Kerala and the Gulf
This is a collection of articles archived for the excellence of their content.
As in 2019
The irony is inescapable. In the not-so-distant past, bank managers used to go out of their way to woo expatriates for investments when they were home on holiday, but now expats, back home permanently, are queuing up at financial institutions across Kerala, desperately seeking loans to set up small businesses, a tailoring unit, tea stall. Anything.
In Malappuram district, which has the highest migrant population (4.06 lakh) in the state and where four out of 10 households have a migrant, Gulf returnees line up daily in front of the office of Kerala State Pravasi Welfare Development Co-operative Society Ltd (KSPWDCS) at Up Hill seeking loans. The business proposals themselves aren’t especially innovative – they range from poultry and beauty salons to dairy farms and bakeries. Gulf returnees are seeking funds under a government-sponsored self-employment scheme.
A P Khader Ali, now a poultry farmer, returned from Saudi Arabia because new regulations made it difficult to renew his visa
Kerala’s six-decade-old Gulf dream is fading, and fading fast. The Kerala Migration Survey (KMS) 2018 conducted by Centre for Development Studies (CDS), Thiruvananthapuram, shows a reduction of 2.78 lakh emigrants during the five-year period from 2013-18. "Nowadays we get around 100 loan applications each month from Gulf returnees desperate to secure a livelihood back home. The total fund of Rs 5 crore allotted to us under the NDPREM scheme got exhausted in February itself," said Pratheesh Mullakkara, secretary of KSPWDCS, which has 15,000 members.
Patheesh revealed that "unfortunately" only a fraction of the project proposals submitted by the returnees for self-employment loans are viable and have any chances of getting approved. "Many are not aware of market conditions in Kerala and come up with a project just because some other returnee attempted it. So, we get a large number of applications for opening poultry farms, dairy projects and bakeries.”
Sajeer Cholakkal's photography business in Saudi Arabia was badly hit by the oil slump in 2015. Back home, Cholakkal has started a Pravasi Sahaya Kendram, an e-services centre
One of the loan applicants, V M Nandakumar, has approached the society hoping to set up a soft drinks kiosk. He had to return from the Gulf two years back after the small construction company he and three others ran in Oman wound up after nationalisation norms mandated appointment of two Omanis in the firm. “We could not afford paying salaries to Omani staff from our narrow margins. After returning home I started taking up small-scale construction work. But the local economy which is also dependent on Gulf remittances is severely hit. Life has got really tough for Gulf returnees like me,” Nandakumar said.
The return of the expats is mainly attributed to nationalisation programmes by many Gulf countries, economic recession caused by oil price slump in 2015 and rise in living costs there. According to the 2018 survey, as many as 29.4% expats who have returned did so following job loss or lay-offs, while 14% have come back due to health problems.
S Irudaya Rajan of CDS, who conducted the 2018 survey along with K C Zachariah, said that Kerala should make the rehabilitation of returning migrants a priority area by allocating more resources. “The number of returnee migrants in the state has touched 12.95 lakh and many of them are in the productive age group. There should be a mechanism for their skill assessment and agencies like Non-Resident Keralites’ Association (Norka) should conduct a post-return mentoring programme on a wider scale,” he said.
A P Khader Ali of Vattalloor had to return from Saudi Arabia after winding up his cosmetics distribution business in 2014 because new regulations made it difficult to renew his visa. The 45-year-old is now a poultry farmer and has become secretary of Kerala Poultry Farmers’ Association on the strength of a large number of fellow expats who have ventured into the field.
Norka authorities said that the NDPREM scheme has helped turn 700 expat returnees into entrepreneurs during the last year. “We are looking forward to 100% utilisation of the Rs 15 crore earmarked for the scheme this fiscal. Under the programme, returnees are granted capital subsidy of 15% (for loans up to Rs 20 lakh) and interest subsidy of 3% for the first four years. We are also giving orientation programmes for all applicants followed by sector-specific training for selected applicants,” says Norka Roots CEO K Harikrishnan Namboothiri.
'Returned due to job uncertainties and rising living costs'
Like most youngsters in Malappuram, Sajeer Cholakkal too had a dream of landing a job in the Gulf. It was "mission accomplished" for him when he flew to Saudi Arabia at the age of 21 in 2006.
After working as a photographer for a year in a studio in Saudi Arabia, he took the entrepreneurial plunge in 2007 by setting up a photography studio in the outskirts of Medina by raising Rs 20 lakh after putting up his wife’s ornaments as collateral back home. "The firm flourished and I took my wife to Saudi and we were living our Gulf dream. I employed three persons and the studio gave us a decent income," he said.
Sajeer Cholakkal says his family of 4 have totally changed their lifestyle by drastically reducing daily expenses
But the oil price slump of 2015 dealt a body blow to small businesses across the kingdom and Cholakkal's firm was badly hit. "Our business mainly came from photographs for visa renewal and other government-related applications and expatriates were our main customers. But the last two years saw a mass exodus of families from the small town of Hawali where we were based, as expats from various countries sent back their families and also returned en mass due to job uncertainties and rising living costs," Cholakkal added.
Back home, Cholakkal has started a Pravasi Sahaya Kendram, an e-services centre where the public, along with expat returnees, can access various e-services like Aadhaar enrollment, submit online applications for government certificates and welfare schemes. He took a loan of Rs 7 lakh from a relative to set this up. He also has a small studio attached to the centre. "The construction of our house which I started while in Saudi is not complete and that is one thing that worries me the most now. The income from the e-services centre works out to just around Rs 15,000 per month and is not enough to sustain my family of four, including my two children. We have totally changed our lifestyle by drastically cutting down our daily expenses and have even sold off my car,” he said.
'Saudi's monthly levy was beyond our means'
It was the imposition of a levy for each dependent of expatriates by the Saudi Arabian government in July 2017 which made Mohammed Safeer return home, putting an end to his 18-year-long expat life in that country.
"My family comprised the wife and five children and the government announced a monthly levy of Saudi Riyal (SAR) 100 for each dependent. Also it was set to increase by SAR 100 each year to touch SAR 400 by 2020. I paid the levy for two months and if I had stayed I would have ended up paying SAR 2400 per month just to keep my family with me, which was beyond our means," said Safeer, from Vattaloor in Malappuram.
Safeer had gone to the Gulf in 2001 as an accountant in a textile firm and had continued in that job for eight years. He said that though he earned a decent salary as supervisor at a private cargo company in Riyadh airport, the levy along with rising living costs made their continued stay in Saudi Arabia unsustainable.
Safeer said that though he invested all his savings to set up a restaurant and bakery at Tirurkad six months back, it is yet to start give him any proper returns.
"The local economies of Malappuram and Kozhikode districts are hit by the uncertainties in the Gulf and it has seriously affected our business as well," Safeer added.
Illustration: Varun Vashishtha
Story of Malayali migration
Migration from Kerala declined by 11.6% between 2013 and 2018
89.2% of total migrants from Kerala in Middle East, remaining 10% in US, UK, Australia
In 2013, there were 20.70 lakh migrants in Middle East; figure fell to 18.93 lakh in 2018
One in every fifth household in Kerala has a migrant
Estimated total annual remittances to Kerala is Rs 85,092 crore
42.3% of total emigrants are graduates or have a higher qualification
Source: Kerala Migration Survey 2018
Why migration is declining in Kerala
Demographic advances have decreased population in migration-prone age group (15-29 years)
Little improvement in wages in Gulf economies; hence rise in living costs, lower savings
Increase in wages in Kerala, which has highest wage rate in the informal sector in India
Economic recession due to oil price slump in 2015. Construction and other services hit
Nationalisation policies such as Nitaqat and family taxes in Gulf nations, due to which more natives being employed
More skilled Keralites thanks to emphasis on education; moving to developed economies in the West
Kerala and the Gulf