Blog: Tough Year, tough Times

The right to be happy, the right to happiness and celebration has been fully exercised by all Mauritians during Christmas and New Year. I come from a culture which celebrates life and in which life includes death, from one's birth to one's demise. This is the ultimate truth. But in between we should not forgo our right to be happy and to celebrate.



During the celebrations, I could not forget the difficult year and the tough times awaiting us. There is not much Mauritius can do to influence the consequences of the financial crisis and the euro zone debt crisis. We have just to be prepared to face the challenges.

But as we are cyclone children, we know what to do when a cyclone approaches and the warnings are given. We get ready to save our life and property. Once it is over, we assess the damages and take actions to be on our feet once more. Time and again we have successfully done so.

America and Europe, with all the resources at their command, all their knowledge, expertise, experience and wealth, are not able to cope with the present situation. A great number of people are losing their jobs. Salaries and pension are being reduced. Banks have gone bust and some other big ones are on the way.

The managing director of IMF, Christine Lagarde, just said that the IMF has revised downward its forecast of a 4% growth rate in the world. Economies of rich countries are either stagnant, growing slowly or squarely in recession.

In these circumstances, will we be able to maintain our forecast or 4% growth this year? S and P has just downgraded the triple A rating of France, Austria, Italy, Spain and five other European countries. In plain language it means that interest at borrowing will go up. Governments will have to explore more avenue of new income and implement austerity measures. SMEs will suffer most.

Our export and tourism sectors are linked with the economic health of European and euro. Already the euro has lost nearly 15% of its value against the rupee. Some economists predict that if euro reaches Rs.35, our export and tourism will be in danger.

Although a small island, Mauritius is not immune to the effects of the euro zone debt crisis. We are still lucky that the shelves of our shops are full. Our unemployment rate is tolerable. No significant job losses. We still have the luxury to pay a 13th month salary bonus, compensation for inflation, maintained social aids, free health, education and transport for students and elderly. These benefits could be affected if we do not pay attention to the challenges ahead.

Should we be fatalists? Can't we do something to minimise the effects of the crisis over which we have no control? Some reputed economists have suggested that we should start by changing our investment pattern. For the last few years, our investment has been dominated by IRS and building of hypermarkets. IRS is a onetime investment. Hypermarkets encourage consumerism. They look very nice projects. We have hardly local products to sell in our hypermarkets. These economists suggest that we must focus in productive activities rather than consumerism. It is the consumer society which is partly responsible to bring in the crisis in America and Europe.

As far as tourism is concerned, Herbert Coucaud, a pioneer of tourism industry, said that there is shortage of 400,000 air seats yearly to fill our room capacity. How can we bring new tourists from India and China without airplanes? Opening the sky has become a must. It may not be in the interest of Air Mauritius, but in the interest of Mauritius. If the interest of Air Mauritius does not coincide with the interest of Mauritius, the interest of Mauritius should prevail.

The Prime Minister has rightly called upon Mauritians to change their mindset to make Mauritius a high income country on the model of Singapore. The simple way to do so is to put into practice all that the Prime Minister publicly states. Charity should begin at home. That is from the top.

He is also right when he states that there is no room for communalism, casteism and corruption in 21st century Mauritius. I believe our leaders and political parties should examine their conscience and tell the people the truth. By their behavior and action daily, they can lead the people towards building a true Mauritian nation. These days, we are maintaining these cancers of our society artificially. If our leaders do not do their job, I am confident that our younger generation will do the job.

Excellence and productivity should be the order of the day in our civil service, parastatal bodies and the private sector. Can we gauge the number of hours the majority of our workers put in productively? Of course, I am not referring to the few exceptions who are delivering and keeping the machine going.

Our banking and financial sector is our pride. They post billions of rupees of profit yearly. They are strong and well regulated. But are they playing their full role to support and stimulate the economy and the SME sector? I am afraid the scheme of three billion rupees to support the SME is stillborn as nothing has changed in the disbursement pattern of loans to the sector. The governor of the bank of Mauritius has publicly criticised them on the rate they charge as commissions, other charges and rate of interest.

How can we expect our entrepreneurs, big, small and medium to survive and face the challenges if our bankers in the words of the governor become banksters just like gangsters? High time for the authorities to have a close look at this sector.

Tough year and tough times should be seized as opportunities to put order at all levels. The best way to start is to inculcate good governance. The legal framework already exists. It has just to be implemented. Had there been good governance, the vice chancellor of the University of Mauritius would not have resigned and many excellent projects in the tertiary sector would not have been blocked by occult hands.

The beauty of democracy is that there is separation of powers among the legislative, executive and judiciary. Thank God Mauritius is still a democratic country and remedial action is still possible. Facing the tough year is a matter of concern for all of us. We have the ability and resilience to do so. Prosperity and future depends on the actions we have prepared to take now.