Cochin, India — A tiny coastal strip at India's southern tip, Kerala has long been considered a third-world success story. This densely packed state of 25 million boasts the country's highest literacy rate and a life style unmatched elsewhere.
Compared with the rest of India, population growth is in check, caste divisions are not as sharp, and land is more evenly distributed. The state ranks low in per capita income, but few are malnourished.
Women have a higher status and economic clout not seen in most of the country. People here live longer than do most Indians, and fewer children die at birth.
``What India will be in a few decades hence, we have already reached in terms of education, health, and quality of life,'' says P.K. Gopalakrishnan, a political scientist in Kerala.
In 1957, a UN study named Kerala a model for third world development. However, people here question whether their successes can be replicated elsewhere.
``There are peculiar factors here. Our education and medical systems go back more than 100 years,'' says T.N. Krishnan, an economist and director of the Center for Development Studies in Trivandrum, the state capital. ``These were not built up overnight.''
On top of that, economic uncertainty now threatens the good life of this tiny tropical state known for its palm trees, lush forests, and brilliant blue sea. Thousands of workers, lured from Kerala to the Middle East during the 1970s oil boom, have begun returning home as oil markets have collapsed.
India was once a major source of labor for the Gulf oil kingdoms, with almost 50 percent of the Indian workers coming from Kerala. Now, Indians are being edged out by lower-priced labor from the Philippines, Bangladesh, Sri Lanka, and China.
The oil downturn already is taking its toll here. Annual remittances from overseas workers that topped $700 million five years ago have dropped by half. Unemployment is inching up, and the largely agricultural economy shows little promise for growth.
Near the state's business center of Cochin, towns and villages are showing signs of hard times. Colorful mansions built with oil earnings are being abandoned by their financially pressed owners.
Widespread consumerism that became known here as ``gulf culture'' is drying up. Foreign-made televisions, videocassette recorders, and other accouterments of the state's oil nouveau riche are being sold off in second-hand markets.
``It appears the crisis is here,'' says Mr. Krishnan. ``It could have serious repercussions, economically and politically.''
Kerala with its long coastline has been buffeted by international forces for centuries. Chinese and Arab traders stopped here before the time of Jesus, and explorer Vasco de Gama claimed Kerala for Portugal in the late 15th century. The Dutch, French, and British followed, drawn by the ivory, teak, and spices of the famed coast.
Living in the most densely populated part of India, Keralans have long been outward looking and open to foreign influences. Christianity, legend says, was brought here in the first century by the apostle Thomas. A small community of Jewish traders from Palestine was already thriving. Islam came later.
Today, Kerala is a religious potpourri. While 50 percent of the population is Hindu, Christians account for one-fourth of the people, and Muslims are a significant minority. A synagogue still exists in the old Jewish merchant quarter of Cochin, although many of its members have emigrated to Israel.
Missionaries who accompanied European colonizers set up schools, hospitals, and clinics which underlie Kerala's high living standard. Seventy percent of the people are literate, twice the national average.
Education, widespread use of birth control, and better health care have freed Keralan women from the rigors of bearing large families, in contrast to their Indian counterparts. Kerala has both the lowest birth rate and the lowest incidence of child mortality in the country.