EDB: A Troubling Paradigm Shift?

with the Economic Development Board, established and existing private sector businesses are being called upon to control every aspect of future business development in Mauritius…

Announced in the 2017/2018 Budget as the apex body to ensure greater coherence and effectiveness in the implementation of the country’s development policies and strategic actions, the Economic Development Board (EDB) was debated and voted by members of Parliament shortly thereafter. Its proponents and movers including Ministry of Finance and Economic Development (MOFED) key advisor Gerard Sanspeur, have vigorously justified and defended the fusion of existing separate institutions like the Board of Investment (BOI), the Enterprise Mauritius (EM), the Financial Services Promotion Authority (FSPA) and the Mauritius Africa Fund, into “an umbrella institution that will transcend political short-term strategies and grow into a national organisation geared towards economic planning and visioning.”

While some free-marketeers expressed their reservations about centralised state intervention in economic and development planning, independent economists at that time, the Mauritius Chamber of Commerce and Industry (MCCI) and the private sector generally gave a cautious welcome to an innovative proposal that looked destined to rationalise the marketing of Brand Mauritius by separate agencies and provide a focal contact to hand-hold investors at all stages of their desire to put their capital to work under our sun.

And by so saying we have already acknowledged a broadened scope of the EDB to cover three functions: (a) national economic development planning-visioning, (b) synergising Brand marketing of the country and its various investment opportunities to overseas investors, and (c) the oft-touted one-stop shop for facilitating their relevant business permits and authorisations.

On the first front concerning the desirability of a strong public sector development planning mechanism, manned by professionals in economy, sociology or prospective analytics, relatively unfettered by government of the day people and priorities, an avatar perhaps of the defunct Ministry of Economic Development that was unwisely absorbed by Finance, has often been raised and discussed here and elsewhere.

In a small island with the constraints born of historical legacy, social connectivity and the daebo-conglomerates that have a big finger in every pie sector of the economy, in a country where large land owners and property developments have a disproportionate say on wealth creation, where innovation has rarely been the credo of the traditional private sector, and where non-legacy entrepreneurs have always had the odds stacked against them, only the public sector could be safely entrusted to planning the contours of our tomorrows. And over the years they delivered the goods.

It might be remembered that since independence and more so from the eighties, the public sector, at times with intelligent private sector input but more often against their grumblings and their near-term horizons, was clearly the pioneer of robust, forward-looking development strategies and initiatives, their planning and their implementation. They are far too numerous to be listed here but certainly a few come to mind: the M1 motorway, the national University of Mauritius, the national carrier MK and the modern airport, the motorway network, the Development Bank, the State Trading Corporation for essential commodities, the ACP-EEC and Sugar protocols, the accent and structures for widespread education opportunities, the delocalised industrial zones, the apparel, textile and other export-industry drive, the Freeport, the BPO and call centre platforms, the financial services and double-taxation avoidance era. At some stage, the private sector even complained of the pace of innovative new development initiatives, platforms and opportunities they were not yet geared up for!

It is therefore an extraordinary paradigm shift that national economic development planning will henceforth be better chaperoned, managed and overseen by an Economic Development Board whose composition, except for the rather ubiquitous Manraj and a young medical researcher, is to be entirely made up of local business sector operators. Their individual and separate competencies at the helm of their finance, commerce, agro-industry and beverage industries or in medical research, are obviously not in doubt. National economic development planning outsourced to private sector is indeed a novel, untested approach, fraught with many questions about level playing fields or conflicts of interest but Government seems unflappably convinced this heralds the New Age.

Were the EDB confined to the independent prospective analysis, the forecasts, the strategies and scenarios of national development on a long-term horizon, including the multi-factoring of its social and environmental dimensions, we might have simply reserved judgement. What makes the situation far more awkward is that the first two objectives mentioned in the third paragraph, are organically linked with the future one-stop permit approval and authorisation processes. Combined with the current Board composition, this is a rather startling proposal with obvious risks and dangers and it has been roundly criticised by former Minister of Finance Rama Sithanen (l’express interview of Monday 14th January 2018).

One wonders how this organisational set-up will favour serious innovative development proposals from outside investors who will have to disclose full financial and operational details of their endeavours to their possible future entrenched competitors on a small local market? We already have FDI that is largely skewed to real estate marketing and sale. Which innovative investor will have the naïve confidence to entrust his business prospects to the EDB while depending on the latter for all permits and authorisations?

Which innovative investor in food or beverage processing or in elderly, nursing or residential care, which private hospital will provide his operational and financial details to the EDB, when these sectors have, for unknown reasons, been singled out for particular vigilance in the legislation?

There are indeed numerous grave unanswered questions. In short, with the EDB, established and existing private sector businesses are being called upon to control every aspect of future business development in Mauritius…

 

* Published in print edition on 19 January 2018

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