The task ahead to put Mauritius back on a high growth mode is daunting. It is therefore not the time for tom-tomming about a second economic miracle ahead of its happening
We normally speak of “economic miracles” a posteriori, after it has happened, on the evidence of objective economic and social indices attesting that the country has indeed made a quantum leap forward in terms of inter alia a significant fall in unemployment, marked rise in standards of living and sustained growth benefiting not a few but all in an inclusive manner.
More importantly, as was the case post the economic doldrums of 1983, the key yardstick must primarily be a common public acknowledgement by people from all walks of life that there has been a substantial general improvement in their well-being. This was the general sentiment of people by 1990 when compared to their dire circumstances in 1983 when the country was on its knees with a heavy debt burden, high tax and unemployment rates, tottering after two devaluations.
The country is currently faced with daunting challenges against the backdrop of high unemployment especially among the young, eroding purchasing power, stunted growth, stark inequalities, a pervasive disenchantment with the political class and a persistently difficult international context now undermined by China’s economic slowdown.
There has since December 2014 been high expectations that government would come forward with a holistic blueprint to address the heavy backlog of these and other urgent problems afflicting the livelihoods of people. For example we need to have a serious rethink at our model of development as it is totally unacceptable that there is such a glaring mismatch between the paltry disposable income of a young salaried graduate earning say the national average monthly earnings of some Rs 25,000 and the substantial sums necessary for him to afford the basic existential needs of investing in a house or a car or of going on holidays. This is a major step backwards as his parents could afford all these and more.
Separating the wheat from the chaff
The government mission statement delivered on 22 August 2015 which builds more substantially on the architecture and tenor of projects in the March 2015 budget speech therefore responds to public expectations for clarity as to the way forward. It defines the thrust of government action which relies heavily on investments in private sector projects, a large proportion of which are essentially real estate developments of various kinds and content to cater to a large extent for the residential and recreational needs of the well to do. A clear distinction must therefore be made between such potentially highly profitable projects for the promoters which have limited impact in addressing the core problems afflicting Mauritius and the others.
In contrast, the mainly Foreign Direct Investments to transform the port into a multifaceted regional hub as well as the investments in the new economic pillars of the economy (ICT/BPO, Seafood, Freeport, Financial services, Tertiary Education sector, etc) all have a potentially more sustainable impact on creating gainful employment for the unemployed and providing a much needed impetus to growth. To this end, it is equally important to reposition the activities in the new pillars of the economy up the value chain through innovative strategies, the induction of the required expertise which we lack or through strategic partnerships.
It must be remembered that the current situation is significantly different from that in 1983 when the preferential agreements and package of incentives provided by the State fuelled investments and massive employment in the Export Processing Zone, sustained growth and ushered a quantum increase in standards of living. In the present globalized world devoid of the props of preferences, innovativeness coupled with the competitiveness and quality of the goods and services marketed by economic actors are the main drivers of investments and growth.
The task ahead to put Mauritius back on a high growth mode is therefore daunting. It is hence not the time for tom-tomming about a second economic miracle ahead of its happening.
The proof of an economic miracle can only be ascertained after the people-centred strategies enunciated and the 40 major projects harnessing some Rs183 billion of private sector investments inclusive of Rs 140 billion as FDI (Foreign Direct Investment) have panned out in the next five years by 2020. However, the evidence of an economic miracle will not be measured by the number of golf courses and their immaculate fairways or gated high-end residential enclaves built as part of the hotchpotch of projects indiscriminately lumped under the ‘smart cities’ umbrella, developed in most cases by sugar groups on thousands of acres of their sugar cane land assets.
It will be determined by the way the colossal investments and diverse private sector projects meet the legitimate aspirations of mainstream Mauritius.
This means better remunerated employment opportunities through a transparent and merit based process of employment, the bridging of the marked income inequalities within the sector and a quantum jump in standards of living generally, driven by significantly higher growth rates to provide the people with the means and pathways to pursue their dreams of happiness. It also means the urgent creation of the necessary jobs to absorb some 50,300 persons who were unemployed at the end of the first quarter of 2015, which includes about 7,600 University graduates or diploma holders to which must be added some 4,000 graduates from the local tertiary education sector and from abroad entering the job market annually.
In the recent past, the inability to develop, in spite of various stimulus packages, innovative strategies to conjure the adverse impact of the enduring international financial crisis resulted in stunted growth levels which averaged some 4% during the 2007-2014 period and rising unemployment. Is it a sign that the private sector is out of steam to brainstorm sustainable strategies out of the straight jacket of a euro-centric mindset, which takes on board the changing economic and international trading landscape driven by emerging markets?
The determinant role of government
It must be stated that the people who voted the government to power against all odds last December had high hopes of a paradigm shift in governance under the stewardship of the Prime Minister. The people were aware that with the exception of a few seasoned politicians to help give substance to government action, the rest were basically neophytes with no experience of government administration.
One of the major disappointments of government action has therefore been the pervasive political appointment of sycophants and sinecures to key posts of the government Establishment, State owned companies and as Ambassadors whilst paying regular lip service to good governance, meritocracy or economic diplomacy, principles reiterated in the government mission statement. As is evident, the government is often doing the exact opposite of what it professes to do. It is obvious that such nominations undermine the necessary synergies required to deliver on the objectives of the mission statement and risk thwarting government strategies.
As per the government mission statement, the implementation of the diverse projects will benefit from fast track business facilitation by civil servants under orders to iron out all constraints (as unjustified delays will not be tolerated and invite sanctions) and by a High Powered Committee and a Joint public-private sector Steering Committee, both chaired by the Prime Minister. This knee bending is all quite disquieting as good governance also means ensuring that civil servants remain independent bulwarks guarding public interest. Under such a regimented framework, who will ensure that the public interest and the interests of the people and the multitude prevail and are not subordinated to leonine tradeoffs towards investors? We are all fully aware of the damaging fallouts on the country of any licence or compromises at the expense of the nation. As the ultimate arbiter, it is Government’s responsibility not to be press-ganged in any way and to uncompromisingly ensure that the public and national interests remain paramount in all circumstances and that the nation’s interests are safeguarded and unerringly upheld at all times. The top civil servants of an independent civil service also have the crucial role of providing wise counsel in this respect and being resolute guardians of the public good.
Government should therefore closely monitor the implementation of the projects and ensure that the private sector employment targets fixed for the different sectors are rigorously adhered to and that all recruitments meet the test of transparency and merit. The more so, as the private sector which employs more than three times the number of employed in the public sector is de facto the main engine of job creation in the country.
It is not economic miracles but the objective scrutiny of history on their track record and the manner they steadfastly upheld their contract of trust with the people and the public interest which determine the legacies of statesmen, politicians and public figures. Far more than economic miracles, it is policies and actions which bring about a quantum jump in the standards of living and quality of life of all and joys in the livelihoods of the people which assure the place of statesmen in the history of a nation. What better legacy than a grateful gong from the people.
- Published in print edition on 28 August 2015