We are of the opinion that Pada’s last budget will not be a "la bous dou” budget. There will be few hidden surprises emerging from his vault. The electoral promises or the welfarist measures may come after the budget without the need to provide the costing and funding of the measures -mostly scorched earth policies.
Why ?
Because,
1. Our Pada is on his way out . La Kwizinn cannot stand him anymore as a result of his blatant unwarranted interference in the affairs(the tenders) of some institutions (SBM, BoM, FSC, STC….) and for the other obvious reason which this regime is well known for.. ....Dubai, u said ! I thought only our Maharaja has an account there !
2. He has a very small margin for more of welfarism.. Moody’s est aux aguets. (with the increasing likelihood of a rating downgrade). That explains all the gymnastics and manipulation to overestimate our GDP and investment figures. Our budget deficit and debt/GDP ratios are too high as compared to our peers and IMF is pressurising us for a gradual “fiscal consolidation over the medium term (which) is needed to rebuild fiscal buffers and further reduce public debt.”
3. Our Pada has indeed reached bedrock bottom ; he has done enough of damage. Despite all his “fané” he is conscious that he cannot leave the stage as a feckless Finance Minister and be remembered as a failure à la UK’s Kwasi Kwarteng and as a thickheaded minister who has stupidly spurned the good advice from local economists and that of international institutions. He is already hinting that he has to straddle between the two worlds of crowd-pleasing packages , a generous scattering of handouts, bolder giveaways and a growth friendly responsible budget with a long term focus. And he has been preparing his way out by trying to build bridges with the press and the private sector.
But Pada will not leave the stage loping his way with that diffident confident saunter and impregnable smugness; he will be more of a wounded man bridled by the criticism and the booing that could get pretty harsh and loud once the new regime starts looking into the hidden horrors of the budget figures and GDP manipulation.
Our Steve , who once thought of doing politics differently, has tried coming to the rescue of Pada by quoting mainly the positive extracts (the usual diplomatic language from IMF) from the 2024 IMF press release on Article IV consultations…but deliberately omits the reference to the “challenges and downward risks that remain”…
The challenges referred to by IMF in the press release are
1. Dipping growth-real recovery growth of 8.9 % in 2022( It’s only in 2023 that we finally surpassed the real GDP of 2019) dipped to the projected real GDP growth of 4.9 percent in 2024 and is expected to fall back to around 3.5 percent in the medium term, in line with pre-pandemic growth. (Our failure to engage in structural reforms has hampered our efforts at “securing resilient and sustainable long‑term growth”)
2. Weakened external position with a CA deficit ,excluding GBCs, which has reached a high of some 12% of GDP in 2023 and a the level of foreign reserves that is failing to provide a sizeable buffer to potential external shocks.
3. Addressing skill mismatches (meaning our HRD is a failure)
4. Fostering digitalization (meaning this regime has not been able to dynamise the IT sector, Fin Tech and take advantage of the innovative technologies)
5. Promoting export competitiveness and diversification.( Failure again to diversify our exports ; exports of goods has declined to a mere 0.8 % growth forecast for 2024) and
6. Enhancing climate‑resilient infrastructure investment. ( The damaging impact of the recent floods and the hopeless new environment bill say it all.)
These politicians cannot think beyond their cheap rhetoric and mindless partisanship that have traditionally defined, and constrained the pursuit of their analysis on any national issue. They have remained shapeshifters that have no credibility on any subject. They are desperately looking for a mission to try to be relevant. They have neither a vision nor a purpose beyond themselves . They lack the vision that invokes hope and aspiration among various sections of our society.
