One can only hope that the decision makers at the highest level finally rise up to the tasks which this situation imposes on them
The Good: The fiftieth anniversary of the birth of a nation is a landmark which definitely needs to be adequately celebrated. It should also be an opportunity to pause and reflect on what has been achieved in terms of socio-economic progress and consolidation of the nation building process.
As we look back on this eve of the anniversary of independence there are reasons to be satisfied with the progress that has been made on both counts. On the economic front, the diversification of the economic foundations of the country from a monocrop plantation model through the addition of a manufacturing and a financial services sector in addition to a thriving tourism industry have been accomplishments of which the country can be legitimately proud.
Add to this the setting up of a successful national airline, a feat which many larger newly independent and more richly resource-endowed countries have failed to achieve. The visible benefits of these efforts were felt during the last decades of the past century when the GDP per capita grew by leaps and bound and the material quality of life of the working and middle classes manifestly improved.
The Bad: The rules of the game changed drastically with the advent of globalization and the transformation of the world economic order as this impacted heavily on the economic performance of Mauritius since the beginning of this century. The writings were on the wall regarding the “inevitable” abolition of the trade privileges which the country enjoyed under the erstwhile international regime of trade protection and preferred access, especially with regard to the all-important Sugar Protocol with the European Union.
Partly due to these transformations — globalization when confronted adequately and with coherent policies, also admittedly had many positive effects globally including the emergence of new economic players and the lifting of large swaths of populations from absolutely poverty — and partly due to poor local leadership resulting in a lack of vision and coherence in economic policy, the Mauritius economy has been caught into a low gear performance resulting from what in economic literature is often referred to as “the middle income trap.”
Indeed from the between 5% and 7% growth of GDP witnessed at the time of the economic boom, the performance of the country has now slumped into what looks like a secular stagnation of growth turning around 3.5% to 3.8%. While this may look not too bad by itself, it is far from sufficient considering what is required to start solving some of the most pressing social problems with which the country is confronted. The key problem is that this growth still comes from the traditional sectors of Tourism, Construction and Real Estate and Financial Services.
The Ugly: In a highly globalized world many of the numerous and complex developments which have a direct bearing on the eventual economic performance of a country lie beyond the control of the government or decision-makers. In the context of liberalization and deregulation imposed by the new norms of economic governance imposed by the new WTO regime, for example, the policy space of local decision-makers is restricted.
Yet it is now exceedingly evident that those countries that have opposed some resistance to the emerging dominant paradigm and instead opted for a mix of policy making and market liberalization have been the most successful in keeping a satisfactory growth trajectory as witnessed even during the Great Financial Crisis of 2008. India and China are of course the most striking illustrations of this approach. Even if one argues that these are large economies which could afford to offer such resistance to the diktat of the developed capitalist countries, this does not take anything away from the fact that the latter approach has proven to be highly beneficial to these nations.
It can be argued that Mauritius, although a Small Island Developing State, has a sufficiently developed institutional and governance infrastructure, a functional democratic framework and a history of policy driven success which could have been better leveraged to resist some of the measures which have proven most harmful to the local socio-economic landscape. It actually became UGLY when the local decision-makers gleefully welcomed the new economic status quo and opened the doors to the dominating neo-liberal ideology.
In the event they ignored globalization’s capacity to “deepen societal cleavages, exacerbate distributional problems, and undermine domestic social bargains” all of which had been the hallmark of the successful economic performance of the country since independence. A network of social protection through labour laws and the Welfare State including free education and an active Private-Public Sector partnership had constituted the two legs of socio-economic progress in the country.
The State which had since independence played an important role as a trailblazer in providing the necessary legal and institutional framework for innovative and creative new economic initiatives has been reduced to a sheer witness and purported “facilitator.” Successive governments have been the passive accomplice of a situation in which the decision making and regulatory capacities of the State have been inexorably withering away.
The Civil Service, which used to have an important intermediation role between the private sector and the political establishment, has been evinced from this role thus creating a climate favourable for corruption and opening the way for the financial powerful to have their way and to what prolific author and commentator Professor Acemoglu has called the “Kleptocratic State”.
The irony of the situation is that we do seem to have reached a point where the dysfunctionalities associated with both the level of corruption and accompanying nepotism as well as the abandonment of policy driven growth are becoming self-evident. The lack of adequate level of economic growth and the systemic failures of the bureaucracy (even more glaring in the breakdown of law and order and the seeming tragic loss of trust in the police force) are the root causes of most of our critical problems.
On the occasion of the celebration of the 50th anniversary of independence, one can only hope that the decision makers at the highest level finally rise up to the tasks which this situation imposes on them if we are to avoid what is increasingly looking like a traumatic future.
* Published in print edition on 9 February 2018