Kerala is a state that is heavily dependent on NRI remittances for its consumption expenditure, with 1.85 million emigrants sending home nearly Rs 24,525 crore in 2007 alone, according to a recent report by the Centre for Development Studies, Trivandrum. Kerala accounts for 19.4 per cent or almost a fifth of all remittances by NRIs. The report titled, “Global financial crises and Kerala economy: Impact and mitigation measures” was prepared at the behest of and submitted to the Kerala government in December 2008. According to the report, most Keralite emigrants work in one of the seven Gulf countries.
Among the Gulf countries they are concentrated in Saudia Arabia and UAE. The recent reduction in oil prices have led to correspondingly lower investments and many Keralites are already sending their families back to India.
It also points to the declining deposits in non-resident accounts in Kerala as an indicator of declining fortunes of Kerala’s emigrants in the Gulf. “Deposits into non-resident accounts in Kerala have come down from Rs 33,303 crore in March 2007 to Rs 29,889 crore in March 2008 - a decline of Rs 3,414 crore in just one year.” Kris from Kerala, who does not wish to reveal his full name, is an advertisement sales executive in Abu Dhabi. His work revolves around the real estate sector and of late the fortunes of the sector have not been good. Dubai and Abu Dhabi have been focussing on building economies that are not dependent on oil. To achieve this they have invested heavily in infrastructure and real estate.
“In the Middle-East, Dubai is the worst hit. Mainly the real estate sector is hit badly and it has caused ripple effects in other dependant industries. Delayed payments to vendors and suppliers of the real estate companies is causing problems,” says Kris. His own work has been affected, as there are not many advertisers for real estate projects. His own income, which depends in part upon the commissions he receives for getting advertisements, has started declining and now he fear for his job. “If you ask me how NRIs are affected, I would say many of them were laid off or paid less salary in 2008. I was in Singapore for last seven years and recently moved to Abu Dhabi. Recently I came to know that two of my buddies in Singapore lost their jobs. You can feel the heat when people close to you lose their jobs. The kind of hardships their families had to undergo, it is really hard. It is a very different feeling from reading that 1000 people lost job in the US. You do not know those people, so you just feel bad for few minutes. But when it happens to someone close there is a great sense of insecurity,” he says.
Many unskilled labourers are employed in the construction industry and a number of them are being sent back as projects come to a standstill and there are no takers for existing projects, according to Kris, “The fact is that a few very famous and big real estate companies have completed building houses, but there are no buyers. So, they offer the “Rent-To-Own” scheme, where you stay for rent for a year, and then if you wish after one year you can purchase the house. The one-year rental already paid will be taken as down payment. This is the kind of state the real estate sector is in Dubai.” The only hope of many of these workers is to wait out the recession and hope that oil prices go up, while their relatives in India fight the government for lower fuel prices.
