“It is the politicisation of all dimensions of institutional public space that is the main culprit”

Interview: Nalini Burn, Economist & International Consultant

‘Yes, the economy is in a dire situation, or some sectors are in a dire situation’

‘I think we should rethink where we draw the boundaries of the economy and what we think constitutes a robust economy for a nation state with clear national economic boundaries’

Our interviewee of this week, Ms Nalini Burns, makes an overview of the state of affairs in the country, commenting on the political situation, the economy, the prospects for the future especially of the youth who cannot be blamed for seeker greener pastures elsewhere – though that space is also being constrained. Although the situation may look grim, she still holds out hope that things could be turned around if we revisit out 50 year old development model. The forthcoming ‘Assises’ bringing together government, civil society and other talents provides such an opportunity.

Mauritius Times: The elections are over, the MSM-ML alliance has won the day but finds itself against a Labour Party-MMM-PMSD opposition representing almost 35% of the electorate. The elections in a number of constituencies are being contested by the latter parties, and it could be argued that the recent Weekend interview of Gavin Glover QC has lent some credence to the petitions of the opposition. But it’s for the Court to go to the bottom of the matter. What do expect will come out of it?

Nalini Burn: Frankly, I have no idea. It will depend on how they will interpret the law, which for a layperson, seems to need it, when I read the interview.

* But whichever way you look at it, the fact is that you have a majority government in place, and its secure majority should allow it to govern the country during the next five years in more or less stable conditions. Or, do you see the opposition being able to rock the boat?

I think it should be able to govern. A majority of votes doesn’t translate in a majority of seats in our electoral system, and that’s the rub of the matter. Any instability will come from within the ranks of the majority coalition, which when you look at what the last in have been offered as well as the first in, would take some major ground-shaking

* There are already early signs of possible trouble brewing within the ranks of the opposition itself: there’s the discomfort of the MMM’s leader to the Labour Party parliamentary leader Arvin Boolell’s perceived soft stand with regard to the appointment of Sooroojdev Phokeer as Speaker, and the other is what appears to be a strong current of opinion within the MMM against the Party going solo at the next general elections. It looks like the seeds of suspicion are being sown within the ranks of the opposition itself, isn’t it?

Well, first of all the opposition did not go in as one outfit in the first place. In a three-cornered fight, the incumbent government played its considerable cards to win that fight. If we use the tools of economic analysis, we have seen an example of a series of private take-over bids and headhunting, which has hollowed out one of the oppositions mainly. And part of the dynamics of the continuing government is then to have played one part of the opposition against the other, which the latter also did. Unlike the British election, with success, hopefully! – there has not been a tactical pact to keep the outgoing government from getting elected.

* In terms of leadership styles, there is what appears to be the soft leadership of Arvin Boolell as well as of Xavier Duval in sharp contrast to the breast-beating (‘tant-qui-mo-là-ou-pas-bizin-peur’) displays of Navin Ramgoolam and the equally toughie style of Paul Bérenger. What do you think the people look up to in Mauritian leaders in this day and age?

I am not so sure that we can think of leadership styles as being a factor in the election and I do not think that voters in all their diversity were endorsing any particular self-branding and/or self-image, which was really hyped-up by some of the protagonists, I agree. If you are thinking of the elections, it took a while before knowing who the clear-cut leader of the parliamentary Labour was, Navin Ramgoolam being held down “manu legalmente”, so to speak, by a barrage of court cases. I don’t think that helped the Labour Party. It turns out because of the results perhaps – pending the outcome of the various petitions, which may or may not go all one way – Arvin Boolell is parliamentary leader. Or will there also be a party leader? That is the elephant in the room right now as far as the milestones to the next election goes.

If you are thinking about the Opposition in Parliament, that is a different matter. Independently of the style, did we have a strong assertive opposition that vigorously tested the outgoing government in deliberations, called it to account? Sometimes it did look that possible coalitions were the reasons for rather low-key performances. However, being Leader of the Opposition does carry a particular responsibility and some weight. The interesting aspect in this Parliament is that we have the remaining two separate sides in Opposition, with the more formidable previous Leader not a Leader anymore.

* When they will have overcome the shock of defeat, lots of ‘Travaillistes’ and ‘Militants’ will surely start pondering the future of their respective parties as well of that of their leaders and what will happen next on the political front. Where do you see these two main opposition parties in five years’ time… if their leaders decide to stay put?

That is a rather broad and complex question, to have a clear-cut answer, and depends also on how the newly elected members perform within their respective parties and some inevitable imponderables. I rather think that the onus is not so much on them, but on what the incumbent governing coalition does to the opposition or to its members, irrespective or even because of their good performance in opposition! May be a lesson of this election.

* It could be said that Pravind Jugnauth seems to have done well with his relatively less expansive leadership style: he has outsmarted two “vieux routiers” in Mauritian politics against their expectations at the recent elections, and he is playing his political cards well if we go by the recent constitutional appointments. He seems to have already set his eyes on the next elections. What do you think?

Again I would not put much on style as such. There have been so many possible reasons, most of which have been aired. It would be great one day for Pravind Jugnauth and his close entourage to open up and explain. But certain smiles caught on TV, for onlookers like me, do say a great deal. Or maybe advise on how to design a riveting Netflix series on realpolitik from a family trust!

First I think that from day one of winning the 2014 elections, the Sun Trust moved entrepreneurially to win the next elections and in case of failure , do rather well in terms of the last mandate. Perhaps what has been the smartest, but not a deliberate move, is for the leader not to have been projected so much. This would have made it possible to personalise opposition, frustration and anger around his persona. All the muckraking videos were about his entourage. He focused on his tangible prestige projects – whether they work or not, they capture the imagination of some – mega events – designed to win sections of the population and some key well-targeted measures to co-opt much of the rest. This is the way in which elections seem to be won these days, with blended specialist firms – that is, with public private connections – hired for the purpose.

Having said this, the recent Constitutional appointments cross the Ts and put the dots on the i’s as regards the winning electoral strategy: positioning the principal member of the ruling coalition as a majoritarian party, which fits in with the ideological stance of the present governing party in India. You now have to BJP India’s advantage both the Star and the Key of the Indian Ocean and the Pearl of the Indian Ocean (Sri Lanka) with recently-elected governments on a majoritarian platform and with close connections to it. It is quite possible that political stance and election technical savvy have been closely involved.

* The one and major challenge facing the Government however is the economy. There is the financing of the popular measures – pension increase, PRB, etc – to be worked out; there are also challenges in the export manufacturing sector and in the tourism industry, along with the galloping budget deficit… The situation does not look bright, isn’t it so?

Yes, the economy is in a dire situation, or some sectors are in a dire situation. But I think we should rethink where we draw the boundaries of the economy and what we think constitutes a robust economy for a nation state with clear national economic boundaries. Maybe none of these are present in the case of Mauritius and indeed of the world, with the intensive financialisation of the global economy – of which we are a small cog – but also financialisation of daily life.

There is an IMF-World Bank Mission now and they will have the more accurate figures as far as macroeconomic indicators go, if they have managed to capture more accurate and complete data on financial flows. But a budget deficit can be financed and debt managed. We are living in times of low interest rates because of in part the fallout of the 2007 financial crisis. And if a big component is debt, and a major component of that debt is domestic and not foreign, the debt repayment goes back to the local economy (currently the September 2019 provisional figures situate budgetary central government domestic debt at 49.9% of GDP, external debt at 7.8% of GDP and when one includes public enterprise debt it is 64.8% of GDP.

That is without counting off-budget debt, that goes through special purpose vehicles, and which are usually government to government). But as long as indirect taxes bring in revenue, that can be managed. With a large share of domestic debt, public spending has redistributive implications: who is paying whom. If your parents are both on a basic state pension, you may not need to give them any income support and use your higher minimum wage (paid by your company) in buying more needed consumer items on credit. In fact, you could use their regular income transfer for monthly repayments on your new fridge freezer.

As far as public finance is concerned, the ideological prescriptions of the International Financial Institutions will be to push for ending universal pensions and go for targeting. (I am very much against that. Targeting leads so much to political capture and I think we can see that in the last and future elections) The IFIs are unlikely to say anything about progressive income tax, which I think is the way forward. They will probably say something about the efficiency and productivity of public investment another source of growth. But I doubt it. What they will come up with, will be the content of the forthcoming budget speeches. And they will not spell doom

* In fact, most economists who have come out publicly about the state of the economy have been saying that it’s going to get rough in the years ahead. But they have been saying the same thing for years now, and we have seen none of that happening. What’s your take on that?

We are now getting truly disconnected from the real productive economy, as we imagine it, within our national boundaries or shores. We have become a platform, a conduit, for financial flows and a hub for flows of goods. The giant firms of today do not produce anything. Look at Amazon, Google, Facebook. We now need new concepts and tools and a great dose of insight to understand the workings of an economy, and how to define it.

It is well-known that our economic model is now more based on balance of payments inflows from the offshore financial services sector which sustains one of the drivers of growth, personal consumption of mostly imports and credit. There is a large sector of employment and businesses servicing it. When you max-out on credit, a little stimulus from the state keeps the system lubricated, every so often and bunching around electoral cycles. Will the inflow of wealth funds and their management keep coming?

What happens to employment when tourism and manufacturing – the real economy – takes a systemic dip, reflected in our balance of trade account deficit? I am not sure there is any adequate preparation for that. Workers may leave the hotel and tourist trade with already uneven industrial relations and tough working hours, take up work abroad in the sector and at home. We adjust. Many tourism business owners, part of large conglomerates, have other ways to diversify their products by cashing in on their ownership of scrub land and now desirable real estate, behind the Pas Géometriques.

We do not seem to factor in the underground economy, which is considerable and its economic and political spin-offs or multiplier effects in economic modelling. If our life-style and aspirations are wedded to this model of unsustainable consumption and production, it will carry on for the time being. It is a lock-in in a gilded box. Unless there is a major shock. And that, every cyclone season and around it, as the climate crisis intensifies, is a very real possibility. And the true vulnerability of our economic, social and associated environmental model will be horribly exposed, as well as our lack of resilience preparedness.

* It is said that the future development of Mauritius will depend to a large extent on the use that is made of its land assets. Would the renaming of the Ministry of Housing and Lands to Housing and Land Use suggest a departure from the real estate FDI-driven economic policy to a more judicious utilisation of our lands?

Over the decades that I have worked in now over 20 countries, I have seen Ministry appellations and configurations change a lot and rather frequently. Without meaning much or even when intending to, not amounting to much!

Why? Because the new name may have tapped into voter or simply better sentiment and expectations. But then hit the hard bedrock of political economy. You say judicious utilisation of our lands. Whose lands are they, in terms of title deeds? Such is the nature of patrimonial capitalism, decades of others labouring on and working the land accumulates to the owners of the land, as you know. Who can pretty much do what they want with it. That is, depending on what the various authorities will allow and facilitate and which lets in the lucrative and secretive and much hushed-hushed about transactions along the supply chain by political incumbents.

Characterising economic policy as real estate FDI-driven is only a partial manifestation of what is happening. As I mentioned before, financialisation and our deliberate diversification into this platform started a few decades ago. It is not FDI as such but portfolio investment and “domiciliation”. The vast gap between returns from global real estate – particularly of freehold land around the coastal belt and negotiation over all kinds of access over public land and returns from agricultural and other uses – make it impossible to imagine this dynamic turning around, when mainstream parties have never fought an election questioning this platform.

It is so lucrative for the financial, insurance and legal sectors. The exemption from land conversion facilitates the sortie de crises which has always characterised the sugar cycles of the past: morcellements for residential uses. So many of the young entrants in politics earn a handsome package adding “local material substance” that ward off the threat of being branded an offshore tax haven. 100% government-owned private companies facilitate this public-private partnership process and the governance is located at the hub at the heart of government. There is no need for a leadership style. The mechanisms and instruments are there.

The second dimension is the allocation of public land for competing uses: It is well-known that this portfolio also allows a great deal of patronage in our clientelist and rent-seeking political economy. There are enough rumours of how finely targeted vote capture has been in key constituencies to explore it more analytically. But where are the research institutions and policy think tanks to do so?

The third important dimension is that our lands should be seen as part of our exclusive economic zone as a result of our scattering of islands across the Indian Ocean. We are a hub of geostrategic importance and it is our location that is significant. So, what will our littoral be used for to the detriment of other resource uses, and for whose ends?

There are now other players who decide on how lands should be utilised and our geo-economic diplomacy can yield rich investment streams for any incumbent government, as well as reduce the leverage of the local private sector. How will the geography of finance and maritime security intersect? What will it mean for us ordinary Mauritians, for our material security, health, well-being and quality of life across generations, which is what economics should be about?

It is of considerable concern that most economists, policy makers and wider elites churn out the mantra that we aspire to be a high-income country, and that we have done so well without natural resources, and we have just the richness of our human resources. What do we want to be a high-income country for? Have we even accounted for the natural resources that we have squandered, factored in the cost of having destroyed the natural value-added that make the country so attractive?

We are losing land – coastal land and ecosystem services, such as wetlands, prohibitively costly to replace, through climate change, wrong policies and mismanagement, and do virtually nothing about it. Nowhere with the sense of urgency that is required. And also, just as much, how little and badly we treat human “resources” and ignore what the reproduction of social life, one of our greatest assets, our way of being, our collective diverse intelligence, depends on.

* A young professional, who by virtue of his calling gets an exposure of different sectors and institutions and even the investigative bodies, was saying recently that things have become highly politically polarised in the country, and that Mauritius is not a land of opportunity anymore. That’s quite pessimistic, but we do come across quite a lot of our young people who do not feel optimistic about the future here. What can be done to rekindle their optimism – after all they are our country’s future hope, isn’t it?

I will not say that it is political polarisation as such which is the main culprit, it is the politicisation (political partisan) of all dimensions of institutional public space from its macro to its micro dimensions.

In a sense, in our patronage-clientelist model, it is the carrot and stick approach. Brought to the next level in the last election: anybody can be co-opted and stand to be counted. The rest seemingly stand no chance. That clear subtext is the stuff of last minute “viré mam”, and not just from the electorate. Are we in for a de facto one-party state?

There are, despite the mind-numbing and soul-destroying failings of our school system, so many brilliant, thoughtful young people who want to stay, some who have chosen to return, and then who, broken, feel they just have to leave again. Yes, times are very depressing. If things were not bad elsewhere there would be a greater drain. What can reverse the toxic dynamic?

There are a number of unsung initiatives that really augur well in fighting for a desirable future, in nurturing talent and creative energy and innovation. Perhaps the creation of an education hub, where foreign staff have been interested to come to work can be this crucible. There are those who care, however few. If they have a relatively secure income which gives time to engage, they can make a difference. But both the government and the opposition will have to play an important facilitating role.

There is enough of a majority to work on two tracks, that of the party as an enterprise and that of a government that fulfils its obligations and commitments to human rights and sustainable development and can use its considerable leverage. There are some in the public sector, who just want the chance and space to deploy their expertise and experience. The private sector has an important role to play. There are those who love their country and the way of life it can yield. But they should no longer be exclusive in keeping all the benefits to themselves. It is for the government to set the tone and create the space.

So far, we have not had any stock taking of the last 50+ years of our independence, and an in-depth evaluation of our development model, which boils down to a business model, as a precursor to envision another future. Taking into account climate change. We have a new parliament in recess while the government crafts its programme, behind closed doors, with the usual suspects. What if at a time when we are supposed to craft a new National Development Strategy (the current one expires in 2020), we do a participatory, inclusive envisioning exercise, that is premised on guaranteeing our democracy – engaging government and opposition and civil society?

On Monday and Tuesday there is the Assises de l’Environnement. It should be premised on and concomitant with the Assises de l’Economie and the Assises Sociales. Nothing less. We could, perhaps, have a chink of a chance of reversing the slide. That would be real leadership, of style and substance.

* Published in print edition on 13 December 2019

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