now a major crisis zone.
What would the main impact of this scenario be? Firstly the monthly remittances from the UAE and the Gulf region would stop. As if Kerala politicians did not have enough to think about, they would then have to cater for the return of millions of NRIs from the Gulf en masse.
They would also have to worry about the growing radicalism of some young Kerala Muslims by extremist ideologies coming from the Gulf.
How these Sunni radicals would respond to a major confrontation between the Sunni Arab states and Shi’ite Iran is unpredictable. They may launch attacks on Shia targets in India, for example.
Indian government and society as a whole are not known for their flexibility of approach and response.
It goes without saying that there would be big question marks over their ability to respond to such a crisis, both to cope with the sheer volume of people returning and the long term financial effects of losing all those remittances and investments.
It might be a good idea for the Kerala government to not only plan for the worst case contingencies but to try to create an alternative future for Malayalees to the Gulf States. Many important questions arise.

  • Is there a state or national long term strategy for the return of expatriate workers in the event of a crisis?
  • Is there a contingency plan for the arrival of expats in a major emergency?
  • What steps are in place to absorb and reintegrate the returning workers into the Kerala workforce?
  • Is there a long term plan to make Kerala more industrialised so youth won’t have to leave?

Now may be the time to think about investing in modern industry which can employ skilled, semi-skilled and manual labourers, without having to go abroad to find work. The alternative means falling behind a fast developing India.
Jeevan Vipinachandran is a political analyst and writer, specialising in political violence and counter-terrorism. He graduated from LSE with a Masters in Comparative Politics: Conflict Studies.
He has written for the Conservative Party, Future Foreign Policy and the Times of Israel. Regular updates can be found on Twitter on @jeevanvc  and Jeevan also blogs on business development and holistic lifestyle growth at

Leave a Reply

Your email address will not be published.