Pena Deba Pu Fer Lor BRP Iniversel a 60 an

Amwin mank rol u pena oken problem pu regle dan pei.

Anu Redemont En Argiman Bidon Ramgoolam

Depi en sertin letan li pe dir ki si pa ti repus laz ki kumans tus BRP a 65 an be BRP ti pu kut 100 milyar rupi an 2035. Mo ti tan sa promie fwa dan so diskur pu kongre 90em laniverser Ptr. Zordi mon truve ki ena usi sa palab la dan so steytmint le 17 Zin 2025 dan Parlman. E lin redir sa fek la. Se en argiman ki mo ti osi demoli dan Preokipasion Sitwayin, en liv ki ninport kisana kav dawnlod gratwitman. 

Be kuma tiart la montre si depans BRP pu pas de 55.3 milyar a 100 milyar dan 10 an se en ogmantasion de 80%. Me li bon kone ki dan le pase nun gayn ban ogmantasion lor 10 banane buku pli inportan ki sa. Par egzanp BRP ti ogmant par 540% ant 1987/88 ek 1997/98 e 170% ant 1997/98 ek 2007/08 ki inklir ban period kot Ramgoolam ti PM. E malgre sa ban ogmantasion buku pli inportan la zame BRP ti depas plis ki 2% GDP. Si li ti 7.8% GDP an Zin 2025 se akoz ti servi li kuma en zarm elektoral dan omwin 3 eleksion e sirtu akoz zame nu pan gayn krwasans mwayin de 8% ki Sithanen ti promet ek so flat tax 15%. Anfet de 2006 a 2025 mwayen krwasans ti selman 3.3% e sa fin fer an sort ki lekonomi apepre 2.5X pli tipti ki seki li ti bizin ete.

An pasan kifer u kwar zame Ramgoolam koz lor to krwasans mwayin depi 2006?

Dracula to Vigorously Promote Vegan Diet

He announced this yesterday on a radio program in Transylvania. When asked what prompted such a big change he confessed that he was inspired by Ali Mansoor launching a grassroots movement and George Chung publishing another book. The count who refused to observe social distancing wore a brand new cape and the legendary four-and-half-inch fangs looked sharp as ever. Dracula also mentioned that he had applied for the top job at the National Blood Bank of Transylvania.

Mauritius Should Showcase the Sithanen Flat Tax Hell

We should make sure all 50-odd African countries are in attendance along with two university buddies. Then bring up the above table on the screen while a fresh round of gato-pima is served. And explain that by the end of last year Mauritius had about Rs1,800 billion of GDP missing compared to what the 8% growth the flat tax was supposed to generate – that’s 36 times how much GDP is roughly expected to fall this year from where it was at the end of 2019. If we assume a very conservative 20% cut for government revenue and the monies are left in a drawer (they are not reinvested) then there is more than Rs350bn of government revenue missing. This could have been placed in a sovereign wealth fund (SWF) that would have easily got us over the bump in the road that the pandemic is now creating. 

But we should have increased the share of government revenue to the OECD average of 35% as our population has been aging since 2005, to improve our welfare state and to bring back retirement age to 55 years so we mitigate our serious brain-drain problem. This would have boosted the SWF to Rs623bn. Even if we had grown at 6.5% over the past fourteen years there would have been between 195bn to 342bn rupees available to prepare us for any tough situation. Why is 5% in the table? It’s our average growth for the fourteen years – a period of progressive and sustainable taxation – before Sithanen started screwing up the economy and Mauritius big time. So even in this worst case scenario there would have been Rs58bn-Rs101bn of extra government revenue available for a bad year like 2020. Without compromising the independence of the BoM, destroying our savings culture and sending our rupee into a tailspin. 

Minister Padayachy has increased personal top tax rates to 40%. He had little choice. We don’t want to have a massive social crisis. 

Another Reason Why Doing Business is Wrong Target For Mauritius

Wanna Know How Absurd the 15% Flat Tax Has Been?

Then consider our recurring water problems since its implementation. Government ran out of money and the efficiency of our water network didn't improve. As much as it should have. Had Sithanen's growth forecasts happened there would have been a lot more cash in the Government coffers. Enough to change 11,585km of leaking pipes. Given that there's only about 1,600km of them do the math and find out how Mr. Sithanen has turned the clock of development backwards.

Had Dr. Kontu not messed up our economy and we had kept on growing at a very reasonable 5.5% there'd be an extra of Rs51 billion of cash in the Treasury. That would have been enough to change all the leaking pipes more than two times.

So it's a money problem. Not a management one.

Breaking Down The Sithanen Toohrooh

At Rs297 billion Xavier-Luc Duval accounts for the biggest share of the almost trillion-rupee GDP gap which accumulated over the 11 years ending last December. That's a couple of billions shy of our 2010 GDP. Vishnu Lutchmeenaraidoo is in second place with Rs227 billion which was generated over around fifteen months. Pravind Jugnauth is in third position with a Rs195 billion gap which also accumulated over fifteen months but he is set to capture the pole position by end of June when another Rs125 billion will be added to his running total.

Rama Sithanen, the father of massively regressive policies, is in fourth with only Rs85 billion because although he was there for the longest period among the six finance ministers the disease hadn't gathered enough momentum as it would in later years. That's how compounding works, right? This point can be illustrated by the GDP deficit generated on Navin Ramgoolam's watch: Rs79 billion although he was Finance Minister (FM) for only seven months. This puts him in fifth position and SAJ is last with Rs44 billion.

If you want to know how much revenue is missing you just have to multiply these numbers by 15% to 20% depending on the growth rates you assume the economy has to generate when you mess around with the tax rates. Finally a rough estimate of Ali Mansoor's share -- he promised back in 2006 to implement Bretton Woods policies that work -- would be the sum of the first three numbers.

Trickle-down Economics Doesn't Work

What You Can Learn From the Audit Report

In 2014 MT paid Rs671 million as dividends to government. Which means that it paid Rs447 million to FT. That's almost five times the dividend paid by Airports of Mauritius. And close to eight times the one paid by SBM Holdings in the same year. MT dividend paid only Rs221 million in dividends in FY ending June 2016.

One quarter of government revenue came from debt in 2014 -- one fifth by mid-2016. Which explains why the Sithanen toohrooh has gotten so big. As if we needed more proof that the bean-counter has been a financial disaster. Public sector debt (PSD) stood at a quarter trillion rupees at end of June 2015. Two-thirds of the domestic portion of that debt was due by mid 2019. Public Debt Management Act has its own way of computing debt as a share of GDP. PSD increased to Rs275 billion by June 2016. On dit merci qui?

Consolidated Fund has a deficit of Rs52 billion. Hmm, must be the early harvest.

I stopped at page 62 of the report. Here are posts on previous editions. And here's one from Singapore.

Oxfam Warns Unjust Society Not Sustainable

The recently published report has a number of interesting stats including:

1. 1% of the world's richest are wealthier than the remaining 99%
2. 8 men are as rich as the planet's 50% poorest
3. income growth for the bottom 50% has been zero over the last three decades while the top 1% have enjoyed a corresponding increase of 300%
4. it takes 10 years for the poorest person in Vietnam to earn what the richest person there makes in a day

The report also highlights how politics may be highjacked so that rules are written in favour of the 1%. I guess a bit like the Sithanen flat tax which has caused 22,000 Mauritians to be thrown into poverty over the first five years of Shaitanomics while incomes for the bottom 10% have risen five times slower than the corresponding income for the top 10%. There's also a trillion-rupee GDP shortfall and the very dumb policy of 'competitive depreciation' which has quickly dumped us into a recession -- in USD terms -- a mere three months after the December 2014 polls.

Basu Says Mauritius Doesn't Save Enough

He is the Chief Economist of the World Bank. Too bad he didn't visit us before two Voodoo economists – one hailing from the Bretton Wood sisters – started messing it up with their trickle-down economics in 2006. But he could have looked at a chart or done his homework. Then again one of his predecessors didn't exactly dazzle us when he visited Mauritius. 

Vishnu is Lucky, Again

To be Finance Minister these days. After almost a quarter of a century. Because that's after almost 10 years of the worst economic management -- Paglanomics -- our country has seen and started by Rama Sithanen with the help of Bretton Woods Ali. And of course with the blessing of Andrew Scott and one pseudo-socialist, Navin Ramgoolam. So improving things should not be that difficult. For example increasing pensions has helped compensate the lack of reasonable progress that the weakest groups of our fellow countrypersons have registered with the toxic bean-counters. And there are many more low-hanging fruits to pick.

But monetary policy was definitely not one of them. So it was quite surprising that Manou Bheenick was asked to leave. And replaced by depreciation-obsessed Basant Roi. Who unsurprisingly since returning to the BoM less than 80 days ago has presided over a double-digit depreciation -- 12% as of today -- of our national currency against the USD. After our central bank had issued a communique on January 30 informing the nation that there would be no MPC meeting in February because Lutchmeenraidoo's budget was due March 16. Or 45 days later.

Hopefully the Minister of Finance who keeps on insisting that he will deliver a 'second miracle' understands how to assess the quality of economic policies. Computing our real GDP growth in USD for the current quarter might be quite enlightening.

SAJ Returns To Parliament, History Accelerates

We now have a Prime Minister who has lived 84 years or 3 years more than my all-time favourite at the time he lost power in 1982. Today is also the first time the Speaker of our National Assembly was addressed as Madam. More history is on the way at Le Reduit when Ms. Fakim will replace Kailash Purryag. The sooner the better.

SAJ is also making a comeback 11 years after having announced his retirement in 2003. This never happened before. Mr. Lutchmeenaraidoo is back too for a third term -- or a fourth one -- after almost a quarter of a century. If he does that again -- assuming he loses his seat in 2019 -- he will be eligible for one of those phones that centenarians receive.

So a larger pension has been paid and there will be a Rs10 billion item in the next budget to unleash the creative capital of Mauritius.

Not missing Sithanen and Mansoor by any chance?

Why Sithanen Won't Eliminate Poverty

Simply because he's so good at creating it. See, at the end of Ramgoolam's first mandate -- Bheenick and Bunwaree were his Finance Ministers -- there were only 500 more poor people than five years earlier. But at the end of Ramgoolam's second -- I guess you recall who was Finance Minister -- there were an additional 22,000 Mauritians that had been thrown into poverty. That's a staggering 44 times more. Or if you prefer almost 2.5 times the 8,902 votes Sithanen got at the end of his first stint as FM back in the 1995 general elections when his party was routed with a 60-0.

There are only two reasons to create so much poverty. One is you love doing that. The other is you don't have the slightest clue what you are doing. In either case I don't think we want someone with that kind of a skills mismatch to be our next Finance Minister.

Pravind Recaps Shaitanomics

Ramgoolam's Cake

Quite funny to hear the PM on TV say that we first need to make the (national) cake before distributing it. Funny because it's almost nine consecutive years that he's been baking one. That's an amazingly long time to bake a cake -- if you know how to bake one that is -- when you remember how long it took us to defuse the demographic bomb. Or how long it took the American economy to create her middle class.

We know for a fact that the cakes that we've been making since 2005 are the smallest in decades. Which can be attributed mostly to the incompetence of the bean-counting duet. We also know that the poorest segment of our citizens have seen their share of the cake shrink so that those who already had too much can get more. That's complimentary of the regressive effects of the flat tax of the same toxic pair.

Labour should get another baker-in-chief.

How Our Constitution Can Help Refresh the Stale Political Scene

By including a couple of new things like a Prime Minister cannot do more than 2 terms. Which means that Navin Ramgoolam shouldn't stand as PM in the next General Elections. By this criteria SAJ too cannot be our PM again.

We should also add something to the effect that a President cannot go back into politics. Once you become our President you should rise above the political fray for good. So here's another reason for SAJ to withdraw from the soap box. And it makes kind of sense that no one should be President for more than two terms.

A similar criteria should apply for the post of Leader of the Opposition. After the next General Elections no one who has held it for two terms can get this important job again. So Berenger will not be our Leader of the Opposition by Christmas next year. Somebody else will.

Another criteria that will do us a lot of good is that nobody should stand as PM candidate more than twice. If you haven't been able to get elected PM twice it's time for you to allow someone else from your party to try. This means that Berenger cannot have another go at the top job.

Finally, no one should be able to hold the same Ministerial portfolio more than two times. Which means that Rama Sithanen and Vishnu Lutchmeenaraidoo cannot be our FM again. Neither can Pravind Jugnauth. While we're at it, we should attach an identical criteria to the posts of Financial Secretary, Governor of the Central Bank and Deputy Prime Minister.

2013: The Year in Review (Q2)

April: Cellphone turns 40. Iron Lady dead at 87. Boston Marathon ends in carnage. Human computer dead at 73. Manu wins 20th, Ivanovic to be tested for rabies.

May: India welcomes friend back as Chinese Premier. Manraj report to cost an extra billion. One famous Himalayan hug turns 60.

June: Why Club M will miss World Cup in Brazil. Amazing ad gets 2013 WWDC started. Confederation cup offers sneak preview of next World Cup. How long things take. ACIM makes serious arguments to the MPC, the Financial Secretary a fool of himself, again. State flip flops on the CNT.

Read the review for Q1, Q3 and Q4.

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.

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.

We also know what's holding us back.