In the context of the recent Annual Summit of the
National Economic and Social Council, it is fitting to review its role and
functions as the country faces the end of the growth cycle based on trade preferences
and develops a new socio-economic model
driven by openness and global competitiveness. -A new
socio-economic model, that is arduously progressively, and at times painfully built,
around a crucial set of macroeconomic and sectoral
reforms and with the participation and support of all social and economic
partners to break free of the strangling embrace of economic dependency .. This new set-up is forcing onto
the agenda a new working relationship to forge the right consensus andpartnership
that will be the making of our future. Indeed our special institutions of
tripartism and conflict management have shaped our past. A rapid dig into our ur
short economic history can help in unravelling
some of the sources and determinants of the
reality of our future development path.
What
are the important determinants that launched Mauritius on a development path
quite unique in the region and nurtured the gradual emergence of the “Indian
Ocean Tiger”?, Was it the “joining of the Yaoundé or Lomé Convention” – which
we have termed as market access -- or was it the “foray in tourism” -- termed as export-led
growth -- the crucial factors explaining our transformation? Recent economic
literature dissecting Mauritius’ success story transcends such simple
reductionism for a more intensive debate on initial conditions, geographic
factors, market intervention and specific domestic institutions. It will be
interesting to try to find our way in this maze of observations, arguments and
counter arguments.
Initial or
climatic conditions, geographic factors, or even specific factors like
population control and the early eradication of malaria (equally important in
the successful transformation of some other island economies like Taiwan,
Singapore and Hong Kong) could not fully capture the complexities of our growth
performance. Indeed, in terms of initial
conditions, Mauritius fared far worst than many African and East Asian
economies. In this respect at least,
Professor Meade was on target in his diagnosis of the unfavourable inheritance
of an economy fragmented on all lines -- ethnic, economic and political --,
vulnerable to terms of trade shocks and impending exploding population and its
remoteness from main markets and epicentres of growth. But it is rather on
openness and the outward orientation strategy that there continues to be
increasing debates on whether Mauritius had market-led or intervention-led
strategies. While some have continued to
post Mauritius as the poster boy of the so-called Washington Consensus -- a
diligent and dutiful student painstakingly adjusting relative prices to free
trade levels and allowing specialisation to be driven by relative factors
endowments --, others have classified Mauritius among the likes of the high
performing Asian economies that adopted a distinctive approach to openness – a
dirigiste trade liberalisation policy that effectively segmented the export
sectors and the local import competing sectors.
But
in the case of Mauritius, the outlier in terms of the unconventional
determinants of the country’s performance, it is claimed that it is market
access and the domestic export subsidies, compensating for some of the
inefficiencies of the anti-export bias of the restrictive import regime and
ensuring the profitability of the export sector, that explain a large part of
the country’s success story. The
resulting rents on sugar, for example, amounted to some 5.4% of GDP on the
average for the last two decades. Many other countries had started their
economic transformation with better initial conditions. They were also monocrop
economies, enjoyed preferential access to exports markets and had free trade
zones. But they failed where Mauritius
succeeded.
There
must be other explanations besides openness and market access. Some economic analysts claim that Mauritius’
openness to FDI brought us the much-needed technical expertise and the initial
capital for investment. Unquestionably,
the spread and diffusion of the technical know-how, marketing talents and world
class management capacity through either joint ventures, strategic alliances or
mere local entrepreneurship and adaptation helped to boost the economy to a
higher level of growth.
But
this seems to be only part of the story for the present ongoing bidding wars to
attract FDI do not seem to be yielding the desired results. Against a backdrop
of secured access to preferential trading arrangements, Mauritius was perhaps
an exceptional case that benefited from the Hong Kong syndrome. This seems to
be essential fodder for those who claim the primacy of a particular set of
institutions for FDI inflows, local entrepreneurship, and innovation. The functioning democratic traditions and
institutions helped to develop a social consensus without which the continuous
and consistent programme of economic liberalisation would not have been
possible. The quality of the country’s
institutions of conflict management, especially in accommodating the economic
elite, ensured that the quota rents from the EU and US markets were properly
utilised into productive sectors and in building up the social infrastructure
to meet the developmental, social insurance and social assistance goals. This
important determinant of growth, that is, the ability of our domestic
institutions to manage the distributional conflicts, triggered by local and
external shocks, stands out markedly in the case of Mauritius. The quality of
our domestic institutions seems to override the other primordial factors
affecting growth.
But the
specific set of institutions of conflict management that has served us well in
a particular setting does not chime with the times. It has to be reconfigured
in response to the opportunities and challenges of adjusting to a more
uncertain, dynamic and connected economy. It will have to embrace the new
reforms, new business dictates and governing principles grounded in competitive
markets, a rule-based framework, openness, the synergies and efficiencies
generated by improved economic management and public-private partnership
schemes and effective governance through greater empowerment, opportunities and
participatory approaches.
Our domestic
institutions, reformulated for a new environment, now have the new distinctive
role of driving the new development paradigm to ensure that our new
socio-economic model is clearly ahead of the future no matter how fast it moves
-- a model that jettisons obsolete practices for a reformist path driven by
greater flexibility and mobility, a versatile and multidisciplinary labour
force with workers changing jobs several times in their careers and working at
odd hours, wider share ownership and broader stakeholder participation in order
to efficiently manage the performance-centered workplace of the knowledge age; a
model that demands a new mindset from all of us. We will have to adopt a Global
State of Mind -- to think globally to acquire competitive rather than
comparative advantage. Our institutions
and economic operators will have to think globally in international relations,
in diplomacy, in marketing, trade and investment.
The NESC
will thus have to assume the new reconfigured role of the earlier institutions
of conflict management. It will have to evolve into an invaluable partner in
the governance of the country by forging consensus through a permanent and
sustained social dialogue for a greater participation of civil society in the
democratic process with the aim of ensuring that social harmony keeps pace with
economic development. It would thus help towards strengthening the bridge
between the civil society and the National Assembly and further increase
confidence in the democratic process and the necessity for a reforming path.
But
unfortunately the NESC, though now a more open but still exclusive club, had
continued to function as the earlier NEDC. It chose to limit its remit mostly
to those few critical issues that are referred to it. Complex economic decisions, programmes and
policies have remained purely academic within the exclusive preserve of
official experts and technocrats peppered with some trade union officials. It
has not functioned as a genuine forum for civil society to organize and give
democratic expression to their views after serious dissemination, study,
debate, and dialogue. This has allowed our litany of differences to impose its
current gridlock such that most of the challenging and topical issues have
become a battleground for political partisanship because it chose the most
limited level of public involvement, because people were not informed about
matters that affect them on a need-to-know basis and were not asked for their
input. The NESC has not been proactive enough to take these issues to the
grassroots and give individuals and groups the opportunity to participate in
vital decisions and strengthen their capacity to assess government programmes
and reforms in relation to their needs, that of their region and the country.
Such efforts tap into the local knowledge and resources of a community, with
the recognition that these resources can be crucial to a successful
implementation.
And
on such issues like educational and curriculum reform, the use of Creole as the language of instruction in schools, the need
to restructure our social welfare policies on the twin principles of targeting
and affordability and to protect our fragile eco-system against environmental
risks, the need for user charges in the transport sector as a start, the
forging of a Mauritian identity, building a fairer society and others, the NESC
was meant to be the institution par excellence to build up grassroots and
community involvement that is ongoing and throughout the year – not a ritualistic process but done with a view to
be informative; to isolate and clarify each point of disagreement till we find
that our differences become resolvable, and by building upon these incremental
resolutions, we can hope to forge a consensus.
It
has to be and seen to be above the common mêlée. ( also melee in English) Its
recent sortie on the MAAS issue, more intent to bludgeon rather than compromise will
no doubt hurt its credibility in its role as the harbinger of national dialogue. It
gave the impression of being too partisan-more deft at letting bridges sag than
building them between the two antagonists-, given the doubtful economic logic
on which its argument are based to suggest taxing the profits of IPP qui dépassent
ce qui aurait été legitime. (This is my first encounter with this type of
profits; I’m more familiar with normal or abnormal profits; if we extend this
logic it will lead us inevitably to forcibly taxing CMT for its illegitime
profits gained by paying its workers a mere pittance -- wages below minimum --
for years, and taxing the sugar and textile sectors for the windfall gains they
have been reaping over decades as a result of the unexpected appreciation of
the euro.) The NESC should be supportive
of government’s commitment to democratisation by forging consensus not by
amplifying conflicts.
The NESC
establishing itself as a platform for social dialogue and consensus, as well as
taking on the task of giving guidance on supranational policy issues: this is
how we have visualized the ways and means for the NESC to develop true
democracy, where everyone participates in the political process on a continuing
basis and where citizen participation is a cherished right. We are aware that
the practical difficulties of forging consensus in our multifaceted and
multi-cultural nation are formidable. Consensus processes ordinarily differ
from blue ribbon commissions in that the latter seeks to ensure input from all
relevant stakeholders in an orderly, disciplined fashion. Consensus fosters
mutual education on the true complexity of an issue, so that policy outcomes
can better reflect the best thinking from various perspectives; it results in
more enduring recommendations that stakeholders are less likely to challenge
and leads to changes in working relationships that can favourably affect
parties' ability to work together over time. While developing consensus is
arduous, even exasperating, that is the only way to produce policies that
reflect the varied perspectives of our citizenry, enabling us to live toether
peacefully and productively.
While government
is driving forward its economic and social reform agenda and committed to
embrace democratisation and empowered participatory governance, the NESC will
have to reorient its role more towards finding consensual solutions to the
concerns and issues of all groups in our society for the common good. We can
then be sure that with this inclusive more broad-based approach we will be able
to work together more effectively and succeed in turning that old adage
“nothing about us without us” into reality.
