Interview: Prof Sheila Bunwaree
* ‘The forthcoming budget should pave the way for a new development paradigm’
* ‘What’s the point of stringent measures when there is already an arsenal of laws that can assist towards an effective regulation of the social media?’
Prof Sheila Bunwaree dissects the current pandemic-induced problems, but also notes that the cracks in the economic landscape had already started appearing before the pandemic as underlined by the IMF. The increasing poverty and rising inequality have been compounded, according to her, by the accelerated mismanagement of the economy and the opacity in regard to the MIC, along with dilapidation and wastage of public funds. Unless we gear up our education and training system and develop innovative approaches to exploit, for example, the opportunities presented by the Africa Fund instead of siphoning it off into white elephant projects such as the proposed 50-storey Trade Centre, we will be on a sliding slope.
Mauritius Times: It should not be easy for any Minister of Finance in these difficult pandemic times to meet the competing demands of the different sectors of the Mauritian economy whilst taking care at the same time of the economic fundamentals of the country, some of which are already in the red. What do you think should be expected from the forthcoming budget?
Prof Sheila Bunwaree: While pandemic times certainly make it difficult for Finance Ministers across the globe to juggle around and try to find effective ways of reconciling economic fundamentals with competing demands of the different sectors of the economy, it is not an impossible task. But doing so requires gusto, competence, creativity, innovative approaches, a culture of transparency as well as the right people working within a meritocratic framework.
The current state of our economic fundamentals is to a large extent the reflection of chronic mismanagement. With a debt level having gone beyond 90% of GDP and which was facilitated by changes surreptitiously brought to the Public Debt Management Act by the current regime, we are now confronted with a debt spiral with the big risk of the economy crashing in a similar manner to what happened in places such as Greece and Zambia some years back.
Looking at how prices are shooting through the roof with people’s purchasing power rapidly eroding and a simultaneous rise in unemployment, we are in what some economists describe as stagflation. The latter coupled with a balance of payments deficit only worsens the situation on the macroeconomic front. When we look at the competing demands of the different traditional sectors starting with tourism which has been most severely hit by the pandemic, the manufacturing sector, the financial services sector with the country still being on the FATF grey list and the EU’s black list, there is reason to worry.
Needless to say that new sectors such as the Blue economy, Agribusiness, Artificial intelligence, Fintech and block chain technology have hardly developed. And yet we have to do everything possible to get our economy back on the rails and work towards reviving it whilst ensuring stronger social protection for those at the bottom layers of society.
* But the challenge is greater now, isn’t it?
With growing poverty and rising inequality in the wake of the pandemic, the challenge is even greater, but all crises present interesting opportunities. There is a need to know how to seize these and be ready to move forward with them. It is not right to put everything on the back of Covid since we are well aware that the cracks were already there pre-Covid and a number of people have been drawing attention to them. The World Bank Group study report of April 2021 entitled ‘Mauritius through the eye of a perfect storm’ in fact confirms this point. The report notes:
‘…The shocks of 2020 came at a time when serious structural cracks were beginning to appear in the foundation of Mauritius’s long term growth model. Even prior to Covid and other events of 2020, Mauritius was on an increasingly fragile development trajectory…’
If we want to stop this fragility from worsening, decisions have to be bold and audacious even if some measures are seen as unpopular. A responsible government which truly has the interests of future generations close to its heart and wants to genuinely build back better without leaving anyone behind should focus on a budget which can help to put the economy back on the rails and aim for a realistic growth level while ensuring that the latter is of a productive nature with job creation on top of the agenda.
Can we expect this from the forthcoming budget? Judging by the trends set and the way that things have been managed as well as the corruption and waste tolerated by the system as demonstrated by the recent Audit Report, it is difficult to foresee a radical approach towards the budget, and yet that is badly required. The forthcoming budget should in fact pave the way for a new development paradigm. Resilience and recovery would simply not be possible if Nature and the environment are not embedded in the development model.
* Mistakes have indeed been made, as highlighted by numerous economists and the IMF in its statement released in the wake of the 2021 article IV consultations. The latter has recommended that the ‘authorities should accelerate the long term structural transformation to turn Mauritius into a sustainable and resilient economy built on education and technology.’ But why is it that successive governments have been unable to make much headway on that front?
Let me first say that I am certainly not a blind follower of IMF recommendations. IMF is known to have caused a lot of damage to certain economies. Their insistence on rolling back the state in the context of the structural adjustment programmes in a number of countries in Africa as discussed in the works of well-known economists such as Tandika Mkandawire and Soludo, for instance, have clearly shown the negative impact that IMF has had on these countries.
The very conditionalities and reforms imposed by the IMF at the time trapped many of the African economies in vicious debt cycles, retarding and/or leading to lopsided development. It is important to remember that it is the visionary leadership of the time that resisted the IMF conditionalities of abolishing free education and free health care that permitted us to obtain an adequate pool of labour to respond to the needs of our first phase of industrialization.
But coming to the Article lV Consultations papers and their recommendations it makes, I must say that they make a lot of sense and I am fully supportive of these recommendations. We must not forget that the latter comes right on the heels of Moody’s downgrading the Mauritian economy to Baa2 level. The economy is in dire straits largely due to its inability to bring about the structural reforms so badly needed. The diversification of the economy that is often alluded to as part of the success story of Mauritius in the post-Independence period, has in recent years come to a standstill. We have not witnessed any new sectors coming up in a significant manner – there has been a lot of talk of the Blue Economy and new technologies that I mentioned earlier, but none of these talks have been shaped and delivered into reality on the ground.
The Article IV papers are right in stating that the economy should be built around technology and education. The latter are indeed central to all efforts towards turning Mauritius into a resilient and sustainable economy. It is a known fact that apart from our exclusive economic zone (EEZ), which remains largely unexploited, the only other resource we have is our human capital. But are our education system and training system producing the kinds of people and the skills that the emerging economy needs? The simple answer is NO.
Judging by the persistent mismatch between the labour market needs and the outcomes of our education and training system, it is no exaggeration to say that our education system has remained largely inadapted, elitist and continues to exclude a large segment of the student population, thus contributing to a wastage of our human capital. There is little effort if at all at reskilling and retooling with a curriculum which has remained almost static over the years. Technology-wise, we are lagging behind many African countries. R&D and innovations remain low, not permitting us to exploit new technology driven sectors.
Successive governments together with bureaucratic elites have been more inclined towards maintaining the status quo and satisfying the demands of the educational elite rather than addressing the fundamental challenges of the system. But there is no room for such an approach anymore. We urgently need an ‘Assises de l’education’ and to develop a technology and education roadmap which will enable the economy to become more resilient as well as ensure that we obtain adequate returns on investments made in the education sector.
* The IMF has also not taken too kindly to the ownership of the Mauritius Investment Corporation Ltd by the Bank of Mauritius. There is continuing opacity around the MIC, its disbursements and the terms and conditions thereof. Aren’t we also missing an opportunity of leveraging substantial bailout funds to recast the ownership of prime assets in the country?
How can any institution or anyone bent on codes of good practices on transparency in monetary and financial policies take kindly to what has been happening at the MIC and Bank of Mauritius? The narratives around these two institutions constitute a very sad story indeed. The continued secrecy around these disbursements, terms and conditions does not augur well at all for the economy. It is totally unacceptable that MIC which has turned out to be some kind of subsidiary of the Bank of Mauritius is using international reserves to come to the rescue of certain distressed companies, and that too in the most opaque manner.
I am certainly in favour of assisting all those who have been badly hit by the pandemic and who are large and important contributors to the economy. But wealth concentration and ownership of prime assets, as you put it, should be addressed and be on the agenda. More so now that it is proven that the pandemic has worsened inequalities across and within borders.
Indeed, if bailout funds continue to be distributed to cronies and clientilistic networks at the expense of the small, unconnected entrepreneurs, we run the risk of seeing social cohesion and peace threatened in the mid- and long-terms.
* Besides the usual calls for further improvements of the country’s competitiveness, enhancement of diversification, etc, we do not appear to be making much progress as regards tapping opportunities in the region, especially on the African continent. Are we missing the boat there?
With a market of some 1.2 billion people, projected to reach some 1.7 billion by 2030, the African continent definitely represents an important market. Apart from being a huge market, the continent offers a host of other opportunities: rapid industrialisation and adding to its value chains, its emphasis on closing its infrastructure gap, the innovations coming to the fore to unleash agricultural and resource wealth, new broadband connections and the potential of increasing digital and mobile access. Such opportunities are for investors and entrepreneurs with the audacity and imagination to seize and embark on new ventures.
The Mauritius’ Africa strategy, which was presented as a new pillar of development in a much earlier budget some years back, was certainly well-inspired, but whether there has been any effective follow-up and evaluation of projects is a legitimate question. The establishment of Special Economic Zones such as the Diamniadio Industrial park in Senegal and technology parks in Bassam, Ivory coast can certainly be advantageous to all stakeholders, but can we know about the strengths and weaknesses of such projects so as to redirect efforts in the best interest of all?
Another interesting element of the Africa strategy was the setting up of the Africa Fund. This was done precisely as a response to the growing opportunities in Africa and the Africa Rising narrative. This scheme was designed to support and facilitate entry of Mauritian investors into the continent. But the latest aberration of the government — digging into the Africa Fund, to build a 50-storey building – ‘a Mauritian world trade centre’ in the Prime Minister’s constituency, more precisely at Côte d’Or (soon to be known as white elephant village perhaps!), only testifies to the incoherence and chaotic management of resources by the current regime. Funds destined for investments on the continent are now being re-channeled into useless projects such as this, at the whim and fancy of certain people in government, resonating with the famous: ‘we are government, we decide’.
I was flabbergasted by the Minister of Finance’s response to a member of the opposition when the latter questioned the validity of the proposed ‘World Trade Centre’ project, highlighting that it was not in tune with the objectives of the Mauritius Africa Fund. The Finance Minister’s response was: ‘…Nous n’avons même plus d’avions qui desservent le continent africain actuellement, comment faire pour que le MAF continue à se développer…’ I leave it to the judgement of the average Mauritian to decide how on earth are Mauritian investors going to benefit from the freshly signed and ratified African Continental free Trade Area about which there has been much ado if the Minister’s ‘logic’ is what we see in his response to the question.
* The success of our economic recovery will depend to a large extent on how well we ride out of the current pandemic locally as well as on overall economic developments in our export markets. What’s your take on how we are doing locally in the fight against the pandemic?
There are no two ways: if we want to survive and rebuild our capacities, retain a competitive edge, and become truly resilient, we have to make the fight against the pandemic our priority. Controlling the first wave was relatively successful, but the second wave has been problematical, with the number of cases rising and the deaths of dialysis patients. It is good that a fact-finding committee has been set up to this effect.
The main problem, as I see it now, is the lack of vaccines as well as persistent vaccine hesitancy which means that it will be very difficult to reach the herd immunity level required and yet so important to keep the nation safe. Moreover, campaigns about Covid appropriate behaviour: wearing of masks, social distancing, etc., remain insufficient.
* The government is working on a roadmap on the reopening of our frontiers, and it would be toying with the idea of introducing travel bubbles with some countries. Would it be safe to go ahead with the reopening of frontiers what with the resurgence of Covid cases in numerous places locally?
It is very difficult to say for sure that we would be safe. We are living through very challenging and uncertain times and having to face all sorts of vulnerabilities and risks. But we have no choice, we do have to reopen and the idea of travel bubbles engaged in by countries such as Maldives and Sri Lanka, if i am not mistaken, is a good one. But again it would have been much easier if government had shown some skills at anticipatory governance by ensuring that vaccines were obtained early enough and the rollout campaigns planned more effectively.
* As an educationist, how do you react to the news that almost half of our education personnel, mostly the teaching staff, have shown resistance to getting the Covid vaccines? Should that be made mandatory?
Resistance to vaccines or vaccine hesitancy is not a Mauritian phenomenon only and certainly not restricted to the educational personnel. Vaccine hesitancy is complex and influenced by a number of factors. The level of mistrust and disinformation to do with vaccines and their efficacy, has impacted on people’s decision-making processes. Context is also important to this discussion. We must not forget the amount of confusion that was created around the vaccination programme at the start impacting on the level of confidence.
That said, vaccines constitute a core component of the fight against the pandemic and one of the most essential ways together with other sanitary precautions. One would have thought that the educational personnel, particularly teaching staff, would be imbued with a large dose of moral responsibility and predisposition to protect the young people they encounter almost on a daily basis. If it is true that half of the educational personnel are reluctant to get inoculated, then one cannot but ask the question whether teachers who are supposed to be the transmitters of knowledge and promoters of the advancement of the greater good, are equipped with such values?
It is therefore important that we intensify the campaign in favour of the vaccine and ensure that teachers understand the crucial role and responsibility that they have towards the children. They must not forget that the children and they themselves can be important ‘silent spreaders’ and how catastrophic the situation can be if we allow them to continue being complacent about the vaccination.
At the end of the day, we have no other means than being somewhat benignly dictatorial and make the vaccine mandatory. There can of course be exceptions on medical grounds.
* On the political front there is continuing controversy about the ICTA proposals to counter abuse of social media and the Agalega issue despite the reassurances of the government contrary to what the opposition would want us to believe. How do you react to these issues?
That social media/technology platforms need to be regulated to counter abuse and protect society is beyond dispute. Engaging a debate with the nation on critical issues such as this is laudatory but when consultation is based on a document whose very content shows proclivity towards undemocratic norms and methods, there is cause for concern. A lot of ink has been spilt on the various dimensions of the Consultation Paper with people expressing their discontent about intrusion in their privacy and the squandering of their fundamental rights. The negative impacts that such controls can have on business and on an economy, which is already in the doldrums, has also been raised.
What’s the point of such control and stringent measures when there is already an arsenal of laws which, if properly applied, that can assist towards an effective regulation of the social media? I am glad that Google and Mozilla have stood up against ICTA’s proposals to control the social networks. This will certainly add support to the various points raised by the many enlightened citizens of Mauritius, who value their liberty and the democratic norms they are used to. I certainly align myself with them.
Coming to Agalega, the opacity around the agreement between India and Mauritius is deeply worrying, more so when numerous newspaper articles from different sources, emerging in the recent past, indicate some kind of militarization of the place. What is also disturbing is that many Agaleans, citizens of the republic continue to be deprived of certain fundamental rights and treated as second-class citizens, while all sorts of infrastructural projects are being developed in the name of development.
Moreover, it is reported that what is taking place there is tantamount to an ecological disaster. We are well aware that rival powers within the global order see the Indian ocean as strategic to their interests and at this stage we are not sure which powers will dominate and what does a new equation reserve for the Agaleans and the Mauritians is unknown. It is our responsibility as citizens to unmask what is hidden underneath and this, in the best interests of all.
* Published in print edition on 28 May 2021
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