A Developmental State To End The Dog Trying To Catch Its Tail Story

Economic Mission Statement Epilogue

The burning issues of economic growth and employment creation remain the principal preoccupation of the population almost one year into the administration of the Alliance Lepep government. The much hyped event around the Economic Mission Statement made by the Prime Minister almost a month ago has at least had the merit of signalling to the population at large as well as to the “captains of industry” that he intended to be at the helm of the efforts to realize the government’s promise of a “second economic miracle.”

The announcement concerning the resumption of a structured public-private sector dialogue was a promising one in view of the thorough breakdown in communications which had characterized the former regime. Unfortunately the momentum which the event was meant to create has been rather short-lived in spite of the fact that there has been a first public-private sector meeting.

If the object of the exercise was to mobilize the traditional partners of government in an effort to “turn around” business sentiment, then it is to be feared that the outcome has been only moderately successful. The desired “breakthrough” which would have revitalized the energies and resources of the nation has failed to materialize.

This mitigated result may be explained partly by the continued dissonance between the day-to-day actions of government and the declared policy statements, and partly by the presence of structural shortcomings, mainly with regard to the lack of execution capacity. The coordination mechanisms which have been proposed seem to be too little too late in the prevailing circumstances and would need beefing up considerably both in form and substance.

In this article we examine a few of the missing links which could explain the lack of sustainable momentum mentioned above. It is suggested that more thought need to be given to what constitutes a “developmental state” model. Not that this is anything new to Mauritius but like Moliere’s Mr Jourdain we seem to be unaware of what we are practising.

In the literature a developmental State is defined as one in which the State has a primary role in framing the preferred development model whose implementation leads to economic growth and prosperity. There are many versions of the developmental state stretching from the authoritarian (President Park in South Korea) to the formally democratic and its “benevolent dictator” (Singapore) and the democratic Public-Private partnership based model (Mauritius and Sir Seewoosagur Ramgoolam/Anerood Jugnauth).

Some authors have identified a number of conditions that need to be satisfied for a country to achieve that status. Matthew Mc Cartney (‘Economic Growth and Development – A Comparative Introduction’) identifies several such conditions. The first one relates to the “existence of a politically-driven desire to promote growth as well as the capacity to do so. This desire often comes from the executive head, surrounded by a small elite of senior politicians, who share the motivations to promote growth.”

To illustrate this point, McCartney mentions, among others, the case of Botswana under President Masire and his team. They led their country through a remarkable growth story not dissimilar to the Mauritius “economic miracle” of the 1980s. It is no exaggeration to suggest that in both cases this was made possible because the same set of conditions as described above prevailed.

In striking contrast to the situation prevailing with Anerood Jugnauth in his first avatar as Prime Minister, this time around although he can be personally credited with an obvious desire to promote economic growth which he formulates as the “second economic miracle”, what is singularly missing, though, is the “small elite of politicians who share the same conviction” around him. This is not meant to be a derogatory remark on individual members of government but rather a reflection on the apparent lack of cohesion which seems to characterize the core “team” of Ministers.

Added to this, the dearth of “execution capacity” mentioned above is proving to be yet another severe obstacle on the path of the realization of the wished-for second economic miracle. Failing to address these critical issues will leave the country in the frantic situation of the dog trying to catch its tail.

A second condition mentioned by Matthew McCartney for a successful developmental state to operate relates to the fact that “its elites and the state institutions had sufficient autonomy and independence from the demands of special interest groups to focus relentlessly on promoting economic growth.”

It is indeed very sad to have to admit that on this count there has actually been a terrible regression compared to the situation which prevailed in the 1980s. The outrageous politicization of the Civil Service and the subordination of the State apparatus to the interest of political leaderships which were intent on enriching themselves and their supporters by confiscating and redistributing wealth from the State have led to a hugely impaired public administration which has forcibly lost all its bearings.

The usual jibes against the bureaucracy notwithstanding most Mauritians would agree that the pool of talents and experience in the Service is quite impressive. A proper reform of public administration characterized by selective and meritocratic recruitment would go a long way towards insulating the Service from undue political intervention as well as pressure from sectorial interests. It would be restored in its real power, authority, technical competence and role as a policy implementation apparatus.

The causes of the conundrum in which the country finds itself are varied. Some are self-inflicted and not necessarily by the present lot alone, others are due to the global economic environment while yet others are embedded in our historical experience. While there is little that we can do about the prevailing global economic conditions, actions taken on the two other sets of causes can go a long way in insulating the country from suffering from the brunt of those external factors.

As will be deduced from the above discussion, the measures that need to be taken for remedying some of the major deficiencies in the system are necessarily of a medium- to long-term nature. The two key notions which constitute the foundation of this approach are Investments and Productivity. We must take stock of the fact that the “liberalization” accompanied by “business facilitation” measures taken straight from the books of the IMF/World Bank combine, while helpful, have failed to deliver the kind of investments (both FDI and local) and savings to sustain economic prosperity. Indeed quite the opposite has occurred. It is not sufficient to put all the blame on the great financial crisis for that would again distract us from taking a hard look at the structural impediments on the way to national prosperity and economic development.

In the short term the best economic statement would be to demonstrate a superior will to align strategic and operational decision-making and a clear commitment to sustain the necessary adjustments in the “way we do things”.

  • Published in print edition on 25 September 2015

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