Thiruvananthapuram, Nov 28 A(Inditop.com) Kerala Saturday said the Dubai debt crisis will hit its economy as many Keralites are working there, and urged the central government to announce a package for those who lose jobs and return home due to the crisis.
“It will hit Kerala and hence the centre should come forward by providing financial assistance (for Gulf returnees),” Finance Minister Thomas Isaac told Inditop here.
Isaac was referring to the $59-billion debt woes of Dubai World, a state-run holding company that manages portfolio of businesses of Dubai, which had Wednesday asked creditors for an extension of six months for repayment of debts.
There are fears that the debt default request by Dubai World would adversely affect the Gulf economies and trigger another round of financial crisis.
“The debt woes of Dubai World is going to be a dampener for Kerala,” said Isaac, a former economics professor at the Centre for Development Studies (CDS) here.
“The reality is that the construction industry in Dubai is going to come to a grinding halt and it would hit Kerala badly because hundreds of Keralites are working there,” Isaac said.
“See, a worker spends a lot of money to get a job Dubai and reach there. I suggest that a minimum of Rs.100,000 be given to each worker who returns after losing his job.”
This amount, according to the minister, will be “seed capital” if the returnee wants to start a new venture or to clear his debts.
The state government has already started a scheme wherein Middle East returnees can avail loans with an initial interest rate of 7 percent from the state-owned Kerala Financial Corp, Isaac said.
“In the wake of the recent crisis, I have decided to relax the interest rate and make it a flat 7 percent for the entire duration of the loan.”
The United Arab Emirates (UAE), which comprises seven emirates including Dubai, is the most preferred destination of Keralites working abroad.
According to a study by CDS, an estimated 800,000 Keralites are living in the UAE.