Titbits: The inflation v/s Growth Debate ; The Right Policy Mix; Inflation Risks; Weak Monetary Transmission Mechanism; Effect of PRB awards on Inflation.

The Inflation v/s Growth Debate

As slipping growth accentuated recently, the Ministry of Finance (MOF) and the Bank of Mauritius (BOM) have found themselves increasingly at odds and the MOF looked to the Central Bank to reduce interest rates to provide a fillip to growth. The view that the MOF is for growth and that the Central Bank is obsessed with price stability is a simplification. Similarly, reference to policies of central banks across the planet and their “forward guidance” strategy to try to justify one’s pro-growth position is illogical and absurd

Titbits: The ESTP ; The Poverty Issue ; Cost-effective Social Transfers ? ; The Evil of Inflation and Inequality.

The Economic and Social Transformation Plan: a non-starter
(Published in MTimes and in L'express 01.09.2013)

We recently had the opportunity in the context of the seminar on the ‘Country Strategy Paper – Mauritius’, presented by the African Development Bank, to listen to the arguments of the Financial Secretary (FS) on the Economic and Social Transformation Plan (ESTP). It was in reply to the few well-chosen barbs of his earlier mentor, Mr R.Sithanen, with respect to the present state of policy paralysis, the absence of any meaningful reforms and the lack of development of opportunities for new sectors. The FS failed to convince us. After having held the country to ransom for seven years with its short-term incoherent and uncoordinated policies and undermining all attempts to set up an independent full-fledged planning unit, it is not the last-minute elbowing to pull out a summarily concocted 10-year plan -- the famous ESTP -- that will convince us that the Ministry of Finance (MOF) can carry out high level thinking, innovative policy making and planning.