Monday, May 2, 2011

Policy Blunders Responsible For Robust Poverty

That's what you take away when you compare our recent inflation performance with that of Singapore. See, our inflation increased sharply when the university buddies took over and started messing up Mauritius and stayed high for 3 years before shrinking to a reasonable 2.5% in 2009 -- the year the Great Recession ended. In contrast inflation in Singapore stayed low up to 2007, spiked at 6.6% the following year and collapsed to 0.6% in 2009.

Put differently inflation in Singapore, save 2008, never exceeded 3% in the last 6 years while that of chota Bharat was always higher than that -- in half of those years it was about 3 times higher -- except in 2009.

It's also funny that union bosses -- who are now complaining about increases in the cost of living -- did not request that the authorities set an inflation target when inflation hit a historical low in 2009 as per article 5.2a of the Bank of Mauritius Act. The next best time to ask for it is now.

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