On the Eve of A Mid Century

Mauritius will have to engage into a transformational transition which can only be achieved through a coherent plan and the courage to undertake disruptive reforms. The acid test of success will be the quality of its leadership

This week-end Mauritius will be celebrating its 25th anniversary of the Republic and the 49th year of Independence. As we look back there is so much that we as a people can be proud of.

Starting from a plantation economy dependent on sugar production for almost all our exports and transforming this into a diversified economic entity with varied exports in services and products as well as geographical markets, we now enjoy the status of a “middle income” emerging economy. This is a particularly remarkable achievement when compared to many other peer nations of the African continent which became independent around the same time as we did and are for their part endowed with huge mineral and other natural resources.

This success can be attributed to a number of factors such as sound leadership both in the public and private sectors, a rare combination of socio-political forces which favoured social mobility and gratified those who put their faith in education as the most effective means of achieving it. Luck has also been a defining factor although some would claim, and they are not entirely wrong, that as a nation we have created our luck– principally by maintaining peace and harmony in our daily living and interactions within a culturally and religiously diversified nation. And that in spite of the whining naysayers.

Having said the above though and in a spirit of objectivity, we may also consider comparisons with another set of countries which were almost in the same economic conditions as when we achieved independence in 1968. The most striking among these are the South East Asian nations such as Malaysia, South Korea and of course our inevitable “competitor” Singapore. All nations which have, from a strictly economic point of view, done better than Mauritius over that stretch of time from independence to the present. One can always argue that many of these countries have at one time or the other during these years been labouring under some kind of autocratic regimes which simply had no time for the niceties of democratic liberties such as freedom of expression or regular and fair elections. Under these circumstances, it is usually suggested that the path to economic growth can be far less complex since it is unhindered by opposition and the need for lengthy deliberations.

Against the above background, it might be an interesting exercise to carry out a quick SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis as the country prepares to enter into its 50th year of independence in just a few days.

Strengths: There is no doubt that the country has a number of strengths on which it can comfortably rely to build its future. First among these are the well-known and oft-cited examples of strong institutions (legal framework, property rights, etc) and our democratic way of life, for all its shortcomings. Then comes the level of education and literacy in the country.

A less quoted point is about the fact that Mauritius has been a plantation economy with a difference. Because of the history of colonial occupation of the country and the terms of the capitulation treaty which marked the take-over of the island by the British in 1810, the plantocracy was composed of local producers so that sugar revenue was ploughed back into the country instead of being siphoned off by “absentee” landowners as happened in the other classic plantation economies.

In independent Mauritius the same pattern of “ploughing back” surplus funds into the economy provided the foundation of the diversified economy. The end result is that today Mauritius has a strong local capitalist class and the level of domestic savings and investments can be fairly high.

Add to this the growth of what has been described as the “state bourgeoisie” – a class of bureaucrats who have contributed substantially to the development of the country through their “knowledge” capital. The regular holding of general elections and the strong role of trade unions in the social fabric have also been crucial in the emergence and maintenance of the welfare state which has proved to be a determining foundation for social development.

Weaknesses: When external and internal conditions are changing rapidly, driven by factors such as globalization and innovative technologies, the need for adaptation and transformative policies becomes crucial. Under such circumstances, it is often the erstwhile strengths which tend to progressively turn into weaknesses.

Traditional ways of doing things and, probably most importantly, of thinking – the mind frame — associated with previous successes become the most serious obstacles to the adoption of a new methods, technologies and processes at all levels of society. Failure to design new transformative policies which can overcome the “inertia” of an existing successful model then leads to the kind of stagnation and social morass associated with what economists have called the “middle income trap”.

In Mauritius the colonial pattern of “division of labour” and established pattern of collaboration between different sets of economic and political actors has paradoxically been one of the key success factors in our past achievements. It is rapidly becoming obsolete. Witness the economic stagnation but also the level of social disintegration (breakdown in families, drugs trafficking, domestic and other forms of violence) which have plagued the country over the years.

Can the country undertake the necessary reforms in its institutions, develop a coherent vision for its future development path and most important of all evolve the kind of leadership which this new situation requires? We could have drawn up a long list of the usual glaring deficiencies in our governance structures in the public as well as private sectors. We believe though that these are mere symptoms. The core issue remains our ability or not to bring radical reforms which address the present and future needs of the country.

Threats: The greatest threats come from the changing global environment. First, globalization has swept away the cocoons of preferential trade agreements and protections. Now political upheavals in our traditional markets are raising unforeseen challenges such as how to deal with Brexit. Volatility, uncertainty and increasing complexity of issues, such as how to deal with Donald Trump as President of the United States put the onus on local leaders whether from the private or public sectors to hone the skills of their organisations so as to deal with such complexity.

Opportunities: A perfect illustration of the kind of complexity what we have mentioned resides in the fact that the weaknesses described above may themselves hide some of the opportunities. Indeed one can argue that, in a situation of volatility and uncertainly, a small island nation which has hitherto mastered and very beneficially used its skills in trade negotiations and networking to its advantage could look for niche opportunities to use its experience. Agility and nimbleness are the key words for a small island nation seeking to maximize its gains in a volatile environment.

In terms of opportunities, a specific one which has up to now been neglected remains the potential for investments and trade with an emerging African continent. At this point in time perhaps the best prospects lie in export of human capital (experts and professionals) and knowledge intensive activities in which Mauritius has an edge over several fast growing countries in Africa which are craving this kind of expertise.

As it enters into its 50th year as an independent nation, Mauritius will have to engage into a transformational transition which can only be achieved through a coherent plan and the courage to undertake disruptive reforms. The acid test of success will be the quality of its leadership.

 Rajiv Servansingh

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