The Mirage of Independence: Breaking the Shackles of the Neocolonial State

Breaking the ‘shackles of the past’ is not destruction but creation: a Mauritius where a young entrepreneur in Rose-Hill has the same chance as a Moka scion, and state institutions are run by the competent, not the connected

By Sameer Sharma

As we mark the 58th anniversary of our independence today, March 12th, 2026, the air in Port Louis is thick with the usual celebratory platitudes. We will hear of the “Mauritian Miracle,” the “Tiger of the Indian Ocean,” and the resilience of our people. Yet, while the current dispensation may concede that the economic landscape is fraught with difficulty, they offer no tangible path forward — providing only a passive admission that lacks a genuine blueprint for reform. For those of us who look past the bunting and the parades, a far grimmer reality is setting in. The tiger is not roaring; it is pacing in a cage of its own making.

“For decades, we have relied on a model that was, for its time, ingenious. We moved from monocrop dependency to textile, tourism, and services. Yet, the engine that drove that growth has become clogged with the soot of patronage, the rust of inefficiency, and the heavy chains of a neocolonial economic structure that we never truly dismantled. To avoid continued economic stagnation, we must break with the “shackles of the past” and the current state’s obsession with preserving a rigged status quo…”

Mauritius is currently at a critical juncture. For decades, we have relied on a model that was, for its time, ingenious. We moved from monocrop dependency to textile, tourism, and services. Yet, the engine that drove that growth has become clogged with the soot of patronage, the rust of inefficiency, and the heavy chains of a neocolonial economic structure that we never truly dismantled. To avoid continued economic stagnation, we must break with the “shackles of the past” and the current state’s obsession with preserving a rigged status quo.

The Multipolar Storm and the Ill-Equipped Island

The world of 2026 is fundamentally different from the one that birthed our young republic. We are witnessing a transition from a unipolar world to a messy, fragmented, and multipolar reality. Historically, these transitions are never peaceful and never easy. For a small island state that will also be impacted by climate change, they require extreme agility, deep fiscal buffers, and a highly skilled workforce.

Mauritius, unfortunately, is entering this storm ill-equipped. Our fiscal position is weak, having been hollowed out by years of populist spending and unsustainable bailouts. Our external buffers are thin, and we are bleeding our most precious resource: talent. The “brain drain” is no longer a trickle; it is a flood. Our youth, seeing a landscape where “who you know” matters more than “what you know,” are voting with their feet.

Furthermore, while the world races toward an AI-driven industrial revolution, Mauritius remains stuck in a digital middle-age. Our infrastructure is lagging, our energy grid is unreliable, and our education system is still churning out workers for an economy that ceased to exist a decade ago. We are not just failing to lead; we are failing to participate.

The Neocolonial Conglomerate Trap

The central thesis of our stagnation is this: Mauritius is not a truly efficient capitalistic society. Instead, we suffer from a neocolonial setup where large swaths of the economy are controlled by a handful of historical conglomerates and their pawns who always seem to get a key economic policy making position or two. Over the decades, an unwritten “social contract” has emerged between the political elite and these private sector players. The politicians get campaign funding and a powerful lobby; the conglomerates get protection from competition. The result is a hybrid monster of private sector oligopolies and inefficient State-Owned Enterprises (SOEs).

This “agreement” has systematically stifled innovation. According to various World Bank reports on the Mauritian competitive landscape, the dominance of these conglomerates creates significant barriers to entry for newcomers. Various import related sub sectors are quasi monopolistic. Many of these importers do not even have franchises. The protection happens locally. For a country that is undergoing a purchasing power crisis, this is a self-inflicting wound. Vertical integration of conglomerates and continued mergers have seldom been challenged in Mauritius.

The World Bank has repeatedly noted that the lack of a level playing field, particularly in sectors like logistics, energy, and retail, prevents the “creative destruction” necessary for a vibrant economy. Innovation is not a priority when you own the market; rent-seeking is.

The Rigged Landscape: SMEs and State Capture

In this environment, Small and Medium Enterprises (SMEs) are destined to remain small and medium. The playing field is not just tilted; it is vertical. Access to financing is unequal, with the traditional banking sector often acting as a gatekeeper for the established elite. Operating licenses and regulations are frequently drafted in a way that favours the “incumbent” — a classic case of regulatory capture.

This concentration of political and economic power has predictably led to an erosion of institutional integrity. If we look at recent trends in the Transparency International Corruption Perceptions Index, Mauritius has seen a worrying decline. In 2025, our score dipped to 48, reflecting a growing public perception that the state exists to serve the few rather than the many. Scandals involving procurement and political nominees have become the “new normal.”

The SOE Rot: From the Port to the Bank

The inefficiency of our state majority-owned enterprises is a drag on our collective productivity. Look at the Port Louis Harbour. Once a hub of the region, it has consistently plummeted in global rankings. In the latest World Bank Container Port Performance Index, our port was ranked among the lowest globally (near the bottom 10%), plagued by aging infrastructure and political interference in management.

Then, consider the State Bank of Mauritius (SBM). This is a company that was set up to ensure that there were more competition and access to financing but its state-owned nature turned it into an unimpressive monster. Over the past decade, particularly during the mandate of the previous government, its profit trends show a disturbing volatility, coupled with a surge in Non-Performing Loans (NPLs). This is the direct result of “political patronage” dominating over merit. When boards are filled with nominees and politically appointed executives based on loyalty rather than competency, the balance sheet eventually pays the price.

The same story repeats across the Central Water Authority (CWA) and the Central Electricity Board (CEB) — institutions that should be engines of growth but have become black holes for taxpayer money. It is unclear why the state needs to run so many companies or banks. They all share one thing in common, their financial performance is terrible. The state management of the National Pension Fund is also a ticking time bomb with an asset liability gap that has yet to be disclosed to the public. Wherever there is a politician in Mauritius especially when it comes to pension funds or corporations, it is always destined to be a failure. The facts have sadly not been on the side of continued state ownership of anything.

The Great Wealth Transfer: The MIC and the Rigged Bailouts

This is not to say that the local private sector is efficient, but this is because it has evolved to become rent seeking. The most egregious evidence of the private sector’s “state capture” is the Mauritius Investment Corporation (MIC). Born during the pandemic, the MIC has overseen one of the largest wealth transfers in our history. While other nations, like the US or Germany, provided bailouts that secured significant “upside” for the taxpayer (through warrants or equity with high coupons), the Mauritian model was essentially a gift to the conglomerates. There is no comparison with what the rest of the developed and emerging world did vs what Mauritius did.

We saw badly structured convertible bonds which were not even convertible with laughably low coupon rates. We saw the state buying land from private players at huge premiums. By cannibalizing the Bank of Mauritius (BoM) balance sheet to fund these bailouts, the state effectively pushed the currency lower, making those same large exporters and banks richer. In essence, we offered large players cheap bailouts by printing money which perversely allowed them to pay for it on the cheap all while the average Mauritian were seeing their purchasing power evaporate.

This wasn’t just bad economics; it was a systemic rigging of the game. Today, the BoM sits on a pile of overvalued, illiquid assets, yet it resists a proper, independent forensic audit. Why? Because the system is owned by the very people the audit would expose. The government may have changed but nothing else has changed. Powerful lobby groups and their men still seem to call the shots. The biggest scandal in the country’s history is barely talked about anymore.

The Divergence: Corporate Profit vs. National Growth

To understand the scale of this “capture,” we must look at the numbers. The latest data for 2025 is jarring. If you look at the nominal GDP of Mauritius — the total value of everything we produce — it has grown by about 50% since the pre-pandemic benchmark of 2019. This growth includes the impact of inflation and the rupee’s depreciation. However, during that same window, the aggregate net profit of the ten largest listed groups (MCB, SBM, IBL, CIEL, ENL, etc.) has exploded from MUR $14.3$ Billion to over MUR $38 Billion.

That is a 166% increase in pure profit. When corporate profits grow more than three times faster than the underlying economy, it suggests that wealth is not merely being “created”; it is being consolidated. We have essentially privatized gains while socializing losses. Very often, business lobby groups will push back on higher targeted taxes such as windfall profit taxes by claiming that this will reduce private sector investment. The reality is that this is a concentrated private sector and most of their new productive investments are focused abroad. Locally they mainly build smart cities and shopping malls which kill small and medium enterprises.

The current political class seems to think they are CEOs, despite having no clue how to run a business. The merger of Air Mauritius and the airport into a single holding funded by the MIC is a case study in incompetence. Rather than ring-fencing a struggling airline, they “cannibalized” a profitable airport to “mask” the losses of another state owned and insolvent company.

The pattern is clear: nominees with zero management experience are placed in key roles, leading to a culture of mediocrity and decay. Currently, the government appoints officials without transparent due diligence or professional interviews. In the case of financial institutions, this selection process should be outsourced to international professionals to ensure we get the ‘best of the best,’ not merely the ‘most loyal of the loyal.’

The Path Forward: A Radical Departure

If Mauritius is to survive the next decade without sliding into terminal decline, we need a paradigm shift. We cannot grow faster without more free-market competition and significantly less state-biased intervention.

* Power Decentralization and Election Reform: We must break the financial link between companies and political parties. Mauritius needs strict election financing reforms. We should follow global best practices, such as those in Northern Europe, where political funding is transparent and capped. Companies should not be funding parties to buy “state capture.”

* Judicial Reform: “Justice delayed is justice denied.” Our judicial system is too slow and has the appearance of being two-tiered. We need more funding for the judiciary, better case management, and a culture of accountability for delays.

* The Land Value Tax (LVT): Our current property tax system is inefficient. We need a Land Value Tax. Unlike a property tax, LVT taxes the value of the land itself, encouraging development and discouraging land hoarding and speculation — both of which are rampant in Mauritius. To ensure food security, agricultural land under productive cultivation should remain LVT-free, incentivizing investment in actual farming rather than villa sales.

* Autonomy for Local Councils: Municipalities and Village Councils should have the autonomy to set and earn LVT revenues. This decentralization would allow towns to manage their own budgets and stimulate local SMEs through transparent procurement, rather than relying on a centralized, politicized federal power.

* Merit-Based Compensation: We need to stop paying for “presence” and start paying for “performance.” Senior state officials, ministers, and institutional nominees should have a significant portion of their compensation linked to clear KPIs, with robust “clawback” provisions for mismanagement or failure to meet targets.

* Free Market Reforms: To move beyond celebratory platitudes, Mauritius must embrace radical decentralization. This requires decisive competition reforms: breaking up conglomerates that dominate entire value chains where national interest is at stake, and redirecting FDI away from ‘concrete and villas’ toward productive infrastructure, such as independent power generation, without reliance on costly local intermediaries. Crucially, we must implement a gradual privatization program where the state transitions to a minority shareholder (25-30%) by listing utility, financial and infrastructure entities on the SEM. This replaces political patronage with public oversight and invites the fresh air of genuine market competition to finally roar.

* Leveraging the Diaspora: Singapore thrived because it actively sought out its best talent, wherever they were. Mauritius must do the same. Our current Sovereign AI Strategy, for instance, is a paper tiger. We lack the energy to power it, the right financial model, people with any experience in building modern Gen AI infrastructure and the ecosystem to sustain it and make it profitable. We need to reach out to the experts in our diaspora who have demonstrable experience in these fields and have the humility to listen to those who have been there and done that.

A Message of Hope

Breaking the “shackles of the past” is not an act of destruction; it is an act of creation. It is about creating a Mauritius where a young entrepreneur in Rose-Hill has the same chance of success as a scion of a Moka conglomerate. It is about a Mauritius where our state institutions are run by the competent, not the connected.

On this Independence Day, let us celebrate the dream of 1968 by finally making it a reality. Let us build a nation that is open, fair, and truly competitive. The shackles are heavy, but they are not unbreakable. It is time we took the hammer to them.

Happy Independence Day to all Mauritians!

Mauritius Times ePaper Friday 12 March 2026