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Lessons from “Communist” (?) China for Communist Kerala

This is a picture from inside the Maglev train @Shanghai. Though it may sound silly, I boarded the train so that I could take this picture!!! At 430 km per hour, this train would travel from Trivandrum to Kochi in half hour. In my mind, modern China is extreme capitalist in philosophy but maintains the existing communist party structure since it suits the political elite. Now cutting to Communist Kerala - A few weeks I spoke to a Mallu friend of mine in the Middle East who is setting up a medical equipment factory in India. Since, I am genuinely interested in my friend’s wellbeing, my first question was - “Hopefully not in Kerala right”? His response – “Do you really want me to go bankrupt?” As I had guessed, he was smart enough to set up his factory in Coimbatore, right across the Kerala border in Tamil Nadu, where the local government wooed him with many benefits. Seeing the impact of Jayallitha’s policies, my friend had predicted that Amma would sweep the TamilNadu elections. So irrespective of political ideology, the blunt reality is that the perception about the investment climate in Kerala has not changed much except probably in the IT sector. I would be skeptical of the claims any political party in Kerala makes about employment generation unless the investment climate changes for real. Another reality that would change the face of the political landscape in Kerala apart from the terminal decline of the Congress party is the impending implosion of the Middle East which literally funds Kerala’s money order economy. Though Kerala has a one of the best law and order in the country and literate workforce, proper land records, relatively low corruption, and great location and connectivity, including tons of NRI deposits lying idle, some of the REAL challenges that need to be addressed are: 1.       Labor militancy and the notorious Nookku nilpu kooli – No English translation for this term, this exists ONLY in Kerala. Basically it goes something like this. You want to unload some furniture that is delivered to your home/factory. The trade union demands an arbitrary amount from you.  Just in case you disagree you have the option to unload your stuff. The trade union folks who just stand and watch this (Nookku nilpu) get paid (kooli) anyway. So YOU unload YOUR stuff, using YOUR effort but pay people who were just hanging out and watching you do this.   2.       Credit Deposit Ratio – In the early 90’s the CD ratios of banks in Kerala was a paltry 51 or so. What it simply means is that for every Rs 100 deposit, the bank loaned out only Rs 51. Even in those days the CD ratio in rest of India was 90+. The situation was so absurd that banks from Kerala would get deposits from NRI remittances, but provide loans in other states though branches there. In Kerala, CD ratio went up to 76 and recently has dropped to the 60s. Not sure if the CD ratio calculation includes loans disbursed only in Kerala or the loans by Kerala banks given to folks in other states (for Mallayas and others) If your startup is struggling due to lack of funds, blame the banks.   3.       Infrastructure: Kerala’s politicians have to give up juvenile tendencies like fighting good ideas because it comes from a different political party. National Highway widening in my opinion was a lost opportunity, Vizhinjam port became a reality when TamilNadu finally made a pitch for it, while political parties were fighting this tooth and nail.   4.       Harthals – Standard fare in Kerala, several business days are lost due to harthals and strikes and traffic disruption by political parties. Harthals impact tourism revenue as well due to bad publicity that has been generated. A message to youth – while you are trolling and whining on FB, why don’t you find the time to get off your ass and get a public interest litigation going? Why are you still waiting for somebody else ( the next Nawab Rajendran) to solve this problem?   5.       Bureaucracy – One of the wonders of the world, the bureaucracy in Kerala is adept at how not to get a business up and running. Even getting a company name of your choice is a nightmare. This needs a cultural change which has to come from the political leaders of various unions.   Foot note: My brief China visit does not make me a China pundit, but I did not hear Lal Salam or Chinese Matha ki Jai, all I saw was a roaring Chinese industrial economy focused on entrepreneurship, job creation and excellent infrastructure and law and order. Can the Communist Party leadership in Kerala adapt to a new world and provide jobs for the youth? That would be very crucial for the next Assembly election and the future of Kerala.     For more independent perspectives http://www.netamaker.com/zing.php  

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