The Hindu : A promising start

Online edition of India's National Newspaper
Tuesday, Jan 21, 2003

Opinion

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A promising start

COMING DAYS AFTER THE conference of NRIs and Persons of Indian Origin (PIO) in New Delhi, the Global Investor Meet (GIM) at Kochi held a new promise for Kerala. The Meet helped foreign and domestic investors look for a new focal point in south India. More than its actual outcome — firm investment commitments worth Rs. 8,000 crores — the GIM's significance was that it threw much light on the changing political mindset of Kerala's main political groupings. The A.K. Antony-led UDF Government did its best to achieve a political consensus with the Opposition Left Democratic Front on the point that inviting investments in industry and infrastructure will play a major role in improving the State's economy. The emerging consensus is significant because only a year ago, the two opposing groups of the State waged a bitter political battle on issues concerning economic reforms such as government downsizing and seeking a loan from the Asian Development Bank as a package to pull the Government back from bankruptcy.

The Prime Minister, A.B. Vajpayee's opening remarks at the GIM were yet another significant aspect of the meet. When he said Kerala could not remain trapped in outdated dogma and sterile ideological debates on issues such as labour reforms, the Prime Minister was underlining what reformists had all along been pointing out — the penchant of some parties in the State to try and stall economic policy changes. Indeed, the conference was an occasion to introspect as to why the State with its exemplary record in social and human development was lagging behind others in economic development. Mr. Vajpayee went to the extent of saying that political differences would not influence the NDA Government's readiness to help Kerala in its process of reform. The Left Democratic Front leader, V. S. Achuthanandan, who had earlier expressed serious reservations about some of the proposals to be discussed at the GIM, later said he would welcome "genuine investments". No longer is Kerala seen as investor unfriendly; instead, to quote industry captains, it is a new and attractive alternative. In effect, the pre-event publicity blitz launched by the Kerala Government and the speeches made at the two-day meet itself, showed that political parties with opposing ideologies were willing to walk the path of consensus, at least on issues concerning industrial and infrastructure development and creating more jobs in a State whose unemployment figures are thrice the national average.

Kerala, held out as one of the world's top 10 tourist destinations, is today in an ideal position to launch itself into progress. A mass producer of rubber, coconuts, cashew, tapioca and spices, Kerala, known for its scenic beauty, relies greatly on its tourism sector, which accounts for nearly 6.7 per cent of the State's GDP, for attracting global investments. Through the GIM, the Government has promised to give more thrust to sectors such as tourism, agro-industries and food processing, information technology, education and health care. Even before the GIM began, the Government revealed its commitment to policy reform by recasting the Empowered Panel to clear investment projects, announcing a Rs.7,000-crore mega-project to build a 515-km expressway right across the State.

All these hold immense promise for a State which is yet to achieve its full economic and industrial potential. But Mr. Antony's challenge now lies in sustaining the reform process, even while seeking to do it through his well known method. This may be difficult to achieve considering Mr. Achuthanandan's letter to the Chief Minister before the GIM objecting to some of the proposals such as inviting bids for privatisation of water supply and commercial use of its rivers. In terms of resource endowment, the State itself does not have vast tracts of land for industry-backed growth. However, the State has great opportunity for adding value to products and services that are unique to Kerala. It is time Kerala looked beyond its massive NRI repatriation to attracting more investment and multiplying employment opportunities for its highly educated youth.

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