The Rainmaker!

A rainmaker in popular parlance is a person who can bring new business or new accounts through his personal standing or portfolio of contacts. It should not be limited to its more pejorative identification with some sort of “miracle man”, nor should it conjure up images of a chieftain leading a rain-dance ceremony to shower rain onto parched lands in Native American folklore. In gauging up successive Ministers of Finance and Economic Development, the term has appropriately far wider considerations.

Of the many reasons that led to the sweeping victory of Alliance Lepep in last December’s elections, the Vishnu Lutchmeenaraidoo (VL) factor has undoubtedly played its role. True, the outgoing Labour Party-MMM alliance had managed to make a mockery of its own alternative proposal, an undecipherable decision-making knot, in much the same way it dragged-out the cumulus of its two-headed Second Republic. Well before the shocking revelations about the Gooljaury-Soornack excesses, the airport nexus and the tribulations of Navin Ramgoolam’s coffers, the population wisely preferred steady and straightforward hands to uncharted and disquieting territories. To many, the economic mastermind of older days had the reassuring aura to bring the bold political gambit of Sir Anerood Jugnauth to fruition. Popular hopes of economic development were pinned high on VL.

He had after all earned Rainmaker status. No other Minister of Finance and Economic Development (MOFED) managed to lay claim to this fabled title where it matters most, in the people’s perception. In retrospect, five indispensable qualities seem co-substantial for a MOFED to reach coveted Rainmaker status:

a) the absolute trust of the political top-gun. Even if SAJ may at times have to intervene to tweak policies, there is no doubt that VL has always held that trump card. Even when surrounded by political heavyweight colleagues like Sir Satcam Boolell and Sir Gaetan Duval and against a vituperant MMM he could hold his own. Which leaves him with maximum leverage to impose his economic policy directions today.

b) bounded ambitions. A Minister of Finance, effective number two of any regime, perceived as being in competition for the top-spot, opens the door to backstage lobbying, destabilisation and rumour mills that pose innumerable hurdles to the implementation of government policies. “Calife à la place du calife” is probably not VL’s daily cup of tea.

c) undoubted competencies and an ability to think out of the box. Vishnu Lutchmeenaraidoo turned conventional wisdom on taxation, fiscal revenues and Fabian socialism on its head in the eighties. More particularly in the Lepep government, with two former Ministers of Finance around, the MOFED has the breadth of understanding of economic development and financial management issues to keep all other voices awed and subdued.

d) trust of partners at various levels. Staffers in MOFED and correspondents in most Ministries will already be relieved that the technocratic, overbearing IMF-style Budget frameworks, that the December rush with considerable overtime in the wrong season, are things of the past. A Rainmaker has also to earn the trust of oligarchy, international investors and local private sector in all its hues and complexities.

e) an ability to weave a storyline for the population. This is perhaps the single indispensable sine qua non for a Rainmaker. A suave ability to reassure, to cajole and to ooze confidence in a shared future, while not excluding firmness where it matters. In older days, this might have been termed management of public opinion.

Coming into office, VL immediately brought in his familiar team of the eighties and made sure the financial elements of electoral pledges were held. It might cripple his financial manoeuvering room but he knew, with the Parliamentary majority in hand and the dismal state of the Opposition, that he would have a fantastically unencumbered political horizon. The MMM has enmeshed itself in bitter leadership squabbles, while the LP’s horizon for a reconnect with its core values and principles may drag out for a while.

Nobody would quibble, at least not yet, in Parliament or outside, about the escalating cost of living or the unprecedented devaluation of the rupee since January. If the Rainmaker has ample political latitude, the economic horizon to meet campaign pledges and ambitious targets of growth, productive employment and raising living standards is much shorter. And the population may have developed a snappier fuse.

So it was with considerable interest that the first Budget of the Rainmaker, after a long spell in retreat and meditation, was awaited. How then did he live up to the expectations? Clearly, the importance of “packaging” is evident as the references to “mega-projects”, “smart cities”, technopoles, and Marshall Plan testify. That aside, in any budget there are undoubtedly a guiding vision, strong points, moot areas and some unspelt domains. First then the strong points that emerge, with their riders:

Mega-projects: To openly adopt various property development schemes from Sugar oligarchies which were already in the pipeline or awaiting approval (Omnicane airport hub, Medine Education Village, Azzuri IRS phase II, etc), was a bold and unprecedented move. There is normally no need to “appropriate” private sector investment projects unless they have budgetary, fiscal exemptions and special regimes of investment assistance being awarded by the state. These may be clarified in due time so all private investors know the score regarding a level playing field. The combined scale of sugar-cane land conversions (reportedly 7000 acres) underscores the necessity for a global rethink of our cane-sugar and agriculture strategy. No mention is made in this budget of SAJ’s promise to small planters to review the bagasse transfer pricing and implement effective ownership of 35% in lucrative cane by-product activities.

If the mega-projects do boost up the construction sector over the next five years, we can only hope that some of it will impact local employment rather than imported manpower. The MSM electorate, traditionally hostile to increasing numbers of foreigners working and living here, may have to digest the fact that the luxury residential components of all the mega-projects are targeted to a wealthy overseas clientele. Through the budget and the announced Steering Committees, major sugar conglomerates need not seek support elsewhere, a VL move that astutely keeps the Leader of the Opposition in a quandary.

SME fundings: Every government over the past thirty years has played up the informal sector and the SMEs in the belief that they can be called upon to substantially infuse growth dynamism into the economy. The seven new SME parks and the announced fiscal and supportive measures are interesting enough but precisely what sort of goods and services will new SMEs offer on the local market, inundated by Chinese imports? Are they equipped to explore regional markets or Africa? Are funds the major limiting factor?

We hope VL’s ambition for a “nation d’entrepreneurs” offers more effective results than previous efforts which have often saddled the country with political cronyism, massive bad debts and a struggling DBM. We also hope that a new SME Bank entrusted with greater responsibilities and a Rs 2 billion line of credit, will have some greater measure of transparency, effectiveness and accountability. More importantly, we hope the “one-stop shop” actually lives up to its name and does not turn into a tool for political patronage. That’s a lot of hopes for one of the star measures of VL’s budget.

Social measures: The Minister’s social intent and objectives in the budget cannot be disputed and he has to be given due credit although some of the measures are not extremely imaginative (6m3 free water, 1700 social housing units, increasing roof slab subsidies, etc). As for the audacious-sounding Marshall Plan for tackling poverty, VL has, to many observers, curiously reduced the 228 pockets of poverty to a limited 38 and asked private sector to undertake a “parrainage” of these, with a concomitant removal of all CSR guidelines regarding the NGOs, their status, their objectives and the priority areas of intervention. This is a strange twist in an otherwise commendable social budget.

There are other strong points in the budget of course and they are not being belittled. The transformation of the Port Louis port into a regional hub has been in the pipeline and receives a welcome boost. Rodrigues and Agalega benefit from a greater level of attention than ever before. Investment in drains or in the water sector to replace defective 50-year old pipes are continuous processes although it receives greater impetus to match Lepep’s promise of “dilo 24/24 et 7/7”. The country and its ICT sector badly need greater and faster international connectivity at cheap rates and this does deserve budget attention. Bio-foods and a centralised Auction market together with a modern slaughter house are welcome. Ambitions in tourism development have been clarified with greater air access and tourist arrivals rather than protecting the privileged few who clamour for restricting new players targeting middle-income travellers.

The budget, however wide in scope, has some moot areas where, most probably, despite the three months lag-time, some ministries have yet to articulate their plans. It is evident in the handling of public sector policy in education, technical, vocational and tertiary training which look more like a quick short-list of ad-hoc intents and measures. One of which is curious to say the least: the announcement “at long last” of a Civil Service College is a throw-back to the nineties when precisely such an institution, termed MIPAM was set up, notoriously failed to live to expectations and had to be shelved after a few years into the University of Technology.

Areas that might have warranted more than passing attention is our dependence on Energy and the associated questions: the review of bagasse usage and IPP terms, reliability and security of our electricity and fuel supplies, policy towards cleaner renewable energies, etc., although Committees and Agencies have been announced: a National Energy Commission chaired by the PM, a Renewable Authority Agency and a Utility Regulatory Authority. It is not self-evident how these answer “the (compelling) need to take urgent and immediate measures for the protection of the environment”. It looks more like buying time until a comprehensive strategy is evolved, a natural enough requirement in such a complex area.

On a similar vein, sections on transparency, recruitments, meritocracy receive due mention with little specifics on actual measures. No mention is made either on the reduction of public wastage, nor on any specific mesures to follow up on annual Audit Reports.

Undoubtedly, the Rainmaker has delivered on the packaging of his Budget Speech. The campaign promises will be largely recouped through two innocuous measures which the population seem to have accepted: an increase in taxes on transport fuel and an insidious devaluation of the rupee, leading to more VAT revenues. The inflation tax would hurt the needy more than others. There are however no macro-economic forecasts and the growth of the economy under the aegis of projects that may take years to have a full-blown effect may not provide immediate results for the unemployed. The palliative measures (crash courses, stages and stipends) and the SME funds may temporarily hold discontent at bay.

The Minister has more budgets up his sleeve where he may have more maneuvering room. The business community other than those identified in the budget may wonder about level playing fields. VL’s desire to bring all ministerial and administrative mechanisms, bottlenecks and hurdles under his control through the announced Private-Public Sector Committees is a novelty and we hope he has more success than Berenger’s unworkable inter-ministerial Committees. Only time will tell if the overall strategy and combined policies deliver on the medium-term horizon and confirm the Minister as the Rainmaker.

 

* Published in print edition on 3 April  2015

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