Putting the Cart before the Horse
Rational decision making requires that we first take all steps necessary to contain and break the chain of transmission of the virus to urgently make Mauritius Covid safe
By Mrinal Roy
The signs are not good. Every day new cases of Covid-19 are detected in diverse areas and localities scattered across the country. The country registered over a hundred new cases of coronavirus in the past week. Some 50 new cases of infection including 19 foreign workers have been identified in three days this week. The number of active cases in the country has as a consequence increased to 284 as at 9 June. A total of 903 cases have so far been detected in this year’s wave of Covid-19 infection in contrast to only 337 cases of Covid-19 recorded during the first wave of infection in 2020.
“Despite the rising number of local cases, the hotel sector and the political lobbies jockeying for their interests continue to clamour for our borders to be opened. Do they irresponsibly want to also expose the country and employees of the hospitality sector to extremely more contagious and virulent imported variants of Covid-19 through tourists inflows at a time when the country is still grappling with the second wave of coronavirus infection and is yet to obtain the required vaccines to vaccinate the population in order to achieve herd immunity in the country?”
What is of particular concern is that a motley of new cases of Covid-19 have recently been detected in diverse locations among factory workers, an employee of a public transport company, in workers’ dormitories, a hospital ward and the offices of a firm operating in the Ebene cybercity. Hundreds of employees of these companies and all those in contact with the infected persons have had to be confined in quarantine. This worsening situation has heightened fears of coronavirus infection in the country especially among the elderly and those with chronic diseases.
Inconsiderate decisions
Every new case of Covid-19 in the country is a setback. A daily crop of new cases inordinately delays the prospects of Mauritius becoming Covid safe again and adds to the escalating costs of managing the pandemic. A rising tally of infected persons in the country cannot be the collateral price to pay for hastily rebooting the economy. The safety of people in the context of a deadly pandemic cannot be sacrificed on the altar of economic and corporate expediency. The collateral victims of such inconsiderate decisions are very often frontliners of government services, senior citizens suffering from chronic ailments, factory workers and other operatives of the economy and the corporate sector
Despite the rising number of local cases, the hotel sector and the political lobbies jockeying for their interests continue to clamour for our borders to be opened. Do they irresponsibly want to also expose the country and employees of the hospitality sector to extremely more contagious and virulent imported variants of Covid-19 through tourists inflows at a time when the country is still grappling with the second wave of coronavirus infection and is yet to obtain the required vaccines to vaccinate the population in order to achieve herd immunity in the country?
In a context of rising daily new cases of infection, how can government consider that all is well, especially as schools are to start in early July? Shouldn’t the current Covid-19 strategy be urgently reviewed to robustly contain and stem the second wave of coronavirus infection in the country?
Are we putting the cart before the horse? Rational decision making requires that we first take all steps necessary to contain and break the chain of transmission of the virus to urgently make Mauritius Covid safe. Secondly, we need to urgently take the actions required to accelerate the programme of vaccination to achieve herd immunity at the earliest.
Existential threats
The country cannot continue to throw good money after bad if it is to overcome the enduring Covid-19 crisis and chart a viable way forward
The world and humanity are facing two major existential threats: Covid-19 and climate change. It is a battle for survival. In February 2021, G7 leaders recognized that ‘no country can be safe until every country is safe’. In their joint communiqué released on 5 June, G7 Finance Ministers and Central Bank Governors reiterated that ‘the Covid-19 pandemic can only be overcome when it is brought under control everywhere’. WHO cautioned earlier this month that ‘it would be a monumental error for any country to think the danger has passed. The inequitable distribution of vaccines means that globally, we have allowed the virus to continue to spread, increasing the chances of a variant emerging that renders vaccines less effective. Inequitable vaccination is a threat to all nations, not only those with limited access to vaccines.’
We cannot therefore rashly rush the process towards a modicum of normality when the virus is very much present in our midst and wreaking immeasurable havoc and disastrous fallouts in the world.
The world and in particular developed countries have learnt from the experience of battling against the pandemic for more than 17 months that no country should hastily lift restrictions imposed to contain the spread of Covid-19 in order to reboot the economy. Too many countries have learnt this key lesson the hard way. Hastily opening economic activities before first and foremost strictly containing the spread of such a deadly pandemic has invariably triggered second and third waves of infection, a rising death toll and escalating costs of managing the new surges of infection. It has been a heavy price to pay to learn this cardinal lesson.
Across the world whenever there is surge of Covid-19 cases in a country, strict restrictions are swiftly imposed and robust actions are taken to contain the spread of the virus in the community. Temporary lockdowns and strict restrictions were thus imposed recently by governments in India, Australia, Germany, France and the United Kingdom to successfully curb the spike in infection in these countries. Actions that need to be promptly taken to contain a surge of infection in a country are not rocket science.
From past experience, countries have learnt to be more cautious and lift lockdown and other restrictions only after a careful assessment of all factors, expert advice obtained and latest information available on the state of the coronavirus infection in the country. Countries are more proactive to the evolution of the pandemic in their countries. For example, on the advice obtained from England’s chief medical officer and chief scientific advisor, ministers are now considering delaying the final stage in the easing of lockdown restrictions by at least two weeks. The advisors pointed out that Covid-19 vaccines currently available give less protection against the more infectious delta variant of the coronavirus now present in the UK.
Debt crisis
The disastrous socio-economic and health fallouts of the Covid-19 pandemic has caused a daunting debt crisis in countries across the world, which are therefore focusing on fiscal and other measures to shore up government revenue. Government spending is expected to be more rigorously monitored, streamlined and cost effective.
The agreement reached on 5 June by the G7 Finance ministers to apply a global minimum 15% corporate tax rate designed to reduce companies’ incentives to shift profits to low-tax offshore havens thus aims at bringing hundreds of billions of dollars into government coffers, cash-strapped by the Covid-19 pandemic.According to their joint statement, the tax rate would be used to target ‘the largest and most profitable multinational enterprises’.
“The agreement reached on 5 June by the G7 Finance ministers to apply a global minimum 15% corporate tax rate designed to reduce companies’ incentives to shift profits to low-tax offshore havens thus aims at bringing hundreds of billions of dollars into government coffers, cash-strapped by the Covid-19 pandemic. According to their joint statement, the tax rate would be used to target ‘the largest and most profitable multinational enterprises’. U.S. tech giants such as Amazon, Google, Apple, Facebook, and Microsoft could benefit from the agreement if the final deal also scraps, as discussed at the G7 meeting, digital services taxes…”
US tech giants such as Amazon, Google, Apple, Facebook, and Microsoft could benefit from the agreement if the final deal also scraps, as discussed at the G7 meeting, digital services taxes. In the 2020 coronavirus pandemic afflicted year, the seven largest tech companies namely, Amazon, Apple, Alphabet, Microsoft, Facebook, Tesla and Netflix grew in value by $3.4 trillion. The first quarter 2021 figures show that their revenue continue to grow climbing to a combined total of $322 billion.
Contact restrictions imposed by the pandemichave madepeople increasingly dependent on digital and online services provided by the world’s largest tech companies. These companies posted record profits when the rest of the world economy plunged into a dire recession.
The G7 agreement, however, still has to be approved by the G20 group of nations, which will meet in Venice next month and agreed in the wider global negotiations which are being conducted among 139 countries at the OECD in Paris before it can be implemented. Fiscal consolidation, fiscal sustainability, government spending rigour and building buffers will presumably also be prime considerations in this week’s budget exercise in Mauritius in a context of extremely strapped government finances.
Cutting the dead wood
The other major issue facing world economies is the questionable government financial support indiscriminately provided to tide over the Covid-19 crisis to companies which are basically no longer viable. Threats and opportunities as well as unforeseen risks are part and parcel of the business environment the corporate sector has to operate in. Companies cannot be artificially kept alive on a government lifeline which the country cannot afford. Covid-19 is an unprecedented threat which has drastically overhauled and reshaped the market environment. In a context of rising indebtedness and limited government finances, it is imperative to cut the dead wood bearing in mind the social fallouts of closures. The country cannot continue to throw good money after bad if it is to overcome the enduring Covid-19 crisis and chart a viable way forward.
* Published in print edition on 11 June 2021
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