CSES in Media

Cashing out of the money order economy

This article was published in The New Indian Express on 23/11/2007

American socio-economist Thornstein Veblen’s theory of ‘conspicuous consumption’ and ‘leisure class’ is vindicated right here. The large, brightly-lit, multi-storied showrooms of Joy Alukkas, Francis Alukkas, Malabar Gold, Bhima Gold, and Kalyan Silks—claiming to be the world’s largest sari store—would put any ostentatious nouveau riche Punjabi to shame. Clearly, Dubai’s gold souks have some pretty well heeled cousins here.

The fact that Cochin was a kingdom is visible ironically in the Maharajah’s numerous insti- tutions jostling in vain with new money steel and glass edifices. More ironical, though, are the red hammer-and-sickle flags fluttering alongside the neon lights of post-liberalisation.

It’s all about migration and money. “Migration has been an opportunity for Kerala. The reverse brain drain and migration, as in the case of Ireland, can also be an opportunity now,” points out KK George, chairman of think-tank Centre for Socio-economic & Environmental Studies. What used to be known as a ‘money order’ economy for decades (owing to the large remittances from Gulf-based Keralites) is now changing into a domestic-driven economy.

The port city, which once accounted for 13% of India’s exports, mainly spices, today reportedly now accounts for a paltry 5%. Economic activity has shifted from Port Cochin —some say a ghost town—to Ernakulam, thanks mainly to the Cochin International Airport (CIAL), the first greenfield airport to be set up under public-private partnership and which now serves as a template for success.

As one drives from Kochi airport in Nedumbaserry into the city, a distance of about 34 km through lush green coconut farms and fast-disappearing paddy fields, hoardings abound of real estate projects of every type advertising homes and dreams. “Almost half the hoardings in Kerala are of real estate developers,” points out Krishnaswamy A, an IIM Calicut alumnus, exporter and entrepreneur.

While the airport may have kick-started the city’s economic revival after years of stagnation, Kochi is now attractive also as an IT destination. In a ripple effect, Wipro’s facilities at the Info Park in Kakkanad are convincing its peers to set up shop here, too. Projects to watch out for: Smart City and CIAL’s IT park at its planned airport special economic zone.