Blog: Budget 2013 - The Gloss and the Reality

The 2013 Budget Speech may appear to have been lacklustre in its delivery but what matters is its substance. Navin Ramgoolam has praised one of his former Ministers of Finance, Rama Sithanen, for having undertaken the appropriate reforms that enabled our economy to be resilient in the teeth of the global financial crunch that is still dogging the USA and Europe.

We have witnessed the catastrophe that the subprime debts engendered. With banks crashing on Wall Street, with the gloom of a 1929 crash looming in the horizon then, Rama Sithanen managed to keep the ship afloat. The Prime Minister has stated that the 2013 budget will help us face up the challenges of the future. The Labour Party has also showered praise on Rama Sithanen. Now Rama Sithanen has become the iconic minister of Finance in the eyes of the Labour Party. He was humiliated and sacrificed to accommodate the MSM in an alliance with Labour in 2010 and one of the sine qua non conditions of that deal was that the Ministry of Finance should be allocated to Pravind Jugnauth. Rama Sithanen was even arrested and detained on a complaint made by Rashid Imrith but he was acquitted and now he is suing the State for damages, and rightly so. What went through the head of Navin Ramgoolam when he succumbed to the wish of the MSM to get rid of Rama Sithanen is still a mystery.

The Budget Speech has listed a number of results like a surplus in the balance of payments; a budget deficit of 2.5%; focus on technology; a more comprehensive strategy on Africa; control on bank charges; diversification of the tourist industry; high class shopping centres to cater for tourists; a better strategy on land conversion; relaxation on residence permits for foreigners; injection of more money to curb the alarming crime rate; exemption of registration duty for the purchase of houses priced at a maximum of four million rupees; abolition of excise duty on motor cycles of up to 200 cylinder capacity; income tax relief in respect of medical or health insurance policies; equalizing price of basic foodstuff in Rodrigues with Mauritius; free school meals to targeted areas.

True to his philosophy Paul Bérenger, as he has done over the past forty years, has been highly critical of the budget except for the one he presented in 1982 when he was willing to follow to the letter the diktat of the International Monetary Fund and those that were presented from 2000 to 2005.This is what he said about the budget even before it was presented in Parliament. “Le prochain budget ne sera qu’un coup d’épée dans l’eau et n’empêchera pas le pays de s’empêtrer dans la crise”. Pour lui, ce qu’il convient c’est l’installation à la tête du pays d’une nouvelle équipe ministérielle; l’actuelle équipe économique du gouvernement étant, selon lui, “dépassée” et “incompétente.” “Il nous faut un nouvel élan national au moyen de nouvelles initiatives économiques en vue de la constitution de nouveaux pôles de développement”.We heard that mantra in the hate campaign against Sir Seewoosagur Ramgoolam in the eighties and we know or should remember how when he became Minister of Finance in 1982 Paul Bérenger felt the handle of the economy too hot to handle. He is always praying for an economic crash in Mauritius so that he can prey on the spoils and accede to power.

It is stated in the Budget Speech that if Africa has the resources and the capacity for a high growth rate Mauritius on the other hand can share with the African continent its experience on democracy, governance and development. The granting of access to nationals of many African countries will be eased but here the government must be careful as some African countries make it very difficult or virtually impossible for a Mauritians to get visa. Glaring examples are the Democratic Republic of Congo, Angola, Ethiopia, and Eritrea. These issues need to be addressed as we have a number of our young professionals working all over Africa and reciprocity must be respected. And whether we like it or not as corruption is so rife in most African countries travelers to these countries always have to disburse money to get through immigration and customs if they want to avoid harassment or even arrest.

There will be high class shopping facilities to cater for tourists but the minister should not forget that Mauritians also go shopping. He must also ensure that some shops put the price of their products not in EURO or dollar only unless the message from these shops is that access to Mauritians is restricted. One important item touched upon by the minister is land. This is what the minister said: “To this end, the Land Conversion Committee will elaborate criteria for land conversion bearing in mind the need for continued development whilst protecting production”.This is a salutary move after the wild and massive land conversion generated by the IRS saga of the MMM/MSM regime. Small planters have not been forgotten. One measure appears bewildering, namely, the maintaining of the freight rebate scheme for planters and exporters of fruits until 2015. When we see the exorbitant price of local fruits should exports continue to be subsidized?

There will be a relaxation in residence permits for foreigners. We should be careful on this. We are living at a time where major countries are closing their borders and access to Mauritians has become very difficult with a few exceptions. An uncontrolled migration may engender social problems. Already we are witnessing this with the massive influx of South Africans in Mauritius. While it is salutary to see that measures will be taken to expedite justice the government should also rethink that practice of sitting judges acting as arbitrators in many instances. Increasing the budget to have more police on the streets and CCTV is not enough to curb the alarming rise in crime. Education is a vital component. Social scourges like alcohol and drugs should be severely checked. Teachers and parents have abdicated their responsibility to inculcate in children the intrinsic moral values that society rests upon.

For teachers the priority is money making through private tuition and parents have reneged on their kids just for their own amusement. The same goes for environment and saving energy. The average Mauritian is not conscious how he/she wastes electricity and water but is quick to whine when these commodities are either lacking or not available.

Our traffic congestion is appalling and many irresponsible drivers prowl our roads. In addition motorcyclists are a law unto themselves and now more will be on the roads. These motorcyclists do not ride their scary engines but they crawl through traffic at their free unmindful of rules or the rights of others as if they are the owners of public places.

Do we need more of these creatures on our roads? How will the food to be distributed to targeted schools be managed? The moment the contract is awarded the opposition and most of the media will start seeing corruption and mismanagement everywhere.

Deductions for health or medical insurance are no doubt a welcome measure but we should state boldly that this is a money making mechanism for insurance companies and for clinics. The abuse that clinics practice and the inhumane way in which they deal with patients and their relatives when the time comes to foot the bill. How will the minister deal with that phenomenon? The minister speaks of increased care for the elderly. Is he aware that most if not all insurance companies refuse to provide health policies to those in their sixties? Is that a constitutional practice that is compliant with human rights? Let us not kid ourselves.

We have tried to highlight some of the practical realities the measures will engender. It is one thing to state in noble terms in a budget speech what will be done. How everything is implemented and within what deadline, probity and financial and legal parameters is another gigantic step that should not be minimized or overlooked. For too long abuses have been allowed to perpetuate in Mauritius and some institutions, both private and public, have become mini States within a State. If care is not taken the backlash may be painful or fatal.