ECONOMIC IMPACT OF RETURN EMIGRATION: STRENGTH AND WEAKNESS - N Niyathi

The large-scale emigration of Keralite workers to West Asian countries has contributed to significant socio-economic change in Kerala. The emigration started with a few thousands per year in the early 1970s but assumed large proportions during 1980s, 1990s and the first decade of the 21st century. According to a state-wide Survey, total Keralite emigrants in the Gulf countries are 20.37 lakh in 2011. Similarly Keralites in West Asia accounts for more than half of the total Indian emigrants. Of the total Keralite emigrants in the foreign countries, the share of emigrants in the West Asian countries was about 89 percent. The magnitude of remittances sent home by emigrant workers is equivalent to 22 to 31 percent of the net state domestic product of Kerala between 2003 and 2011. The total remittance received in Kerala from the emigrant workers was Rs.49, 695 crore which is equivalent to 31 percent of the net state domestic product.

                        Global economic and financial crisis since 2008 created a depression in the Gulf Co-operation Council (GCC) and it has created unprecedented loss of employment and fall in economic activities in the Gulf countries resulting in exodus of migrant workers. Migrant workers engaged in construction, trade, manufacturing, agriculture and domestic service sectors lost jobs and were forced to return. There was a small increase in the number of emigrants at the state level, but traditional centres of emigration in the State had experienced decrease in the number of emigrants. The post global crisis period (2008 to 2001) was a major turning point in the history of emigration of Kerala.

                        Liberalization and globalization policies since 1980s promoted international migration throughout the world. According to ILO, migrant workers are persons admitted by a country other than their own for the explicit purpose of carrying out an economic activity. Study on emigration to West Asia shows the socio-economic backgrounds of emigration, processes of emigration, economic and social impacts of remittances and issues and problems of return emigrants. The economic impact of Gulf migration in Kerala attracted considerable attention from economists and demographers.  Since the mid-1970s, the factor which had a great impact on Kerala’s economy especially on labour market, consumption, savings, investment, poverty, income distribution and economic growth has been the Gulf migration and migrant remittances. Issues connected with return emigration such as the cause of return, socio-economic background of the return emigrants, the current activity status of the return emigrants and the problems faced by them are available in several studies. Study on return migrants from the Middle East presents their socio-economic characteristics, living conditions and problems abroad and economic status after return. Study also shows that on the one hand there is an improvement in the living standards of the majority of return emigrants, while on the other hand, for a sizeable proportion of the return emigrants, the migration has given them financial loss, sufferings and distress (A.C.K.Nambiar, 1995) In another field study majority of the Gulf migrants return due to lack of job opportunities, reduction in salary and hostile immigration policies during the period between 1996 and 1999 (Dr.B.A.Prakash). The survey findings conclude that majority of the return emigrants could not find any gainful employment and face serious financial problems.

                        Kerala migration to the West Asia continues to be an important topic of research. The studies observe that migration is continuing to provide the most dynamic factor in the economic growth of Kerala state even in the 21st century. Migrants of the 21st century are structurally different from those of the 20th century. The rise in oil prices in 1973 led to a very rapid increase in the revenues accruing to the oil producing countries of the West Asia. This accelerated a process of industrialization and social change in these countries characterized by massive investment in social and economic infrastructure necessitating the service of a large number of foreign workers.

                        The global economic crisis since 2008 is one of the worst since the world depression of the 1930s. According to World Bank and ILO, one of the regions that faced serious consequences of the economic crisis is the GCC countries. The construction sector is the worst hit by the crisis and a large number of construction workers from India, Pakistan, Egypt, Yemen, Bangladesh, Sri Lanka and Philippines have been forced to return due to loss of employment. In the Gulf countries, most private sector jobs, especially in agriculture, construction and household/domestic services, employ foreign workers. Keralite emigrants accounted for half of the stock of Indian emigrants in the Gulf countries.                           According to a migration survey of 1998, total emigrants from Kerala were estimated at 13.62 lakh. The subsequent surveys estimated the total emigrants at 18.38 lakh in 2003 and at 21.93 lakh in 2008. A survey in 2011 estimated the total emigrants at 22.80 lakh and out of them 89 percent are in Gulf countries. Kerala Migration survey 2014 by centre for Development studies estimated that more than 24 lakh people from Kerala are living in foreign countries and their remittance was nearly 36.5 percent of states net domestic product.

                        An analysis of the return emigration rate shows that there has been a marginal decline in the rate between 2008 and 2011. The return emigrants per 100 households declined from 15.3 in 2008 to 14.7 in 2011. The total remittances from workers received in Kerala were `13,652 crore which was equivalent to 25.50 percent of the net state domestic product. The remittances received increased to `18,465 crore in 2003, to`43,296 crore in 2008 and `49,695 crore in 2011. The amount of remittances received in 2008 was equivalent to 31 percent of the net state domestic product.

                        Role of NRK ( Non Resident Keralites) in the socio-economic progress of Kerala is significant. NRKs contributions to states’ overall development are at household level, community level and state/country level. Household earnings food consumption, health care, housing and educational attainments of emigrants have improved. All these factors have contributed to general socio-economic improvement of the state of Kerala. Migrated Keralites with better employment and high wage salary purchase land, construct good houses, send children for higher education and generally improved their living standards and socio-economic status. But there are also migrated Keralites without skill and higher education compelled to work at low wages, and live in poor facilities and for them remittances to Kerala are low and their socio-economic status are poor.

                         NRI deposits from foreign countries especially Gulf Countries is a key growth engine for Kerala. In flow of NRI deposits are `135609 crore in March, 2016 as against `109603 crore in March, 2015. It shows an increase of 24 percent. But domestic deposit in banks increased only by 13.2 percent. NRI deposits constitute 32.19 percent of total deposits in Kerala. It shows the impact of NRI remittances in the Kerala economy.

                        Study among the return migrants shows that majority are employed either on part time or full time basis. Studies on return migrants (2014) shows that nearly one-fifth of the return emigrants are unemployed. Similarly from self employment and wage employment, they get only a small amount as monthly income. Studies also observe that socio-economic status of 40 percent of return emigrants due to emigration to Gulf Countries have not improved. Two thirds of the households have created several financial problems.  Similarly migrations of the head of the household create social tension and problems for return emigrant households. Emigration has adversary affected the education as well as character formation of the children and has created mental stress and problems to wives of emigrants. Return emigrants also feel that they are isolated from the society due to emigration. Return emigration also create a mild or moderate recession in the economic activities in the localities having high concentration of emigrant households.

                        It is true that return emigrant household’s socio-economic back ground is still poor. Holding of land is small and hence income from farm is small and inadequate for a household. Similarly return emigrants live in small houses constructed prior to their migration. Their consumption expenditure is generally weak and low. Above all return emigrants have high incidence of debt due to borrowing for meeting the expenses of migration, house construction, marriage expenses, medical treatment etc.

·        Author is a senior economic analyst and Director of Rajiv Gandhi Institute of Development studies, Trivandrum. He was former Additional Director, Kerala State Planning department 

            

 
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