Policy Choices


To the layman, neither the devaluation of the rupee, nor the scale of government’s lifestyles and its privileged dealings with suppliers/contractors under emergency, nor again the exaggerated levels of taxes and VAT on fuel have anything to do directly with Ukraine. They are matters of public policies and choices by a government

By Jan Arden

The open economy we have so long worked for and thrived upon, has been no doubt impacted since mid 2020 by the world’s exposure to the Covid-19 pandemic and the current ongoing war in Ukraine, prodded along by NATO’s policies and the consequent invasion of its eastern region by Putin’s Russia.

Our growth rate that slumped by 15% has yet to catch up with pre-pandemic levels, while the authorities have adopted the non-conventional approach of dipping their hands deep into the Central Bank’s reserves through the Mauritius Investment Corporation (MIC), greater public debt and a consequential devaluation of our national currency to keep a social explosion off the streets. In difficult times, most businesses and families would curb their excessive reliance on those projects and capital expenditures, that are simply not priority and can be delayed, postponed or simply canceled, not quite what we infer from government budgets.

The temporary sop of subsidies for a few essential commodities having ended this month has left the population exposed to a barrage of exorbitant price rises for such commodities as cooking oil (more than 100%), milk powder (+50%), diapers and other daily essentials, harder hitting the lower to middle classes already struggling with high taxation levels on fuel. The Rs 40 forked out to authorities on every litre of fuel has, as we know, cascading consequences on transport, distribution and many small business activities.

As for the Central Bank, the IMF staff reports and appraisals have for the past two to three years lambasted, in not very nuanced terms, its credibility, policies or balance sheet as an institution independent from the overbearing oversight of the high powers at the Ministry of Finance (MoF). From a press report Monday last (Le Mauricien, 5th July, ‘Twin Towers Under Fire’), it would appear that the Central Bank has been in receipt of the latest IMF Staff Appraisal Report since a fortnight and its publication is exceptionally still under wraps.

It is not clear what such delay brings as comfort to the Central Bank or the MoF for that matter. What is clear is that ordinary Mauritians are being forced to finance the high spending sprees of a government that seems at a loss for economic development alternatives and solutions other than drains, canals, property sales to foreigners and more public expenditure at large scales.

The impact on a dwindling and impoverished middle class will have been barely softened by the budgetary promise of a monthly Rs1000 allowance to the elderlies and employees from end July, while the daily life for thousands, irrespective of party colouration or urban-rural divide is taking a severe hit according to many economists.

To the layman, neither the devaluation of the rupee, nor the scale of government’s lifestyles and its privileged dealings with suppliers/contractors under emergency, nor again the exaggerated levels of taxes and VAT on fuel have anything to do directly with Ukraine. They are matters of public policies and choices by a government reputed to be sitting on a “war-chest” of 40 plus billion rupees.

We cannot unfortunately foresee any change in orientations over the near future, unless, as increasingly disenchanted Mauritians would suspect, looming general elections suddenly loosen all strings.

* * *

The bolt from MT

In a surprise development that stunned both the highest spheres of government and most observers, the CEO of Mauritius Telecom (MT) handed in his resignation on June 30th after having been a loyal, smart and perhaps decisive partner alongside current PM Pravind Jugnauth since his electoral defeat of 2005 and a Senior Advisor at the latter’s PMO from 2017 to 2021.

“MT is now gearing up to its next level of growth. I will unfortunately not be part of the next ride as I have submitted my resignation today. I am unable to continue without compromising my values and that is not an option for me…” he wrote in a parting note to MT employees who were sufficiently aghast as to give him the warmest signs of affection as he left MT Tower with, some might say, a public flair for communication.

This was therefore no ordinary matter although it was yet to be made clear precisely what snake the CEO would have been asked to swallow that would be so incompatible with his “values”. After all, slamming the door on one of the State’s plush jobs with consequential exposure to an orchestrated smear campaign and the possible wrath of a government that has acquired a reputation of chasing and hounding opponents through various institutions and agencies without qualm is not given to every regime stalwart.

That was to be answered on the very next day, Friday 1st July, on a scheduled Radio-plus live interview of nearly two hours that attracted an extraordinary audience of some 18,000 on that web station, ten times more than past widely followed events and sagas. Undoubtedly, the population had sensed that this was a different kettle of fish from previous spats and resignations such as those of former Ministers Roshi Bhadain and Nando Bodha or the demotion from Cabinet of former Ministers Ivan Collendavelloo or Yogida Sawminaden, trapped in affairs that our fabled anti-corruption agency has yet to unravel.

The extent of the damaging revelations on radio had senior advisors, wielding unelected powers, and the highest spheres of Pravind Jugnauth’s inner circle scurrying for a relatively credible parade against the bolt from the MT’s CEO relayed so widely on air and on the radio’s web station.

Hijack the country’s internet traffic

According to his account, on the specific count of the unacceptable snake to swallow, Sherry Singh explained having received a few weeks previously a phone call from the PM allegedly ordering him, there was no option left open, to allow a third party of unspecified foreign origin to install at MT the necessary hardware and software that would divert and effectively control all ingoing and outgoing internet (including WhatsApp, Facebook, Instagram, etc) traffic to the Republic of Mauritius. A phenomenon he referred to as “sniffing”, but that only hides the enormity of the alleged proposal and its potential consequences for a sovereign jurisdiction like ours, which has yet to tumble down to North Korean levels, as far as we know.

Most of us will recall the considerable uproar when the ICTA and the Attorney General came up last year with a White Paper that purported to do exactly that through a legal enactment which was unceremoniously dumped as the former PM Navin Ramgoolam, leader of the Labour Party, was quick to point out. He added that the idea of diverting and controlling all internet access to and from the island had not been dismissed but was now the object of a back-door ploy, if the allegations of the CEO were true.

Navin Ramgoolam and all other political parties and many respected voices, like those of past President Cassam Uteem, intimated that Pravind Jugnauth had no choice but to come clean on what would be tantamount to “high treason”. The latter, rather than a solemn forceful denial through all channels at his disposal, chose to answer questions after an NGO function, saying essentially that “he was lying” and “wait and you will see” when pressed for any actions he might take if this was an outright defamatory statement from Mr Sherry Singh. This sounded far from adequate to reassure the population. He did add to a question about unelected circles and advisors that he worked with a Cabinet of Ministers, although one might suspect that such a preposterous proposal, if true, would most probably have not been presented for Cabinet approval.

At Tuesday’s National Assembly session, the PM at last gave a short but stout denial of his or government official dealings with third parties to the PNQ of the Leader of the Opposition. Unfortunately, by blocking any supplementary question, the session was turned into a raucous affair by the Speaker, resorting to expulsions all round of Opposition MPs. If hounding and checking on internet exchanges of political opponents was the objective, the alleged proposal would certainly have dealt a hammer blow to all citizens as well as to banks, insurance companies, legal cabinets, the business community, foreign embassies and the very fundamentals of our open economy.

Political expediency, even if government feels the troubled times call for desperate measures, cannot justify such grave risks to the economic and social infrastructure of the country, the confidentiality ingrained in the Banking Act, potential diplomatic repercussions and the innate freedoms of all citizens. Every vigilance should be exercised to ensure that any new CEO does not entertain such a paleolithic measure.

Mauritius Times ePaper Friday 8 July 2022

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