Friday, November 22, 2013

Tuesday, November 19, 2013

How Our Standards Bureau Can Save Lives

By making sure, for example, that no buses that are unfit for our roads are allowed to operate. It seems strange that NTC buses kept having problems over several years yet they were not left in their garages.

Also I don't understand how in the past as many as 400 people have been victims of food-poisoning after eating from the same street vendor. That's just one example. There have been many.

Here's another one. Fans burning down houses and killing twins. Standards need to be rigorously enforced.

Friday, November 15, 2013

UK Prime Minister Sends Letter to Forum

After heads of government of Mauritius, India and Canada announced that they wouldn't be going to Colombo -- the capital and not the detective -- because of the human rights record of the island state. David Cameron said it would have been better to raise the issue there than to boycott the meeting altogether.

Sri Lanka responded that she is not a British Colony. Anymore.

Thursday, November 14, 2013

Watch Carlsen Challenge Anand

Cricket-crazy Nation Says Goodbye To Sachin

He is one of cricket's greatest and is ending a 24-year career this week. As I am totally ignorant about that game and hardly know anything about Mr. Tendulkar I youtubed his name and sure enough I stumbled on this interesting interview of Mr. Perfect telling us about his buddy. Enjoy it!

Wednesday, November 13, 2013

Shouldn't We Create a Fiscal Policy Committee?

Given how pervasive any changes to tax laws are. I mean we've seen what the flat tax of two university buddies have done to our economy and to the lives of our people. We've also seen how the same toxic bean-counting architects of probably the darkest pages of our economic history -- right up there with slavery -- have ended the part they played in it: the PM didn't exactly give them a standing o.

So, we could set up a committee with two persons on it: the Minister of Finance and the Governor of the Central Bank. Each one would have one vote. In case of a tie the PM can cast a vote. What better opportunity to allow avowed Socialists to show their real stripes?

We could but we shouldn't. We already have way too many institutions doing overlapping work. What we need though is the institutional capacity to analyze proposed policies in a totally independent and most rigorous way: the PPO.

Friday, November 8, 2013

Thursday, November 7, 2013

Do Mauritians Need To Learn How To Save?

Not really. We were always big savers. For example the average savings rate during the 15 years preceding the Sithanen/Mansoor reforms was 26.4%. A few years into the reforms it had hit a 30-year low of about 12%. 

Hmm, so tax rates are cut by 50% and savings plunge by about an equal amount? That does make a lot of sense because people adjust their savings to keep their standards of living at about the same level.

So no, we don't need any advice on building a savings nest. What we need is to make sure that bean-counters are always kept away from policy positions. Because although they will sound the alarm they can also go on and screw up big time. Which is a darn good measure of their skill level.

Tuesday, November 5, 2013

15% Flat Tax is Enemy of Good Growth

Bean-counters' answer to their own manufactured lie was a promise of robust growth rates if we reduced taxes by 50%. That -- as expected -- didn't happen. They said well it's because of the financial crisis. Not really, the mess we're in was hatched in Mauritius: our economy didn't rebound in 2010 when the rest of the world did. Besides 57 countries had better growth rates than us in the first three years of the reforms -- which include, by the way, the years of 'early harvest' and 'bumper crop'.

But government has collected more revenue they say. Its revenue can increase if you have higher growth rates, better collections or if you are ripping us off with unreal prices. There has been better collections -- this can happen irrespective of tax rates -- but they did not make up for the shortfall caused by the string of ridiculously low growth rates of the reform vintage. Which is in any case what the PBB circulars have been telling us year after year. One is mostly a one-off thing, the other a cancer that spreads rapidly. You can find that out by recomputing the revenue government collected minus the stupid things (hedging billionsabusive energy prices, making SMS more expensive, high internet prices, wider-than-necessary interest rate spreads, etc). And have a look at the servicing of our debt and its structure for some additional clues that we need to add a couple of higher tax brackets on budget day. Having a good look at recent shutdowns of the US government is also not a bad idea.

And if unemployment has stayed stuck above 10% since the reforms began is it because our people don't have any good skills or is it because there are too many poverty-pay jobs on offer? And because the floodgates of stupidity have been opened? And no, we cannot increase productivity forever in one activity. We need to do other stuff. And use a range of tax rates to make intelligent bets.

Finally if our trade relationship with the rest of the world is unbalanced is it because we're not exporting enough or because we are importing things that we don't really need?

Sunday, November 3, 2013

More Proof Crisis is Homemade

Recall that the bean-counters were quick to say that their 'reforms' had produced green shoots followed by an early harvest in 2007 and a bumper crop in 2008. That is easily disproved. They also said something else: that growth rates would have been a lot better had the Great Recession -- which began in 2008 and lasted 18 months -- not happened. And that as soon as conditions will get sunnier in the world things would improve for us because we're one of the world's most open economies. 

But as the above graphic shows, we didn't really rebound when times got better. Unlike the object of our economic fantasies: Singapore. We also know for a fact that a lot of the record poverty that was created has been produced well before 2008. And before Bheenick got appointed as Governor.

Friday, November 1, 2013

Desvaux Says Illovo Split Switched After Meeting

With SAJ from two-thirds/one-third to one-third/two-thirds of the windfall gains in favour of the private participants of the deal. So he said on a private radio on Tuesday. Desvaux was the right-hand man of Berenger when the latter was Prime Minister between 2003 and 2005. And before that too.

Sydney Selvon has come to the rescue of the 'remake' by saying that JMD was a "Mr. Nobody in the media" on the FB wall of the LP. Maybe he was -- and that's irrelevant anyway -- but he also had the ear and the trust of one of our former PMs. So he doesn't exactly qualify as small fry. Even though his understanding of how the economy works is sketchy at best.

SAJ has denied the allegations made by JMD while Berenger was not too convincing at their press conference yesterday.