Sunday, March 21, 2010

FDI, Job Creation and Our Last 4 Governments


About Rs1.3 billion of FDI poured into Mauritius the first time Sithanen was Minister of Finance. During that period some 33,000 jobs were created by our economy. Then Navin became PM and we received Rs3.4 billion. That, along with whatever local investment was undertaken, helped to create 21,500 jobs. 

Interestingly Federation 2 created roughly the same number of jobs although FDI more than doubled to Rs8.9 billion. But we have to remember that in 2000 France Telecom paid Rs7.2 billion for a 40% equity stake in Mauritius Telecom. Given that this equity sale didn't create any jobs overnight then it's only a maximum of Rs1.7 billion that was put to work for job creation.

And when we brought Navin back to power in July 2005 some Rs39.1 billion of FDI got into Mauritius till the end of 2009. The snag is only 40,000 jobs have been created with so much FDI. And the ratio FDI/Jobs stays surprisingly high even after considering the effect of inflation.

So it appears that a lot of it has not created enough good jobs and is probably of a speculative nature. And we know that the unemployment rate has stayed in double digits since July 2005 while the savings rate has hit a 30-year low.

Bumper crop, quand tu nous tiens...

22 comments:

Anonymous said...

I think you should give these political actors a break - these seemigly simple buy HIGHLY telling conclusions must be beyound their reach, lol.

By the way, how come one one asks these sorts of questions to our leaders?....by this i mean our valued journalists....who just do a good jot at reporting the obvious(hang on, they cant even do that, they just regurgitate...)

Ashfaq said...

I fear our journalists are products of BA french/English/Humanities courses .. how would they come up with such economico-financial analysis ! .. lolz

Anonymous said...

Ashfaq:

yeah you right, I just couldnt say so for fear of sounding rude. Well then why do these so-called journalist beleive they have such a good undestanding of (unsound)policies....Im tired of listening to them or reading their empty opinions!

Anonymous said...

It is so easy to turn a cuppa into gold. Journalists are not spared. Don't trust them to tell lavender from s***.

Kozémotandé said...

Never mind the mediocrity of the press this kind of analysis should first of all come from the political parties making the opposition. Where are they to be found in our country?

Anonymous said...

No need to mention oppostion parties here....think about it...even the leaders in power cant figure out what they are doing!

Kozémotandé said...

And yet everyone, whether in the majority or in opposition, believes that he/she is apt to govern and we should blindly hand over power to them!

Sanjay Jagatsingh said...

It's true more of our journalists and political class should do their homework.

But the kind of interesting debate we're having here ain't gonna hurt our democracy.

akagugo said...

Why can't journalists ask such questions?
Yes, all of you commenters here have parts of the answer... The same question is pertinent when technical issues are at hand: what do these five cases have in common - The 3 fires that occurred buring the construction of Le Preskil hotel, the issue of viability of the overpass at Food Canners (from the Motorway into Bell Village), the uproar against inadequate drains in the wake of March 2009 floods and the recent flooding of houses at La Ferme Reservoir.
Case No.1: Fires were set to the hotel, but no arsonist was ever found. All blame was laid on the hotel management for failing to negotiate with self-proclaimed "fishermen", while the area is notoriously devoid of aquatic life being in a dead-space (no accumulation of fluvial deposits, no major tidal activity etc). Yet the press in general exposed the opinion of the "fishermen" only, the absence of the contractor and the promoter being passed as "silence complice / silence coupable". Technically, in project management, third parties are not party to the contract and should not be allowed to interfere in the timely completion of the project at hand for fear of increased time-related direct and indirect costs. Case No.2: Press reported that the overpass was too narrow to allow 13m-long buses to go through. Because of their reputation for breaking down at any time, they feared that lorries or the same buses may get stuck on it, thereby causing traffic jams... More than 15 years after putting this in service, jams were caused by other things (émeutes à Camp Chapelon, accidents, and what not), but NEVER any accident / breakdown of heavy vehicles on that overpass. Technically, the only fault i find in that overpass is that when you need to go through it, you naturally have to slow down, and this should therefore have lead those who designed it to place its approach lane on the LEFT of the carriageway. But the carefully studied curve and width of the overpass proved to be a very good design. Case No.3 Floods of March 2009 had a dramatic outcome, with one student getting carried away and drowning in raging waters. Everyone blamed the drains that they themselves helped to obstruct by littering streets everyday, not mentioning the sudden appearance of odd objects (mattresses, fridges, microwave ovens, washing machines and what not) in the drains on odd mornings... Journalists tried to pin-point non-maintenance, lack of civilised manners and faulty design but failed to ask the good questions: design life of a drain is based on a simple assumption that the land-use does not change over time. But if you clear shrubs, convert agricultural land into residential areas and build roads rain cannot permeate through these new artificial surfaces and you are in fact creating the best conditions for flooding. Combine this with the fact that any litter outside bins will (WILL) end up carreid by rain water into road-side drains (risk of clogging) which all ultimately end up in waterways (risk of silting and blockage under bridges) and therefore reduction in area of flow, spillage above river banks, into neighbouring buildings, etc...

akagugo said...

Case No.4: I studied the quality of water held in La Ferme reservoir as part of my thesis for graduation as a bachelor's degree in 1999. At the time of site visit, I recall my supervisor commenting on the number of squatters' huts near the spillway of the dam. Too bad, a spillway is a carefully reinforced safety feature that is set at a lower level than the crest level of the dam, so that when when water rises up to the level of the spillway, any more incoming water spills over it, thereby preventing an erosion of the above-ground parts of the dam structure at any other place - those who visit La Nicolière should just look under the bridge to get a clear picture of how this thing works in practice. When the reservoir did overspill in 2010, these squatters had had the time to convert their huts into concrete 'houses' and were now complaining that water was damaging their property, and this was promptly publicised, sorry, published. Photo à l'appui, s'il vous plait. It is only on the following day that the responses of CWA was sought, but no AFP-styled illustrations were given to support CWA's stance. The common layman will recall only the dramatic photo's showing suffering of the poor ti-dimoune. While the latter should not have been allowed to have built anything on such a dangerous place.

Just to say how journalists generally fail to seek specialist, technical advice before telling their story, while the layman tends may be manipulated by an over-simplification of real technical issues. Most of the time, they find it preferable to publish first, explain technicalities later. Too late, this is how the damage is done too often.

Sanjay Jagatsingh said...

Asterla ki pe truv sa.

Sanjay Jagatsingh said...

Our President saying her efforts to justify her salary has brought in almost a billion rupees of FDI. It would interesting to get the breakdown and who financed the different trips.

Sanjay Jagatsingh said...

BOI reported to have found that the nearly Rs60 billion we've received in IRS/RES/IHS have generated significant spillover effects. Yeah, right.

Sanjay Jagatsingh said...

Does the sale of (pricey) real estate qualify as foreign direct investments?

Sanjay Jagatsingh said...

I mean if it's a productive asset like a factory sure. But a villa?

akagugo said...

A villa? In the minds of the promoters, yes, very much: you'll have a graduate team tending to its upkeep: gardener (holding a MSc in Agriculture or in Landscape Architecture), a maid or majordome (Diploma in Hospitality Management), a chauffeur (PhD in something), baby-sitters (Diploma in Early Childhood), maintenance engineers (MSC Electro-Mechanical Engineering) etc.
Yes, definitely productive, as they have persuaded themselves and the gullible/spineless Authorities having delivered the permits. Same for those having given support to Love Bridge, and all the PONGO's, BONGO's and what not...

Sanjay Jagatsingh said...

Monn byen apresye sa interviu bongo, pongo la. Tks.

Anonymous said...

A former BOI boss once said on T.V that IRS estates create different types of jobs.The golf courses of these communities ,for instance require high-tech gardeners,not the traditional guys with shears....

Sanjay Jagatsingh said...

So that's the kind of jobs our knowledge workers should be doing?

Sanjay Jagatsingh said...

@my 30 November 2016 comment

Guess we'll now find out about the details of that almost 1 billion FDI. Also read that only responsibility of the President with the PEI is the overview of a $300k grant from the Gates Foundation. That's only like Rs10 million or a trifle. Nothing really that our President should waste her time on.

Who's driving the 7 Range Rovers and the Jaguars?

akagugo said...

In reference to my comment of January 3, 2017 at 2:36 PM: The trend is being confirmed:

"Dans quelle mesure ce projet contribuera-t-il au développement de notre économie?

Le secteur de la gestion immobilière, tout comme celui de l’hôtellerie, requiert une main d’œuvre dont des femmes de ménage, des chefs, des superviseurs, du personnel de maintenance et des concierges. De plus, notre secteur d’activités est étroitement lié à l’industrie immobilière qui est l’une des sources d’investissement étranger direct (IED) les plus importantes à Maurice. Pour commencer, le partenariat devrait générer entre 15 et 20 emplois en 2017.
(...)
Le secteur de l’immobilier se porte mieux depuis l’assouplissement des projets développés sous le régime de Property Development Scheme (PDS) et, plus récemment, l’introduction du R+2 scheme. Je pense que le gouvernement devrait continuer sur cette lancée et ouvrir davantage notre économie aux étrangers en plus des IRS/RES/PDS. Il faut que les étrangers se sentent chez eux à Maurice."


Very promising indeed. Or sad and depressing. Depending on who's paying your salary...

Sanjay Jagatsingh said...

Hopefully the Rs1 billion of FDI AGF was talking about is not the purchase of real estate in Royal Park. Apparently a Rs50 million science park will be built. That's 5% of one billion rupees. Thing is aren't we rich enough to build bigger stuff which will have a lasting effect on the well-being of our country? There was after all Rs927 billion of GDP missing at the end of 2016 because of the Sithanen flat tax.