The Economy, Economists and Politics
— Nobel P. Loser
Let this be said and known. We are not fools. And we are not ready to allow others to play the fool. Of course, we are talking about the economy!
Last, first. In recent days, many voices made themselves heard while they dwelled quite extensively on some aspects of the economy or on the economy generally. The one common word heard is inflation. In their usual dress, as experts on the economy or financial analysts, writers and/or speakers have made a useful contribution to this important debate by correctly tagging inflation as the people’s number one enemy.
Here, “people” has no other meaning than the common man. Viewed from this angle, our experts and analysts appeared to have suddenly woken up to the common man’s rescue. That rising inflation will eat most if not all of the interests accrued on their savings. That rising inflation means the common man will have to dish out more money to pay for the same size of his monthly “ration”. That rising inflation is an invisible tax on the common man, and for sure, MRA does not recognise it for income tax purposes.
Having pleaded the cause of the common man, our experts and analysts now vehemently insist that measures be taken to curb inflation to avoid the country any social trauma. Some rightly pointed to the Bank of Mauritius (BoM), not as an accused but as a solution provider; as the one institution that, according to them, can roll up its sleeves and go for the fight.
So, let’s stay with the BoM for sometime.
This institution is legally bound and mandated to take up this fight. Not now, but always. Not for X or Y and not against X or Y, but in the greater interest of the country. And nothing is greater than the people. And this is not about conventional wisdom. It’s wisdom, tout court!
But in Mauritius, the truth is this: when it comes to the economy, the truth is that there are things that are greater than the people.
We don’t suffer from amnesia yet. Everybody will remember that during the final months, weeks and days of Sithanenomics, our usual lobbywallahs pressured for a change of the course of monetary and exchange rate policies. They argued, quite unbelievably but not surprisingly, that “a little increase in inflation” is a risk worth taking to salvage their P & L and balance sheets, which, as you are certainly aware, they refuse to publicly acknowledge. And they also refuse to publicly acknowledge that their suggestions for a change of policy in this direction would in no way increase the volume of exports or contribute to improve productivity in a way that would bring real gains.
In effect, the change of policy would have simply transformed monetary policy into a milking cow for a few, but against the greater interest of the people. We can confirm that the lobbywallahs are still very active within the corridors of Government House. We don’t think George will deny this truth, lest we do some news breaking next time.
At the time when the lobbywallahs were favouring a policy change that would have caused inflation to increase, we heard no expert then, no analyst shedding tears on the expected adverse impact of this on the common man. This is the politics of certain economists and financial analysts.
To end on the BoM, suffice it to say that had the institution been at the beck and call of lobbywallahs each and every time they cry about the dangerous presence of the wolf in their midst, speakers and/or writers would have garlanded Manou Bheenick and praised him as the best central bank Governor Mauritius has had.
Standing in Parliament, in the midst of the BoM saga that received the full backing of the Opposition and the then Finance ministry, Rama Sithanen strongly cautioned lawmakers, while referring to the Governor, saying that the latter is fully conversant with economic and financial matters. For the lobbywallahs then, the best policy option was to help oust Bheenick who would knowingly not be yielding to their demands.
Now let’s come to the economy as professed by politics, parliamentary and extra-parliamentary Opposition. We won’t repeat their habitual comments on inflation or on other issues or their happiness about the city without power. The country should take the Opposition more seriously only when the Opposition decided at last to take this country seriously, as far as important economic issues are concerned. And not the usual self-styled lobbying practice to favour policies and ideas that don’t take care of the greater interest of the country as a whole.
In effect, and if their love for country is that strong as is being professed, the Opposition should come up with strong signals and tell us how and in what ways they can be useful to support the implementation of unpopular policies that would do good to this country and benefit future generations. And we won’t say either that all budgetary measures announced in November or approved in December are people friendly or antithetical to inflation.
As far as some pressing issues are concerned, the country would need strong institutional clean up, reviewing of existing laws and regulations, and, in some cases, may be constitutional change if only to break away from toxic politics and practices.
Let us take a few examples.
First, this country cannot afford to have the public administration we have, including our infamous parastatal bodies, in terms of manpower and productivity, efficiency and costs, quality and on-time service delivery, to name a few. This mammoth structure is simply becoming financially, socially and economically unsustainable. Should we add the public deficit which is growing dangerously and so many other allied issues?
Second: wastage of funds and resources. For decades, we have been hearing the same story. Of late, the establishment of a unit to look into the matter at the Finance ministry has been announced. Are we fool enough to believe that this unit will work out effectively and succeed to cut down billions of rupees of wastage of taxpayers money?
Third: Energy and water development and management. Can the Opposition tell us how they can help these issues to progress without playing politics? As was the case regarding the sell out of the jewel in the crown days after the September 2000 general elections for a mere seven billion rupees…
We are afraid. No government on its own would be able to tackle the issues that may well affect the lives of generations to come. Unless the country is trained and made ready to accept and bear with the temporary difficulties that will follow in the event the country decides to take the bull by the horns.
The dangerous thing about the economy is when certain politicians dream to be Santa Claus personified.
Nobel P. Loser