Let Us Rebuild A Better Kerala

Kerala flood

Nassim Nicholas Taleb in his famous book ‘The Black Swan: Impact of the Highly Improbable’ explains the consequences of rare and unpredictable events. A ‘black swan’ event like the Great Deluge of 2018 happens once in a century. A disaster like this requires a non-conventional, out-of-the box response. The ultimate aim of reconstruction should not be just repairing the damage and compensating for the loss, but rebuilding a better Kerala, if possible a ‘New Kerala.’

In the wake of the recent catastrophe, our main focus should be on rebuilding a better Kerala, if possible a ‘New Kerala’, says Dr. V K Vijayakumar

Estimates of money required for reconstruction varies from Rs. 10,000 to Rs. 50,000. These are estimates. What we need first is credible figures of loss and destruction: loss to public infrastructure like roads and bridges, loss due to partially damaged/completely damaged houses, loss to business and industrial establishments etc. Credible data is crucial since assistance seekers tend to exaggerate the loss to get bigger relief. Details relating to loss have to be put on website.

Resources have to be raised from wherever possible. We need not ask for foreign assistance; but if it is forthcoming it maybe accepted, provided there are no strings attached to it.

The emotional connect which NRKs have for their home state should be utilised. Out of the 30 lakh NRKs abroad, around 10 lakhs are resourceful. If at least five lakh NRKs can contribute reasonable amounts according to their capacity, that will be a big amount.

Vast majority of NRKs would prefer to give money to NGOs who can deliver with efficiency rather than to the government. The unholy alliance of the politician-bureaucrat-contractor is too well known. Therefore, an innovative Public-Private-Partnership with credibility should be devised for the implementation of the reconstruction programme. This PPP model should be transparent and subject to social audit.

Already burdened by huge revenue and fiscal deficit and public debt, further reckless market borrowing will take Kerala into a debt trap

People will be coming forward to give money if they know the beneficiary; contribution to the CM’s fund will not enjoy the same personal element. Therefore, it would be a good idea to invite sponsors for reconstruction. Initial estimates say that 7000 homes have been destroyed and around 50,000 partially damaged. If details of these affected people and extend of the damage are made public, it would be easy to find sponsors. This model can be tried in other areas, too.

The Government of Kerala has suggested seeking the Center’s approval for raising the State’s borrowing limit to 4.5 per cent of SGDP (from the current maximum limit of 3 per cent) and borrowing from the market to finance reconstruction expenditure. This would be a mistake. Kerala with one of the highest revenue deficit, fiscal deficit and public debt to SGDP is fiscally vulnerable and therefore, any reckless market-borrowing programme can lead to a debt trap. The State should go for soft loans, with approval from the Centre, with nil or low interest with repayment spread over 30 to 40 years. Soft loan affiliates of the World Bank like IDA can be approached for this.

Winston Churchill, referring to the conditions after the Second World War that led to the formation of the UN, is said to have remarked: “Never let a good crisis go waste.” Kerala should learn from this crisis and try to build an environment-friendly sustainable society. We should also use this crisis to drastically change our present waste management system, which has the potential to unleash another crisis. Surat, which was one of the dirtiest cities in India, transformed itself into one of the cleanest cities in the country after the Plague of 1994. Let us learn from the Surat experience and transform the State. Otherwise, as George Santayana famously remarked, ‘‘those who do not learn from history are condemned to repeat it.’’ Kerala can certainly do better. Let us all strive to make our State a truly God’s Own Country.

(The author is Investment Strategist, Geojit Financial Services)