Worries about the Future

Editorial

The overall situation in the world is so bad that, in spite of a picture of seeming normalcy – holding of elections in the US, India, here too the village elections – that governments want to project, everywhere one can sense that there is palpable worry about what kind of a future awaits us. Reassurances sound fake, and this impression is compounded by the lack of transparency about measures that are taken, especially where taxpayer money is involved. Several of the rich countries have already announced publicly that they are in recession, and that their economies are not expected to grow by as many percentage points as would be necessary to prevent this tendency.

And yet in Mauritius, we are told by the Minister of Finance that there is a fresh uptick in the economy, without spelling out the details of the sectors in which this is happening concretely. We have not ceased to repeat that compared to what is happening in the rest of the world, even in our sister island Reunion which has more sophisticated medical facilities (since Reunion = France), the government’s strategy has managed to contain the spread of the Covid-19 pandemic. And this is allowing us to move about and do our routine activities – though not normal business – in a freer environment than elsewhere, except New Zealand.

This said, we cannot fail to reiterate that the irregularities in the procurement of the necessary medicines and equipments have impacted the credibility of the regime adversely, and that perception is yet to be reversed, despite the investigations and arrests made by ICAC. Doubts continue to remain about the final outcome, which may go into oblivion – much as nothing more has been heard about the ventilators bought from a packing company at explosive cost, besides the fact that there has been no pre-testing which raises the serious and important issue of whether they will work at all or properly when commissioned . And if not what next?

The same opacity persists about the conditions attached to the loans/“assistance” being advanced by the Mauritius Investment Corporation Ltd to distressed large companies, a point which we have been canvassing from the very beginning. Belatedly, we note that the opposition alliance only now is alluding to that, though from a political and governance point of view it does not suffice to say ‘better late than never’. The matter is still supremely important and relevant, and the sooner the people have the answers the stronger will be the regime’s legitimacy.

Now has surfaced louder and more visibly the debate and the questions about the Contribution Sociale Généralisée, which according to Business Mauritius is going to have a system wide impact on the Mauritian economy and destabilize the pension structure to such an extent that in a foreseeable future it is going to be unsustainable. This is because of the demographic decline which means that the ratio of young employed who will have to pay for an increasing proportion of elderly will alter such that fewer young will be available to pay for more elderly.

But for a start, there is a skewed contribution between the public and private sectors meant for paying out pensions .What is worrying even more is the closing down of the NPF which, through its investments, etc., is basically able to generate a return that pays for pensions – in other words, a sustainable source to do so. The new proposals which have been enacted without any prior discussion with the stakeholders mean that the NPF moneys to the tune of about Rs 165 have now been transferred to the Consolidated Fund – effectively the budget. That is, it will be spent rather than generate revenue as before. And with the Special Reserves of the bank of Mauritius that have been used and will no doubt be used up in due course, it is the Consolidated Fund that will be channeled for budgetary expenditures and the wasteful largesses that we have been witness to.

Where, then, will the money come from to pay pensions in the future? Does this all mean that we’ll be moving in the direction of dismantling an important plank of our Welfare State? If that were to happen, the consequences are certainly going to be dire not only for the vulnerable sections but for the country as a whole.

In a few days we will be celebrating the arrival of Indian Indentured Immigrants at Aapravasi Ghat, on 2^nd November. What a contrast this will symbolize. Whereas our valiant ancestors braved all and faced so many obstacles, they yet managed to survive honourably and bequeathed to us a legacy in terms of land and some assets, including the little that they could save. We their descendants, are doing the exact opposite: we are placing a heavy burden of unending debt on our own future descendants.

This is something which our leaders should seriously ponder.

* Published in print edition on 30 October 2020