Kerala's economy is dependent on the money sent by Malayalis working abroad. In 2016, Kerala received Rs 63,289 crore from its expatriates, a 11% drop from 2014 when remittances stood at Rs 71,142 crore: Representative ImageExpatriates from Kerala have played a key role in improving the financial health of the state. Beginning with Sri Lanka, Malaysia and Singapore they reached Africa to send money back home. Later, the next generation found the Gulf countries greener.
Today, expatriates working in the Gulf countries form a big part of the Malayali diaspora who propel the economy of Kerala. Hence, we have a lot to worry when expatriates return from several foreign countries due to changes in labour laws in those nations.
Remittances
The World Bank last week released its data on remittances, with India once again topping the list. The Indian diaspora sent back $68.96 billion in 2017, and China came second with $63.86 billion. In total, global remittances touched $613 billion last year, with India getting 11% of it, followed by China ($64 billion), the Philippines ($33 billion), Mexico ($31 billion), Nigeria ($22 billion), Egypt ($20 billion), Pakistan ($20 billion), Vietnam ($14 billion), Bangladesh ($13 billion) and Indonesia ($9 billion).
The influx
The country's foreign reserves saw an inflow of $68.96 billion (Rs 4.48 lakh crore) last year. This formed 25% of the last fiscal's revenue generation. Until 2014, remittances into India were increasing every year. But after that, there was a big drop in remittances in the next two years. However, remittances went up once again last year.
India got the highest remittance in 2014 -- $70.39 billion. However, since the value of Indian rupee has gone down, in rupee terms, India got the highest remittances last year. In 2014, the average exchange rate of the US dollar was Rs 61, which now stands above Rs 65.
Expat Indians
According to latest data, 1.64 crore Indians work and live abroad. Though they form just 1.5% of the total population, they are the backbone of the entire economy of the country, with their annual contribution forming 4% of the gross domestic product (GDP).
The number of Indians going abroad in search of jobs is increasing every year. If there were 1,13,60,823 expatriate Indians in 2010, the figure stood at 1,64,44,830 in 2017, a 46% growth in seven years. India is on top of the list of nations with most immigrants. After India, the other countries in the top 10 include Mexico (12 million), Russia (11 million), China (10 million), Bangladesh (7.8 million), Pakistan (6.1 million), Ukraine (6 million), the Philippines (6 million) and Afghanistan (5.1 million).
Kerala's backbone
Kerala's economy is dependent on the money sent by Malayalis working abroad. In 2016, Kerala received Rs 63,289 crore from its expatriates, a 11% drop from 2014 when remittances stood at Rs 71,142 crore. This forms 15% of Kerala's GDP. The role of immigration in turning Kerala into a consumer state is indisputable. The service sector too thrives on remittances. Does Kerala have the wherewithal to constructively use the huge fund that it gets every year from its diaspora? How much of this fund is utilised for the growth of the state? Kerala society expects an answer to these questions from authorities.
The state was able to manage the after-effects of the collapse of the agriculture sector with the help of remittances. Migrant labourers too are thriving in Kerala because of this funds flow. Twenty-five thousand migrant labourers from other states are working in Kerala and they send home Rs 17,000 crore.
The immigration to Gulf countries became rampant since 1960 following the discovery of oil. Today, 89% of Kerala diaspora is working in the Gulf countries. Malayalis still yearn to go to Europe, the US, Canada, Australia and other countries. According to latest data, 22.46 lakh Malayalis are living in foreign countries. In the UAE itself there are nine lakh Malayalis; in Saudi Arabia the figure is 5.37 lakh.
The returning expats
Of late, the number of expatriates returning to Kerala for good has increased considerably due to increasing localisation in the Middle East and economic instability across the world. The Gulf countries are yet to fully recover from the crash of 2008. Expatriates are also affected by the drop in oil prices, the lacklustre construction sector and localisation. Stricter norms for appointing nurses and other careers have also cast a shadow on the hopes of Keralites.
In 1998, 7.4 lakh expatriates returned to Kerala. In 2003, the figure stood at 8.9 lakh, in 2008 it was 11.6 lakh, in 2011 11.5 lakh, and in 2014 12.5 lakh. In 2016, the number of expatriates dropped by 1.54 lakh than two years ago. While we had 24 lakh expatriates in 2014, by 2016 it came down to 22.46 lakh. Economists believe that when new data arrive, the figure could go down further. The income too dropped to the tune of Rs 7,800 crore during this period.
It is difficult to completely rely on Census and other surveys conduction by establishments like National Sample Survey Organisation on expatriate Malayalis. The Kerala Migration Survey conducted by the Centre for Development Studies since 1998 provides authentic data on Malayali migration. But the truth is that no significant research is conducted in this field. In the next five years, Kerala needs to get remittances of above Rs 1 lakh crore to go-ahead with its development plans. Keralites need to find new immigration destinations other than the Gulf countries.
