Post-budget 2011 – The Monetary Policy Stance

At its last meeting which was held in September 2010, the Monetary Policy Committee (MPC) of the Bank of Mauritius unanimously decided to cut the Key Repo Rate by 100 basis points to 4.75 per cent. The main arguments put forward were that with inflation remaining subdued in the domestic market and given the weakening growth prospects in the country’s main export markets, substantial monetary easing was necessary to give further support to the ongoing economic restructuring and provide the opportunity for embarking on a major drive to improve productivity and national competitiveness.

Budget 2011: Dismantling the TINA Policies

    We were among the ones who did not applaud when the TINAs (There Is No Alternative), moulded by the infamous “triple shocks”, ushered in their new socio-economic model that promised us a new phase of sustained, broad-based growth and full employment but ultimately failed to deliver on our economic, social and environmental goals.

Labour Market Flexibility: Soft and Hard Constraints

In the context of the debate going on the issue of the Tripartite National Forum, the chief editor of l’expressgratified us with a beautiful piece titled “Réformiste” on the reform of the labour market and the issue of flexibility

Creative Accounting and the Special Funds

Budget 2011 also meets the commitment to remove some of the opacities about the Special Funds and integrate all these funds that were proliferating all over the place into the budget for better expenditure coordination, accountability and transparency.

Why the Economic Restructuring and Competitiveness Programme (ERCP) ?

Despite attempts to cleverly pepper the ERCP with the jargon of the earlier Stimulus Packages, it still does demarcate itself from those earlier Packages in that it anchors the growth dynamics in more solid stuff in both the short- as well as medium-to-long-term, and the restructuring strategies and productivity enhancement measures easily fall in line. The Stimulus Package had been criticized for not showing any clear intention to resolve the current structural imbalance in the economy, which is so dependent on the Euro market and selective capital inflows.

Titbits : Another WB report, Reforms & Audit report

Another WB report: Investing Across Borders 2010

‘Investing Across Borders 2010’, another report by the World Bank Group that warns us on overly restrictive and obsolete laws which can be an impediment to foreign direct investment by creating additional costs to investment. Again our scores are excellent. Of the 33 sectors covered by the ‘Investing Across Sectors’ indicators, 32 are fully open to foreign capital participation in Mauritius.

Titbits : Cost of credit, Public debt and PBB

Cost of credit

     There seems to be a sudden awakening on the question of the cost of credit, may be because of the comments in the WB report – Investment Climate Assessment Mauritius 2009 -- that “the cost of borrowing in Mauritius, as measured by average interest rates, is high by comparative country standards.