Kerala feels the pinch as slowdown hits Gulf jobs

The southern state of Kerala is drifting towards economic turmoil as the global slowdown begins to affect expatriate remittances from Gulf countries.

 

Over the past nearly four decades, the state's economy was bring driven by petrodollars.

 

Two indications of the prosperity that the Gulf connection brought were palatial houses dotting even villages and an ever-growing balance in the non-resident Indian (NRI) bank accounts.

 

That party seems to be getting over, with job losses being reported from the Gulf countries in significant numbers.

 

Recruitment firms are telling Gulf job aspirants that the Gulf dream is on hold, if not over.

 

Says Josy (not his real name), who was all set to go to the Gulf this month as a restaurant waiter: "The recruitment firm has told me to wait a few more months as the employer in the UAE is unsure of business picking up immediately. In any case, I am also reconsidering the offer because the salary was too low."

 

The numbers of those returning home after job losses are yet to be officially ascertained but at least two clear signals point to something having gone wrong: a slump in the property market that was always patronised by people employed in the Gulf and a high rate of inquiry for school admissions for the next academic year.

 

Official figures on these will take some time coming, but as the word about job losses in the Gulf is spreading, Gulf-based prospective bridegrooms are no more in the highly-sought after bracket.

 

According to a senior executive in a construction firm here, whose company has operations in the Gulf and Kerala, the meltdown in the construction sector in the two markets has delivered a telling blow to the state.

 

"Large-scale recruitment for construction projects in the Gulf has stopped altogether and there has been a clear drop in the value of assets in Kerala in which Gulf Malayalis [people from Kerala] have invested," he says.

 

While the numbers of those returning are yet to be confirmed, banking statistics point to a slackening of funds in non-resident accounts.

 

Outstanding balances in NRI accounts in Kerala banks were lower at Rs316 billion (Dh26.3 billion) at the end of September 2008 as against Rs319 billion at the end of June 2008.

 

Banking circles feel that the December 2008 figures could be still lower, considering job losses in the Gulf.

 

What is worse for Kerala is the fact that the souring of the Gulf dream is coinciding with economic problems at home, caused by the global slowdown.

 

Kerala's exports in different sectors from seafood to coir products have been hit and its tourism industry is also affected by the economic crisis.

 

Late last year, state finance minister Thomas Isaac warned that the global meltdown had affected Kerala in different ways and that the state could witness job losses to the tune of 150,000 in the traditional sectors alone.

 

That figure, now seems set to swell by unemployed Keralites returning from the Gulf states.