Budget 2016: Time for direction!

This Friday many will be watching with interest the national budget speech of Hon Pravind Jugnauth. For content, style and delivery.

On the political front, the traditional 90-minute exercise, under the floodlights of TV cameras, will be more critical than any of his previous budget speeches. Pravind Jugnauth already held the reins of Sun Trust and the MSM but, having emerged from the judicial tracasseries of MedPoint, he should now command greater personal legitimacy from Cabinet colleagues and the motley assortment of Lepep parliamentarians.

Mr Gerard Sanspeur, his senior advisor at Finance, has made no secret of a coming “revolutionary, Big Bang budget”, very different from any of his predecessors, including the likes of Xavier Duval, Rama Sithanen, Vishnu Lutchmeenaraidoo and… Pravind Jugnauth himself. We have no reason to doubt these authorised utterances but whether the exercise actually meets such predictions of boldness or not, all politicians, MPs and observers will also scrutinise body language and speech delivery for tell-tale signs of the Minister’s mettle not just at the Treasury but as an aspiring candidate for leading the country.

He will be batting on a slippery and tricky pitch, where many of government’s own actions have landed him. This being the second attempt at a government budget in the past eighteen months, the incoming Minister has his work cut out to restore credibility and confidence in government policies and strategies. He will have to tread warily as sycophants, ministerial colleagues, trublions and unexpected announcements, such as the Central Bank’s decision to change currency notes, can still trip him up. As a future leader with national aspirations, the body politic, economic operators and socio-economists will be also studying critical litmus-tests of Pravind Jugnauth’s leadership abilities by restoring a sense of equity and unmuddled direction in the conduct of national affairs.

A primary test could well be whether government moves away from the overarching obsession with property deals and “smart cities” benefitting the privileged land-owning establishments, grabbing most of the FDI, bringing in nothing to a cash-starved Treasury, selling the country off without really impacting unemployment, while, against all in-built promises to the contrary, imposing heavy resource-funding demands (roads, drains, electricity, water) on the country and ordinary struggling taxpayers. Even those fortunate few large operators must have been bamboozled by such unexpected generosity from public purse, as all corporate taxes, import duties, land conversion taxes and registration dues were grandly waived aside, measures they were perhaps neither expecting nor clamouring for!

Agriculture, agro-industry and small planters have been ignored as several thousands of acres of best lands were being redirected to “betonnage” for one-off villa sales bringing little to state coffers. Traditional pillars like manufacturing, construction, trade and SME sectors have had little cause to rejoice over the recent past while the “blue economy” has remained in waiting mode.

Addressing continued skills mismatch or promoting productive new pillars like a concerted plan for the development of an international education hub are still in limbo. Unemployment, graduate joblessness and youth demotivation remain a concern, while the negative impacts of Brexit or the DTAA are still to be felt. It would indeed be tedious to recap the abandoned pledges, the sectors in limbo or in plain difficulties, the possible new productive economic pillars left fallow for want of coherent strategies. All his economic advisors are acutely aware that things have to move.

Of the various other litmus tests of equity, measures for addressing the treatment of CSR or an effective coordinated plan directed towards the downtrodden and the disadvantaged will be high on this watch-list. Rather than sterile polemics, a sense of urgency in tackling the deteriorating law and order situation, the disruptive social scene or the disastrous infiltrations and trafficking of drugs, synthetic or otherwise, would be most welcome.

Hard and courageous choices will be needed between massive public sector investment schemes, most notorious of which is the proposed Heritage City property development deal of some Rs 35-40 billion aiming primarily to transfer Parliament, some ministerial offices and build the associated residential, commercial and office towers in a green field zone. Highest-level blessings and enormous consultancy fees have been committed to the project, while billions will have to be disbursed for basic infrastructure prior to any site development.

For comparison, the light-rail transport system, at current estimates of some Rs 25 billion, had elicited dozens of detailed feasibility studies and reports, while we have to be content with the skimpiest of briefs regarding the economic and social justifications for the announced Heritage City. Many observers reckon that the light-rail proposal that had been finalised in 2014 held promise of urban and commercial development all along its corridor while reducing huge traffic congestion and reducing pollution.

In the parlous state of public finances and exacerbated national indebtedness, even with the benefit of the various generous loans and grants offered by New Delhi, Mauritius can ill afford to run after several hares simultaneously. Not to mention the country’s doubtful technical, supervisory and managerial abilities to absorb and oversee large infrastructure projects to specifications, within time and budget, if the previous public sector road development programmes are anything to go by.

Equally high on the watch list will be announcements regarding the public sector’s own lifestyle, particularly in the current context of social depression and economic “attentisme”. After a profligate year contributing largely to the difficult state of public finances, we can understand that neither an announced 600 million Rupees four-lane international-norm highway for a “smart” developer in the south, nor the proposed 600 million Rupees for currency notes replacement (fortunately rapidly dismissed), nor the stupendous scale of overseas travels for ministers and their accompanying delegations, nor the large depreciation of the Rupee, nor the ever-possible prospect of costly judiciary setbacks in high-profile politically motivated cases (CT-Power is only one case in point), can enthuse increasingly irate taxpayers, consumers and voters.

There are some signs that government, whatever previous political alliances are accused of or may have condoned, is hearing the rising call to curb some of its own largesses, the excesses of its nominees and the spending habits of parastatals. It can no doubt go further on the road to greater soberness, transparency and accountability in the public sphere if only for appeasing an incensed public perception or to reduce risky reading of upcoming and future Audit Reports.

At the end of the day, challenges may only be opportunities in disguise. And on the soddy pitch of adversity, Hon Pravind Jugnauth may well be standing up this Friday to stamp his authority and sketch his credibility as a future political leader respected in his own right. He may need to move out of some impressive shadows to give the country some hope and shed light on his own ambitions. But the real test won’t be on the announcements of the day as much as on the capacity of his team and the government-controlled machinery to actually deliver tangible results over the coming year.


* Published in print edition on 29 July 2016

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