Sunday, September 09, 2007

Kerala model?

What Kerala model? There has some discussion on this (link via Varnam and Churumuri) on an NYT piece Titled, Jobs abroad support model state (btw, brilliant article) in India. This is but an open secret to anybody who has any knowledge of this state. It is so obvious that migrants apart (both within and without the country), tourism supports the state. And it is not just jobs abroad, it is the entire democracy (non communist states) in India that support the so called communist state. There is nothing communist about Kerala except strikes and lack of development and the names of the parties that compete in the elections. Otherwise they are as capitalist as they get. They routinely indulge in the same "niceties" that other parties indulge in - namely corruption, nepotism and land grabbing et al.

Name a job in Kerala. Can't think of any? No, you are not wrong. For a while in the 80s, you could get jobs in state owned enterprises and once the economy opened up, nobody, almost nobody set up shop in Kerala despite 100% literacy and a high percent of educated labour force - perfect for IT services and BPOs. Why? Troublesome local politics that ends up in a strike every few days. Now a few brave IT companies have started to create some jobs there. Let us see how much they succeed here. But everybody in the state is educated. Is that due to the communists? You have the answer.

Kerala’s culture of human investment is at least two centuries years old and owes early debts to the missionaries and maharajahs who emphasized schools.

Life expectancy, again, is it due to the "great communist" policy?

But Kerala’s life expectancy is nearly 74 years — 11 years longer than the Indian average and approaching the American average of 77 years. Its literacy rate, 91 percent, compares to an Indian average of 65 percent, and an American rate the
United Nations estimates at 99 percent. Those enviable outcomes, its supporters stress, are a result of policy choices: Kerala spends 36 percent more on education than the average Indian state and 46 percent more on health.

Ask around and you will see that many of the Keralites you and I know do not go to either government schools or to government hospitals. There is enough private investment in this sector in the state. Yes, it is true that on an average healthcare and education is more accessible in Kerala than in many hinterlands, but that alone doesn't account for longevity does it? It has to be coupled with awareness and perhaps education. So, it is not the state policy that resulted in this "miracle".

Amartya Sen, a future Nobel laureate in economics, wrote widely on Kerala, arguing (in a book with Jean Dreze) that its “outstanding social achievements” were of “far-reaching significance” in other countries. In a book on three places that inspire global hope, Bill McKibben, an American, wrote that “Kerala demonstrates that a low-level economy can create a decent life” and shows that “sharing works.”

As you drive into Kerala or land anywhere one thing will strike you. The enormous ads of jewellery shops. Can you buy tons of gold with "low level economy?". The local jewellery business is the biggest in the country. Why dont we see jewellery stores in West Bengal another communist stronghold? Think of lack of jobs there too, think of high levels of state spending on education there too.

Now look at the Malayalee enclaves all over the world. What? Theres one near where you live too? (Think Bombay, Chennai, Bangalore - almost anywhere). Yes, there has to be. Half the working population slogs elsewhere sending money back to their hometowns. I know this because my dad used to do this as would his friends. There is no such thing as a Kerala model - if there is, it is a model you don't want to emulate.

Heres TVR Shenoy from a few years back on the same topic.
Shadow warrior, as usual does a hatchet job.


deepak said...

I know that it is extremely easy to criticise and that echoing the west seems like a wonderful and stylish idea to the current pravasi keralite youth..

anyways, try reading the following rebuttal by an eminent person.

(from )
« NYT Finds August Retail Data Weaker Than Meets the Eye | Main | How Much Money Will the U.S. Spend Promoting Children's Health in the Developing World? »
The NYT Doesn't Like Kerala's Socialist Ways

That is the main thing that one would learn from reading an NYT article on the increase in migratory work patterns among people in this Indian state. The article reports that one in six workers in the state is now employed outside of the country. Is this more or less than elsewhere in India? The article doesn't tell us.

Is this good or bad? The article implies that high rates of migratory work are bad, but that depends on the alternative. If the alternative is good paying jobs at home, clearly having to travel to distant countries is bad. But if the alternative is low-paying jobs and underemployment then having access to migratory work is good. If citizens of Kerala do migrate for work in higher numbers than workers elsewhere in India, is this because they are more desperate than workers elsewhere in India or because they are more likely to have the skills desired by employers elsewhere in the region? (As the article notes, their literacy rates and education levels are much higher than elsewhere in India.)

Rather than informing readers, the main purpose of this article appears to be to try to discredit a development model that has focused on providing basic human needs. As the article points out, life expectancy in Kerala is nearly as long as in the United States and its literacy rate is 91 percent, compared to 65 percent for India as a whole. Kerala accomplished these goals in spite of the fact that is far poorer than the United States and is even poorer than the rest of India. (The article exaggerates the income gap by using exchange rate GDP. On a purchasing power parity basis, India's per capita GDP is $3,800 per person compared to $44,000 in the U.S. It is also worth noting remittances by migrant workers are not counted in GDP, so if a larger share of Kerala's workforce is employed outside the country than is the case for other parts of India, it would be expected that it would have a lower per capita GDP.) While the article implies that this development path has negatively impacted Kerala's growth relative to the rest of India, the information it presents readers does not provide a basis for making this assessment.

--Dean Baker

Neelakantan said...

Deepak, your link does not tell you anything either. Kerala has a higher percent of migrant population on a lower base - that is very obvious if you look around yourself or in the gulf or in various parts of the country. Is this because of literacy, yes, but it is also because there were very opportunities in Kerala.

Kerala has no industry worth its name - despite a good labour force. The only industries are government owned and run (with very few exceptions)apart from tourism.

There are no opportunities because there was no growth. How does growth happen? Growth happens by way of money being pumped in. This can happen by people working in Kerala or elsewhere. (ditto for india - india could have remained a labour supplier - remember the coolies or developed industries inside - no prizes for guessing which gets more benefits to India). The fact that you have few employment opportunities implies that Kerala has very little growth in itself. Now, Kerala gains a lot by way of remittances which indeed makes the state richer than any Indian state, pretty much - the fact that much of the money is unaccounted and goes into gold is another story.

Now, none of this is good or bad in itself. What is bad is ascribing this to stupid, muddle headed communist policies that prevented the state from taking advantage of its labour force.

In a nutshell here is what happened. The stupid communists prevented growth and the people found a better way to live life. Fair enough. Now the communists turn back and take credit for the same - that is the stupid part and people like Mr. Sen, based on their own interest and tunnel vision, help them take credit for it.

Note that in Kerala, there is a fair amount of greenery, scope for tourism (Munnar is good not because of communists, but because the English left a lot of land as tea estates which is under private control). But look around you, the backwaters are slowly decaying. Kerala is really like most of India - it is no different.

I reiterate, there is no such thing as the Kerala model.