Gross Domestic Wellbeing

When India gained its independence, the southern state of Kerala promised to be nothing but a headache for the new nation. Near the bottom in almost every indicator of development—literacy, health, general wellbeing—the state was a basket case. Yet over the span of fifty years everything had turned around, and suddenly officials in the state capital of Thiruvananthapuram could boast some of the highest scores in general well-being not just in India but in the world. The state’s human development index score (measuring health, education, quality of life, etc. on a scale from zero to one), sitting at .83, outstrips the Indian average of .52 and surpasses many developed nations scores as well (even Germany’s score is only .89, not much higher). And this small, developing state has managed to reach parity in literacy, in health, and in education with developed nations despite its comparatively abysmal gross domestic product per capita, thus defying all conventional wisdom stating that HDI scores will rise only after GDP increases. Political scientists, economists and sociologists alike call it the “Kerala phenomenon.” Most developing nations—Mexico, Brazil, China, Kenya, and a host of others—have taken the prevailing logic to heart, striking a Faustian bargain and cashing in their free speech, basic health care, education and human rights for economic gains in blind faith that money will be able to buy back what they traded away. But Kerala never tried to bargain away these basic assets. All citizens have a right to primary education and access to secondary and tertiary education. Kerala, which used to have a literacy rate of 47 percent in 1951, now has a literacy rate above 90 percent, compared to the average of 65 for the rest of India. At an average of 77 years, its life expectancy is closer to America’s 78 than India’s 64. This emphasis on education has been matched by a commitment to a free, open and tolerant society as well as a vocal and critical media. Kerala has more newspapers available per citizen than any other Indian state, and newspaper circulation reaches more citizens than any other state in India. Thus, a strong educational base and a large media presence have bred a population that is politically aware and a government that is more transparent than that of most other Indian states. Government accountability and the access to a podium this has crafted for Keralites has proven a stronger tool for pushing for and attaining high levels of wellbeing for the masses than the GDP-driven schemes of other developing states.

The Keralite education system and media have forged a culture of egalitarianism and tolerance. Most Indian states, in the quest for an impressive GDP per capita, have set equality issues on the sidelines, and, as a result social tensions and gaps rage on. Kerala has a more even income distribution than a majority of Indian states, and has a series of anti-poverty and income redistribution measures in effect to combat economic inequality. Over the past half-century, Kerala has discredited the caste system, discouraged the practice of sex-selective abortions and infanticide and erased much of the social stigma that runs rampant in the remainder of India.

Not everything is rosy, however, on the sandy beaches of the southern Indian state. A closer look at its economy reveals some startling dissapointments. Its HDI is high by any standards, and at first glance it seems that Kerala has achieved high GDP growth. Yet Kerala’s actual growth rate figures show that 20 percent of the state’s GDP is made up of remittances—money which Keralite immigrants send back home. The figure for the rest of India is only three percent, meaning that any growth seen in Kerala’s GDP is flimsy, contingent on a generation in exodus from their homeland. At home, in 2010, 13 percent of Keralites were unemployed. Among women and 19- to 29-year-olds, close to 50 percent are jobless. Worse, of those seeking employment, a vast majority have high school or professional degrees; only 14 percent of job-seekers are unskilled laborers. The industry that should be there to accommodate the educated masses has failed to materialize, pushing the greatest human potential for the state’s future out of Kerala—the greatest aid to brain drain. It is estimated that 10 percent of Kerala’s population lives outside of Kerala, and if job opportunities do not change, the high education and aspirations of the state will help that number to grow. Kerala’s high HDI levels cannot continue unfetered in the face of such glaring and amassing economic woes. The infrastructure is in place, but if the minds and money produced by and meant to perpetuate it fly away forever, it will all come tumbling down.

But given that conventional models of development have fallen short, the Kerala model—empowering an open and egalitarian state to seek self-improvement and well-being—deserves some careful attention. Developing nations must examine Kerala’s flaws and overcome them in order to best move forward. To save all that it has made and correct its model of development into something more sustainable and replicable, Kerala now has to find a way to put the vast human capital it has created into effect. Instead of solely focusing on GDP growth or human development, a better model demands moderation and sequencing. Developing countries should look to the Kerala model early in its implementation of economic and social programs. Once a nation’s HDI closes in on .8, the country should shift its focus to economic growth by opening markets and offerring incentives to entrepreneurs and businesses, attracting the ventures and jobs that will trap the minds and money healthy and strong society has produced.

The first and most important social infrastructural step for a nation to take, though, is to develop its education system. Obviously, for developing countries this means increasing the literacy rate by establishing more schools, training more reliable teachers and widening access to these institutions. However, access requires those the state seeks to educate to be healthy and prosperous enough to attend schools. Once coupled with a strong and free media, this educational system will help to eliminate negative social constructs, corruption and human rights abuses, making the state an attractive and stable location for businesses and citizens alike. Once this has been achieved, the government must promote, through education and social campaigns, a socially and economically egalitarian society. The more tolerant, free and open the society becomes, the better the country will be able to build its human capital and, eventually, a productive, high-GDP economy based upon those strong and educated workers.

Finally, the government of a developing state following the ideal Kerala model must be democratically elected. More than that, though, the voting citizens need to be willing to experiment with different philosophies of governance and courageous enough to drive towards innovative political structures and initiatives that the state itself may not be bold or savvy enough to implement from within. It is through this acceptance of different ideas that Kerala was able to create one of the first democratically elected, longest-lasting and most successful communist governments in the world. Kerala has been so successful at generating a high HDI because it has a government focused on benefitting the people, whereas the democratic governments in other developing countries and states in India are more focused on benefitting businesses. Before the communist government, Kerala had been a princely state with high levels of inequality and almost no political representation for the lower classes. Only after the election of the Communist Party in 1957 was Kerala able to make impressive strides in education, economic equality, health, social tolerance and quality of life. This reform in politics, after education and an open media, is the most important move that the state can make to solidify the gains of the Kerala model.

A state seeking to adopt the Kerala model need not necessarily have a communist government, but it must have a democratic government unburdened by capitalist interests and instead focused on serving the people of the state. In Kerala the ruling parties have been willing to experiment with a form of government separate from the rest of India and different schemes in order to achieve a high HDI. This was a lucky break, but in other states seeking to emulate Kerala, opposition parties and voices of criticism must not only be present, but encouraged to push for political innovation. The mix of education and recognition of civic obligation in Kerala has led to some of the highest voter turnouts in India—75 percent in the April 2011 parliamentary elections. A static government or political party that is not backed by the people will not be able to achieve the success which Kerala has experienced.

After these reforms have taken root and become effective (a process which probably will take at least a few decades), it is imperative that the government then initiates a more vigorous GDP-driven growth scheme. Kerala has taken some steps towards economic liberalization, but more needs to be done.  Although there is some debate whether economic liberalization is the best method for growth. The fact remains that encouraging and incentivizing private investment is necessary for a state to reduce unemployment, increase GDP and put its human capital to use. Market liberalization does not have to be as intense as the 1980 and 1991 reforms of India, or the free-market reforms in China. Instead, Kerala should seek to reproduce the incentivized-business development models pursued in the United States and the Nordic countries. In order to grow,Kerala must encourage entrepreneurs, as well as larger multinational companies to settle in the region. This reform is imperative—without openness to conduct business in the state, Kerala’s human capital will only leave for better opportunities elsewhere and slowly draw the states’ high HDI away with them.

These reforms are not meant to be a panacea, nor should they be seen as a cry for a new kind of communist revolution. The fact is that, regardless of the economic shortcomings of both Kerala and the Kerala model, it seems to have worked reasonably well. Although Kerala has many social and economic problems, the obstacles it faces are less crippling than the human rights abuses, disregard for locals of unbridled multinational corporations, illiteracy, unreliable health care, repressed media and crippling, inescapable poverty the majority of developing countries experience today. Keralites are poor and jobless, but at least they are healthy and educated and can stand up for their rights. This cannot be said for the rest of the Indian states, China, South Africa or Brazil, to name a few. As for the economic problem, this is a simple matter of, through staggered and reasonable GDP-focused growth, raising standards of living and opportunities for the vast human potential which Kerala has created. Keralites should not fear opening their economy as a chance for capitalist interests to infiltrate their ranks and sabatoge the progress they have made—their political activism and awareness, empowered through an unwavering media voice, would never allow such a fall from grace to set in upon the state. Nor should other states fear to pursue the Kerala model, even in a modified form. Though the experiment in south India has not reached the apogee of its potential, and though the conventional development model’s GDP focus has some merits, the promise of Kerala for the benefit of humankind more than merits its serious consideration.