Time for a Kerala model 2.0

Not many know that Kerala, better known for its militant labour, ayurveda and backwater tourism, is also home to world-class hi-tech industries employing highly skilled workers in thousands. Two of these stand out — Terumo-Penpol in Thiruvananthapuram, among the largest manufacturers of blood bags globally and Dentcare Dental Lab, Asia’s biggest manufacturer of precision dental prosthetics located in non-descript Muvathupuza about 40 km from Ernakulam.

Both these world-beating companies are the outcome of individual visions of their founders — a former civil servant and an impoverished dental technician — who saw a possibility and, against overwhelming odds, had a world-beater up and running in under two decades. Kerala abounds in similar greenshoots, thanks to decades of state driven social-sector interventions.

The Kerala model has clearly delivered but it is no longer sustainable. The State’s GDP at $60 billion is $20 billion less than next-door Sri Lanka’s which has 13 million fewer people. Kerala could have done much better over the last couple of decades, if only its leaders had the perspicacity to move their State qualitatively up the educational and skills ladder and given it the economy it deserves. Their failure has resulted in over 20 years of inexcusable drift.

Lose the next decade and Kerala loses it all. Demographic realities will kick in sooner than expected, eroding the State’s capacity to effect the kind of economic transformation it so badly needs. Kerala already has proportionately the largest pool of aged for any large state in India and, disturbingly, more students in high school than at primary levels for some time now.

The start of India’s economic liberalisation coincided with the Iraqi invasion of Kuwait and the first Gulf War that followed. Kerala, then enjoying an extended demographic dividend, could have reviewed its exposure to the uncertainties of the Gulf in the light of emerging opportunities in a liberalising India.

Now, it has a mere decade of opportunity, against the two it threw away. The State needs to seize the moment to become India’s first fully developed one with an economy to match. For this, Kerala should pitch itself with comparable countries, engaging, partnering and competing with the rest of the world to get a larger share of the Indian pie, thereby creating a whole new rapid-development model the rest of India can seek to match.

For a start, the State could put itself on course to economically best Sri Lanka in under five years and a decade later overtake Malaysia, which is near identical in population, literacy levels, migratory trends and HDI, but one which has a GDP more than six times Kerala’s and nearly twice that of Maharashtra’s.

With technology driving every aspect of the Indian economy, the need for an educated and skilled workforce is growing exponentially and it is widely recognised that India is woefully short of skilled manpower.

That oddly enough is Kerala’s chance. Unlike in the rest of India, most students in the State have for long stayed the course, however imperfectly, completing ten years of schooling — something Mao achieved for China by the early 1970s, contributing to that country’s spectacular rise soon after. However, Kerala needs to do a lot more, much faster to emerge as the country’s first fully developed State. Modi’s ‘Make in India’ thrust has unwittingly handed it a second chance.

Aspirationally, the Kerala Perspective Plan 2030 has got it right by asserting that the State ‘will be in the league of the top ranked ‘countries’ ( not States!) in terms of efficiency, competitiveness, services and market delivery in education’. So what does the State need to do?

First, the government must go all out to transform Kerala into an economy high on education and skills by achieving an advanced degree of proficiency in science, technology, engineering and mathematics or STEM as well as English. For this, Kerala will do well to listen to its parents rather than its politicians and make English the preferred medium for education and communication across all its schools. Malayalam need not lose out in the process for it can be compulsory all through 10 years of schooling, the longest in the education cycle of any student.

Simultaneously, Kerala must opt out of those distracting central schemes it does not need — JNNURM, MGNREGS, or the Sarva Siksha Abhiyan — and claim its monetary equivalent instead. This, combined with additional resources raised nationally and globally, should power the State forward economically as it has socially.

Sustained funding to achieve all this will be needed over years, possibly decades. A back of the envelope calculation indicates that Kerala will annually require around ₹15,000 crore to cover around five-million students over a decade-long rapid-transformation cycle.

Additionally skills development should go world class through Very Large Multi Skill Training Centres, aggregating scarce training resources to train a million young adults annually, requiring around ₹6,000 crore or ₹60,000 per head.

Finding money should not be a problem; there is enough sloshing around. Kerala must recognise that it has rich veins to tap. Greece, with less than a third of Kerala’s population. received bailouts totalling a staggering €300 billion from the Eurozone countries, the European Central Bank and the IMF.

A fraction of that should cover a deep overhaul of Kerala’s educational and training systems, resulting in a steady stream of high quality scientists, engineers, technicians, and health-care and hospitality professionals.

Kerala’s social indicators have for long demanded that the State gets an economy that complements its social success. Matching Sri Lanka’s GDP over the next five years and, soon after, exceeding Malaysia’s are perfectly attainable goals. Kerala just needs to develop a big mindset and the huge will to succeed. Other States starting with Tamil Nadu are bound to follow. The whole country, not just Kerala, stands to benefit from such a development. Need one ask for more?

The writer is a former member of the Expert Committee On Employment & Skills Development, Kerala State Planning Board; and visiting faculty, Centre For Contemporary Studies, IISc Bengaluru