The complex challenges that Kerala faces on the development front are well known. Blessed with nature’s bounty and human development indices comparable to the best in the West, the State has been on an economic upswing thanks to an industrious and cash-rich emigrant population and a thriving, though at times battered, cash crop economy. Rising incomes have led to a boom in the consumer goods and services market. The labour scene has been relatively peaceful of late. So what’s the problem? A narrow agricultural and industrial production base, acute scarcity of land for big ticket investments and the absence of political consensus on the most suitable development trajectory have all been hampering Kerala’s efforts to embrace new-age development. If the plans unveiled at the ‘Emerging Kerala’ business and investment summit held last week are implemented, however, the State might well be on its way to finding solutions for these vexing issues.
Unlike the Global Investor Meet (GIM) held in 2003, which was focused on bagging investment promises then and there, the Emerging Kerala summit aimed to project the State as a friendly investment destination. Given the disappointing outcome of GIM, which resulted in a trifling sum flowing in by way of investment, the Oommen Chandy-led United Democratic Front government walked the knife’s edge, reassuring doubters on both sides of Kerala’s highly polarised political divide about its intentions and its resolve to play the game by the rules. In the event, the summit generated considerable interest in the business community both in and outside the country. The deliberations produced, by the State government’s reckoning, some 45 positively actionable investment proposals having a combined outlay of around Rs. 45,000 crore, many of these from non-resident Malayalis. There was keen investor interest in areas such as tourism, public infrastructure and transport, IT and total healthcare solutions. It is still too early to assess the summit’s outcome and what awaits the government is an obstacle course. The real test would come when the hard bargaining begins. The government would have to take the sensitivities of the local ecology and communities on board when deciding on land utilisation. Mr. Chandy and his team also have the difficult task of building political and civil society consensus on each project. That the Opposition, despite staying away from the summit, did not try to put a spanner in the summit works could be a good sign. But that is for starters and there is a good distance to cover before Kerala really emerges as a favoured destination for investment.