Encourage import substitution!

Points to Ponder


A FIRST POINT: Our economy is not flourishing as it used to in the past. The Labour Party and its alliances have never said that the “poelon est trop chaud” as some others have done and given up the fight. The Labour Party and its alliances have worked harder still and they have managed to have a positive growth, whatever the percentage.

What is the cause and who is responsible for the going down of our economy? The main one is the greed of the governments and of the private sector of the so-called capitalist countries, with their huge economies that the economy of the world cannot suffer and accept. Those big capitalist countries are learning how to accept poverty. Therefore we have to put the second question.

Who is responsible for the downward trend of our economy? It’s those very same capitalist countries which no longer have the money to buy our goods, and our factories are having to downsize with the spectre of closing down looming. If tourists from those rich countries stop coming to our hotels, the latter too will go the same way as factories. In both cases, our people will lose their jobs. We have depended too much for everything on outsiders . Even vegetables, pulses, milk, sugar are bought from other countries. If we can pay the same price of, say, peas of the same quality why is it that instead of growing our own we prefer importing them? Why do we import so many varieties of fruits when we can grow local fruits, which we know are tastier? Further, imported fruits do not necessarily have better vitamin content than the local varieties. We keep importing them simply because people have been buying Australian, South African, English and French fruits from the colonial days. The colonial mentality takes a long time to disappear, in many spheres.

Of course we shall have to buy our rice and flour from other countries, but why not buy them from countries that will buy our goods in exchange?

The difficult global economic situation has not been created by us but we cannot escape its consequences. It is as if the global situation is the main culprit but we cannot punish it.

Those who are in employment, together with their trade unionists if they have any, must strongly defend against the loss of jobs. It goes to the benefit of the workers, of the employers as well as the country as a whole when we have a maximum of people in employment. We shall then have economic progress and relative peace in the country.

At the same time the employers must be fair to their employees in dealing with them. They must see to it that they are given the proper wage that will allow them to lead a decent life. The employers must no doubt make a profit in order to survive, but such profit must not be exaggerated. We all know that in the past, the big sugar companies used to say on a regular basis that they were always making loses, but yet they were investing heavily in other sectors like the hotels, textile and other industries. People have been taught by these very entrepreneurs how and why they cannot and should not be trusted.

Hard times are ahead of us, whether we like it or not. Our only chance is to look to the East, for economic growth will come from there. We have been told that the top hotels were in the recent past reluctant to accept tourists coming from Asia, apparently because they wanted to have only European tourists in their establishments. This is racism in its crassest form but it was done in a subtle manner.

* * *

Prudence in the family budget

A SECOND POINT: Every country has a budget that is voted by its Parliament, at least in the democratic countries. Normally, government spends only the money that is voted by Parliament, especially when it comes to capital expenditure. Once a contract is awarded for any project all parties must conform to the specific terms of the contract, as regards costs, work to be done or the time frame. You cannot go outside the terms of the contract; if you want to have a variation of the works to be performed, the procedure must be spelt out very clearly and there must be sound reasons for this.

My purpose in writing about this relates to the family budget. Just as our country has a budget, we expect every family also must have one too, but unfortunately, all families do not. It is very easy for the head of the household to know the total income of the family and its estimated monthly expenditure. Such an exercise will help to put the family finances in order.

When there is a budget, unnecessary spending will be cut down, people will not be taken in by the attractive advertisements such as take delivery now pay later, or by fictitious sales which can tempt one to spend on futile articles. Many people do not pay enough attention about whether they will have enough resources to pay in the future and thus risk giving up the article they bought on credit. They never realize that, at the end of the day, the sellers do not come out as losers: it is always the buyer who ends up paying the costs.

The income of the family comprises the salaries and wages of the members and other regular sources of money, such as pension, interest, rent in some cases, dividends, or alimony in certain cases; there maybe other sources of income too.

The expenditure normally includes the costs of groceries, water, electricity, medical care, school expenses, transport, clothing and such items. Alcoholic drinks, cigarettes, gambling and such other expenses should be completely banned from the budget.

A person without a budget plan ill soon fall in a debt trap from which it will be impossible to get out. Especially if his income is regularly less than his expense; in this case, either he brings his expenses down or increases it by working harder.

A person who works reasonably hard must get enough money to meet all his expenses and at the end of the month, he must provide for some saving for hard times. Those who have enough money to spend on unnecessary expenses do not need to have a budget, they are the persons who are born with a golden spoon in their mouth. But everybody does not have such an opportunity.

* * *

A THIRD POINT: We live in a very strange world. The Governor of the Central Bank of the Republic of Trinidad and Tobago is reaching retiring age and the post has to be filled. Three persons have been short-listed, and there is no provision in the law for an interim Governor. The three persons are Dr Patrick Watson, Dr Dhanaysar Mahabir and surprisingly, Michael Mansoor, the chief executive of the Barbados-based CIBC First.

The Finance Minister who was questioned about the qualities that the government was looking for in a Governor of the Central Bank had this to say — “someone who has a good intellectual background, someone who has experience in the financial background and someone who certainly has leadership qualities”. The name Michael Mansoor rings a bell but I wonder where? Is he going to leave his present job soon? I do not think so.

* * *

Taxation matters

A FOURTH POINT: Is France going down the pre-1982 Mauritian way in taxation matters?

People should remember that in those days, the highest taxation rate in Mauritius was 75% of the income (or was it 80%?). That very high rate was found to be unproductive and the subsequent government brought it down drastically. Those liable to pay tax collaborated and at the end of the day, government was not the loser.

With the international economic situation improving, we could not be left behind and soon we were part of the countries that were on the way to progress. These days, the economic situation is worsening and we cannot say when things will improve. What is France trying to do with its economy? We do not know. Let us not talk about the United Kingdom, Ireland, Italy, Greece, Spain or Portugal. Instead of going forward, they are going backward.

What about Mauritius? It should produce more food, there is no other solution.

* Published in print edition on 20 July 2012

Add a Comment

Your email address will not be published.