In 2017, the situation is more challenging. The world economy is not opening up to all countries as it happened in the 1980s. International competition for market access is tough. We need to fix the base firmly if we want to “make Mauritius great again”
During the 2014 election campaign, the current government team stated that they would bring about an ‘economic miracle’ should they secure power. Not having seen a significant economic overhaul since a long number of years, a number of voters supported the idea. It may be recalled in this context that a report by the World Bank had described the big economic turnaround of Mauritius of the 1980s as the ‘Mauritian miracle’.
Evidently, this high sounding description was meant to contrast the new dynamic situation in the Mauritian economy with the situation of low and erratic growth which prevailed in the preceding period. The World Bank also had in mind perhaps the absence of such a breakthrough in economic growth in several neighbouring African countries, despite many of them being endowed with far more natural resources. Mauritius appeared to the World Bank as a regional economic pace setter.
Hopes for a brighter future
Mauritians have clung to this idea of an all-embracing economic rebound, described as a ‘miracle’ at the time. But we have to see things in the proper context. When a number of favourable conditions prevail both locally (the right domestic policies and resources) and internationally (strong international demand), a quantum jump in economic performance, such as the one which happened in the 1980s, is possible. Were the ‘miraculous’ experience of the 1980s easily repeatable, several governments, which have come to power since that time, would have produced one. There hasn’t been any such thing.
Despite all the odds however, we have kept the economy going on an even keel. That we have not dipped into negative territory is in itself commendable. People hold hopes however of the recurrence of the sharp economic turnaround as it happened in the 1980s. This is because, after so many years of relative slow-going since the ‘economic miracle’ of the 1980s, people want to feel more secure once again.
And then there are politicians and news media which keep stoking up public opinion against “non-performing politicians”. They put the onus of lacklustre economic growth on political adversaries. They create the fond expectation that nothing less than an upsurge in economic growth shows the true mettle of politicians. Nothing is further from the truth. It requires a lot more than politicians alone to put a country into higher economic orbit.
In the 1980s, we had a low base from which to pick up. When people suddenly found themselves having a choice of jobs, in contrast to the previous situation of ‘Quatre Jours à Paris’, when it was difficult to even come across a single lasting job offer per person, the sharp turnaround impacted very strongly on their imagination.
A vast economic transformation can come about if there is a solid foundation for it. In the 1980s, it was enough for the emergence of the new manufacturing sector to increase our economic scope. It created vast spill over positive effects on other sectors of our economic activity (small businesses, wholesale and retail trade, construction, communications, transport, services). With time, this momentum is running out of steam.
In 2017, the situation is more challenging. The world economy is not opening up to all countries as it happened in the 1980s. International competition for market access is tough. Mauritius is finding it difficult to fully employ both qualified persons (graduates, medical doctors, law practitioners, etc.) and less skilled ones. Sectors which have contributed to our growth in past years have increasingly come under stress. We need to fix the base firmly if we want to “make Mauritius great again”.
Widespread blown-up expectations
Mauritius is not alone to wish that the good old days of prosperity visit upon us again.
The British who voted themselves out of the European Union on 23rd June 2016 did so partly on the assumption that, once they break away from Brussels, they would be unfettered enough to resuscitate the glory and grandeur of the vast empire over which they once held sway. They dream of restoring that kind of power and position in the world.
Nostalgia of the past is manifesting itself in other ways. Israel is nostalgic about its thousand years history, unmindful of the fact that until the end of World War II, it didn’t as much as have a territory of its own called Israel. Many in the Middle East view it as an oppressive neighbour, backed by American military support.
There are regular massacres of civilians in the Middle East. Rivalries involve countries from Iran to Saudi Arabia, from Iraq to Libya, Syria to Yemen. Countries are up in arms. Millions are paying a heavy price as warring factions – claiming to be the sole custodians of the truth – fight each other. The deep urge to exclusivity – a quest for a glory which once was and is sought to be restored – has destabilised an entire region for decades. The looked-for El Dorado is not in sight despite so many lives being lost daily.
On the other side of the Atlantic, the new American administration wants to resuscitate a past period of prosperity. This resuscitation rhymes with Mexicans and Muslims not being part of that story. They are to be either deported or banned from entering the US. China is seen as an intruder which would have taken advantage of free trade to take away American jobs. Under a now bygone industrial arrangement, it is being said, labour-intensive techniques of production had kept Americans more fully employed. It is sought to recreate this past era.
To be resilient
There is nothing wrong to hold high hopes for a better tomorrow. A small country such as Mauritius doesn’t have to fight for geopolitical power like those other bigger countries. But we have to pay attention, given all that’s happening around us.
Our job is to lay down a broad resilient economic base, to better face current economic uncertainty. We also need to re-integrate economically with other countries with which we can share mutual advancement objectives.
We have to consider changes taking place across the globe. Numerous countries have now joined the global mainstream. Technology has evolved vastly. International mobility of skills has become an edge with which countries compete against each other on the global stage. E-marketing and robots have joined the workforce. New global power configurations are due to emerge.
One of our major objectives can be the building up of adequate key local critical mass to play a sustainable new intermediating role in the provision of both goods and services. We’ll have to go out. People will not come to us of themselves. With the right local incentives and demonstration effects, we’ll be able to transcend our limitations again and attract to ourselves the builders of tomorrow’s world.
There’s strategic work to do, laying down the foundation for our next quantum jump in terms of economic performance. Once we focus on the long term again, we should be able to construct a more brilliant future.