For the Future Now
We cannot make abstraction of the fact that, as a country, Mauritius today is not quite clear what it is headed for in terms of its economic play out. At the global level, things are changing fast and what was taken for granted as a sector of production yesterday may face severe competition today from other global producers. The post 2008-09 economic crisis world is adjusting dynamically. Even before the crisis, however, new countries such as China emerged and overtook long established players such as Japan to occupy today the position of the second largest economy in the world after America. South Korea was nowhere after the East Asia crisis of 1997 brought it to its knees but hosts today some of the world’s forefront technology companies. The very centre of gravity of economic activity is poised to shift in the years to come once the re-configuration at the global level takes firm shape. This situation calls for continuous positive realignment if a small place like Mauritius were to continue to thrive as it has done in the past.
Already, difficulties are surfacing up. There is currently a concern that our tourism sector is not doing as well as it should have been doing. Less than half our hotel rooms are currently occupied. There is a seasonal factor behind it inasmuch as European summer usually coincides with the low season here in Mauritius. In other words, our hotels are used to experiencing this sort of situation at this particular time of the year. However, there are long term risks that a clientele which gets used to alternative cheaper destinations, compared with Mauritius, may be lost to us for good. In that case, a structural problem will come in. This can be overcome if we find out alternative ways of compensating and diversifying for the loss of custom. We could even take action by improving our international competitiveness and appeal as a prized destination in this context. For this, we need a full time professional minister coordinating all the relevant parameters (ticket costs, taxes, packages, service levels, country brand, source markets, security, etc.) which determine the flow of visitors to our shores. Time cannot be lost discussing party political matters. It goes without saying that this framework cannot succeed without a responsible, efficient and hard driving management at individual firm level.
Similarly, our textile sector has not been doing the best it could have done in terms of exporting out. Our traditional export markets are buffeted already by falling demand due to economic downturn. We no longer can export to them as much as we used to do. So, our exporters have taken on new markets such as South Africa to make good the shortcoming. Even this has not proved to be as good as one would have wished. A rising US dollar has brought down the South African rand of late and cut down rupee earnings from this market. This will no doubt seep negatively into the bottom line of the profit and loss accounts of those exporting enterprises. Once again, situations like this call for dynamic adjustment so as not to lose markets. In fact, what one needed to do was to beef the sector up, whether at the level of operating efficiency or by re-orienting it with adequate and readily available supplies of productive labour, the right sort of raw materials, new and higher value-added market outlets, reliable energy supply at future internationally competitive levels, high class management, etc. That would again have called for a dedicated teamwork involving the government and captains of industry to spur the industry’s continuous uplift against the background of rapidly changing international market profiles.
Signs of stress have appeared in other domains of economic activity. The constant flow of FDI which Mauritius experienced towards the end of the last decade and earlier during this decade is unlikely to keep flowing at the pace seen before. Excessive liquidities in the home countries that were supporting their outflows to countries like ours are drying up. The relief this brought to our deficit in the current account of our balance of payments will not play out as it did in the past. This will be the case the more the international economic downturn took time to abate soon enough. Our financial sector is also seeing itself increasingly challenged the more other countries’ governments have felt the stress of being unable to collect the amount of tax revenues they need to pay up all they have been budgeting for. It is a tough environment we are operating in and we need to see ourselves through it. Needless to add that all areas of economic activity of a country work together consonantly and that there are negative repercussions across the board even where only one or two of them are directly hit in the absence of proactive management.
There is no reason really to paint Doomsday scenarios if some sector or other is not doing as well as one would have wished for. In Mauritius, for example, it suffices for the overall economic rate of growth to fall by 100 or 200 basis points for decision-makers and economic lobbies to start making distress calls. It need not be so. The past has demonstrated that economic difficulties have indeed been the springboard for our making new breakthroughs and expanding economic horizons to insulate ourselves from the threat of economic distress.
Difficulties that have started appearing on our economic horizon are beckoning us to take up the challenges once again. We can do this if we have the correct attitude on the part of those who have been entrusted with the stewardship of running the ship of state. The more they have the necessary competence to assemble all the elements of the economic puzzle coherently and act unfailingly to redress them, the more we can get out of the difficulties and rise to new heights. All you need to do is to break the gridlock which is stalling the big machine of efficient economic production. It calls for a sense of commitment to the superior interest of the state.
Rather than complaining that the global economic situation is making economic opportunities slip out through our fingers, the real job is to consolidate what we have in view to the future. We need to set ourselves global benchmarks of performing whichever the field of activity we embark upon. We need to cultivate ambition in our entrepreneurs. Our ambassadors need to go out opening shopping opportunities for us abroad. We have to groom up a domestic pool of talent that can break new barriers at the global level and motivate it to contribute in multiple spheres.
We need not look negatively to imposing ourselves longer hours of work; rather, we need to look at the longer term and become more innovative and hell-bent on cultivating the amount of productivity it needs to go out and meet the next world on a stronger footing. If we pursue this path, we will stop fretting unnecessarily when small little things come up in our way. Because the risk of adopting this latter attitude is to be entrapped into becoming an idle, insular and pampered lot unable to deal ingeniously and productively with the world.