2020: Forging Ahead

Editorial

By M.K.

The elections are now well behind us, despite electoral petitions having been lodged by the opposition parties about their conduct, etc. We’ll leave it to the Supreme Court to determine these cases so that any lingering doubts are dispelled for the good of the country. Notwithstanding, the fact is that there is a new government in place, and those in power are surely aware that they have to deliver on a lot of expectations.

This means there is serious government business to do. The country will only come out of its multiple predicaments and hopefully prosper, according to the capacity of government to finance its electoral promises, and arrest the swelling of the public debt for a start. Among the other challenges awaiting it are: improving access to education opportunities and its outcomes, addressing the issues relating to the thorny problem of inequality, the degradation of our environment and of the social climate, kick-starting the engine of economic growth and creating enabling conditions that will generate jobs, amongst others.

It would be in the interest of the country to set targets which meet the expectations of the population at large, those that have been built up during the short but evidently successful – for the victors — electoral campaign. This will require sustaining and expanding the vital sectors concerned. Whatever be the targets and policies formulated in this context, translating them into tangible outcomes as promptly as possible will demonstrate concretely Government’s commitment ‘to walk its talk’. The Executive arm should therefore be sufficiently strong and capable to undertake the required actions harmoniously and with proper coordination so as not to waste precious resources. Much needed efficiency at all government levels and in its undertakings must become the norm across the board.

Mauritius already has a strong economic base. It has been the result of decades of painstaking work done under various governments, building up from scratch the requisite processes of decision-making and the execution of those decisions in a market-oriented framework. The machine may appear to be clogged up or imbalances appear from time to time, necessitating reforms so as to set things back on course in such circumstances. But the basic groundwork for smooth operation has been firmly laid down. It needs to be adjusted from time to time to make things flow easily or take new directions.

The real task is to identify clearly the way forward. This is where ideas come in as principal inputs towards the next overhaul. Consider the financial sector of Mauritius. It has been here for a long time; it has added many new activities down the years but there was a quantum jump in terms of the variety of services provided from 1989 onwards. Offshore was grafted on to the sector as from this latter period, procuring it an international dimension. It was policy-making that made it possible for the sector which was employing around a thousand persons at the time to employ more than 12,000 at much higher levels of income than before. Had the same kind of policy twist been given to the agricultural and sugarcane sectors and vegetable/horticultural production, they would not have seen their number of employees decline from around 55,000 in the 1970s to less than 20,000 today.

Most of our export efforts are directed towards the West. Access to those markets has forced us to keep standards up. We have however yet to employ the nimbleness so gained to attract another wave of foreign and new investors from other parts of the world to expand our overall production possibilities. We are not referring to the one-off IRS type of FDI here. We have been unable to enter the regional market even in a respectable manner to achieve the required diversification of the production base.

If we cannot go out to invest in those outside markets, we could still invite their shoppers to our place. The range, quality and prices of our products could achieve this to an extent but that will require growing out of the poor culture of excessive mark-ups in local commerce. Giving monopoly profits to local entrepreneurs and businessmen acts to inhibit external ventures by locals; if that was not so, why are our IPPs not going out to capture outside markets? True competition has to set in. If entrepreneurs remain content to go on milking the local cow, they will be ill-prepared to face external competition.

The government’s programme to be announced on January 24 will hopefully reflect how it is intended to expand the economic space in practical terms. Going forward calls for a sober but pragmatic approach to development. One must be realistic enough to grant that the government needs a reasonable timeframe. But its programme should reflect a degree of re-orientation of policies towards a more balanced sharing of burdens both from the tax and non-tax angles. At one level, the government is expected to act to smooth the rough ends that have made it more difficult for those at the lower end of the pyramid; in fact, the main job in this case is not to allow the situation of the worse-off to deteriorate.

At another level, the government would be expected to throw in sufficient numbers of new projects and their accompanying policies to create a bigger and more fairly distributed economic space. In between, we have the middle class that has seen its aspirations to better living standards frustrated during the past years. This group needs to be given sufficient means to spearhead its evolution, preferably into promising new activities, especially by equipping it with state-of-the-art knowledge and skills in as many fields as possible.

The successful transformation of the current situation demands an approach which combines a comprehensive and fair vision of all of the above, with clear indications for its materialisation over a given period and in a non-conflicting mode. Governments are elected precisely because they have to tackle difficulties of the sort – and lead the country forward.

* Published in print edition on 10 January 2020