Sunday, August 23, 2015

Kozelidir Turns 007

Yep, it's 7 years since we published our first post. 1,272 have appeared since then -- this one included. Along with 4,142 comments. August 23, by the way, is the date when Mount Vesuvius started rumbling and eventually destroyed Pompeii. It is also the start of the battle of Stalingrad: one very bloody war.

It's been a lot fun blogging in here. And reading your comments. Which have helped to connect a lot of interesting dots.

Thursday, August 20, 2015

Journalist Belittles 10-Billion-Rupee Economy

So our Rs10 billion 1982-economy would be about the size of some companies in the latest Top 100 list? And that would be proof that the economy was not going well at all? Or? One problem with this argument is that we're talking about 1982 rupees here. If we assume that average inflation has been about 5% since then Rs10 billion in 1982 would now be worth about Rs50 billion. Assume that inflation has been 7% instead and you get a Rs93 billion economy in aaj ki paisa. Which is three times more than the turnover of the current leader of the Top 100 companies.

16% unemployment is also not so bad given the devastating effects of cyclones in the 1970s -- Claudette for instance sent Mauritius into a depression -- and that we were a left-for-dead country.

Monday, August 17, 2015

5-Year Olds To Start School With Assessment

To see if they're ready. And if they're not the school will wait for them to be ready. That's what the Minister of Education told a radio station she plans of doing soon. There are at least two problems with this idea. One is how long is the school going to wait? And two parents -- knowing that there is an evaluation -- will start preparing their children for it. Probably a good one to one-and-half years before the test. So we're looking at toddlers taking private tuition.

Not good. Because our school system already takes away way too much of the light that each person is born with. And produces way too many obese parrots.

Sunday, August 9, 2015

Four Reasons Top Taxes Are Too Low

One is obviously the low growth rates that Mauritius has clipped for the past few years: indeed 2015 is looking to be the 5th consecutive year that it will be under 4%. I don't think this has ever happened. At least not since independence. I am sure you remember that one bean-counter promised Bretton Woods-inspired robust average growth of 8% back in 2005. Which was the reason the tax structure was flattened.

Two is that tax receipts have literally stayed flat in real terms over the last 12 months. Indeed the MRA disclosed that it collected only 4% more in the last fiscal year. Which roughly matches the increase in the general level of prices. We've alluded to that before.

Three the MCCI said that more than a third of the businesses it surveyed recently are complaining that Government is not doing enough to improve their businesses. Well, with the silly flat tax Government has ensured that it would have less resources -- and the private sector would have more -- to drive the economy. If nothing much has happened and is going to happen Government should raise top taxes to move Mauritius forward. If we don't want to keep on waiting for Godot.

Finally the flat tax has increased inequality tremendously. You just need to compare the number of people thrown into poverty after Navin Ramgoolam's first and second mandate. We can also have a look at how real disposable income has changed for the richest and poorest 10% of our households for the same periods. That's pretty bad for our social fabric and for better economic growth.

There is of course another reason why top taxes should increase.

Friday, August 7, 2015

Ex-Pak Agent Says 26/11 Hatched in Pakistan

Tariq Khosa, former head of the Pakistani Federal Investigating Agency, made this explosive revelation and provided detailed facts to support it a few days ago. 164 people died in the November 2008 Mumbai attacks including our own CEO of SBM, Chaitlall Gunness. Mr. Khosa ends his article by asking if Pakistanis were "as a nation prepared to muster the courage to face uncomfortable truths and combat the demons of militancy that haunt our land? That is the question!"

Good question when one recalls the recent Peshawar massacre where 132 schoolchildren lost their lives.

Thursday, August 6, 2015

US Companies To Disclose Pay Ratios in 2017

So has decided the Securities and Exchange Commission yesterday. There is some flexibility in the way this can be computed but you will have to agree that the thrust is good given how pay packets have become disconnected from actual performance and talent.

The Indian Ocean Tiger should jump on the bandwagon. ASAP.

Monday, August 3, 2015

Did Etihad Airways Receive Subsidies?

No according to a former CEO of MK who works for the Gulf airline. Yes according to a group of American airlines who put governmental help dished out to Emirates, Qatar Airways and Etihad at $42 billion. Essentially by adding interest-free loans, capital injections, benefits of government guarantees, absorption of fuel-hedging losses and low airport charges.

A couple of months ago The Wall Street Journal mentioned that Eithad had sent a report to the US authorities acknowledging help of a little over $14 billion from its government. Some of that help was reported by the Australian Financial Review back in May 2014.

So I guess -- for our national strategic interest -- we should be very careful not to get mesmerized a bit too quickly. Air Mauritius has a brilliant future if it is allowed to operate on strong bases of meritocracy.