Sunday, May 3, 2009

External Factors are Unfavourable Only When Berenger and Sithanen Are in Government, Right?


Wrong. Take sugar for example. It's one of Sithanen's Triple External Shocks and one of the reasons he's put the middle-class and the poor on a strict diet for almost four years now. But sugar was already a small sector back in 2005 -- 4.2% as the above table indicates and close to 2% this year -- so that the initial 5% reduction in the price we sell our sugar at would have reduced growth by about a fifth of a percent. Not a lot you will concur.

Compare that to 30 years ago when sugar represented close to 19% of our economy and was hit by a pretty little thing called Claudette. That led to a sharp contraction in our national production in 1980 with the sugar sector responsible for over three quarters of the 10% decline in output. That year also witnessed the second oil shock with the real price hitting a level that was to be surpassed only last year. And as if that was not enough a new chairman of the Federal Reserve by the name of Paul Volcker took office and stopped targeting interest rates. The latter of course were to go through the roof and plunge the world economy into a nasty recession.

2 comments:

Kranti said...

Sithanen came from space where he was on vacation. Coming to earth as Minister of Finance, he then learns that Mauritius faced triple shocks, viz. he did not know there were problems related with sugar, he was unaware about oil prices and how could he know our textile sector was facing problems, poor chap. He started weeping... and he started peeling Mauritians.

Sanjay Jagatsingh said...

Do you think he would stop peeling us if we could keep him happy ? Btw, do you have any idea what would make him happy?