Blog: Our Dream, Fear and Uncertainty

Fear and uncertainty which has been gripping America since the subprime crisis in 2006 and the present euro zone countries have caused persistent risks to the economic health, high unemployment, debt and low growth in developed countries and access to financing for developing countries.

Similar fear and uncertainty is today gripping almost all levels of our country. It is healthy that our leaders from all parties are cautioning our countrymen to the effects of the slowdown, even recession in America and Europe. Our well-being, our jobs depend on our exports to and on tourist arrivals from these countries.

America has given itself and to the world what is known as the American Dream. A national ethos in which freedom includes the promise of prosperity and success.

The ethos today simply indicates the ability, through participation in the society and economy, for everyone to achieve prosperity. According to the dream, this includes the opportunity for one’s children to grow up and receive a good education and career without artificial barriers. It is the opportunity to make individual choices without the prior restrictions that limited people according to their class, caste, religion, race, or ethnicity. Immigrants to the United States sponsored ethnic newspapers in their own language; the editors typically promoted the American Dream. Martin Luther King and Barrack Obama both sold the dream to the American Blacks.

In 1931, historian James Truslow Adams popularised the phrase in his book Epic of America. He wrote it has been a dream of being able to grow to fullest development as man and woman, unhampered by the barriers which had slowly been erected in the older civilizations, unrepressed by social orders which had developed for the benefit of classes rather than for the simple human being of any and every class.

In the 1960’s, Jean-Jacques Servan-Schreiber, founder of L’Express, was struck by a presentation of his collaborator Michel Albert. He discovered that Europe was completely outclassed, on all fronts, management techniques, technological tools and research capacity. The result was his international best seller which I read in 1967, Le Défi Americain - the American challenge.

He advocated a federal Europe with a common currency and a decentralised France to meet the challenge. Later he wrote Le Défi mondial, the global challenge, devoted to the technological rise of Japan through computerisation.

Last week, Britain vetoed the amendments to the European treaty. Even at the risk of isolation and the breakup of its government to save the “city” the financial market of the world. France and Germany vowed together with other euro zone countries to save the euro. Still many banks and countries are facing insolvency.

The “Protester” Person of the Year

The emerging economies China and India have slowed down. The Indian rupee has collapsed against the dollar, selling at more than Rs.53 to a dollar. Nobody is able to predict when the rot will stop and countries will start growing.

Since the onset of the financial crisis in 2008, the World Bank group has committed more than 196 billion dollars to developing countries including record commitment to education, health, nutrition, and infrastructure providing much needed investment in crisis-hit economies.

We have witnessed massive protests against austerity and adjustment measures. For the first time, there have been prolonged protests at Wall Street. Two million workers were in the streets of Britain to oppose reduction of pension. Such measures and protests brought down the governments of Greece and Italy.

In its last issue The Time Magazine has honoured the “Protester” as Person of the Year.  This is a well pondered decision which should not leave us insensitive.

Should we not feel lucky to be living in Mauritius? This year growth is estimated to be 4.1% of GDP and the forecast for 2012 is 4%. There has been no massive layoff, no reduction in pension. Children are going to schools, benefiting from free education and free transport. We still provide for free health services including high tech medicines.

The government has doubled its subsidy to patients going abroad for treatment. The non-contributory old age pension has been maintained and increased by the rate of inflation. Without any major difficulty the working life has been extended to 65 years. Massive road infrastructure is being built. The sugar reforms are being implemented as per plan.

Then why this fear and uncertainty which have now reached our shores? Simple. The situation is not too bright. Our five star hotels are selling their rooms and services at the rate of three star hotels. The small and medium hotels and guesthouses and tourist residences which accommodate 40% of tourists are shaky.

I was not shocked to learn that the three billion rupees provided in the budget to support SME’s development may become stillborn. There is no change in attitude and conditions of the banks. Most probably, the major share of this fund will go to prime borrowers. They will benefit from the subsidised rate of interest. The 15,000 SME’s and those who want to start business will still be in pre-budget situation. They are in danger of becoming bankrupt and victims of sale by levy.

Let me hasten to add that I do not blame the banks for their cautious approach. They have learnt from the experience of major banks which failed on account of subprime lending. Subprime does not benefit lenders and borrowers. Unfortunately just providing some finance will not be a remedy to the diseases of the SME sector. Thousands of planters have already abandoned their plantations and others have lost their lands. Should we be surprised again that the population is worried about its future?

In the face of such challenges, our opinion leaders, our leaders are talking mainly about significant issues of whether politicians should address socio-cultural functions and similar issues. The need of the hour is for all of us to stand together to usher meritocracy, combat corruption, bring in more transparency, reinforce democracy. There is no need to give way to fear and uncertainty.

We have the potential and resilience to realise the American Dream for ourselves. The American Dream is not a nightmare nor has it failed. We have just to grow up. But do we have the will?