‘Crisis in Middle East could affect Kerala economy’December 24th, 2008 - 9:18 pm ICT by IANS
Thiruvananthapuram, Dec 24 (IANS) The impact of the global economic crisis on Kerala would depend on what happens in the Middle Eastern economies, said a report by the city-based Centre for Development Studies (CDS). The CDS, which was asked to prepare the report on the global slowdown, has identified six possible areas that could affect the state economy.
They are: remittance inflows, availability of credit from the banking system, exports, tourist arrivals, prices of intermediate inputs, prices of imported goods.
The report was handed over to the state government Tuesday.
K.J. Joseph, a member of the CDS study team, told IANS Wednesday that out of the six, five have already had its impact on the state.
“The only thing which has not affected is the flow of remittances and this is largely because things are not that bad in the Middle East. One can safely say that crisis in Kerala will begin when there is something happening in the Middle-East,” said Joseph.
There are more than two million Keralites working abroad of which close to 90 percent are in the Middle East.
Last fiscal, Kerala received Rs.245.25 billion in remittance, which is about 20 percent of the state’s net state domestic product and 30 percent more than its annual receipts.
The study added that state was the least prepared to face the crisis and urged the government to be prepared with “good governance”.
The state government should ensure “security measures to the needy, strengthen the public distribution system, maximise the National Rural Employment Guarantee Scheme, seek fresh investments for infrastructure development,” said Joseph.