Monday, December 11, 2017

Stuff Which Will Drive Voting On Sunday

Voter turnout. For the last 5 general elections turnout in BR/QB has been between 74% and 81%. 74% is a 30-year low reached in December 2014. I don't have the turnout for by-elections. This will be the 10th by-election since our independence.

The LP/MMM alliance won all the three seats in 1995 with a vote range of 60% to 73%. In 2014 only one candidate of the LP/MMM team, Kavi Ramano, got elected and that too in third position. The vote range collapsed to 34% to 48%. Mr. Ramano is not in the MMM anymore while that party seemed to be really on the defensive. And Berenger's predictions have not been getting better.

There are at least two candidates from smaller parties who scored more than 10% in the last General Elections: Raj Madhewoo and Jack Bizlall. Electing one of them would be no big surprise as Dev Virahsawmy a relatively unknown candidate from a then one-year old party got elected in 1970. And let's not forget that one Vikram Hurdoyal from got 25% in 2014 in constituency no.10.

Voters have been getting more sophisticated over time. The internet has accelerated this process. Just consider the number of debates that we've seen in this campaign. There have also been some interesting initiatives like one candidate submitting a declaration of assets and two swearing affidavits. Plus voters managed to see through the dangerous plan of establishing a plutocracy in December 2014.

There is a widespread feeling that traditional parties have failed us. Lepep has been too scared to field a candidate although there was a natural campaign theme available for one of its parties to test the assumption that it had now become a national party. The MMM and the LP are very pale reflections of what they say they are and what they have been.

Money won't play a big role in this campaign. You saw how much money there was in the safe of one politician in 2015. That was at the end of the campaign for national elections. How much was spent? Yet he still suffered his first electoral defeat in twenty-three years. Imported crowds and fake polls won't vote. Neither will debates apparently constrained by studio size.

Sunday, December 10, 2017

8 Essential Questions Voters in No. 18 Must Ask Themselves

1. Do you like what has happened to your beautiful town or neighbourhood over the past 11-12 years? You know like a proliferation of casinos and all the bad things that come with it.

2. You've invested in the education of your children. Their skills are needed to solve the problems of our country. Are they doing meaningful work and being provided with numerous opportunities to make our country move forward and remain the beautiful garden it has been for so long? Or have they gone elsewhere as too many doors are shut here?

3. Do you remember the wicked plan to turn our country into a banana republic that was hatched by Sithanen, Ramgoolam and Berenger in 2014? Doesn't it look like they will try that again banking on how unhappy Mauritians are with the poor performance of the Lepep government?

4. There's about 1,200 billion rupees of GDP missing from what Sithanen promised for slashing top tax rates starting in 2006. That's more than Rs10 billion of government revenue which could have been spent in every constituency including yours. The Lepep government has also given unreasonable tax breaks. Do you want to have to work harder and for less because of parties like the MMM, Labour Party, MSM and PMSD work for the few and not for the many?

5. Do you remember what happened to the savings plan you built over several years when an incompetent finance minister started taxing your interest income because he had to make the rich pay less taxes?

6. Shouldn't the level of debate in our Parliament be raised so that solid solutions to matters of national interest are found?

7. Our electoral system (FPTP) makes it quite easy for us to keep politicians out of parliament. The MMM, LP and Rezistans ek Alternativ want to remove this right from us with a dangerous modification called double candidacies. Do you want to vote for candidates from such parties?

8. The bottom 70% of households saw their share of the national cake fall to 20-year lows in 2012 while the policies started by Sithanen and maintained by governments with ministers from the LP, PMSD and MSM have thrown a record 22,000 extra people into poverty. Do you want this to go on or do you want to bring sanity back?

Simple Tools To Evaluate Political Projects (4)

Let's bring back the income distribution data from the previous post.

Income share in % 1986/7 1991/2 1996/7 2001/2 2006/7 2012
Bottom 20%              5.6      6.4      5.9      6.2     6.1      5.4
Top 20%                  44.2    43.5    46.2    44.8    45.6    47.5
Ratio                         7.9       6.8      7.8      7.2      7.5      8.8

After Bheenick and Bunwaree had reversed some of the damage of policies of Sithanen, Berenger and Pravind Jugnauth reduce slightly the share of the bottom 20% while they increase that for the top 20% by 0.8%. Finally after the first five years of the Sithanen flat tax the weakest 20% households see their share fall to at least a 25-year low while the top 20% hit a record level of 47.5% after they get an increase of 1.9%. There is little surprise then in seeing the share ratio reach a record 8.8X.

So each time Sithanen has been Finance Minister inequality has increased. After his first stint the top 20% saw their share rise by 2.7% of GDP and his flat tax has handed this group another 1.9% in 2012 while the bottom quintile have seen their share fall by 0.5% and 0.7% after his stints or toxic policies were implemented. Lutchmeenaraidoo, Bheenick and Bunwaree on their side have reduced inequality when they were Finance Minister. At this point in time it is useful to have another look at the different cakes that were baked.

1977-82: 8.5%
1982-87: 33.0%
1987-92: 38.8%
1992-97: 30.3%
1997-02: 29.1%
2002-07: 24.6%
2007-12: 25.1%

We can see that not only the biggest cake was produced by Vishnu in the five years ending in 1992 but the sharing was also the best for the bottom 20% as they grabbed a 6.4% share. Compare this to the smallest share of the bottom 20% and one of the smallest cake produced in the first five and half years of the Sithanen flat tax. There are other interesting conclusions you can draw from combining these two data sets. Have fun. We'll return with a few more tools.

Saturday, December 9, 2017

Simple Tools To Evaluate Political Projects (3)

So we've seen the types of cakes that have been cooked over five-year periods for the last 35 years. In this post we look at the second part of our framework to analyse political projects: how the cake is shared. Statmu provides us with a wealth of data to do this. The simplest information is the share of the cake going to the bottom and top 20% households. For example this what happened since 1986/7 (the sexy charts will be for later).

Income share in % 1986/7 1991/2 1996/7 2001/2 2006/7 2012
Bottom 20%              5.6      6.4      5.9      6.2     6.1      5.4
Top 20%                  44.2    43.5    46.2    44.8    45.6    47.5
Ratio                         7.9       6.8      7.8      7.2      7.5      8.8

Clearly this puts the lie to the assertion used by TINAwallahs that there is little we can do about inequality and that it is a phenomenon which is entirely tied to globalisation. As the data shows although it has been increasing -- let's focus on the ratio for now -- since 2001/2 there are also two interesting periods where it actually fell. One is in 1991/2 which coincided with the passing of the baton of Finance Minister between Lutchmeenaraidoo and Sithanen. So the former actually decreased inequality by putting an extra 0.8% of GDP in the hands of the bottom 20% and this was mostly financed by reducing the share of the top 20%. Enter Sithanen and he reverses most of the gains of the bottom 20% while giving the top 20% an extra eye-popping 2.7% -- that's more than three times what the bottom 20% got in the preceding 5 years. This ensured that the top 20% got their biggest share since 1986/7.

And then five years later Bheenick and Bunwaree clawed back three-fifths of the loss the bottom 20% experienced and reduced the share of the top 20% by 1.4% or half of what they gained during the first stint of Dr. TINAnen. We obviously have more to say on this interesting dataset. We'll do this in our next posts.

Friday, December 8, 2017

Tania Diolle Raises Bar By Submitting Declaration of Assets

Miss Diolle has purchased a flat and a motorcycle which she is financing with monthly payments of about Rs13,000. Wonderful! Now can the other candidates do the same please?

Although Sithanen is not candidate in this by-election it would make a lot of sense if he did the same along with making his tax returns since 1990 public. See wouldn't it be fun to find out if he has benefitted from the policies he has implemented as Finance Minister? You know like reducing top tax rates and abolition of taxes on dividends etc.

Looks like the MMM will lose a lot more sleep now.

Sithanen Worried About Inequality

That was at a LP rally about a week ago. That's kind of funny when we look at his track record. The household budget survey (HBS) of 95/96 -- he was the finance minister for most of the 5-year period covered -- tells us that the poorest 10% families saw their share of GDP decrease by 13%. In fact all households saw a fall in their share of GDP except the 10% richest. The latter group bagged a 10% increase.

Fast forward 16 years and what does the 2012 HBS say? That the weakest 10% of our fellow citizens experienced a 14.7% fall in their share of the national cake. The next-to-weakest 10% also witnessed a double digit decrease. In fact not only did the bottom 70% of households not see their share increase or stay constant but these fell to 20-year lows. For example for the first time the share of the 10% poorest fell below 2%. The 2012 HBS captured the first five years of the Sithanen flat tax which is the worst form of trickle-down economics. Although he was denied a ticket in 2010 because he had badly mauled Mauritius he was still the one who had been the FM for the greatest part of the five-and-half year period.

The 2012 survey also highlights the fact that an extra 22,000 people were thrown into poverty by the policies of Rama Sithanen. That's more than one in every six poor people at the end of 2012. We can also compute changes in real disposable income to get some more perspective. As the chart below shows the 10% poorest saw an increase of only 6.7% over the five and half years ending in 2012 while the top 10% saw an jump of 30.2%. Compare that to the numbers of the 2001-2 HBS.

So Sithanen is the last person to be worried about inequality given how much of it he has created. And his return to the Labour Party will make it really easy to keep Ramgoolam, Boolell and himself out of parliament for another five years starting in 2019. For more in-depth analysis have a look at Who's the Better Cake-Cutter? and Why Poverty is Winning?

Arvin Fares Very Poorly On Labour DNA

Let's consider three core values of the Labour Party which have helped produced extraordinary results specially between 1968-82.

1. The use of an excellent constitution and the FPTP system. He is for proportional presentation (PR) which is something the LP has always been against. Arvin was also very quiet in 2014 when the MMM and the LP tried to transform Mauritius into a banana republic. Not taking a stand did not prevent him from seeing a 6-term winning streak in riding no. 11 come to an end. Besides our FPTP system has provided us with stable government after government. Something which is less likely to prevail with another dose of PR. Ask Rodrigues and Angela Merkel.

2. Progressive taxation. He is for low-taxes. Boolell doesn't seem to understand the difference between low and progressive taxes like they were before Sithanen messed them up and the 15% flat tax. The latter had already caused a GDP gap of over a trillion rupees -- that's 1,000 billions -- by the end of last April. And record inequality. It's also kind of contradictory for him to say that trickle-down economics doesn't work and at the same time be for it.

3. Building strong teams. While he mentions currency depreciation as one of the failings of the Lepep government one might believe that if he was given the chance he would appoint a progressive Governor at the BoM. But he seems to like the sugar industry way too much. A very regressive attitude. He penned an article recently where he asked for help for that sunset industry. There is so much government can do. If it is going to throw money after a dead industry how will it roll back problems like the lack of opportunities for our youth and tackle other national priorities? And this will in no way put Mauritius in a position to have a stronger currency which is a great wealth lever.

Overall Mr. Boolell seems to have little in common with the kind of values of the Labour Party that have produced legendary results. The funny part is that he is trying to get elected in riding no.18 on the strength of past acheivements of the Labour Party. Voters are no fool.

For Ramgoolam, December 2014 Was Worse Than A 60-0

See we know what happened on the two times the outgoing government didn't manage to get a single candidate elected. The incumbent PM along with what voters considered the best candidates were ranked just after those that were elected. For example the table below shows the eight unelected politicians who got the highest percentage votes in 1982. A similar situation occurred in 1995.

None of this happened to Ramgoolam in 2014. Thirteen MPs were elected but he was none of them although he had topped his riding in the preceding five elections. Neither were Arvin Boolell -- he had bagged six consecutive wins since 1987 -- and Rama Sithanen whose electoral model must have suggested fleeing to a 'safe' riding. In fact four losing candidates did better than Ramgoolam. It was an amazingly wonderful result. Mauritius had said no the wicked plan of transforming her into a banana republic.

Wednesday, December 6, 2017

Simple Tools To Evaluate Political Projects (2)

In this post we look at the size of the cake which is the one of the two parts of the political project as we defined it in the first post in this series. We can have an idea of the economic cake that a government will generate if we analyse what politicians say, have in their electoral manifesto and have said and done before. We can also look at 5-year periods as it is the frequency at which the very interesting household budget survey (HBS) is carried out. As I don't have time to design a beautiful chart right now I will just present the data. So here they are.

1977-82: 8.5%
1982-87: 33.0%
1987-92: 38.8%
1992-97: 30.3%
1997-02: 29.1%
2002-07: 24.6%
2007-12: 25.1%

The 8.5% led to the first 60-0. It's an interesting period where one cyclone wiped out two years of progress. Don't think voters were able to separate this from the skill level of the government they had at the time. The years 1982 to 1992 were free of major natural calamities, benefited from the great work done in earlier periods and happened in a very favourable international environment. That gave us the biggest cake of the last thirty-five years.

The cake contracted by about 10 percentage points over the following ten years -- during which the second 60-0 happened -- and another 5 percentage points between 2002-07. The consolidation of our textile industry occurred in the latter period. Finally the last period is the first 5 years of the Sithanen flat tax. Pretty small numbers given the 8% growth that was promised to trickle down. 8% growth over five years is a cake that increases by 46.9%. This has contributed to a GDP gap of Rs269bn by the end of 2012. A cake smaller than expected of course translates into governments that get less done and increases the odds of getting booting out of power.

Tuesday, December 5, 2017

Anu Konpran

Nuvo seri mini-podcasts pu uver nu lizye. Byen gran.

Ala trwa promye:

1. Banana Republic 2.0

2. Kifer Moris pa enn pei gran reveni

3. Elekter servi zot lespri

Bann leres pu ladan.