Behind the Figures

If the Minister of Finance (MOF) feels the heat, he is not letting anyone see him sweat. For the third time in three weeks, he is “not happy at all about all that”- RS Denim, the STC and the Bank of Mauritius. While he tries to settle old scores, collecting enough of ammunitions to embarrass the Governor of the Bank of Mauritius on allegations of exaggerated expenses incurred by him, we will continue, on our side, to query some of the opacities of the Budget.

Titbits: The new labour laws; Reinventing MK; The emperors and their fiefs; The stimulus package : Out of steam; The Gold Option; The Maurice Ile Durable ( MID) Project

The new labour laws

At the Round Table organized by the Confederation of workers of the private sector (CSTP) on the new Labour laws, the representatives of the Mauritius Employers Federation and the Minister of Labour were conspicuously absent.

Titbits : A different perspective: The 24/7 economy model ; And the Grand Bassin show ; Kowtowing to the Asian Powerhouse ; Collective responsibility and witch-hunting; The next Minster of Finance; Depreciation of the rupee ; Abolishing the laureate system

 A different perspective: The 24/7 economy model

An avid commentator of the Mauritian scene once remarked that we are des beaux parleurs, and we get so carried away by our own rhetoric that we start believing in them and the clichés that we readily churn out. We have turned our homeland into a knowledge hub, a regional financial and services hub, a Seafood hub, a judicial hub, an inescapable Cyber hub, a Financial, Banking, Management or Legal Service Centre, a Maurice Ile Durable, you name it.

Aberrant !!! : Hedging; Extension of class hours; Food security; Two million tourists in 2015; The Integrated Resort Scheme (IRS); Our man from Harvard.

It is so aberrant that some of the stewards and opinion leaders of our economy have grown so gullible, refusing to wake up from the torpor into which they have been lulled in as the new formidable cohort of followers and cheerleaders. It is much easier to bend to the wind, to join the bandwagon than to take a hard look at the facts and filter out the frivolous statements, the incendiary rhetoric and its inadequacies.  Leadership or management or any such position of responsibility is supposed to be about more than cheering your team, humbling and jeering the other side- the dissenting side- that has freed itself from that horrible urge to always fit in and now dares to think differently. It’s supposed to be about changing the country for the better.

Stimulus package: Greater Coherence needed

The effectiveness of the additional stimulus package of around Rs 10 billion, equivalent to 3.8% of GDP ( much above the 2% norm recommended by the international institutions) to shore up our economic performance will depend to a large extent on some important parameters. A fundamental one, as pointed out by erudite Pierre Dinan, is our ability of “sortir du mode du projet pou passer à l’action” - especially the big time lag between allocation of funds and actual work being started.

THE NEW TAX BURDEN

Following the advice of the IMF in its document “FISCAL ADJUSTMENT STRATEGY AND MEASURES TO PROTECT LOW-INCOME HOUSEHOLDS” of February 2006, the Ministry of Finance decided to apply some of its recommendations in the reform of our tax system. The IMF, in its standard application in most countries, usually argues in favor of streamlining the tax expenditures or tax concessions. 

Managing capital inflows

The recent IMF policy discussion paper-“Capital Inflows and Balance of Payments Pressures—Tailoring Policy Responses in Emerging Market Economies (EMEs).” prepared by Atish Ghosh, Manuela Goretti, Bikas Joshi, Uma Ramakrishnan, Alun Thomas, and Juan Zalduendo dated  June 2008  raises some of the very issue that we have been discussing recently on the appropriate policy responses to the surge in capital inflows.