Friday, August 21, 2009

Titbits: The 24/7 economy model: A lifeline for traders; Regionalisation; The IRS and RES Model; HIV/AIDS: AOL joins the fight; Exchange rate and Inflation


The 24/7 economy model: A lifeline for traders

These were exciting moments as crowds thronged the streets of the capital in support of the fun and frolic of the Mauritian version of the 24/7 concept as promoted by the Human Resource Development Council (HRDC). Should HRDC be doing that?
More daunting tasks await them, like that of preparing our workers to succeed in their transition to a more challenging work environment by acquiring new skills and greater flexibility. Rather than 24/7 which will pick up its own momentum in due time as the economy matures and as we continue diversifying in other activities, I’ll prefer calling such fun and frolic by the more realistic “Port-Louis By Night” – a profitable venture that will benefit our traders while our workers already lured by the TINA (There Is No Alternative) policies of gambling and bumper harvests will be the “dindon de la farce”. These events had been cleverly planned to fall at the end of the month ensuring that our dear workers delve deep in their pockets to provide a lifeline to our traders. “Afin que l’économie 24/7 puisse fonctionner, le patronat et les syndicats doivent coopérer,” warns our Minister of Education.

At the National Pay Council, when it is time to compensate the worker for his loss of purchasing power, he is told that he will only get the equivalent of his productivity and for the 24/7 economy model, he is expected to put in more effort both in quality and quantity terms to boost his productivity. But the worker is also concerned about his purchasing power, his employability and the commitment of the patronat to provide the tools to boost his productivity. If the patronat persists in providing peanuts, it will only get monkeys; and meanwhile the show of fun and frolic moves on.

 Regionalisation

The issue of regionalisation in the education sector seems to have seeped in back on the agenda and already the shutters are up and some of the leading figures of the anti-regionalisation side have promptly drawn out their weapons ready to nip it in the bud again. I do believe that they will very soon, swiftly and delicately, be swept under some nice carpets somewhere until some of our enterprising thinkers can find a version that is more palatable to our middle class -- that same one that had already delivered its verdict on this issue in terms of a massive vote against the pro-regionalisation MSM-MMM regime. A class that benefits from the status quo and will fight to its last member to preserve it; but it knows that its main argument, namely that the system needs appropriate doses of competition and cannot accommodate a process of levelling from the bottom, may no longer stand as the pressure builds up among its own ranks that we are paying too high a price in terms of quality and creativity and evidence from Finland, Germany, and even Singapore shows that our system is too archaic to be preserved.

For example, in these economies, they have now created pathways that enable students to move from vocational education to higher education after working for a few years and are increasingly using technology and distance learning in an effective way to improve productivity, efficiency, reduce costs and improve access. We have no alternative but to overhaul our education system from end to end if we do not want to doom it to mindless rote learning and mediocrity.

 The IRS and RES Model

They continue coming despite the present doom and gloom in the climate of business affairs; they are buying like crazy; understandably they should, given that we are giving away our prized possessions for a few pennies. “Nou ti deza locater lepok coloniale, sa pé retourner”. Instead of the new pillars that would have reinforced our economic resilience and security, we are building our future on quicksand and sowing the seeds for future recriminations by our progenies for putting in place policies that are promoting economic apartheid – a pervasive threat to our social and national cohesion.

The threat is the Integrated Resort Scheme (IRS) together with the Real Estate Scheme (RES) that is sprouting everywhere --at Le Goulet, Bel Ombre, Albion, Rivière Noire, Anahita, Savinia, Roche Noires… This is not what we had bargained for when we supported our leaders in “Putting People First” and the “Democratisation of the Economy”. We were told that we had some unfinished business with our democracy; it had to be democratized further, that the whole production chain has to be unbundled and more opportunities would thus be opened to other stakeholders, especially the small players.

These promises have gone haywire; the local landed plutocrats have joined hands with foreign capital; we are being pauperized; the dollar and the euro are appreciating and the plutocrats are enriching themselves at our expense. We remain bystanders -- some of our own have been bought in by the crumbs at the table and some of our workers, back from the 3 years of circulatory migration, will get jobs as maids and gardeners. We have become strangers in our own land. That’s the new twisted version of Vision 2020.


HIV/AIDS: AOL joins the fight

There are increasing concerns that the enduring fight against the scourge of HIV/AIDS is having some setbacks. Some NGOs are highlighting some recent data that show a tendency for relapse – a figure of 50 new cases every month is being quoted. According to the recent literature on estimates, there are about 24,000 opiate users and out of which 20,000 are injecting drug users (IDUs) in Mauritius, representing approximately 50% of the total drug using population. Despite all the efforts of committed NGOs the situation is not improving. The spread of the pandemic continues unabated. We refuse to give in to despair.

Some new NGOs like the ART OF LIVING (AOL), rich from its experience in Africa, Iraq, Palestine and its partnership with UNAIDS, have joined the fight . It also operates a De-Addiction Research Centre in Kolkata based on the Therapeutic Community model with the objectives of (1) physical and therapeutic treatments in achieving de-addiction and abstinence from drugs and alcohol, (2) helping patients to develop a positive attitude to take appropriate decisions independently, (3) helping them to rehabilitate socially and for gainful employment, (4) assist family members to understand the dynamics of drug- and alcohol-dependent individuals, and (5) conducting research and training to handle the problem. It has also initiated community based programmes for treatment of alcohol and drug abuse in several cities in India -- in Himachal Pradesh, in Kashmir, Delhi, Chandigarh and Faridkot, Barnala and Ludhiana in Punjab and Jhansi and Meerut in UP. In these programmes, on average 100-200 patients have sought treatment in the de-addiction camps.

The Art of Living HIV course appears to hold great promise as a therapeutic complement to traditional HIV treatment. Participants also reported a reduction in fear, depression, and loneliness. Interestingly, the techniques of the Art of Living HIV course have been shown to significantly reduce the stress hormone, cortisol, a very important finding for those living with HIV-1 infection, since reducing cortisol levels can help improve immune system functions. According to Texas A&M University, research on patients who have followed the practices taught in the Art of Living HIV course has demonstrated: decreased plasma cortisol (stress hormone), increased plasma prolactin (well-being hormone), mental alertness with simultaneous relaxation, and increased natural killer cells in the immune system.

The Art of Living people are bringing in their new approach and proven techniques to support the local campaign to combat HIV/AIDS. Using their own funds, they have started a de-addiction programme at Terre Rouge and they aim to cover other afflicted areas soon. We will need more of such NGOs in the future, those which are always at the forefront in the battle for the downtrodden – be it Poverty Alleviation, the Millennium Development Goals, Mission Green Earth or HIV/AIDs. This is an NGO that believes in “…serving: that is the right direction for every individual… Human beings have the unique gift of being able to connect with others. Even birds and animals have this ability. An elephant forms a bond with the mahout. Dogs and cows form bonds with their owners. Every creature has this strength; it is especially strong in human beings. We have to nourish this aspect in ourselves – to become one who has no enemies… This is not difficult. We only need to have this intention… We have to instil a sense of belongingness in society. No one should be an untouchable in society, even in politics.”

Exchange rate

For the whole year of 2008, a comparative analysis with other countries showed that the rupee was excessively appreciating against the Euro and not depreciating enough against the dollar.      

 
 
 
Nominal Exchange rate changes (%) for 2008
Nominal Exchange rate changes (%) from Jan to July 2009
Textile producers
 
 
Rs to Euro
Rs to $
 
Rs to Euro
 
 
 
 
 
 
 
Indonesia
 
 
-10
-30
 
3.9
Malaysia
 
 
0
-9
 
-5.2
Pakistan
 
 
-9
-29
 
-10.0
Thailand
 
 
-2
-5.6
 
-3.4
South Africa
 
 
-30
-51
 
+14.6
Tunisia
 
 
-13
-15
 
+3.9
Morocco
 
 
-2
-13
 
-0.1
Egypt
 
 
10
0
 
6.9
Turkey
 
 
-33
-35
 
-0.1
Mauritian Rupee
 
 
5
-5.5
 
-5.7
 
 
 
 
 
 
 
Appreciation = +ve
 
 
 
 
 
 

 

As for the period June to July 2009, the trend has reversed as far as the Euro is concerned; we are one of the few countries that is registering excessive depreciation. It is thus not surprising that we are not hearing much from the exporters lobby these days. The good days of 2006 and 2007 are back; you recall the fillip that they got from an excessive depreciation of the rupee and we collected its resulting effect -- the spoils of a high inflation of 10.1% in 2006 and 8.8% in 2007.

As for the trend against the dollar, we have more or less the same trend as in other countries over the same period.

 

Trend of currencies to the $




Inflation

When the inflation rate was 10.1%, we were provided with a whole set of international data to show that it was all because of imported inflation -- a result of the surge in commodity prices. Now that inflation has come down to less than 7%, a similar exercise reveals that we are not doing well at all in denting the inflationary pressures. This is to some extent confirmed by the third survey on inflation expectations carried out by the Bank of Mauritius in June 2009. 56.8% of respondents found the inflation rate to be high where 13.6% judged it to be too high. 50% of respondents also indicated that prices of goods and services have gone up and 47.8% expect prices to go up as too. Though respondents expect a drop in inflation in the short term, they anticipated a pick up in the medium term to around 7.5% in December 2010.


Inflation rate (%)

China
-0.5
Britain
+1.7
Euro area
+0.4
France          
+0.4
India  
+5.2
Indonesia
+4.2
Malaysia
-0.4
Singapore
-0.2
South Africa
+6.6
Mauritius
Around 7.0