Editorial

The Year That Has Been 

The year 2011 has not been a very productive one from a global perspective.

If you were looking at the Arab Spring as a new dawn of awakening, you might get disappointed the more you find the old guard coming back in disguise to hijack the fruits of the revolutions.

There is some relief from the fact that the protests got afoot at least against dictatorial regimes which had assumed that nothing could budge them ever from their tyrannical fortresses of personal rule. The protests came from the bottom, not from the top. Even as of now, members of the Security Council are busy wrangling among themselves for power and influence while thousands of protesters have already got killed and more are likely to be killed so that the tyrant does not lose his grip on power in Syria. Thousands of innocent victims have continued to fall at the hands of state and religious terrorists in several countries.

 

 

If you thought that European leaders would be able to bring their act together to save the Euro from its originally flawed packaging, you may be making a mistake. It is one thing to bring a whole lot of countries to sign up a treaty advocating the enforcement of fiscal discipline on each one of them from Brussels. It is quite another thing to get them to hold on individually to a Germanic austerity package of spending cuts and added taxes to bring back individual countries’ budgets that have gone out of kilter into balance at a time European and other major economies are likely heading for depression. Rigour is good in economic management but inflexibility and one-track mindedness is a poison.

If you believed that global economic salvaging would come from America, you should draw your own conclusions from the partisan brinkmanship that politicking has assumed over there all the way this year so that they have become specialists in last-minute make-it-or-break-it decisions. These chaps are more likely to drive down the confidence factor, which should have lifted the American economy from its knees, to its lowest level. Their focus is on securing power next year, not on the essential restoring of growth in a sustainable manner.

If you thought that, short of the Western economies triggering the much needed global economic uptake, it is the BRICS countries that would take over from them so as to sustain global growth, the pace of economic activity has already slowed down considerably in China and India. They were supposed to hold it while demand was falling in the West. They are now overheating with inflation. It was believed that the latter two, together with Brazil and South Africa, were well placed to spearhead a new wave of global demand to keep the world economy from going down. They no longer pose as the champions of global economic revival.

At a time of a crisis the first signs of which appeared in late 2007, one would have expected global leaders to remain sensible and level headed. We could have expected the highest institutions, including the international financial institutions, to marshal their facts with lucidity and come up with a clear charter on how to get out of the mess in an orderly manner. Instead of that, several of them messed it up further, letting the markets “capture” the political process.

Many of the institutions have thus become a byword for opacity and political meddling, usually not for the general good. This has provoked another wave of protests from the grassroots, known as the ‘Occupy Wall Street’ movement. Citizens facing a bleak future and deprived of bare necessities of life, in the face of indecent distribution of wealth and incomes to the richest few on the planet, have not hesitated to face the bullets and the batons of security agents country after country. For the majority of citizens of the world, their joie-de-vivre has been replaced by an anticipation of worse-to-come. What a sad outcome for a year that was originally expected to start turning the world around from the preceding period of gloom!

Here, in Mauritius, people realize it that we can only make headway to the extent the external economies we depend upon manage to extricate themselves from their on-going complications. The retrospect above shows that the sword of Damocles has instead been suspended all the year round over our heads. Yet, we have no alternative because we depend on them for the tourists who come over; we rely on their economic space to sell our sugar, textiles, seafood and services such as ICT and financial services. Even our national airline has tied up its fate to one of theirs, forgoing its customary caring image, for the sake of squeezing in as much profit as possible.

So do other countries placed in positions identical to Mauritius vis-à-vis those markets try to become even more competitive than they were before. In other words, the more competitive we manage to remain globally, the greater the chance that we will retain our shares in such markets. We appear to have cut an edge by refining sugar for exports, which is a higher value-added product than raw sugar. This has happened despite the fact that institutions like the NPCC and Enterprise Mauritius witnessed some of their biggest personal power struggles during the year. Had they not turned their guns inwards to such an extent, we might have made even better inroads where it matters the most, who knows?

Our ICT sector has upheld the level of employment among the youth, which is where unemployment is biting the most, especially among the less well trained and less qualified. Moreover, sustained spending sprees throughout the year helped shopping centres add to youth employment. Construction and transportation have been booming, perhaps less forcefully than in 2010 but maintaining still a pace that has raised in parallel serious environmental concerns as their expanding activities went on to occupy even greater space than before.

The political front was stuck almost for the full year on the MedPoint scandal. This story bred an atmosphere of corruption and abuse of political power in the past 12 months, diverting energies away from constructive work that could have been undertaken otherwise. It led to changing speculation about which major political party would become the bedfellow of the other one against changing perception about the real source of the scandal.

That game assumed bigger scale after the MSM abandoned the government in which it had been elected. With the MSM’s departure, the PMSD increased its weight in government. The PMSD leader became the new Minister of Finance; if only to show that divergent economic tendencies may inhabit within the government, the new Minister of Finance took measures in budget 2012 to relieve large income recipients of the capital gains tax and the tax on dividends to which his predecessor had subjected them less than a year ago.

The saving grace in economic policy came from the rupee’s exchange rate; unlike in the preceding years like 2006 and 2007, the rupee’s slight appreciation against currencies like the US dollar in recent years helped keep a partial lid on price rises. Imagine what the scale of inflation importers would have inflicted on us had the rupee depreciated instead when, with rupee appreciation actually, inflation has already scaled up to 7% on a year-to-year basis. Despite the rupee holding it out, we could not escape from weakened prospects of growth and the threat of more inflation to come as oil prices remained in the upper range due to tensions in the Middle East.

That we had not been concentrating on real issues while we lost our way in the political jungle of alliances and misalliances is reflected by the severe water shortage conditions citizens have faced throughout the year. Substantive issues like this (supply of energy, food security, market diversification) have been receiving lesser attention; this phenomenon is also manifest in the failure to draw up a long term vision of growth for the country fighting it up against an increasingly tougher global economic environment. Little has been done, for instance, to achieve a strong dose of economic diversification and consolidation in this context.

Nevertheless, 2011 had the singular merit to see the report of the Truth and Justice Commission, inquiring into the past history of slavery and indentured labour, delivered. The Creole language was introduced in schools and an Equal Opportunities Act was passed as well. The government lodged a case against the government of the UK which declared the area around Diego Garcia a marine protected zone, in an attempt to consolidate its usurpation of our territory. It is not clear yet as to what all of these will lead to in the social and economic architecture of the country. It may well be harmoniously joined with an acceptable version of electoral reform.

We should no doubt have been looking into all these side issues. It is the quality of good overall leadership to look at side issues but also to focus pointedly all the same on the lifeblood of the nation, that is, on those essential factors that are vital to upholding a stable and growing overall condition. We should know what exactly our priorities should have been and whether this chapter is not being neglected for chasing things that don’t help in the long run. Mauritius has not fully focussed on its priorities and it is not too late to grapple seriously with the structural factors that really matter.

 

M.K.

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