Blog: Do not expect a miracle from Duval
We have reached it, it's finally here, we are on the eve of the 2013 budget that will decide how our economy will perform over the next 12 months.http://www.moibrahimfoundation.org/mauritius/ and http://www.doingbusiness.org/rankings). The private sector cannot keep on expecting too much from the government, while they keep on doing mistakes.
The issue is, Mauritius never really learnt from its mistakes back in 2008, at the peak of the financial crisis that happened in America. Back in 2008, we learnt that we are more vulnerable than ever when the two biggest economies (America and Europe ) falls down to their knees. Despite those obvious signs that we were too dependent on these two economies, most of the companies in Mauritius barely learnt anything from it. If not they just ignored it and continued on promoting their 5 stars hotels in European markets. The truth is, we have been greedy, betting a lot of the strength of the EUR/USD, setting up five star hotels that target only a niche portion of the market. Back in 2008, at the height of the financial crisis, I was still working at CMT, everyone was worried about the long term future of the textile industry. My only thought at that time, was, well it was very stupid for you to put all the eggs in the same basket right. These strategies work only in times of prosperity, an economic situation we are not having since 2008.
Now back in 2011/2012, we are again at the same issue and still no solution in sight. What is worse, the leaders back in Europe explains that this is just the beginning, this eurozone crisis is expected to last at least 5 more years (http://business.financialpost.com/2012/11/05/euro-crisis-to-last-another-5-years-at-least-merkel/). From a business point of view, business leaders in Mauritius are no different from companies such as RIM or NOKIA. These companies were innovative back in their good days, but they never improved on it. They never expected threats such as Samsung or Apple. Now these companies are almost forgotten. Share price of RIM fell from $148 to $8 and Nokia fell from $39 to $2 within the last five years.
The solution as I see it was always there, namely the BRICS (Brazil, Russia, India, China, South Africa) and the MIST (Mexico, Indonesia, South Korea, Turkey). Those countries have enjoyed considerable growth over the last 5 years (http://www.bloomberg.com/news/2012-08-07/goldman-sachs-s-mist-topping-brics-as-smaller-markets-outperform.html). Businesses in Mauritius need to train staff that speaks foreign languages that targets these emerging economies. We should invest more in promoting our island in these emerging economies, thus ensuring a diversified market.
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