Antony’s challenge

Kerala is a land of many paradoxes. It can boast of the best achievements in the country in terms of literacy, life expectancy, birth control, infant mortality rate and health care. But by locking up its capital in such non-productive assets as houses and jewellery, it has blocked the path to economic growth. Kerala lags behind not just TN but its other southern neighbours, Andhra and Karnataka, in economic indicators such as industrialisation, electricity consumption and foreign direct investment.

Kerala attracts less FDIs than even states like Haryana, Orissa, West Bengal, UP and MP, despite the state’s rich natural resources from coconut trees and spices to rubber plantations and scenic destinations. Kerala’s biggest asset should be its hard-working and well-qualified workforce, which is the state’s biggest export. (A third of Kerala’s three crore population lives outside the state and the 250,000 who work abroad contribute half the total NRI remittances to the country). But it is not just outsiders who hesitate to invest in the state, even locals have reservations. MRF Tyres, one of its biggest enterprises, has major production units outside Kerala.

Until recently Kerala did not offer a hospitable climate for business enterprise. Successive LDF governments adhered rigidly to the Marxist dogma which distrusted private industry and considered MNC a dirty word. Obstructionist and unreasonable demands by the workforce backed by political parties fostered the impression that Keralites work much better outside their home territory. Take, for instance, the IT sector, in which the Kerala government was actually a pioneer. When computers first came to Kerala, unions and parties raised a hue and cry, and a campaign was launched to smash computers, branded as enemies of the working class. The computer would, they insisted, fuel unemployment. Fifteen years later, Kerala is trying to make up for lost time by wooing the second generation of IT entrepreneurs by advertising its advantages in terms of better facilities for connectivity and cheaper rates.

In Kerala populist slogans and an agitational mindset have put paid to many a proposal for the state’s betterment. When a World Bank paper suggested tapping two per cent of the Periyar river to benefit Kochi’s industries, which face an acute water shortage, the government was accused of selling Kerala’s main waterway to the World Bank. A viable scheme for deep sea sand mining was similarly stymied by a PIL in the courts and an emotional campaign calling for every person to light a lamp to protect Mother Sea.

Congress Chief Minister A.K. Antony is acutely conscious that if the state is to attract investment, it has to change its image and people’s attitudes. A major step in this direction was the Global Investors Meet (GIM) in Kochi this January inaugurated by Prime Minister Vajpayee. The Kerala State Industrial Development Corporation (KSIDC) worked for six months to host the conference which was to showcase a new Kerala. That MOUs had been signed for 97 projects, worth some Rs 11,000 crore, in the wake of GIM reflects the KSIDC’s success. Keralites abroad as well as foreign companies expressed willingness to invest in the state, in tourism, IT and infrastructure.

But the euphoria after GIM has begun to subside. Antony may have swayed public opinion in favour of the need for an investment driven economy which could offer more employment, but the left opposition remains unconvinced. The state government’s ambitious schemes to attract investment are in danger of getting derailed due to obstructionism by those opposed to the government. In the last month Kerala has been hit by a series of violent protests. The agitations are ostensibly in protest against police highhandedness in handling a demonstration by tribals refusing to vacate forest land in Muthanga in Wayanad. But the disproportionate outcry threatens to scare away potential investors. The burning of the car of a Swedish cameraman shooting a film on tourism for a foreign TV network and the gherao by workers of a British High Commission official at an industrial park near Thiruvananthapuram are scarcely an advertisement for Kerala’s new investor friendly face. Meanwhile, Opposition parties continue to defer a meeting with Antony for finalising proposals from the GIM conference.

Ironically, while the Kerala CPI(M), intentionally or not, sabotages the efforts of the state government for bringing investment to Kerala, its counterpart in West Bengal is eager to invite MNCs to the state. Antony needs the co-operation of the Marxists if the work culture of Kerala has to alter. If China and Vietnam can change why does the Kerala CPI(M) want to remain the last bastion of an outdated philosophy and rest on its past laurels in the social sector? A debate is on in the CPI(M) on the issue. It took 15 years to drop the opposition to the computers. Kerala cannot afford to wait that long this time around.