Near mid mandate: Governance failures principal stumbling blocks for economic prosperity
In another six months this government would have completed half of its mandate. On this second anniversary of the elections which brought it to power, it will surely come out with a list of what it has achieved up to now and there is no doubt that some of these would be quite commendable.
Among others would be the implementation of the electoral promise to hike the Universal Pension and the initiation of some form of minimum wage through a series of Remuneration Orders for different sectors, while we await the formal introduction of legislation to formalize and generalize the process. The social measures contained in the last budget were also well received by the population and the Minister of Social Integration has announced the implementation of some of the most critical ones for the end of this year.
Then there is the courageous decision to take the bulls by the horns when it came to the issue of street hawkers although the government would likely be rather prudent in its claim because of the peculiar political context. There are surely at least a score of such measures that the government can lay claim to. So why is it that the general mood in the country is one of utter disappointment accompanied by an apparent wish to undo what was so enthusiastically undertaken in the last general elections?
It is actually not hard to find the answer to the above question – the most obvious contributing factors being the perception of the government as being vengeful and spiteful during its first months in power, the continual outbreak of “scandals” involving several Ministers, the MedPoint case and subsequent resignation of Pravind Jugnauth from Cabinet, among others. The latest cases at Air Mauritius, and the long still unfinished saga of the acquisition of the Apollo Bramwell Clinic have made the perception of breakdown of governance even more acute.
Against this background of chaos and absence of coherent leadership, one factor that has been acutely critical in its effects on the credibility of the government has been the “crisis of expectations” following the victory of the Alliance.
Unconvinced during the election campaign that they had the least chance of forming the next government, the leaders of the Alliance Lepep formulated the most unrealistic promises, presumably thinking that they would never be held to account for these. In the event two among these have proven almost toxic once the most improbable and unexpected results brought the Alliance to power. These were the public commitments taken with regard to the process of appointments of officers, advisers, chairmen and other key personnel of parastatal bodies and other State Owned Enterprises followed by the promise of a repeat of the first “economic miracle” achieved under the stewardship of the same Anerood Jugnauth-Vishnu Lutchmeenaraidoo duo in the 1980s, almost forty years ago.
With regard to appointments, accusations of nepotism, which the Oxford Dictionary describes as “undue favour in appointing one’s relatives to office”, have been particularly ferocious and damaging to the credibility of government especially in view of the promises made during the campaign. The numerous appointments of sons and daughters and other close relatives made soon after taking power have profoundly shocked the population, struck by the cynicism of such behaviour.
As for the second “economic miracle”, things have clearly not played out as the Alliance had planned. The budget presented by Vishnu Lutchmeenaraidoo in 2014 was condemned to fail given the prevailing mood in the country in the aftermath of the BAI affair. Its repercussions rippled through the business and investing community, the latter unable if not unwilling to lend a mindful ear to the government’s propositions.
Meanwhile, for reasons best known to them, SAJ and V. Lutchmeenaraidoo seem to have fallen foul of each other. In spite of the best efforts of SAJ as the new Minister of Finance coming out with the Vision 2030 document in a desperate move to salvage the situation, no marked improvement was noted. Under the circumstances the realization of the second “economic miracle” is sounding more and more like the proverbial mirage.
The second anniversary of their accession to power and the coming new year 2017 should provide the government with an occasion to assess its present situation in order to define what is the best way forward. Pravind Jugnauth as Minister of Finance has been consistently trying to convey the view that we are not doing as badly as is generally perceived in terms of our economic performance. He is perfectly in his role in this endeavour. However there is a fine line to be drawn between complacency and realism.
Denying the fact that even an improved GDP growth rate nearer to 4% (far below the target set by government for 2016) while satisfactory is far from what is required for the transmission of a job creation and investment boosting dynamics in the country. This is simply a recipe for more of the same. Such incremental progress corresponds to the “muddling through” approach which has indeed been the hallmark of economic policy for more than a decade now. It was Einstein who said something to the effect that a definition of madness is to do the same thing over and over and expect different results…
As a conclusion to the above, it is clear that there are no miracle solutions to what are looking more and more like a basket case of “secular economic stagnation”. We can, however identify three conditions which are vital for a real breakthrough which would boost economic growth:
1. Urgency for improved governance
In the light of events during the past two years, while Mauritius continues to enjoy political stability at a macro level, the breakdown of institutions and seeming abandon of a rules-based governance structure mean that predictability and confidence in policy orientation have all but vanished. Economic operators hate such an environment in which only opportunistic, short-term commitments will be taken – which may, for example, partially explain the preference for real-estate projects and primarily rent-seeking behaviour. A deliberate and overt commitment to the strengthening of existing institutions and innovation is therefore a necessary condition for more risk capital to be invested.
2. Need for reality check
Recognizing that there is a real problem is a good starting point for resolving it. The unique recipe to get out of the present tunnel is more a function of the ability of policy-makers to understand where exactly the problems lie, evaluate strengths, weaknesses, opportunities and threats and then prioritize responses and finally execute with clarity. This approach requires openness to new ideas and wide consultations which can only happen if there is a radical change in mind-frame at the level of politicians and the administrative cadres.
3. Reducing the gap between intentions and actions
All too often even good ideas and projects never materialize. The first step towards achieving this obvious objective is to take cognizance of the increasing inadequacy between the new increasingly complex environment in which governments operate and the stale, under-equipped and generally demoralized administrative apparatus which has not undergone any major reform since independence. Short term special measures need to be taken to immediately add capacity and knowledge-acquisition and sharing programmes into the existing pool of knowledge capital.
It looks likely that boosting public sector productivity growth by a few percentage points would not even involve any additional costs but only requires a new approach which re-affirms the authority and independence of the high cadres of the Civil Service. A Civil Service Reform based on a longer term perspective would then need to be initiated.