Going through Sithanen's interview in the latest edition of the Week-End newspaper, the reader cannot afford not to be impressed by our master crafter’s articulate display of the right intellectual sound bites- Technical Rebound , the Scarring Effect, Business Model, Liquidity et Solvency, Creative Destruction, good money after bad money , an unprecedented crisis with direct consequences, we have to think out of the boxes and disrupt the system otherwise we will be disrupted , cette dimension d’Attractiveness, Unity of Purpose and the Collective Patriotic Effort.
I went thoroughly over the two pages of the interview- the 40+ paras of the elaborate arguments, interspaced by the above well-chosen one-liners- and I could pick up only these few lines on his proposals for reform of the present economic system-“ ll faut améliorer notre écosystème. Il nous faut réintroduire des politiques qui avaient fait la réussite de Maurice. …. On ne pourra pas sauver toutes les entreprises. Il faut sauver celles qui sont stratégiques et qui ont de l’avenir. Nous devons investir dans la science, la technologie, l’ingénierie et les mathématiques (STEM). En terme social …., C’est le moment de revoir la redistribution de notre État providence, qui favorise disproportionnellement les riches et l’Upper Middle Income Group et désavantage les lower Middle Income Group, Middle Income et les pauvres..” He also adds that” le pays n’offre plus cette dimension d’Attractiveness, parce qu’on a changé l’écosystème, plus compétitif parce que les taxes sont trop élevées”
That’s rather meagre in terms of concrete proposals to map out our own course for the future ! Despite his sharpness at deflecting the demanding and awkward questions with an easy grace, he still seem to be behind the curve.
The pandemic has made the current environment unpredictable. The permanent changes in behavioural patterns need to be assessed correctly to make long-term gains. Many of our economists believe that truly major reforms await the country, things that were not tried in the past. When economic actors rethink their activities and the financing models around more sustainable frameworks, and more and more Mauritians , becoming convinced that we need not be returning to the status-quo of the pre-Covid world, they will be calling for a rupture with our present economic model- a rupture that will mean a limit to the construction of hotels and the encroachment of our public beaches, a genuine concern for the environment and an end to the real estate schemes, among others.
Unfortunately, our much vaunted think-tank remains trapped within the box of the old policies and the old ways of thinking !!! -“Il nous faut réintroduire des politiques qui avaient fait la réussite de Maurice”. Covid 19 would thus be just a passing phenomenon; everything will be back to normal and we will go back to business as usual and we will continue applying the traditional liberal policies and the business facilitation and tax reforms which we have tried umpteen times resulting , time and again, in a lopsided weakening economy with its huge and widening disparities of income and wealth and long-lasting , persistent structural imbalances , giving rise to further economic problems down the road.
(See my article “The chance of a real rethinking of our economy ,Published in Weekly no.421, 8-15 Oct 2020 and l'express of the 13 Oct 2020)” We cannot understand our man's persistence- who some have justly or unjustly qualified as a defender of the narrow interests of the plutocracy- at clinging to a fast-disappearing tax-centric Mauritius. The whole world is moving to a new threshold now with the possibility of the imposition of a minimum global corporate tax. We cannot thus rely on the same liberal policies to build or enhance our competitiveness.
On the question of the reform of the welfare system and a fairer redistribution of the fruits of growth, Sithanen and the whole crowd of TINAwallahs (There Is No Alternative) do not seem to realise that our people are not prepared to go through another 50 years of deception that our liberal economists/politicians keep weaving around them -an economic system, that continues to subsidise the rich and fails to rid itself of its excess baggage and doesn’t deliver for large parts of the population, is a failed economic system. All the issues pertaining to encroachment on our land, our beaches, our coasts, to our environment and the plundering of our natural resources and our Exclusive Economic Zone by an economic elite and its agent- the political elite-are testimonies of a failing economic system.
But Sithanen persiste et signe, arrogating to himself a role in the proposed national unity government government to fiddle once again with our economy to deliver more of the same !!! And we have also the media barrage, from some of the mainstream newspapers, which are being used to goad their economist/politician supremo and constantly eulogise his so-called 2006-2008 reforms-limited to tax and business facilitation reforms- while failing to hold their poodle answerable to higher standards, greater consistency and reliability on some of his policies and stands/opinions , namely:
• the FRN: huge foreign exchange losses on an international loan taken on the eve of the 1995 general elections .
• VAT: his ardent opposition to the introduction of VAT which has the benefited the budget in terms of rising revenues and enabled a unified revenue authority ; we cannot say the same about the NPRT or the taxation of savings.
• Pension reform: his opposition to the pension reform proposed by the 2001-2005 regime starting by the targeting of pension. He is today an ardent proponent of pension reform whereas he was championing a hefty populist increase in basic retirement pension in the 2019 Labour electoral Manifesto, despite its clear unaffordability.
• tax reform: abolishing the historic sugar export tax, slashing corporate taxation, huge promotion budgets to the tourism sector, and EU compensation money for the restructuring of the sugar going to the sugar barons instead of supporting those who had shed their sweat and toil for decades to enrich these barons.
• free transport: an ineffective policy decsion that has led to huge wastage of resources .
• tax-centric GBCs : tax-havens used mainly for round-tripping and tax evasion by multinational corporations amounting to millions of dollars of tax across Africa .
• Budget deficit and Public debt : colourable accounting and the creation of Special Funds outside the budget.
• Empowerment progamme: a mere palliative that did not deliver.
• Capital spending to GDP: falling ratios that had to be rescued by a concocted decongestion progamme with roads and roads that led to nowhere without any reduction in congestion costs.
• Growth : years of puttering growth & the absence of substantial reforms in an archaic rent-seeking and tax-centric economy.....!!!
• The hedging fiasco : unsound, albeit criminal, hedging activities at Air Mauritius and STC which have swallowed billions of rupees, and burdened the national debt.
Our much-vaunted- economist cum politician- Supremo has the habit of tiptoeing around the problems/challenges or plainly sweeping them under the carpet when the going gets tough; he fails to walk the talk, it's all patter and prolonged inaction. Sorry, Mr Sithanen, the national unity government will have to do without you ; we will have to take you off scene, once again, much before the mood of the nation become more hostile partly due to the sequence of “échecs sur toute la ligne ” of your liberal policies and partly because of the prevailing uncontrollable inflationary pressures ( some unreliable characters seem to have dared to link it to your suggestion about helicopter money) and the rise in income inequalities.
I do not think that you will be able to meet their expectations- their quest “du vrai changement” that should be, above all, a call for a new economic paradigm that will dramatically change the socio-economic fibre of Mauritius- and especially the ones that will attend to the interest of "the many, not the few", for a rising economic tide that could lift all boats instead of polarising the country between few haves and many have-nots.
