labels: economy - general
Iraq war affects Kerala’s economy the most; thousands return news
Nisha Das
12 April 2003

Thiruvananthapuram: The US-led war against Iraq has sent distress signals to the economy of Kerala, which relies heavily on remittances from its people in the Gulf. Kerala’s reliance on Gulf remittances is so heavy that funds from non-resident Keralites (NRKs) account for half the deposits in commercial banks in the state.

According to State Level Bankers’ Committee figures, out of the total deposits of Rs 56,093 crore in the banks, NRK funds stood at Rs 27,467 crore in the third quarter of 2002-03. Experts fear that the prolonged war would have a chain reaction on the state’s economy as it did in 1991.

State government officials say after the war broke out in Iraq, exports from the state to the Persian Gulf countries have dwindled, tourist inflow from the Gulf countries have come down and new job prospects have been put on hold.

“Export orders for items such as seafood and vegetables from Kerala to various Gulf countries have come down because of the war. The prolonged war will surely put Kerala to hardship,” says N K Bubesh Babau, an exporter.

Fearing that the long drawn-out war in Iraq would adversely affect the state’s economy, the Kerala government is drawing up a contingency plan to deal with a crisis situation that could erupt.

Last week Kerala Chief Minister A K Antony went to New Delhi especially to discuss and apprise Prime Minister A B Vajpayee and other central ministers about the adverse impact that the Iraq war would have on Kerala. In his meetings with union government ministers and officials, Antony said Kerala’s economy would suffer badly if the war in Iraq is prolonged.

“Already, there are lakhs of Keralites who have come back from the Gulf over the years. Most of them are jobless here. The Iraq war would impact employment prospects from the state and affect the exports from Kerala. We want the central government to help the state in the event of a long-drawn war,” says Antony.

Manpower recruitment agencies in Mumbai say many interviews for new jobs in Kuwait and Saudi Arabia have been put on hold. “We were supposed to have cleared the job appointments of nearly 100 people this week for various companies in Kuwait and Saudi Arabia. But all job recruitments have been frozen due to the war,” says an official with Santhosh Agencies, a Mumbai-based consulting firm.

Similarly, leading hotel chains in Kerala have reported that tourist bookings from the Gulf countries have come down due to the war. “In times of war, no one wants to travel overseas for holidays. We have got cancellations of at least a dozen bookings from the Gulf in the past one week,” says the manager of a leading tourism resort chain in Munnar.

The increasing number of expatriates returning to Kerala from the Gulf has alarmed the state government. In the last one decade, nearly 800,000 people from various Gulf countries returned to settle down in the cash-strapped Kerala. But the government has not been able to do anything so far to rehabilitate these returnees.


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Iraq war affects Kerala’s economy the most; thousands return