With Dubai in financial crisis, Kerala’s Finance Minister TM Thomas Isaac tells Kunal Majumder how it will impact the state and its NRIs
Nearly 37,000 expatriate Keralites have already lost their jobs due to recession. How do you plan to combat the effect of the latest Dubai crisis on Gulf NRIs?
This is not going to be on any scale as with Kuwait during the Gulf War. But nevertheless, it is a matter of serious concern. It is better to be prepared than underprepared. We are planning two schemes. One, we are constituting a welfare board. It will be announced any day. It will provide a safety net for people returning from the Gulf. Second is the Kerala Financial Corporation. We have a corpus of Rs 100 crore with a soft loan option at 7 percent for those interested in self- employment.
According to the state government, how many people are expected to lose their jobs?
I don’t know the exact figures but a huge number of Keralites have indeed lost their jobs. The job losses can exceed the present 37,000 speculated. This is a result of negative net migration. It’s surprising because ever since the Gulf migration began, Kerala has had a positive labour outflow. This is for the first time that there is a reverse trend.
Kerala has always seen Dubai as the dream job destination. How prepared is the state to handle the inflow of those returning due to job loss?
The impact of the crisis will depend on two factors. First is whether the other Emirates are going to be affected. The answer is possibly not much. They will be able to contain it. The second issue is its impact on the long construction activities in Dubai, which have been going on for three to four years. That’s where we are going to see a severe problem. The other real estate companies will find it difficult to raise such huge capital now. All financial institutions are going to become very cautious in lending to companies. There will be deceleration in development and that will have a serious impact upon migrant workers in Dubai. There is an expectancy of reverse migration from there.
Have you approached the Central government to provide funds for resettlements?
The Central government does seem to focus on the ‘return and resettlement fund’ but that wouldn’t work because this fund is a contributory corpus. It is insane to expect people who are returning after losing their jobs to contribute. Instead, the Central government should incorporate a package that provides financial help. My suggestion is that the amount of support should be offered in reverse proportion to the duration of stay in the Gulf.
‘Kerala has always had a positive labour outflow. This is for the first time that there is a reverse trend’
There have been reports about problems with the IT Park in Kochi. Will the Dubai crisis also impact the other projects in the state?
The Smart City project is facing a cash crunch and it looks like it may be affected. DPWorld is in charge of the Vallarpadam terminal. They claim that things will go on well, but you have to wait and see. Dubai Ports is also managing parts of the Kochi port.
What about investments from Kerala in Dubai?
The reaction of Kerala businessmen is not negative. Maybe they are putting up a brave front. But I must say that they have been positive so far.
How will the crisis impact the state’s economy?
Kerala’s real estate sector was picking up relatively well, but now I think it is going to go down again.