Bring Back Planning: Start with Manpower Planning and Industrial Policy

“Governing is about setting priorities, managing your politics, thinking strategically, picking your spots and looking for genuine opportunities that can be exploited…”

A lot has already been said about this now infamous recruitment of 60 doctors in government service. The opacity of the process and the resulting hue and cry of protests and allegations is unfortunately becoming an increasingly common feature of society. The other related phenomenon which now forms part of our daily routine is the immediate “basculement” of such issues in the public domain through the medium of private radios.

The comments which are aired range from the simplistic (we just have to) to the more intelligent when they are not simply totally irrelevant. It has become a form of social catharsis by which each and every one who is lucky enough to get through to the station is afforded an opportunity to vent their frustrations.

Our purpose here is neither to go into the merits of the last recruitment exercise nor to comment on this new form of public debate save to say that, although it may serve a useful social purpose, it falls woefully short of the hard thinking process which must underscore our approach to problem-solving. We argue that Planning must be restored to its rightful place in the government decision-making process.

All through the razzmatazz of the past few weeks one thing has clearly come out and the Minister of Health has made a rather blunt statement to that effect: we have too many qualified doctors compared to our capacity to absorb them in the public service – in a context where apparently the domain of private practice for such generalists is already saturated this leaves us with a daunting social problem which simply does not have an immediate solution.

To make matters worse the situation is no different among young freshly qualified lawyers as indeed is the case for young graduates in management, engineering or the humanities. On a macro level such oversupply of qualified professionals and graduates constitutes an apparent paradox for a country which has the ambition of becoming for Africa what Singapore is to South East Asia.

Confronted with an outburst of public anger, officials from various quarters have struggled to come up with some quick fixes in an effort to placate the rising criticisms. Thus the Vice Prime Minister, coming back from a mission in Saudi Arabia, has suggested that hundreds of doctors could soon be recruited in that country. In the same vein one has heard about the need to “export” our doctors to Africa.

As much as one may wish that such ad hoc measures could prove helpful, under the circumstances they are more likely to remain in the ether world of good intentions and nothing more, at least in the short term.

The tragic truth is that if in the past we had been more pro-active and determined in putting in place the right institutional and legal framework, including through negotiations with our neighbours in Africa or our traditional partners of the European Union, the scope for “exporting” our qualified and skilled professionals could truly have been an extremely remunerative avenue for many of our professionals. This could have been undertaken under the provisions of Mode 4 of the negotiations in Trade in Services in the GATS (General Agreement on Trade in Services) as well as in the context of SADC and COMESA. Mode 4 makes provision for “the temporary movement of natural persons” among member countries under the GATS.

The fact of the matter is that such a comprehensive approach is unachievable without some form of PLANNING which would look into all its implications (training, harmonization of standards, fiscal treatment of earnings, etc.,) Sadly though the very concept of planning has for all intents and purposes been “banned” from the vocabulary of our decision-makers for nearly a quarter of a century now.

Under the wave of liberal ideology and forced adjustment to the new mantra of free market, which had become the credo of our Ministry of Finance, even the Ministry of Economic Planning and Development had been decreed as an anachronism. The term “planning” had become taboo for many of our policy gurus in their unconditional surrender to the Washington Consensus. Thus one of several “babies” that were thrown away together with the bathwater under the guise of cleansing our erstwhile dominant model was the Ministry of Economic Planning and Development and the Economic Planning Unit (EPU) under its aegis.

The fact that the EPU had been an effective actor in the promotion of economic development is something to which many of the respected economists of the country will gladly testify. Yet when the Ministry of Economic Planning and Development was dismantled some years back in favour of an enlarged Ministry of Finance and Economic Development, very few voices dared to oppose the move including the then Prime Minister. Those were admittedly the days of surging globalization accompanied by the triumph of liberalization and deregulation as the WTO and the Washington institutions set on their mission of defining the new rules of the game to which developing nations were expected to meekly adhere.

Today the regime has been hugely discredited by the advent of the Great Financial Crisis of 2008 onwards which has left the leading world economies in shambles and resulted in what is dubbed as one of the worst period of wealth concentration in human economic history. The United States and Great Britain – champions of the new Anglo Saxon version of unbridled market capitalism – have had recourse to “nationalizations” of banks to save their national economies from systemic crises. In Mauritius the iconic flat tax has failed miserably in delivering on its promises of sustained prosperity.

A wide window of opportunity has opened up for those who dare to define an economic model based on local experience. This is not to argue that we should go backward to some “Soviet style” central planning or even to the 1970’s version of “picking winners.” What we are suggesting is the sort of loose planning system in which the State, in collaboration with academics, the unions and business defines the broad parameters of economic development over the next ten to twenty years while meeting politically acceptable norms in terms of distribution of wealth, responding to the aspirations of the youth and the desiderata of a more equal and fairer society.

If return there is, then it should be to that of a smarter version of what we have been very good at doing in the past and which has largely contributed to our economic and social progress. A smarter version which will take into account the analytical prowess of information technology as well as the new imperatives of a more open and competitive environment.

A new version of the EPU, for example, would as a matter of urgency need to tackle two of the most crying constraints on our future growth and economic development: that of an ageing population and the lack of skilled manpower which severely limits our ability to materialize the much called for “high income” economy. A more formal approach to Manpower Planning and an activist Industrial Policy would likely constitute, among others, the most obvious components of the new planning process. Taking care of the present mess caused by the unemployed graduates and professionals and making sure that we do not find ourselves in the same situation in the future would be the focus of this Planning Unit.

As regards Industrial Policy, long-term planning implies assessing which sectors and industries are most likely, given the competitive environment as well as their opportunities and strengths, to offer the most potential for growth and employment creation in the future. Policies would then have to be designed for creating the right incentives and conditions for attracting investors to those areas.

For example, what could be the most likely weight of the services exports sector in the overall economy in the medium and longer term? And how would this be broken down into sub-sectors such as ICT, Financial Services, Tourism and export of professional services such as management consultancy, architectural and engineering services, legal corporate advisory services training and education?

To conclude with what we had started regarding the issue of over-supply of professionals and graduates, a proper institutional framework needs to be put in place with our regional and global partners and appropriate fiscal and other incentives provided locally for the temporary movement of natural persons to be an effective part of our export of services strategy.

Clearly no individual employer or even the private sector institutions have either the clout or the necessary incentives to address such vital issues for our economic growth. It requires co-ordination and vision culminating in a coherent PLAN which only government can drive. The same reasoning can be generalized to many other potentially beneficial areas of economic activity where a “smart” planning authority can quickly add value to our development process.

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