Our bloggers/economists have been providing convincing arguments in favour of the free transport measure. There is no doubt that fare levels affect many people's finances directly. There is a general attitude that public transport should be free or "cheap", because of social, environmental and efficiency reasons. As they have pointed out, indeed, the key impacts and effects are mostly passenger growth, mode shift and environmental benefits.
My contention : Can the economy afford/sustain such welfarist measures now ?
The urgency now is to restore the country’s economic verve after a decade in the doldrums. For years we have been living under the constant risk of a Moody’s downgrade to junk status. Luckily Moody’s latest rating exercise had somewhat overlooked some major issues, such as GDP overestimation, the lack of progress to effectively lower the fiscal deficit and debt, and the significant vulnerability of the external accounts.
But at this crucial juncture in our economic development, the country has other priorities that need to be addressed namely, among others, the need to boost growth and create productive jobs. Indeed, there are urgent priorities now which are more short term and should be tackled immediately. For example, what is happening to our exports sector is very worrying; we need more resources for diversification, for training, for industry support , for restructuring , for improving external competitiveness. Equally in the agri. sector, the financial services, ICT , tourism sectors.... developing new pillars of growth and investing heavily in the new technologies and HRD while consolidating the policies for inclusive and green growth. All these policies have the potential of boosting growth substantially and creating more sustainable, high-productivity and high-wage jobs.
It is a question of timing…Everything in its own time...For example when Singapore was building up its rail transit system and spending more on social schemes, its real GDP growth averaged 8.5% p.a. This enabled Singaporeans to enjoy further rapid increases in living standards; its exports sector was flourishing, its companies were prospering and it was attracting record levels of foreign investments in productive sectors and its foreign reserves stood at some 30 billion dollars (some 4 times our present level).
It could thus afford its redistribution policies including the provision of public and merit goods while constructing its infrastructure and building its nation.
We can equally do it if we know our priorities and we drive forward, one step at a time, ensuring that there is audacity and conviction to take bold decisions and a willingness not to succumb to scoring the quick wins of the day but to the initiation of long term reforms and expenditure prioritisation to chart a new path for Mauritius and a great future for our children.
