For the past five years
we have been force-fed with high doses of Programme Based Budgeting , the Ease of Doing Business Index, labour and fiscal
reforms to be told now by the WEF’s Global Competitiveness Report that we are
still being burdened by an inefficient government bureaucracy and an
inefficient labour market.
Le Defi Quotidien of the 14 September 2011
notes that « alors qu’effectivement le
climat des affaires est excellent à Maurice, dans la pratique c’est souvent une
autre histoire. » ; a previous issue had noted that « Cinq ans après l’entrée en opération de la fameuse « Business
Facilitation Act », cette loi révolutionnaire qui a soi-disant éliminé la
bureaucratie, voilà que cette bureaucratie tant décriée fait son retour dans
nos institutions régulatrices : municipalités, conseil de district, organismes
publics, etc. Les entrepreneurs en ont marre. Les renseignements obtenus auprès
des institutions publiques varient d’un officier à l’autre. Dans certains cas,
l’officier n’est lui-même pas sûr de ce qu’il avance. Il y a un monde de
différence entre ce qui est écrit sur les « guidelines » et ce qui se passe en
réalité ». The Joint Economic Council has also remarked
that « la lenteur administratif pénalise
les investisseurs. »
On the fiscal front, there has not been much improvement either-
Revenue as a % of GDP has stagnated at 20% , current spending has increased as
a proportion of GDP whereas capital spending stayed at a dismal 3% of GDP.
And now we are seeing more of the same coming; the current lot
of reform proposals do not seem to be the silver bullet that will negate the
impact of the slowdown in the US and Europe and fire growth.
We are not surprised that some commentators are already worried
about being served the same recipe once more- the ones that have not offered a
more cohesive explanation for the problems or any real solutions .
Mr Malenn Oodiah in his interesting article
titled -Pu tir leson sa fwa la - argues that « À Maurice, en 2008, nous nous sommes contentés de la fameuse résilience
de notre économie et de certaines mesures pour parer au plus pressé. Après,
c’était business as usual alors qu’il aurait fallu une réflexion en profondeur
par les gouvernants et les opérateurs pour repenser notre stratégie et modèle
de développement. Ce qu’on constate par contre au niveau gouvernemental c’est
l’incohérence avec deux orientations pas forcément compatibles : le MID et le
Duty Free Shopping Island. Et au niveau des opérateurs privés, on est resté
dans une stratégie de développement reposant essentiellement sur le
développement de l’immobilier et l’exploitation du foncier. ….Dans
la présente conjoncture, la priorité des priorités c’est de trouver des
solutions aux nombreux problèmes économiques et sociaux auxquels se trouve
confrontée la très grande majorité de la population. Comment éviter les
faillites d’entreprises, qui augmenteront le taux de chômage ? Que faire pour éviter la
paupérisation des classes moyennes ? . »
Indeed
we cannot continue to do business as usual
According
to Kenneth Rogoff and Carmen Reinhart, Europe and the US are not experiencing a
typical recession or even a double-dip Great Recession. Rather the West is
going through something much more profound - a second Great Contraction of
growth . “It is a slow - or no-growth
waltz that plays out not over months but over many years.” Growth in the
western part of the world will remain sluggish for many years and this is going
to drag down the markets and sentiments worldwide.
Short
term fixes would not do. What lies ahead is a long protracted period of
turbulence and maybe a new crisis ; there is a need for new thinkers on the
ship to assume new responsibilities. The Middle East has just sent us a serious
alarm signal. The problem is that the clock is ticking and the need for new thinkers
and leadership is becoming as critical as it is urgent, especially at a time
that the country is passing through its worst phase of political governance and
the high inflation is hurting the pockets of ordinary citizens.
We will be sacrificing an
entire generation if we do not think out of the box of IMF/WB formulas and land
and real estate developments and act quickly.
There is a need of of
urgency in policy-making and concerted action to tackle the larger predicaments
of weakening growth and plunging business confidence starting with measures to
boost both public and private sector investment .
We need to generate greater collaboration
between industry, civil society and government to transform existing governance
and the economic model to find our way back to the path of rapid asset creation
and our potential growth level.
Education reform: A new
team that is committed to, first and most important of all, educational reform
- an education system that instead of churning super rats for a rat race
nurtures excellence and creativity and has the ability to provide learning to a
broad cross section of citizens, to advance national proficiency in Maths and
Science and to create an adaptable labour force as well as to develop a
national appreciation for discovery ,entrepreneurship and the creative process.
- And an educational system that has in-built processes to ensure a continuous
striving towards the ideal of universal access to quality education.
Build Skills : The
contribution of most sectors to economy-wide higher value addition will
eventually stagnate if the sectors do not move up the technology ladder. It is
the lack of skills in the labor force that is impeding the transformation to a
higher value added economy ; the new thinkers and bureaucrats, believing in
skills training as the essential prerequisite for greater competitiveness as well
as for promoting inclusive growth in the country, will need to identify the
desired skill sets of to- morrow and look at systematic ways to mobilize
massive resources to develop them rapidly. They will have to ensure that
our Corporate leaders work closely with educators to churn out a labour force
with the right skills . For short term
solutions to the skill-deficit in the workforce, both
the Empowerment Foundation and the MITD will have to be shaken up to provide
more robust training programmes to promote skills upgrading ; a National Skills
Regulation System will monitor these programmes as well as the
internships and apprenticeships schemes that can go a long way at filling the
gap.
Competitive markets: Our
new team of policy makers will have to continue pursuing the democratization
goals of Government. They will need to actively challenge entrenched
economic privilege in order to ensure that markets are competitive, information
is transparent, and consumers have choice.
Focus
on Innovation: Mauritius future
innovation-led growth must rely more on technical efficiency that requires an efficient
national environment which will reinforce innovation within the business sector
and encourage firms to compete on the basis of unique products or services. In
restructuring our existing economic activities and in initiating new ones
innovation will have to be a key driver of this change. Our
new team should encourage a new wave of Industrial Policies that strive to
create a R&D culture and foster innovation by new instruments (competitive
bidding for earmarked funds and a
R&D tax credit). Given the fact that the private sector
underinvests in research, government can play a key role to support growth by
investing in science and technology, increase its funding for research needs
and create the institutional environment that supports technological
change.
We need a technology strategy to address
specific needs of innovation and technology diffusion. What about a publicly
funded Mauritius Industrial Technology Research Institute (MITRI)?. MITRI would
be patterned along the Taiwan, South Africa and Singapore technology research
institutes. MITRI will scour the world for cutting technologies and use its own
laboratory facilities to assess their appropriateness to local conditions and
build pilot versions to demonstrate them to prospective investors. The
experience of existing public research institutes grouped under MITRI will be
an asset in tapping the promising research areas like sugar-based technology
(for plastics, polymers and for medicinal purposes), renewable energy
technologies, seafood and ocean resources.
Paul Romer
contributed an approach to growth theory based on innovations in either
products or production methods as the key ingredient for development, rather
than capital, labor, or other factors of production. Romer
argues that importing ideas from abroad, through inward FDI, is
an effective alternative to growing them at home. Our new
think tanks will have to be selective in our choice of Foreign Direct
Investment flows , encouraging those that are important sources of managerial
ability, technical personnel, technological knowledge, administrative
organisation and a source of innovations in products and production techniques,
all of which are in short supply in Mauritius. These well-screened FDI
inflows will impact positively on
the economy so far as product upgrading and increased productivity are
concerned.
A
productivity budget: The Achilles heel
of Mauritian economic performance in recent years has been weak productivity
growth. Our new team will push for a budget that re- prioritizes the budget decisions, giving
more weight to the kinds of investments that boost growth and innovation (e.g.,
research, education, infrastructure, and information technology) and less to
those that have little impact. This will be accompanied by sectoral reforms to generate productivity
improvements, in agriculture, industry, public utilities, health, education,
etc. Such a budget would have thus considered that its economic priority is to
bring in a new dynamism in the main productive and social sectors of the
economy while ensuring that the economy becomes more inclusive, broad-based ,
equitable and sustainable over time, for e.g health sector reforms that will give the poor
access to high-quality care.
Export expansion and diversification: The proposal in past
budgets of setting up Trading Houses in COMESA and SADC regions which “would
provide a shop front, warehousing facilities, marketing services, selling bulk
and breaking bulk and taking orders for Mauritian products” and the pursuit
of economic diplomacy by our Embassies will have to be re-examined by the new team. Export
market information requires urgent attention. Given that our institutions will
have to think more globally in international relations, marketing and
investment options, Entreprise Mauritius and BOI could secure trade offices in
key markets by being based in the Mauritian missions abroad. This will enable
global knowledge acquisition-acquiring crucial market knowledge, finding the
right people, firm and institution, building the contacts for insightful
information and leads. It will also influence the ways our business sells and
markets our brand, builds relationships, secures resources and negotiates the
best deals and partnerships for our industrial and SME sectors.
A long
term vision: Professor C.Junglee laments
that « nous n’avons pas de vision ou de
stratégie à long terme. Pourquoi ne pas mettre sur pied un institut monétaire
et fiscal, où siégeront des experts apolitiques, qui analyseront vraiment les
problèmes et formuleraient des solutions au gouvernement. Cet institut aurait
permis de garantir une stratégie à long terme. ». Perhaps a Planning Commission would be a better
option. In his interview in Business Mag of the 10-16 August 2011, Mr Tim
Taylor notes that for years we have not had any national discussion on the main
challenges facing the country and he even talks about the need for a long term
vision and Plan. Indeed our corporate leaders want to see more coherence in the
strategies, in the likely course of events, the main constraints and
opportunities that will emerge and the key choices that have to be made
including the linkages between sectors, and
implementation capacities. Our new kids on the block will have to start work on
a long term strategy -a National Long-Term Perspective Study
(NLTPS) - to shape a vision of Mauritius for the next 20 years, Vision 2030 is
a future that begins now.
