Late Night Live - Separate stories podcast How did Kerala get rich?
May 6, 2025
Tirthankar Roy, a Professor of Economic History at the London School of Economics, dives into Kerala's remarkable transformation from one of India's poorest states to one of its richest. He discusses how migration to West Asia and remittances bolstered economic growth, alongside education and healthcare investments stemming from high literacy rates. Roy also explores the political shifts that fostered a supportive environment for private enterprise, revealing a unique model of development that contrasts state intervention with market dynamics.
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Kerala's Unique Economic Geography
- Kerala's climate and geography favor plantation industries unlike much of arid India.
- This led to a unique economic pattern less reliant on traditional monsoonal agriculture.
Policy Caused Economic Decline
- Kerala was poor because its resource industries declined due to anti-foreign investment policies.
- Its dependency on foreign capital in commodity sectors made it vulnerable to these policies.
Migration and Remittances Drive Growth
- Kerala's revival came from migrating workers sending remittances, aided by literacy and health.
- These remittances shifted from consumption to investment in services like healthcare and tourism.