How Long Things Take

1. Presentation of Financial Secretary to one MPC meeting -- about three quarters of an hour
2. Presentation of one UK budget by Gordon Brown -- about forty-five minutes
3. Implementation of free education in Mauritius -- literally overnight
4. Creation of the world -- 7 days
5. Kurukshetra War -- 18 days
6. Creation of the American middle-class -- 7 years
7. 2005 economic reform in Mauritius -- 8-year poop and still waiting for Godot
8. Deactivation of Mauritian demographic bomb -- 10 years
9. Malawi following famine-creating policies courtesy of the World Bank -- 2 decades

The Economic Mess is Actually Bigger

Than previously reported. Although I had forgotten to add the budget of Jeetah's Ministry I didn't include the much larger capital repayments either. So that now -- based on the same budget 2010 numbers -- we have debt servicing 82% and 80% larger than the education budgets for 2012 and 2013 respectively. It was already 38% a couple of years ago.The total debt service for these four years is a staggering Rs69.25 billion and the corresponding figure for education spending is only Rs42.62 billion -- Rs27 billion more. That's roughly 10 Midlands Dam or one LRT plus a couple of billions to spare. In case you're wondering.

Debt Service to Exceed Education Budget By 40% in 2013

That translates into 4 billion rupees more on interest payments than money set aside for human capital or if you prefer two Midlands-dam-sized reservoirs. The other alarming thing to note here is that expenditure on education is not even expected to keep up with increases in the general level of prices. On dit merci qui?

Hope Xavier is paying attention.

Ramgoolam Has A Challenge for MSM MPs: Resign From Parliament

So he said at a lengthy press conference which ended a little while ago. He did not think too much of their political weight either suggesting that they might have downgraded from a little party to bagasse.

The Prime Minister also said, in reply to a question about Ali Mansoor's controversial circular, that the Financial Secretary is a technical guy but that it's the politicians who craft policy because they consider more dimensions than the bean-counter. Really? Can he substantiate this?

Water Problems Confirm Ramgoolam's Economic Model is Junk

Abusive electricity and petroleum prices over the last five years brought a lot of money to the government till. Especially as the VAT rate was kept at 15% during a period oil prices went through the roof and their subsequent collapse was not passed on to us. Rs4.7 billion was mysteriously lost at the STC which doesn't have any oil price risk to hedge.

Record amounts of debt was borrowed -- including Rs9 billion from the World Bank -- while government did not build schools on a scale we saw between 2000 and 2005.

And Ramgoolam did not solve our recurring water problems: he was too busy making speeches while waiting for robust growth rates which never arrived.

Shaitanomics Failed To Deliver Robust Growth

As shown in the above graphic, growth rates between July 2005 and April 2010 were on average very similar to those of the best-managed-country-in-the-world vintage: 4.33% vs. 4.41%. And that's going to make it way easier to show how Mauritius wasted another 5 years.

Budget 2011: Reality Check!

Les Politiques Toxiques De Sithanen Perdurent Avec Mansoor

What Killed Many IRS Projects

Depreciating currency and dullness of Mauritian evenings are two reasons we identified last year. Overpricing is a third one. Here are a few more:

1. Getting someone from the World Bank(WB) as Financial Secretary who promises to adapt WB policies to Mauritius. Investors know very well what happens when government allow Bretton-Woods-formatted cowboys to run the show: they screw up public finances and the economy, people eventually take to the streets and governments lose power along the way. That usually doesn't help real estate values to firm up. 
2. An eyebrow-raising event: WB opens an office here in 2008 based on totally fallacious arguments. We didn't need a WB office in the 1970s when we went through very turbulent economic waters so how come we needed one 4 decades later when conditions are infinitely more manageable? Investors definitely interpret this as a signal that a few idiots have decided to send our country to the dogs.
3. Investors were attracted by sexy ingredients that are the foundations for our country's reputation as the poster child of economic development: success in defusing the demographic bomb, rapid industrialisation, progressive taxation, free education and other carefully thought-out components of our welfare state. With the introduction of the Sithanen-Mansoor-Scott-Ramgoolam flat-tax they fear Mauritius may have lost her magic touch and know government will have no money to maintain standards or solve any national problem. Which is essentially what happened over the past 5 years. And that doesn't sell properties.

Guess you've noticed that the policy spaghetti that killed these IRS also killed our savings and made our economy more vulnerable. Things could get out of hand pretty quickly.