Post Covid-19


It is said that all crises represent a wake-up call, and allow countries to push and get things done that would not take place under ‘normal’ circumstances. Crises cause starkly visible hardships and bring to the surface festering gaps in the system that hit people very hard, in terms of the essentials they need and the usual conveniences that make for decent living and socialisation. People are able to more freely express their dissatisfactions and real difficulties, through the widespread media networks, and the authorities have no option but to pay attention and find quick solutions so as to avert social unrest.

Even while the crisis is still unresolved, analysts and opinion leaders are prompted into thinking about ‘what next’, with views being articulated on an almost daily basis. As regards the current pandemic, it’s being said that it provides us with a once in a 100-year chance to shake up the system, revisit the economic structures and policies, be it as regards our flat rate tax system, distribution of wealth, the focus on real estate development to the detriment of food production, and so on. Fundamentally, the so-called neoliberal capitalistic model is deemed to have failed the people at large, and echoes of socialism are being heard in the very bastion of this model, the US, from Democratic candidates.

The Mauritius Labour Party, founded on socialist principles, had come up in 2005 with a democratisation of the economy agenda, namely the ‘Framework for a Labour Party Economic Democratisation Policy’, which constituted its main electoral plank for that year’s general election. The authors of the Policy Framework emphasized that the agenda would serve “to bring reforms to the national economic structure that will result in democratising the latter and open the doors of economic opportunities to the majority of the population in order to mobilise the overall competitive advantage of the whole population endowed and/or to be endowed with resources, in order to attain optimal international competitiveness. This is not only an ethical consideration – which in itself is a justifiable end – but it also responds to the need to bring rationality and a greater dynamism and efficiency to the national economy.”

Some progress has since been achieved in certain sectors of the economy. However, there is no doubt that we could have travelled much further towards broadening the scope of economic opportunities if proper attention had been given to fixing the issues of teamwork, synergy and shared vision among the stakeholder ministries. This agenda might also have suffered from a weakening of the political resolve in anticipation of alliances to be contracted for general elections, thus the care taken not to unnecessarily ruffle the feathers of the prospective ally. Too bad that this was not pursued with the seriousness and persistence that such a ground-breaking agenda required.

Mauritius being a market economy, in practice there is a dense network of interconnections in the way business is done across sectors with the result that the same persons who have, historically, captured the heights of the economy do so over and again each time they sense an interesting big new opportunity to do profitable business. Others are incapacitated right from the start. The resulting status quo means that none other than the existing big players make inroads into business in any meaningful sense, effectively excluding potential “intruders”. Worse, this style of economic development has nurtured a business-foreclosing and rent-seeking mentality among the handful comprising our established business class.

To be fair, a government can do so much and no more if it is serious about enabling more and new players to create or seize new economic opportunities if serious initiatives from existing other players are not forthcoming. Bringing more and newer entrepreneurs to do business presupposes that the businesses should be viable and sustainable over time. The need for serious and disciplined management from aspiring newcomers is a sine qua non, especially in light of past experience when a large number of relatively small loans given to SMEs by the DBM had to be written off due to mismanagement or failure to evolve with market demand.

However, not only will persistence of the current situation of guarded and protected business turfs not unleash the entrepreneurial dynamism we should have been fostering to make new breakthroughs, it will also widen the already yawning inequality gap, as French economist Thomas Piketty has demonstrated in his book ‘Capital in the 21st century’. The big question remains, therefore, which political-cum-economic philosophy will prevail post-Covid-19.

Economic democratisation makes much economic sense, and should in no way be sacrificed for reasons of political expediency, or through State capture by questionable means, including alleged commissions on major infrastructure projects and others, the financing of political parties/ politicians and election campaigns. Will the current government pursue what was left wanting by previous governments in order to ensure that potential players be given a fair chance and be empowered to overcome the obstacles which prevent them from contributing to increase the potential of the economy? If this can be one of the collateral fallouts from Covid-19, perhaps coming generations may even be thankful that the crisis occurred. But this remains to be seen…

* Published in print edition on 17 April 2020

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