Let us address issues, not persons

It is a harsh world out there. Unless we transform meaningfully and integrate everyone from top to bottom into a globally relevant domestic production machine, we’ll miss the boat

 The call for a fairer distribution of economic power has been becoming shriller in rich countries now whereas it used to be the case in mostly newly independent “under-developed” countries in the earlier post-colonial period.

Americans voted lately to severe ties with others (e.g. Mexico, China, TPP, NAFTA) not only because the 1% had taken away a too large share of national wealth and incomes. It was also because the intermediate period which had seen increasing numbers of countries embrace democracy and the free market had shifted prosperity from them to outside “rival” countries. This is the background against which the Canadian Prime Minister and the American President are discussing this week in Washington DC whether the North American Free Trade Agreement, which came into force as from 1994 between Canada, the US and Mexico, should remain or go.

No one knows at present where all this talk about isolationism of certain individual countries will end up eventually. What is certain however is that economic and political ties underlying international relations which have developed so far will no longer be the same. The chessboard will now be shaped by private vindications of individual countries and likely be reconfigured around new poles of economic – and political — centres of power. We do not know how all this will eventually roll out among countries but life will not be the same. Mauritius has no choice than to adapt skilfully.

Chart a new road

It will be wasteful for us to worry about all that’s going on and what our fate will be due to this phase of international resettlement. In the face of this new wave of adjustments, nations which make progress do not speculate. They act, in their best interests, at the risk of being caught napping or overtaken by others more alert. We should be doing precisely that. Nothing can be more helpful than having a clear roadmap to embark upon, after assessing and acting upon our own internal strengths in each domain we venture out into.

The world is beckoning us to keep making ourselves relevant to it, howsoever much it is changing and is likely to keep changing. The more we heed this message, the more efficiently we’ll pull all the strings together which need to be pulled up for our good. The Roman Empire of old gained its strength from the numerous roads they had built to expand their outreach to the confines of the then known world, safely walking back to Rome by those roads after conquests. If the roads on which we used to travel are obstructed, we should logically go around the obstacles or build new ones to reach our destination.

We’ve seen that our total domestic investment (the foundation on which jobs are created and economic activity sustained) has contracted during the past five consecutive years from 2011 to 2015. Although higher in 2016 compared with 2015, the 2016 level of domestic investment is below what it was in 2013. The signal couldn’t have been clearer. Our dynamism has shrunk.

Investment doesn’t happen to the extent one would wish for a variety of reasons: non-availability or prohibitive cost of finance, investors’ expected rate of returns not being met, companies’ dividend policies not conducive to incremental investment, the period of waiting before project fructifies, lack of sufficient demand for goods and services produced, outlook for the economy, skills and talent availability, bureaucratic obstacles, low productivity, uncertainty, etc.

In the given economic climate the world over, the question shouldn’t be who in particular is getting the best out of it, the “capitalist” or the one low down on the ladder. It really should be how to keep development sustained despite all the odds. No need for esoteric battles unconnected with reality. Look at the bigger picture. A new phase of extensive fighting it out is necessary as countries struggle to eke out a share out of the possibly shrinking international pie.

Policy redesign

Events show that even before the current uncertainty hit the world, Mauritius was getting signals that the model it has been operating on was facing serious headwinds.

Air Mauritius was in turmoil. Banks were having too much surplus liquidity to hold, unable to invest them adequately and productively. Our international financial services sector was increasingly being exposed to unjust criticisms about its governing rules. Exports of our textiles and garments weren’t keeping up pace with their past rates. There wasn’t much alternative innovative use to which our ageing sugar industry was being put while export preferences were being fast eroded. Proliferation of thefts, crimes and drug abuse showed that we were losing the social handlebar due to inherent weaknesses stemming from inadequate response to the challenges we increasingly faced.

Instead of addressing the challenges stemming from this front, the political class was targeted each time an economic or social indicator didn’t perform as expected or a scandal erupted. Day-to-day management took over the need to attend to strident call for policy redesign to address firmly all the long term weaknesses showing up. There were bits and pieces, here and there, not the cohesive strategy to get us out of the ruts. It is the reason why certain people in top positions in the public sector personalised issues, no matter what the consequences of private attacks on the essential institutional superstructure on which the country should function. This appears to be going on today, much to our loss.

We need to veer course. First, pull everybody together in a concerted pragmatic effort to lift all the boats together. Without losing time, Mauritius needs now to embark on a mutually reinforcing strategy for development, given the changing unpredictable global outlook.

We have to continue opening up to trade, investment, talent, newer skills, more technology, bringing innovation home where it matters really through an alliance of local/international tertiary institutions and clusters of integrated companies operating in diverse fields of activity going out to meet the world markets with another generation of locally produced goods and services. Share all strategic information among all stakeholders to keep cutting an edge as a trusted foremost provider of the best in goods and services to other countries.

We have to be ambitious first and secondly competitive. No one will pick us up for special treatment. To find our way, we’ll need to create a globally enviable environment for all we undertake from here. Our tax and other incentives should be the most adapted in a global environment. We have to have a bee-hive of constantly renewing work-learning skills adapting whenever necessary to changing circumstances. We have to work hard on all plausible identified fields of activity suited to our history, size and capacity to add to our economic base.

It is a harsh world out there. Say whatever you want: unless we transform meaningfully and integrate everyone from top to bottom into a globally relevant domestic production machine, we’ll miss the boat. With so much on our plate, can we really afford the luxury of picking up against each other when our drawing board for the future and its implementation have been yelling at us for so long?

Anil Gujadhur