Thursday, December 31, 2009

Kozelidir Person of The Year 2009

Attributed to the Mauritian Civil Society for making its voice increasingly heard.

Bet You Didn't Know You Understood Portuguese

Recyclagem needs no explanation. Papel and plastico neither. See, I told you! Lixo means garbage and misto obviously means something other than paper and plastic. Actually it means mixed. But you knew that from having ordered fritto misto in an Italian restaurant before.

What you will have a harder time understanding though is why we can't sort our garbage to make recycling easier instead of throwing stuff that we can use over and over again many times (like the overtherm egg packs that ensure safe travels from the hen to fridge). We should allow Brazil to inspire us where as many as 800,000 people sort garbage.

And what do you think lixo nuclear means?

Wednesday, December 30, 2009

The Kind of Year 2009 Should Have Been (End)

July: You now know that texting is as bad as drunk driving. And that the great little country ain't dead yet. You should also doubt and discuss and start writing in our sexy language.

August: We should have been quite concerned about the ability of the economic reform to produce results. And paid a bit more attention to search results.

September: Ramgoolam should have shown he's a little bit more serious about MID and we should have adopted an economic constitution. We should not have forgotten how rich we are and why his airness is above the rest. And you should never cross a Nepalese bridge without our free guide.

October: We should have allowed miracles to immediately enter our lives and started to Samba.

November: Ramgoolam should have appointed new board members at the central bank and cancelled the tax on savings.

December: Maybe you should have been less surprised about couples breaking-up. Ramgoolam should have ended MEXA's blackmail and understood that the stimulus package did not save 5,000 jobs. Teachers should not have been inspired by MEXA.

Read the start of the review.

The Kind of Year 2009 Should Have Been

January: Berenger should have allowed Lutchmeenaraidoo to head the MMM. Oil prices should have come down by 25% to give our economy a breather. And our banks should have collapsed because there was a stimulus package ready to save them.

February: Board of MK should have been replaced with prudent persons while MP Dayal should have yelled for fact-finding committees over the STC and MK hedging scandals. Mansoor should have resigned from two more places and Hu should have been asked to stick around for good. Ramgoolam should have allowed his star candidate to run for office.

March: You should have ordered Mallaby's excellent book to get a good grasp on the World Bank. And you now have no excuses about not speaking up.

April: Our island should have sunk with all the terrible weather. No link was established between sporting the ancestor of havaianas and poverty-reduction. The Mauritian people should not have been kicked like that.

May: Island's international standing should not have been damaged. Government should have known better why firms die and get some hostage-negotiation training. Budget should have attracted a 1000 times more interest. We should have been spared those dead bones and external factors should have gotten their act together.

June: Work on fixing our balance of payments problems should have begun. Government should have improved the job dynamics in our economy. The King of Pop should have stayed a little longer.

Read the rest of the review.

Sunday, December 27, 2009

How Rating Agencies Struggled With Growth

Or is it greed? You should read the SEC's summary report below to find out for example about one analytical manager e-mailing to a colleague that rating agencies were creating an even bigger monster -- the CDO market. Let's hope we're wealthy and retired by the time this house of cards falters. ;o)."

Not too sure they managed to retire in time.

Wednesday, December 23, 2009

Why The Stimulus Package Didn't Save 4,700 Jobs

First of all Sithanen claims that the economy has created some 40,000 jobs since July 2005. That's roughly 8,000 jobs per year. If our economy is creating jobs this fast then we didn't need to save any because it would have created 4,700 jobs in 7 short months -- about 700 jobs every month.

Secondly, did these companies need to be saved? Does not paying your rent for several years although you operate in a booming industry related to the global financial meltdown?

Thirdly, didn't we hear a few greedy bosses wanting stimulus money but indecently saying at the same time that they didn't guarantee they could save any job. We've also heard worse than that.

So for all of this I am not buying into the argument that the stimulus package saved nearly 5,000 jobs. You shouldn't either.

Monday, December 21, 2009

How Long Will Your Marriage Last?

Not too long if there is contempt in your conversations. That's what psychologist John Gottman has found in his lab at the University of Washington through which more than 3,000 couples have transited. In fact he's able to predict 18 times out of 20 whether a couple will still be together 15 years later just by listening to 15 minutes of their interactions. Applying this kind of analysis fellow psychologist Nalini Ambady has identified four factors that will prompt a patient to sue her surgeon.

Even if you're not a married doctor you may still want to order Gladwell's bestseller Blink by clicking on the image below to find out about plenty of other interesting stuff like why you should trust your sweat glands when playing cards.

Blink: The Power of Thinking Without Thinking

Saturday, December 19, 2009

How To End MEXA's Blackmail

Create an employment insurance program like Canada's. That won't take too long to set up. After all we did come up with 4 jours a Paris when hell broke loose back in the 1970s. And this time around we're a much richer country.

The other thing we should do is to go back to our progressive taxation system: that's a wonderful antidote to greed and inequality. And corruption.

Friday, December 18, 2009

Vayid Finds de l'Estrac's Latest Book Biased

So he wrote in an article in Le Mauricien today. Essentially Mohamed Vayid said that de l'Estrac seems to be blowing that same old biased trumpet of Labour (1968-82) = Bad, MMM = Good. And he kind of found it awkward that the author has used I in a history book. He suspects that de l'Estrac might have gotten a little bit confused and has instead written an autobiography. The book, according to Vayid, doesn't show the detachment which is necessary for it to be taken seriously.

What do you think?

High VAT Rate Financing Inequality

Recall that the VAT rate was increased from 10% to 15% to finance the construction of quite a bit of public infrastructure. In contrast we didn't see anything on that scale since July 2005. Technically speaking then, government could have brought it back to 10%. If that had happened the debt-to-GDP ratio would have risen  to 57.72% as shown above. That's a little bit higher than where it was when Ramgoolam set off to Put People First.

Where did that 161.623 billion-rupee debt number come from? Simple. VAT receipts have amounted to about Rs17 billion per year over the last 4.5 years or if you prefer a total of Rs76.5 billion. One-third of that (5% is one-third of 15%) is Rs25.5 billion. Given that the last percentages of the VAT rate don't bring in as much as the first ones I chopped Rs5.5 billion off to get the round number of Rs20 billion. I then lumped it with the estimate from the Ministry of Finance.

Yeah, I guess you could call that reverse Robin Hood.

Russia's Emissions Down By 40% From 1990 Levels

Is that a triumph of eco-socliasm? Not really. The collapse is rather due to the economic problems that followed the break-up of the Soviet Union. In fact the emissions reached a maximum 60% decrease in 2003. And Russia is not alone. The other republics of the former Union also exhibit similar patterns as this interesting NYT graphic will show.

While you're at it I would recommend you scroll through the interesting timeline on climate change which begins with Fourier's early theory and ends with COP15.

Thursday, December 17, 2009

Top 10 Most Viewed Posts

1. Stuck in the Colonial Model

Cuttaree Displays Romantic View

Of both his leader and himself in an interview this afternoon. First his leader. Berenger is supposed to have been the one to pull the country out of a slump back in 1982. We've discussed about that myth before.

Jayen Cuttaree also confesses that we could have to wait another 50 years to find a third world candidate to the post of Director General of the WTO who campaigned as hard as he did.

Are you surprised to hear such a self-aggrandising statement from the deputy leader of an intellectually decrepit party like the MMM?

I'm not.

Wednesday, December 16, 2009

Beyond The Smokescreen

Financial Analysis 101 teaches us to take turnover and net income figures of companies with a grain of salt. That's because these numbers are based on items that have been manipulated by management in the not-so-distant past. Hence the recommendation to at least cross check them with the company's cash flows to evaluate their quality. For example cash-trapped Infinity BPO shows a big turnover but hasn't been paying its rent for ages. Granted that hubris and bad management may also be at play here.

Similarly, Sithanen claims that his economic policies have worked as they've created 40,000 jobs. I think we need to cross validate this statement with the savings rate to get a clue about the kind of jobs that have been created. The idea is that if the economy is creating good jobs the savings rate should improve quite a bit -- people should have something to set aside once they've attended to their living expenses. At a minimum it should stay flat.

But as you may now know, the savings rate has plunged to a 30-year low of 12% or if you prefer to less than half its average level over the 15 years preceding the Sithanen screw-up. It looks like a lot of the jobs that have been created haven't pulled people out of subsistence.

Monday, December 14, 2009

Poll Recommends We Get New Board Members at the BOM

89% of the people thought we should get new board members at our Central Bank. I suspect they are all too aware that the Bank of Mauritius has two more sidewalks where impromptu press conferences can be held to usurp the prerogative of the Prime Minister.

28 people participated in the poll which closed only minutes ago. That's 2 more than the last one or 7.7% extra people if you can only think in terms of robust growth.

Sunday, December 13, 2009

Burty David Dies at 63

While attending a function in his riding this afternoon. I met him for the first time in the early 1970s when he used to come down to our house in Beau-Bassin after my dad took him under his protective wing. He would drop by several times a week and sometimes several times a day in those days. I didn't see him that often after June 1982. But we did meet a few times after 1998. The last time I saw him was on July 23rd 2008 during an official ceremony honouring SKJ as pictured above. My heartfelt sympathy to his family.

The economist with a household name also passed away today. Indeed Samuelson is dead at 94. Read the NYT article.

Saturday, December 12, 2009

McDo passe au vert

La démarche initiée par McDonald's en Suède en 2000 et cette année à Chicago pour promouvoir une image associée au developpement durable se répand au Canada, au Brésil et en France. Le fond rouge - symbole d'une mondialisation sanguinaire aux yeux des alter-mondialistes - sera remplacé par le vert. McDonald's ne cherche pas à calmer ses plus ardents critiques, mais veut s’adapter et reconquérir constamment et fidéliser sa clientèle. Rien n'est laissé au hasard. Désormais, graduellement, menu, source d'énergie, déchet, emballage etc. afficheront des prétensions écologiques partout à travers le monde.

Ghana Sexier Than Mauritius

The East West Perception Index 2009 is out. It ranks how a particular country is viewed by others. Singapore tops the index. New Zealand, Ghana, Italy, India, the United Arab Emirates and Mauritius rank 4th, 5th, 8th, 9th, 17th and 45th (up 22 places from 2008) respectively.

Friday, December 11, 2009

Teachers Saying Syllabus Too Heavy

Those of the Government Teachers Union (GTU) to be more precise. They were in the streets today saying that they are against abolishing private tuition to standard IV pupils (9-year-olds) because they need the extra time to try to complete the curriculum. I agree with them. And that's easy to solve. We just need to rewrite the syllabus so that they can complete it within class hours (we also need to rewrite it to make it more interesting and so that our kids don't end up as bean-counters when they grow up).

But they are probably thinking more about the extra money they make out of private tuition which for some is more than what they make as government employees. Maybe they are underpaid. Maybe they aren't the only ones. But that's not too difficult to find out either.

By the way, it's not the only post we've written on this topic. What do you think would happen if you hit the CPE label?

Thursday, December 10, 2009

Gilbert Ahnee Quits

This has been one of the top stories unfolding over the last few hours. He will apparently be taking on a new job in January. Probably some of the most interesting pieces he has written as editor-in-chief were penned in the last few months when he finally started to doubt the toxic economic policies of Rama Sithanen.

We are also grateful to him for his good taste in allowing the readers of his quality paper as he liked to describe Le Mauricien to enjoy quite a few of our pieces in the Forum section.

We wish him all the best with his new challenges.

Tuesday, December 8, 2009

Soon Playing At A Theatre Near You

Inflation Targeting Turns 20

It started in New Zealand, the land of the kiwi -- the bird, not the fruit which is originally from South China -- back in 1989. That was to be followed by Chile a year later and by Canada in 1991.

The reason you want to target inflation is because it is the worst enemy of the poor. Besides there is no real trade-off between economic growth and inflation. And that's so easy to prove. For example the growth rate over the past 9.25 years has been 4.3% but the average inflation rate since July 2005 under Sithanen's toxic medicine has been about 54% higher than what it has been under Federation 2. Industrial relations also tend to improve when trade-unions see that you're serious about fighting poverty.

The UK's Treasury has also evaluated the benefits of inflation-targeting while you can read Canada's interesting experience with inflation control by clicking on the image below.

Monday, December 7, 2009

How To Make The Most of Kozelidir

If you've got a lot of time and an infinite amount of good taste you can scroll through the 300+ posts and enjoy them one by one (and tell your friends on facebook about it by clicking the relevant share button). Or month by month if you hit any of the month buttons on the right of your screen. That's not going to be the most popular option given the current size of the blog. Here are a few shortcuts.

Let's say you've enjoyed reading Samad's piece entitled Les inegalites meurtrieres and want to read posts along the same line. Piece of cake. Just hit the label entitled inequality at the bottom of the article and 4 other posts will pop-up for your immediate consumption including a 4m52s video of Thomas Piketty who's an expert on inequality and an opportunity to be different from Ramgoolam. Or maybe you're interested with posts on growth? Easy. Hit the growth label instead and you'll be on your way to read 17 more posts on that topic (more as we put labels in every post on Kozelidir). Of course, you can leave as many comments as you wish and you can do so in Kreol, English or in French and enrich the ongoing debates. Which you can also do by participating in the occasional poll that we hold.

Another quick way of looking for stuff that interests you would be to use the search boxes. I prefer the one that has search this blog on top (use it to find articles written by Richard Hokenson, Veer, Shy, Koztou and Mamoujee). The one in the top left corner gives different search results (I am not too sure I remember how they are really different -- drop me a line if you find out).

You can also join us on Facebook by hitting the FB Join Us box or follow us on Twitter. Some of our fans have added us to their Google reader and what not while others have even enjoyed purchasing the great books we've reviewed.

Finally if you want to have an overdose of Samad's writing you can visit Tchombo! and read about a A Femme Fatale Named Tina and the other posts in there. Likewise if you want to read some meatier stuff I've written, head to The Jag! where pieces like The Fallacy of The Triple External Shocks Argument awaits you.

Happy reading!

Governor Responds To Detractors With Humour

Click here if the audio file wouldn't start.

Les inégalités meurtrières

Le rapport de l'Organisation mondiale de la Santé est on ne peut plus édifiant au sujet des inégalités générées par des politiques de la "croissance à tout prix". Voici un aperçu:

"La croissance économique permet d’améliorer le revenu dans de nombreux pays, mais l’augmentation de la richesse nationale ne suffit pas à elle seule pour améliorer la santé dans un pays. Faute d’une répartition équitable des avantages, la croissance nationale peut même exacerber les inégalités. Les pays nordiques, par exemple, ont suivi des politiques qui encouragent l’égalité en matière d’avantages et de services, le plein emploi, la parité entre les sexes et de faibles niveaux d’exclusion sociale."

Le rapport ne se s'arrête toutefois pas au niveau du constat. Le mal-être qui gangrène notre société doit nous interpeller à méditer sur ses recommendations:
  • Améliorer les conditions de vie quotidienne, c'est-à-dire les circonstances dans lesquelles les individus naissent, grandissent, vivent, travaillent et vieillissent.
  • Lutter contre les inégalités dans la répartition du pouvoir, de l’argent et des ressources, c'est-à-dire les facteurs structurels dont dépendent les conditions de vie quotidienne aux niveaux mondial, national et local.
  • Mesurer et comprendre le problème des inégalités et évaluer l’efficacité de l’action menée.

Friday, December 4, 2009

Ramgoolam Failed To Make Sea Change

Sithanen's New Model is Actually Old Crap

Here's how the Doctor's special medicine was supposed to work: cut tax rates sharply and you'll get growth rates that will be so robust that you won't need to reduce any government expenditure to balance your books -- Laffer, according to Krugman, incidentally promised that revenues would increase. For example Federation 2 produced average growth rates of 4.33% when taxes were about 25-30%. Now if you cut tax rates by about 50% by flattening the tax structure you obviously need much higher growth rates to compensate for the now-lower tax rates. Makes sense, right?

The snag is that with the tax rates flat at 15% Sithanen only managed to deliver average growth rates of 4.32%. That's the worst performance in 25 years in case you're wondering. Trouble is that's too little growth for a 15% tax rate (his growth rate is already lower than that of Federation 2). Which would explain why he came with special levies on bank profits for two straight years and a funny 2% contraption called CSR. And why he's been budgeting billions without actually spending them. He's also been borrowing like crazy specially in foreign currency while telling us at the same time that he's fought hard to prevent Mauritius from going into the ICU of the IMF.

When the supply-side crap was first tried in the US -- top tax rates fell from 36.5% in 1980 to 26.7% in 1989 -- robust growth never arrived causing the Federal debt to increase from a little less than $1 trillion to $4 trillion from 1981 to 1992. What it did produce was a lot of inequality and a lot of poverty. Doesn't that sound familiar?

Thursday, December 3, 2009

How You Know You're A Liar

According to Sithanen that would be claiming that it is possible to reduce the VAT rate. Of course it is possible because when the VAT rate was increased from 10% to 15% we saw a lot of schools coming out of the ground and the Treasury building and Le Reduit were renovated. In contrast what did you see during the last 4.5 years in terms of new infrastructure despite that government bagged twice as much VAT on record oil prices from 2006 to 2007?

Another lie would be asserting that no country invests more than 50% of their reserves in gold. Which is what Sithanen repeated in an newspaper interview today adding that Vishnu's proposition is pure folly. Google disagrees and brings up the relevant wikipedia page. Here are the countries that are completely crazy according to the Minister who didn't know how to resign.

Haven't you had enough of his lies?

Wednesday, December 2, 2009

Government Debt 101

Debt-to-GDP ratio of the central government (that doesn't include parastatal debt) is down by about 8.5% since its 2005 level. That's roughly where it was in 2000. How could that have happened given that the economy grew by about the same speed throughout the last decade (4.33%)?

Simple. Headline GDP numbers are calculated in real rupees -- after taking inflation into account -- while debt-to-GDP numbers involve nominal amounts. The trick is to make sure that the denominator increases faster than the numerator. For example nominal GDP has increased annually by 10.59% on average between 2005 and 2009 while debt has increased by only 6.26%. The corresponding numbers for Federation 2 are respectively 9.03% and 13.24% which would explain why the ratio went up.

Why did government debt increase at a slower rate during the last 4.5 years? We've covered that already. How important has been to lower the ratio? The answer to this question is another question: how has your life changed in the last 4.5 years?

Tuesday, December 1, 2009

We Undermine Trust at our Own Risk and Peril

Partha Dasgupta, Professor of Economics at the University of Cambridge, seems to be stating the obvious: trust-building is the foundation of everything positive we wish to achieve. But his paper is illuminating in the sense that it treads where standard economic theory fails to convey the key insights on why some countries outperform others.

For instance, he clearly demonstrates how productivity, competitiveness and socio-economic development are linked to trust among all stakeholders. That's a far cry from a TINAwallah's perspective. Of course, implementing the proper mechanism to curb breach of trust is a challenge.

It is also true that fuelling mutual cynicism is not a viable option. Whether at the micro level, like a household and a firm, or the national level where compliance to rule of law must be the most pervasive and strongest. The more so when sanction for leadership failure has become so elusive.

Kuma Bann GLD Depans Zot Lenerzi

Nek gueler gramatin tantot. Se impe seki Aline Wong ti dir ena pa tro lontan. Bizin dir kinn donn zot tu: stimilus pakeg, flat tax, rupi inn sort Rs20 an 1985 pu depass Rs60 en 2007 plis tu kalite lezot lavantaz. Ena ti envi pran kass dan stimilus pakeg zis oka ou zot gagn problem pli divan. Ek ena pe gagn kass depi dan sa pakeg la alors ki zot sekter pe grandi a tut vites.

Zot pa truv ase mem. Ki zot le pu zot chup chap inpe? Enn bol derive? Bizin aret gaspiye nu kass ar sa bann lasos la. Kreer enn lasirans somaz, bes prix internet ek kuran ek laisse bann nuvo entreprener emerze. Bann vre.

*GLD=Gurma laminn dipin