Wednesday, July 27, 2016

How Long It Takes To Eradicate Poverty

Back in October 2007 Sithanen, as Minister of Finance, declared that it was possible to eradicate poverty within seven years that is by 2015. This hasn't happened. Last week he made another prediction: that poverty could now be eradicated by 2026 or 2031. Why didn't we make poverty history last year? Is it because Sithanen was not Finance Minister after 2010? Not really. Because the main plank of his reforms -- the flat tax -- was still in place after he had left. And because his other toxic half who was not sacked before October 2013 kept himself quite busy with their agenda of screwing up Mauritius. Besides, some of the damage done by the bean-counting duet will take a lot of time to fix. Just look at our domestic savings. In any case as the above chart shows Statmu reported that an additional 22,000 people became poor over five years of his reforms. That's forty-four times more people than after Navin Ramgoolam's first term.

So how long does it take to eradicate poverty? You can start your stopwatch once you bring back policies that make sense. Income distribution will improve overnight with progressive taxation. We can also look back at our history for clues. Krugman told us that the American middle-class was built in seven years. We shoul aim to make the economic system dynamic enough so that poor people can move up the social ladder fast. Like it was before 2006.