The Economic Development Board –Some Issues

(Published in L'Express)
The Economic Development Board (EDB) is essentially designed to improve investment promotion and facilitation by merging the Board of Investment (BOI), Enterprise Mauritius (EM), and Financial Services Promotion Agency (FSPA). It is a beefed-up BOI, to strengthen the existing powers of the BOI, which would also take over the role and functions of EM and FSPA.

The latter organizations are the clear losers in this merger/restructuring.  EM has a special role as a “national export promotion agency responsible for export promotion and export development”, and administers a number of export support schemes. The EDB is an institution with broader and different goals, just as the BOI, and it is feared that the export emphasis and direction which EM was designed to impart to the economy will fall by the wayside.  On the contrary, there is an urgent need to reinforce export oriented policies and support institutions that foster exports, especially of manufacturing and industrial exports, as well as exports of services, other than financial services and tourism. 

FSPA too is a key and specialized promotion agency for the financial services sector. The global business sector is currently at a crossroad facing major threats from the OECD and EU anti- tax erosion initiatives, and will need to engage in a major strategic restructuring to sustain its growth and employment potential.  It is an inopportune time to dissolve the FSPA into a broader BOI.  The Mauritius Tourism Promotion Agency (MTPA) has a similar critical role to respond to the new challenges facing the tourism sector.  For the same reasons, both the FSPA and the MTPA should not be absorbed in the EDB. An EDB which reflects broader and strengthened powers for the BOI as an investment promotion and facilitation institution would be more logical and less controversial.

The EDB has also been saddled with the objective to support and advise Government on strategic economic planning and economic policy formulation.  Trinidad and Tobago has likewise set up an Economic Development Advisory Board to provide advice to the Prime Minister in the development of policies, programmes and projects for the country’s long term development and economic transformation.  The difference with the Mauritius EDB is that the Trinidad and Tobago EDB is exclusively dedicated to supporting the country’s development strategy and policies, and is not at all involved with investment promotion and facilitation. 

Moreover, the Trinidad and Tobago EDB is supported by a secretariat of professional staff of various disciplines who are employed by Ministry of Economic Planning and Development, and its Board is broad based, including a wide range of persons from academia, the public sector, the private sector, the labor movement, and independent professionals.  In contrast, the Mauritius EDB Board has only 8 members, and none from trade unions.

The Singapore EDB is, on the other hand, engaged in attracting business and investments to Singapore, as the lead agency for enhancing Singapore’s position as a global business centre, with the Ministry of Trade and Industry as the parent ministry.  The Singapore EDB is not responsible for strategic planning and policy advice to Government.  In Singapore, national economic strategy plans are developed by special committees set up by the Prime Minister and chaired jointly by the Ministers of Finance and of Trade and Industry, with the participation of other ministers.  For instance, a Committee on the Future Economy convened in January 2016 to develop economic strategies for the next decade.  Around 9,000 stakeholders were consulted in this process. The Committee submitted its report to the P.M. in Feb 2017.  National economic strategy and planning in Singapore is fully driven by Government on the basis of broad public consultations, not by the EDB.

The combination in the Mauritius EDB of the twin objectives of (1) investment promotion and facilitation and (2) of national economic strategy and policy advice, is nonsensical. The EDB should focus on the first objective.  The formulation of economic strategy and policy should be entrusted to a dedicated broad-based committee or agency, under the aegis of the Prime Minister’s office.