THIRUVANANTHAPURAM: As Kerala's fight against COVID-19 enters a critical phase, disaster mitigation agencies have warned the state of an impending economic crisis.
The National Disaster Management Authority (NDMA) and the Coalition for Disaster Resilient Infrastructure (CDRI) -- an international forum launched by India -- have come together to forecast that the state will face serious challenges in reviving the economy.
For recovery, Kerala can consider reopening the tourism sector partially by exploring the concept of 'travel bubble', the two agencies suggested in the report 'Response to COVID-19 - Kerala'. However, health and finance experts differed on the suggestion to reopen tourism, terming it both 'suicidal' and 'unrealistic'.
According to the report, though the state's handling of the coronavirus crisis is commendable, an economic crisis looms large over the state. "Around 20 per cent of Kerala's population resides abroad and with the ongoing crisis, a large number of expats have been returning to Kerala. This puts Kerala in a uniquely vulnerable position due to an increased risk of the virus and a fall in foreign remittances," the report said.
The report added that with foreign remittances accounting for one-third of the state's economy and with remittances predicted to fall by 15 to 20 per cent this year, the state will face serious challenges.
One solution suggested -- exploring the 'travel bubble' to reopen tourism -- is a concept which countries like Australia, New Zealand and Fiji are considering, wherein borders will be opened to international tourists from nations free of coronavirus.
"Tourism is one of the major contributors to the economy of the state. It accounts for 10 per cent of the state GDP. For economic recovery, Kerala can consider partially opening limited tourist locations, for instance, the backwaters or the hill stations," the report highlighted.
'State cannot decide on its own'
D Narayana, honourary professor, Gulati Institute of Finance and Taxation (GIFT), said the Union government has to make a decision to that effect before the state can reopen its tourism sector. The Centre will also have to make clarifications on the quantum of flight and train services and on how to handle foreign tourists.
"Reviving the tourism sector is a must. But the sector needs the handholding of the government for revival as it has been stagnant for the past six months. It seems the state can no longer rely on international tourists. It should focus on domestic tourists. But it is also going to be difficult as the situation is worsening by the day," Narayana said.
But health experts are not amused by the suggestion to reopen tourism in the NDMA-CDRI report. "Reopening the tourism sector now will only help increase the infection rate," said an officer with the Directorate of Health Services.
In a report submitted earlier to the government, GIFT had said the pandemic, with its severe impact, is likely to drive the state finances to a precarious and unprecedented condition.