PRB Report: Both boon and burden

Editorial

In his presentation of the PRB Report at the Vaghjee Hall yesterday afternoon, Prime Minister Pravind Jugnauth started by a brief overview of how the country had coped with the Covid pandemic since the lockdown of March 2020. Stating that the World Bank had ranked Mauritius 4^th among the countries that had best managed the crisis, he said that the government had advanced the sum of nearly Rs 80 bn to prevent mass redundancy of workers and to support business enterprises, especially the tourism industry. He added that almost Rs 25 bn had gone into the payment of salaries in the wage assistance scheme. He thanked the civil servants who had worked hard to keep the administration running, and also the frontliners and other workers who had toiled with great dedication in the service of the population, acknowledging their collaboration during the difficult times that the country had been going through.

Coming to this 9^th PRB report, he said that it had been prepared under difficult and constrained circumstances, and that despite the difficult financial situation that the country was facing, the Report had paid particular attention to those at the lower end of the scale. He gave as example the fact that the minimum wage for general workers had been upped to Rs 10250, which represented an improvement of the ratio between the highest salary of a PS to that of a worker from its earlier 1:7 to 1:6.2, thus reducing the gap.

He ten outlined some of the recommendations contained in the Report, which he said had placed emphasis on efficiency and efficacy, and on continuity of training to ensure business continuity. In reply to questions, he also added that an Addendum would be published within nine months, and that it would incorporate any further recommendations made by the stakeholders post the Report, and that the PRB would also have considered any anomalies and omissions that would be raised by them.

While this buoyant mood and the goodies invoked are no doubt a boon for the eventual beneficiaries, some contrary opinions have already been flagged, for example that this announcement is meant to distract attention from other pressing issues that the country is facing, or that it is to sweeten the mouth in view of the forthcoming municipal elections.

However, the more critical underlying issue of concern is the financial load that the PRB adds to the country’s finances, since it will cost approximately Rs 6.5 bn. Although the PM pointed out that with the opening of borders the economy is already picking up, the fact remains that recovery as in other economies around the world (except the bigger and more resilient ones) is definitely going to be slower than usual – in fact it is difficult if not impossible to pinpoint a timeline.

With Rs 80 bn already out of our reserves, the debt per inhabitant is surely going to increase some more. Government revenues come either from raising taxes or from loans taken locally or internationally, to finance its expenditures. Where do we stand as regards our public debt levels? And we must not forget that we have an ageing population that is increasing, and that the dependency ratio is not favourable, putting a further burden on the population. This means that the future of yet unborn generation is already being burdened with increasing debt. How is all this going to be sustained, to be reimbursed?

Thus, in the short term the PRB fallouts may look like a boon, but there is no gainsaying that going forward, it is more like a burden for the country.

* Published in print edition on 15 October 2021