Gulf Migration, Remittances and Economic Impact

Globalisation around the world has resulted in labour movement between labour markets. Migration from one country to another country has become a common phenomenon. This international migration contributes to the development of both sending as well as receiving countries even though the contribution to sending country is significant. The contribution of migration to development can be seen at family level and community level. At family level, migration may improve household earnings, food, health, housing and educational standards. At the community level, improvement can be noticed in health, education, sanitation and infrastructure benefiting both migrants and non-migrant households. The oil boom of 1973 in Persian Gulf motivated the oil exporting countries in the region to come out with development plans constrained by labour shortages. This new labour market attracted both skilled and unskilled labour from the countries like India, Sri Lanka, Pakistan, Bangladesh and South East Asian countries. The poverty, unemployment, low wages and poor standards of living in India caused many Indians to migrate to Gulf to encash the new opportunities. In India the southern state of Kerala received much attention in the 1970s in view of the large number of emigrants to gulf countries which resulted in a paradigm shift in the socio-economic conditions of certain regions in Kerala. It is worth noting that Kerala State alone received Rs.18465 crores of remittances from gulf regions during 1999-2004. On an average, remittances from gulf country contribute 22 percent of state income. This paper examines the contribution of gulf migration to Indian economy. Attempts are made to study the volume of remittances and its impact on the economic development. Efforts are also made to bring out the consequences of migration on social conditions and its impact on labour market. migrating to the countries like USA, Middle East, Canada, European countries, South Asian countries and others to find better occupational opportunities. These migrants vary from unskilled workers to large scale businessmen. GULF MIGRATION FROM INDIA After 1970, there was a major shift in the migration trend in India. The oil price increase in 1973 gave rise to a massive investment programme by the oil producing Arab countries, resulting in an increase in demand for labour (Shekhar 1977). These oil producing countries permitted the immigration of workers from other countries. This process resulted in a massive emigration of workers from India to gulf countries. The boom in software industry during 1990 to 2000 also motivated the computer professional to migrate to USA, European countries, South Asian Countries and gulf countries. In India the southern state of Kerala received much attention in the 1970s in view of the large number of emigrants to gulf countries. The emigration to Gulf countries totally changed the socio-economic conditions of certain regions in 56 ABDUL AZEEZ AND MUSTIARY BEGUM Kerala like Malappuram, Kasargod and Thrissur. The changes have been eroded into the consumption pattern, investment pattern, life style, religion and education. As a result, economically and culturally, some parts of the state simulate the Gulf countries. Some of the migrants have come back and settled down in their native places seeking self employment. . There are few studies on migration from Kerala to Gulf countries and its impact on the economy. The study conducted by Zachariah et al. (2002) observes that migration from Kerala to other states of India and to countries abroad has become so rampant that its impact is felt in every aspect of life in the state. At present almost all families in Kerala seem to have been affected by the Gulf migration in one way or other. Migration has affected every facet of life in Keralaeconomic,social political and even religious. The study conducted by Zachariah et al. (2002) focus on the areas like dimensions of migration, human resources, desposition of remittances, consumption and economic consequences of migration. The major reason for migration from Kerala is the economic benefits. Zachariah et al. (2002) opine that through migration the economic status of the households may improve which gets reflected in their consumption standards, quality of housing property and income. Nair and Pillai (1994) observes that the main cause for migration is the scarce employment opportunities in Kerala. According to Kannan and Hari (2002), Keralites working abroad constituted 10% of the total workforce in Kerala. Through migration, on an average four lakh Indians get employment every year. As evident from the data shown below (Table 1), during the period 1993-2004, majority of the migrants are from Kerala followed by Tamilnadu and Andhra Pradesh. There has been a steady decline in Kerala’s contribution to migration since1998 ,but at the same time the share of Tamil Nadu and Andhra Pradesh have increased by considerable numbers (Table1). One of the reasons for decline in labour migration from Kerala during 1998-2004 is that larger number of people migrating from Kerala now is graduates, who are engaged in skilled and professional related activities in the Middle East countries. These categories of migrants do not require emigration clearance whereas the majority of migrants from Tamil Nadu and Andhra Pradhesh require emigration clearance to immigrate to foreign countries as they are mainly unskilled workers. (Srivastava and Sasikumar 2003; Irudaya 2003). From the Table 2 it is clear that the number of graduate Non Resident Keralites (NRKs) in various countries in the year 2004 have increased by 133 percent compared to 1999.Sametime NRKs with primary education have decreased by 40.7 per cent in the year 2004 compared to 1999. The increase in NRKs with education below primary level is only marginal. Table 1: Statewise distribution of migrants from India Year Andra Karnataka Kerala Maharastra Punjab Rajasthan Tamil Others Total