The Singapore Lesson
Mauritius will host an official visit of Sellapan Ramanathan, President of the Republic of Singapore, from 4th to 7th June 2011. The distinguished guest will, amongst others, address the National Assembly in the course of this visit. Short of tendering any advice as to how we could run our affairs to emulate the established efficiency of Singapore, which would not be in accord with diplomatic protocol, he would be doing us a good turn by enlightening us on the crucial choices Singapore has made to usher itself into a near OECD status from the marshland that it once was. There are basic differences which would make it impossible to replicate in Mauritius the success story of Singapore. However, it would cost us nothing to learn from the holder of the highest office in Singapore as to how does his country not only manage to keep up an internationally untarnished image of itself in the provision of financial and non-financial services alike while it keeps working continuously at the edges to adapt the country’s production to ever changing global economic profiles. Singapore appears to have thought out in advance ways and means of tackling market constraints that might have hit it had it not acted to ward off dangers in advance. This kind of constant repositioning of the economy, without having to accommodate distorting micro demands by particular sectors of the economy, must be resting not on generalities or declarations of intent but rather on actual actions taken by getting the right insights into the path of future development.
We have witnessed and are still witnessing a series of popular uprisings in the Middle East, involving an enduring clash between holders of political power who have unduly enriched themselves in some of the cases whereas the bulk of the population is impoverished in economic terms as well as in terms of freedom of dissent. Yet, quite a few of these fires of tension are well endowed in natural resources such as oil. Protesting citizens have reached a point where they are prepared to sacrifice their lives at the hands of security forces of the rulers of these countries. In contrast, there is no such fierce opposition between the people and holders of political power in other places, such as Singapore, despite this country not being endowed with rich natural resources. This may mean that there is no need to trade off the power vested in the political establishment against the welfare of the population if the scope of the economy is improved constantly without giving rise to skewed distributions of incomes. We may not go as far as Singapore has gone in this respect but we may learn a useful thing or two on how to keep the balance on an even keel. We may also learn about what Singapore does in order not to allow problems to lie in wait and swell up to unmanageable proportions, which is no doubt a cornerstone of its economic success down the years. We may also gain insights about the mechanism Singapore adopts for people in positions of command to always remain efficient in the delivery of their work. It is rare for decision-makers in Singapore to shift the blame onto others or to find excuses for current shortcomings in past wrongdoings. They tackle problems head-on.
This list is of course not exhaustive. We agree with Mentor Minister Lee Kwan Yew who once said: “do not look for solutions to issues of Mauritius by copying what we’ve done in Singapore”. For us however, answers to some of these concerns should help apprehend our future with a higher sense of “connaissance-de-cause” than it is usually the case here. We hope that the President has a nice stay among us and that we can build better bridges between the two countries after the visit.
The Delphis-First City Bank affair
In 2004, Mr Sunil Bheeroo, the Company Secretary of the First City Bank (FCB), the successor bank to the former Delphis Bank, requested the Independent Commission against Corruption (ICAC) to investigate a case involving certain malpractices that would have been resorted to at the FCB regarding unauthorised granting of loans to specific persons. ICAC has proceeded this week (i.e., 2011) with the arrests of the former Chairman of the FCB (also the former MD of the Development Bank of Mauritius), the former Chief Executive Officer of the FCB. It is also poised to take similar action against a highly politically connected client of the FCB, in this case.
The former Chairman of the FCB has been accused of having obtained a bribe of Rs 2 million to facilitate the takeover and integration with the FCB of a leasing company owned erstwhile by one of the FCB’s dominant shareholders, namely Mr H Sookun. The former Chief Executive of the FCB, on his part, has been charged with having facilitated the grant of a substantial loan to a highly politically connected client of the FCB, namely Mr Aboo Maghoo, without seeking the authorisation of the FCB’s higher authorities therefor. Mr Maghoo himself is likely to be queried regarding allegations of influence peddling in the matter of securing the banking licence for the FCB from the Bank of Mauritius after the delicensing, it will be recalled, of the Delphis Bank by the central bank in 2002.
After having seen the evidence culled out by ICAC, the Director of Public Prosecutions has decided that further action would be warranted to be taken in the case. It is a good thing that ICAC has, after such a long time though, brought up the charges which remain to be conclusively proved before the court in any event to establish actual guilt. At the time Mr Bheeroo had alerted ICAC about the matter, it was widely believed in the public that the erratic track record of the FCB was continuing from its previous existence as the Delphis Bank. It was surprising that the central bank had allowed a single individual who, it appears, would not have the best of manners in finance to effectively control the Delphis Bank. That was an unsound decision to all evidence. It was a manner of compounding the problem by having another individual, Mr H Sookun, having no track record in banking take up a very significant shareholding in the Delphis Bank re-baptised as the First City Bank, together with the DBM.
All this sounds quite unhealthy for a hallowed sector of activity such as banking. There is a likelihood that if it is established that there has been malfeasance and money transfers in the grant of the banking licence to the FCB, the central bank may also have to provide its piece of evidence in the matter. FCB took over Delphis Bank in 2002; it is in 2004 that Mr Bheeroo denounced the alleged malpractice at the FCB involving loan given to Mr Maghoo who is said to have peddled influence towards the granting of the banking licence in 2002. ICAC probably needs to investigate what went wrong between 2002 when the banking licence changed hands and 2004 when Mr Bheeroo brought up the case before ICAC. There may be more stories to tell.
If ICAC successfully establishes its case, this will be yet another tale of alleged corruption following closely on the recent Medpoint case, the more so as it is alleged that Mr Sookun would have stated having paid in a sum of Rs 25 million to secure the banking licence, presumably in 2002. All this reflects quite poorly on Mauritius, whether or not the cases are finally conclusively proved. It amounts to a lot of energy being diverted to deal with a culture of corruption that does not appear to be dating back to yesterday. Had strong signals been given that authorities will adamantly and expeditiously bring to severe justice some corruption cases that could have been stood up as exemplary to anyone likely to be tempted to go off course, we would not be risking finding ourselves with further cases of corruption on our hands. It is this direction that needed to be given at the earliest so that we don’t continue drifting in this direction too far.