The flight of capital, talent and workforce

The flight that took industrialist Sabu M. Jacob from Kerala to a warm reception in Telangana is a microcosm of what is routinely and often silently happening in Kerala.

Capital, talent and workforce have been leaving Kerala over decades.  The best efforts to industrialise Kerala took place in the last few decades of Travancore Government. Subsequent democratic governments only saw the decline of traditional industries. The first major industry to move out of Kerala in a significant manner was the cashew industry. The coir industry declined, but remained in the State like the wood industries as it is not easy to shift the raw materials from Kerala.

Kerala has always lagged in manufacturing. Service industries dominated; but that needed money to come in from outside either in the form of remittances from Keralites working outside or tourists. What distinguishes Sabu Jacob’s Kitex Garments is that it is a rare (for Kerala) 100 per cent export-oriented manufacturing unit in the State.

A unit of Kitex group

One of the major constraints for manufacturing units in Kerala is environmental factors.  And the major allegations being raised against Kitex Garments and related companies is that it is polluting a river, and that it is not paying minimum wages.  But to a neutral observer, it is clear that Kitex is the least polluting of several major industrial units in Ernakulam district. Clearly, there is selective amnesia from the part of officials and politicians. It is not clear whether Kitex did not pay minimum wages to any particular section of the workers. But generally, the workers there are satisfied about their wages.

Militant trade unionism, which is fortunately on the decline now, and greedy full-time politicians have been the bane of all industrial enterprises in the State. There are signs that the latter too may face a decline in the future. In fact, the fight between Sabu Jacob and politicians from both the ruling and Opposition fronts is a political fight—a backlash, at least from a few entrepreneurs, to the exploitative tactics of politicians.

Twenty20
Sabu Jacob had floated his own political party Twenty20 to fight the situation. He captured control of several panchayats from regular politicians, and fielded candidates from eight constituencies in the last Assembly elections. His candidates failed to win in the Assembly elections because the entrepreneur failed to take certain things into consideration that makes a successful political campaign.

His selection of candidates was something similar to his company selecting it managers. The candidates were qualified but lacked popularity. If Twenty20 had fielded actor Sreenivasan or had roped in technocrat E. Sreedharan, the outcome might have been different.

Their campaign style too was defective. The candidates often started speeches with their biodata and there were not many local people accompanying them during house-to-house campaigns. Sabu Jacob’s speech showed feudal tendencies with him often reminding people of the services of his father and family. He also declared that it was in people’s interest to vote for Twenty20 (as they were benefiting from his hand-outs and good governance in the panchayats) and he would go his away if his party was defeated. This was when the biggest stake holder was Mr. Jacob himself. The party had no declared policy on most subjects or position on hot topics in the State.

But Mr. Jacob always stressed the need for creation of employment in the State and highlighted the flight of the youth from the State for jobs outside the State.

Migration of workforce
What the party was raising was something that should have been serious concern to the State for long. Early migration from Kerala started to Burma (now Myanmar) and Malaysia before independence.  After independence, small numbers of people were migrating to the United States, Canada and European countries. But it was the construction boom in the Gulf in the seventies and eighties that turned migrations into a flood. Now people also migrate to Australia and New Zealand.

According to government agency NORKA, about 40 lakh Keralites are now working abroad. While those in Gulf countries will return, almost all of those migrating to developed countries will never return.  Number of Keralites working in other States is given as 13.74 lakhs.

According to 2011 census, the total workforce in Kerala is about 116 lakhs which comes to 34.78 per cent of the population.  (This means that, on an average, one employed person supports two others). This is apparently against the resident population.  But as many as 63.74 lakh people work outside Kerala. This means that about a third of the State’s actual working population is forced to seek jobs outside the State. This is a serious situation which needs to be corrected urgently.

Tailpiece:
Whatever the political parties in the State are saying against Kitex Garments, the investors are supporting the company deciding to have investments in Telangana. The price of shares of Kitex Garments shot up by about 80 per cent in three days after Sabu Jacob left for Telangana. On July 13, there were no sellers for the share, indicating that the share price may go up further.
It is indeed a vote of confidence for Telangana and the negative vote for industrial climate in Kerala.

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