Aberrant !!! : Hedging; Extension of class hours; Food security; Two million tourists in 2015; The Integrated Resort Scheme (IRS); Our man from Harvard.

It is so aberrant that some of the stewards and opinion leaders of our economy have grown so gullible, refusing to wake up from the torpor into which they have been lulled in as the new formidable cohort of followers and cheerleaders. It is much easier to bend to the wind, to join the bandwagon than to take a hard look at the facts and filter out the frivolous statements, the incendiary rhetoric and its inadequacies.  Leadership or management or any such position of responsibility is supposed to be about more than cheering your team, humbling and jeering the other side- the dissenting side- that has freed itself from that horrible urge to always fit in and now dares to think differently. It’s supposed to be about changing the country for the better.

Hedging:      We gulped it all down-lock, stock and barrel- that the unfortunate hedging losses explain the present predicament of our Paille en Queue. That’s absurd. Air Mauritius was not competitive enough to bear the drastic move from a near monopoly situation to a more competitive one. Air Mauritius was already feeling the deleterious effects of the liberalisation of air access before being hit by the hedging losses, yet another one of those inadmissible blunders that was amassing into such a whole heap of mismanagement that it was inevitable that it would soon burst out in the open spilling all over the place sparing very few.  It is not the hedging losses which is the issue, it is the strikingly inept management of the company that has been allowed to carry on unchecked for years. The other side do not want to settle for half-baked solutions. For the small fries and for much less than the Rs 6 billion (that may peak up to Rs 9 billion) they are being told to lev pake alle while the CEO and the Board of Air Mts, shamelessly, stay put.

And at the STC they seem to be on another planet; teleconferencing with Morgan Stanley, negotiating with Mangalore Petroleum, the Gujarat Cooperative Milk Marketing Federation (Amul) and the Chinese Authorities (wheat) and even allowing themselves the luxury of exploring the possibility of indulging in diamond trading on the sides that will help to cross-subsidise our wheat and gas consumption. And at the end of the day the outcome is not much different from that of Air Mauritius – huge financial gaps- but with the difference that the STC covertly passes it on to the consumers who are there to carry their burden of incompetence. Meanwhile they stay put – the risk committee, the Chairman, Advisers, Managers, petit copains et al. MK in the inspiring piece titled “Fault lines”, in this paper’s last week edition, addresses this issue with such comprehensive authority when he notes that “ our institutions suffer from the gaffes that are made by certain privileged people who believe that, no matter what they do, they will get away unscathed. Would it have been possible to run those institutions with aggressive and independent-minded professionals? We believe so.” So does the other side. These guys should go and proven-professionals should replace the whole bunch of amateurs squatting at Air Mts and STC. “Unfortunately, no new government will take the initiative to drive in this direction because each one has to gratify its so-called supporters. “

On the other side there are also some who have some doubts about the now generally accepted view that the amateurs of the risk committees were somewhat unlucky on hedging -that it was all through a one way-bet and that the only way that the price of petroleum could go was up. The dissenters may now appear to be wiser after the event. But they were among the few that did not conform to the widely held view that the price of petroleum will soar to US$ 200 –an assumption that became an edict. The few had, at the beginning of last year, warned that “ it will rather through the financial markets that most of the tremors will be felt by triggering a rise in risk premiums, a drying up of market liquidity and crashing share prices- equity and commodity prices including petroleum.” And the ex- Governor, Mr Basant Roi, of the Central Bank reminds us today that “there was a clear indication that the price of oil was about to decline. A little more than six months ago Mexico sold oil in the futures market at US$70 when the prevailing price was US$130. A turning point in the price of oil was around the corner. This turning point was confirmed when, quite a few months ago, Saudi Arabia decided on its national budget…... Several of the oil-exporting countries had their respective budgets based on a pegged price for oil that was far below US$100.”

Extension of class hours :     It is so absurd that the extension of school hours for a mere 30 minutes has suddenly become the  revolutionary move of the day  that will transform our schools and colleges from institutions that emphasize rote memorization to ones that teach practical applications and  instil creativity. The other side is concerned that such a minor graft onto the overly competitive and elitist system is being brought upfront futilely canalising energies when other more important issues like deteriorating quality standards and discipline are being grossly ignored.  It is surprising that such a dysfunctional system is being allowed to continue perpetuating inequalities in opportunity and producing misfits when they get out into the real world. Indeed, this education system is turning out to be very costly in terms of wastage of our main asset- human capital.

Food security: It is inadmissible that our grandiose food security strategy has not been properly costed the different options and provided for an appropriate support scheme that induces farmers to improve the production of risky crops such as potato and onion and thus allow us to beat the market and better face the food crisis. The other side is querying whether we are not committing the same blunders as in the case of the Gros-Bois potato project, one of the exhibits during the recent visit of Marianne Fischer Boël, European Commisioner for Agriculture.   Selon un planteur, " gouverman finn perdi boukou kas dan sa proze la’.

Two million tourists in 2015 : It’s so depressing to acknowledge that the persistence of the authorities has paid off and the controversial 2 million tourists by 2005 target has gradually seeped into some knowledgeable quarters who think it is more profitable to dance to the tune of the piper  than to display any dissenting dissonance. On the other side, we had first of all our environment specialist and crusader, Nicholas Rainer, who believes that we have two millions reasons to fret before we tune in to the 2 million tourists target-“ Two million tourists would be suicidal for Mauritius’s environmental and social balance. Politicians and common sense are odd bedfellows indeed.” And more recently another of our committed environmentalist, Assoc. Prof Ramesh Durbarry of the UTM reminds us loud and clear that the: " Deux millions de touristes en 2015 : nous ne sommes pas prêts ! ….. N'oublions pas d'autre part l'impact de 2 millions de touristes sur la nature : l'augmentation de la pollution de l'air et celle de la pollution sonore à cause d'une trop grande circulation routière, l'utilisation d'un espace de plus en plus restreint, la contamination de nos ressources en eau, la perte croissante de notre biodiversité. La pression va augmenter sur notre réseau routier, sur nos infrastructures portuaires et aéroportuaires. »

Do we have a strategy for the sector that incorporates all these elements ? 

What is our strategy now that the growth rate of the sector has plummeted from 14% to a mere 2.6%  ?  We will need more from the MTPA than the traditional “ gardant la qualité et la proximite de coeur” strategy . Otherwise lev pake alle and leave it to the professionals.

The Integrated Resort Scheme (IRS):  It is pathetic that some knowledgeable analysts just do not give up on the IRS issue; they scoured the SIDS-  Singapore, Hong Kong, Dubai and even Reunion island -to find out some valid arguments that could justify the IRS ; some of their recent findings are indeed bewildering :  “The more foreigners living in Mauritius, the more it will help the small and medium enterprises and the masses.”  And this gem –“What does Mauritius has as options ? No one owes us a living …” so let us leverage our property market to the Beckhams and Baachaans and wait for them , once in every two years when they choose to occupy their Mauritian villa, to spend their prized US dollars on our Made in Mauritius products.  The other side is prompt to argue that the issue is not about xenophobia or any other phobia, it just a question of the opportunity cost of using such prime land-for e.g hosting on the present IRS sites institutions of higher learning of international standards will bring in addition  substantial external economies to the economy. Among the dissenting ones, Percy Mistry, prefers “  the kind of land development in a fully opened up land market, along with an appropriate tax basis for converting agricultural land into ‘developable’ land ….. Those options would be much better and far more equitable than the IRS and RES” that do not extend our production frontier, that is, boost future production of either goods or services.

Our man from Harvard

            Our dear cohort , always free for free lectures, were all there in the front seats avidly imbibing those glimpses of  insights – on the recession facing many economies with the only exception being our miracle island, inflation targeting and reforms- but the appeal of the lectures failed to  transcend the charisma of the messenger. And Nita who often finds herself on the other side, in her habitual caustic way, had a dig at our vaunted think thanks “ just because somebody from Harvard who uttered such nonsense, it never occurred to anyone….that someone from Harvard could be wrong.”

 

With due acknowledgement to MK, he left me with no choice but to uplift his concluding paragraph which is so contextual that it fits in effortlessly, corners and all, without any aberration, and adds value to this article that has dared to dwell on the fault lines, that is, on  “certain public servants who assume a posturing so as to project themselves as being close to the new centre of power each time there is a change of government. The necessary lack of character behind such posturing has opened the way for the less technical of our public servants to reach the top. Having reached this position, they perpetuate themselves by targeting their more efficient colleagues. Decades of this practice have saddled the public institutions with mediocrity. It is not surprising therefore that our public service is not as incisive and result-driven as it could have been. It has become prone to blunders and incapable of innovation to face the challenges of the modern world.”  But probing  our institutions’ fault lines can be hazardous.