It is high time Kerala reduced its dependence on Gulf remittances and strengthened its productive capabilities for moving forward, Nobel Prize-winning economist Joseph E. Stiglitz said on Monday, underscoring the need for the State to have a “diversified economy.”
Delivering the keynote address at ‘Kerala Looks Ahead,’ a three-day international conference and consultation organised by the State Planning Board, Prof. Stiglitz said Kerala could scarcely continue to rely on remittances from the Gulf States any more. “The irony is that Kerala has become, in that way, indirectly dependent on oil, on a carbon economy. You do not think of yourself as a part of the fossil fuel economy, but indirectly you are. And that is why it is very important for Kerala to be looking ahead,” he said.
Sectors
Part of moving ahead is to recognise that by 2050 the world will largely be based on renewable energy. Which means the oil-dependent Gulf States may not have the position they enjoy today, he said. In developing a diversified economy, Kerala needs to focus on areas such as manufacturing and agriculture even as it leverages its strengths in education, skills and health-care, Prof. Stiglitz said.
Job creation
It is imperative for Kerala to evolve strategies that create more jobs in the State itself. It has to generate its own productive capabilities. Also, Kerala cannot rely on the Central government in New Delhi which has shown itself in so many ways to be “economically incompetent,” he said, adding that Kerala has to go its own way to the extent possible.
“Unfortunately another lesson of COVID-19 is that one cannot be reliant on debt for the development strategy. The countries around the world that relied on debt are facing difficult times. There are debt crises in country after country. So Kerala will have to rely on a great extent on its own resources,” he said.
Prof. Stiglitz attributed Kerala’s success so far to a competent government, participatory democracy and decentralisation, the reliance on science and the continued importance given to planning, education and health-care.
Role of government
The COVID-19 pandemic has stressed the important role of government, Prof. Stiglitz said. Having governments that do not understand their important role is dangerous and leaves the society vulnerable, he said, citing the example of the U.S. government under former President Donald Trump. “When the crisis started we all turned to the government as we do whenever there is a crisis. But 40 years of denigrating the role of government under neoliberal ideology had left the (United States) government in a position where it could not respond,” he said.
