Tumultuous Times

If only we regained focus…

What do we stand to gain in these difficult times if we kept bringing to the forefront personal
conflicts producing the most negative distractions from issues which really matter to
uphold the country and its economy?

Mauritius has made economic and social progress when the global situation was relatively peaceful. There were eruptions of violence, such as between Israel and Palestine, which have been around for the last 60 years at least, but they were sporadic and did not cast doubt on global stability. So, one would wish that a relative calm prevailed globally for economies such as ours to make progress.

There were already signs of global unease since 2008 when the financial and economic crisis came to dominate the world. Since then, the situation has never been the same. Two years later, the Greek problem erupted and created more uncertainty. This applied not only to Greece. The whole of the euro area felt that if, unable to pay up its debts, Greece were to exit the euro zone, other countries (Spain, Italy, Ireland) might have to face the same music. That was expected to put at risk the very idea on which the euro zone had been constructed. This fear has been muted but it is not gone altogether.

For a number of years now, the world economy has been slowing down. The effect of such slowdown at the global level is not to break the barriers which keep growth from happening. No, there is a tendency for countries to shelter themselves from adverse consequences of expected slowdown. The various protective regional trade agreements being signed up among exclusive groups of countries is the symptom of this kind of negative reaction.

The latest in the series are the protests being raised in Europe against proposed preferential trade and investment agreements between the US and Europe and another one with Canada. Yet, extensive discussions over a number of years among officials of the two sides had given the impression that few remaining official differences were closed to the point the arrangements appeared to be ready for signing up. Voices are now also being raised against the US-Asia Trans-Pacific Partnership Agreement.

We are currently reviving discussions, on our part, for a Comprehensive Economic Cooperation and Partnership Agreement (CECPA) with India. A Preferential Trade Area agreement is sought to be achieved in the first place. All this can have positive fallouts for Mauritius if we manage the situation better than with the tax treaty between the two countries.

We have to bear in mind however that both India and Mauritius are dependent for their progress on the global economic situation. Were the world markets to open up confidently again, India and Mauritius would be able to muster their collective strengths in distinct areas to advance their international economic scope. This kind of mutually supportive approach would be better than to keep fighting for long as it happened with regard to the tax treaty over so many fruitless years.

Our objective might be to use technical know-how from both sides in fields suited to us to discover new markets for new products. Mauritius made headway economically when it combined its local resources with technical know-how in garment manufacturing from the Far East. Now that global competition is giving a hard time for our textiles to carry on as well as they did in past years, the quest for some newer activities may help grow the economic scope again. India can help and it would be best if the two countries worked together for mutual benefit.

Other countries (Singapore, South Korea, Japan, Germany…) beset by the pessimism which has taken hold of global markets since quite some years now, are forging ahead nevertheless to the extent they can. They have no time for infighting. Their companies are making inroads into unconventional areas and products, despite the lack of appetite for markets to keep up the demand. They say, if we are able to make headway despite the prevailing gloomy outlook, we should be able to do even better were all this gloom to be dispelled sometime in the future. It is in this spirit that we should open up our economic scope.

Maybe the globally tense situation will not ease soon enough. But we can’t wait for it to come around to greater stability in our quest for expanding our economic scope despite difficulties. A place like Mauritius cannot afford to dissipate whatever resources it has. Quite the contrary. We need to muster all the resources we can to get over our constraints. If we wait for the global tenseness to cool down to embark on fresh economic initiatives, we might be in for a very long wait, indeed.

Why? The world is not cooling down any soon. Last Sunday, the two sides (the government and FARC rebels) which have been disruptively fighting each other for the past 52 years since 1964 over what was initially an insurrection against growing economic inequality, signed up a peace deal in Cartagena, Colombia. Hopes for economic and social progress were raised for Colombia.

On the other hand, there was on last Sunday an emergency UN Security Council meeting to discuss about the blowing up of the latest US-Russia-Syria deal. No solution was reached. The carnage on the ground continues and no one is minded to come to a settlement. As if the big power tensions, including in the South China Sea, are here to continue, no matter how disruptively all these tensions impinge upon global peace and economic well-being.

We should learn from all this disruptive global tension the victims of which are the worse off people of the planet. What do we stand to gain in these difficult times if we kept bringing to the forefront personal conflicts producing the most negative distractions from issues which really matter to uphold the country and its economy? We should ponder.

Anil Gujadhur