Latest IMF Staff Report is Another Big Time-waster

I’m definitely not spending more than a few minutes on a report (it’s not the only one) that says right off the bat that our economic performance was solid before the pandemic appeared. In 2020 COVID-19 caused a damage of about 100 billion rupees to the Mauritian economy while the GDP shortfall of the 15% flat tax (a Bretton Woods best practice implemented by one of the boys) between 2006 and end of last year was over Rs2.1 trillion. That’s more than 21 times the economic loss from the pandemic.

It’s no surprise then than the IMF/WB have created famine and failed to predict huge uprisings. How much is that litre of oil again now?

The First 49

Fourteen years of brilliance. Followed by twenty-three of bat-bate. And twelve of crap.

Air Asia Drops a Paradise, Adds Another One

Guess you heard they are pulling out for Mauritius. After only four months. Wonder why and how it is related to other recent airspace decisions. It's a loss for Mauritius as they offered interesting links to Asia at prices that partly made up for the continuous slaughtering of our currency. But they don't look too worried. They've just opened up a route to our sister paradise in the Pacific.

And of course proportional representation (PR) has created another huge mess in Rodrigues. A very comfortable majority of 10-2 for the OPR has melted into a regional government that will be a lot weaker. This of course comes right after the mess of 2012 when the wish of the voters ended up being frustrated with the same PR seats. What we saw on Monday was kind of expected wasn't it? Just like having mutating 'experts' in electoral reform put their hairdryer into high gear to try to confuse us with jargon they don't understand very well. Besides it was kind of obvious that the Duval Committee was on shaky grounds. And we know PR will produce unstable governments. After unstable governments. But did we have to use Rodrigues as a guinea pig? And that too for 5 years running?

Four Reasons Top Taxes Are Too Low

One is obviously the low growth rates that Mauritius has clipped for the past few years: indeed 2015 is looking to be the 5th consecutive year that it will be under 4%. I don't think this has ever happened. At least not since independence. I am sure you remember that one bean-counter promised Bretton Woods-inspired robust average growth of 8% back in 2005. Which was the reason the tax structure was flattened.

Two is that tax receipts have literally stayed flat in real terms over the last 12 months. Indeed the MRA disclosed that it collected only 4% more in the last fiscal year. Which roughly matches the increase in the general level of prices. We've alluded to that before.

Three the MCCI said that more than a third of the businesses it surveyed recently are complaining that Government is not doing enough to improve their businesses. Well, with the silly flat tax Government has ensured that it would have less resources -- and the private sector would have more -- to drive the economy. If nothing much has happened and is going to happen Government should raise top taxes to move Mauritius forward. If we don't want to keep on waiting for Godot.

Finally the flat tax has increased inequality tremendously. You just need to compare the number of people thrown into poverty after Navin Ramgoolam's first and second mandate. We can also have a look at how real disposable income has changed for the richest and poorest 10% of our households for the same periods. That's pretty bad for our social fabric and for better economic growth.

There is of course another reason why top taxes should increase.

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.

Why Government Securities Are The Safest

Because of two things it can do that private corporations cannot. The first one is to collect taxes and the second one is to print money. So that if a big payment is due the state can always raise income or corporate taxes or have its adviser -- the Bank of Mauritius -- order a container of the good stuff from Thomas de La Rue. But you don't want to play with these levers for day to day matters. Or to compensate for dumb policies. Nope. You want to design policies that are at least sustainable if not thoughtful.

Still these two trump cards puts government in a very strong position to undertake the biggest projects. Which is why, for example, it used to produce all of our electricity through one of its manifestations.

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

Iceland Prosecutes Former PM

For failing to keep the country out of harm's way. Indeed 3 banks borrowed the equivalent of 10 times Iceland's GDP before failing and dragging the country into a deep recession. Interesting. I thing we should have this kind of accountability codified in our laws. And they should apply to senior officials in a position to mess up Mauritius in a big way.

You mess up, you don't collect 200.

Should We Benchmark Against Trinidad and Tobago?

The Prime Minister thinks we should. I don't. See although T&T started at about USD5,000 per capita just like us when Ramgoolam II first became PM, they now roughly have twice our income level per Mauritian. Higher oil prices since then must have helped given that in T&T oil and gas accounts for 40% of GDP and 80% of exports. This could explain why it clocked a 12.6% growth rate in 2006. Something Ramgoolam won't tell you.

Just like he was bragging about having a higher growth rate than Singapore back in 2008 but stopped talking about the South East economic dynamo when the Tiger rebounded out of recession with a 14.5% growth rate in 2010. He then started talking about Greece. Seems that he always looks for countries that happen to do worse than us at one point in time. Which is fine though because you are watching Pyongyang TV. 

2011: The Year in Review (Q2)

April: Bean-counting claims new victim: free distribution of laptops. 10 ways to solve water problems proposed. ECB hikes rates and hints more on the way while battling with a sovereign-debt crisis. Phase 2 of the Midlands Dam would have held more water than currently in Mare aux Vacoas. 82% of poll not happy with Government.

May: Policy blunders responsible for robust poverty. DSK taken off plane to face attempted rape charges. Presidential pause ruins Obama toast. Jaysen reaches roof of the world. World is playing football, Barca is playing something else.

June: Bhagwan asking whether contract of Financial Secretary should not be terminated. Mansoor says water problems date back before his arrival 5 years ago. World's longest passenger plane arrives in Paris. Bill Clinton has 14 ideas to cut US unemployment. Bad Economics made Mauritius a sad place. Deerpalsing wants planning unit under PMO. More Mauritians visit Blogger than any newspaper.

Read the review for Q1, Q3, Q4.

2011: The Year in Review

January: African leaders get wonderful opportunity to benefit from advice that could be lethal to their political careers. Water problems confirm Ramgoolam's economic model is junk. Planning maverick barely recognisable because Labour Party forgot who she was. State could have spent our money better. Bunwaree makes access to A-level education easier.

February: IMF analysis too bland to pick up social volcanoes that had been brewing right under surface of Arab world. Journalist remembers SSR's last public meeting. Minister magic needed at earth's driest place. Union boss wants price of basic foodstuffs controlled.

March: Nobel puts feet in mouth. Powerful earthquake sets off deadly Tsunami in Japan. BRIC and Germany say no to military action in Libya. Boolell says he's not there to serve fat cats. Proposed 10-20% hike in water charges has no basis. MPs want answers from Financial Secretary. Free guide to understanding the infamous stimulus package published.

Read the review for Q2, Q3, Q4.

Two-thirds of Poll Think MSM MPs Should Resign

From Parliament that is. For sure it's a small party but big enough for Ramgoolam to have needed them to stay in power given how bad economic policies were during his second mandate.

Sithanen Available To Offer Opinion on 5 Issues, To Anyone

Which he qualified as extremely complicated. These are:

1. Electoral reform
2. Institutional reform
3. Double Taxation Avoidance Treaty (DTAT) with India
4. Global Economic Situation
5. Local Economic Situation

He met the PM yesterday and has volunteered to tell Berenger exactly the same thing he told Ramgoolam if moustas wishes. He is also prepared to meet anybody else who is keen to hear what he has to say. But he didn't want to tell Radio+ this morning.

Two things seem to be happening here. First, it looks like he's desperately trying to creep into the limelight again because if he is prepared to tell everybody exactly what he told the PM he should write an article about it or make a little statement to any of our radios. I mean for the sake of efficiency -- and in the spirit of the, ehh... PBB -- that's what he should do. The second one is that he seems to have a lot of time on his hands to be able to go around like a ghar ghar ki lota. But it's true that the unemployment rate has remained in the double-digits for the last many years.

As far as the 5 topics go we know that electoral reform is not priority; we have tasted his idea of institutional reform with the appointment of his toxic little buddy as FS and the display of what a pathetic Bretton-Woods puppet looks like and that treaty has probably contributed in preventing the full genius of the Mauritian people to emerge. And the internet provides us with enough information about point 4 so we don't really need him for this while I am hoping he will issue a mea culpa to the beautiful people of Mauritius for the unmitigated mess he has done to our local economy with his ultra-liberal policies.

Finally, these issues are not exactly complicated and the sun will keep on rising in spite of him.

Boolell: We're Not Here To Serve Fat Cats

That's what he said at the Annual General Assembly of the Mauritius Chamber of Commerce and Industry a few days ago. He added that our economic policies need to be reviewed and highlighted anti-competitive behaviour by some economic players.

Sounds good. But is this something that he has now carved on his DNA or just another speech to fool us?

Riviere: SSR Pa Ti Enn Gran Zestioner Ekonomik

Se seki linn dir dan enn interviu Journal du Samedi resaman. Ki u pense lor la?

Lion Ill-Advised To Beg on Tiger's Behalf

Like recently heading to L'Elysée for a godi or asking for scholarships and brains in Singapore. And whilst it's nice that India has drawn a map of our exclusive economic zone for free we're rich enough to pay for it and for everything else that we need to swiftly get our main national problems out of the way.

Yep, we must be quite rich and particularly crazy for having contracted Rs9 billion of foreign debt we don't need from the World Bank. Any guess how much interest we've been paying to this loan shark since 2006?

The Only Signal Ramgoolam Sent

Sithanen failed so he dumped him. Because if things were so great, he would never have contracted an alliance with Pravind Jugnauth or renewed the contract of SAJ as President.

The only thing everybody is angry about is why the PM didn't do that way earlier.

Trade Deficit Highlights Sithanen's Failure

We've been paying for imports we really don't need by selling our land. That's as unsustainable as the combination of flat-tax with worst growth rates in decades. Besides growth rate isn't a comprehensive enough performance metric. That's why we need a sea change in our economic policies. And we need it fast.

Bridge Crossing

Ramgoolam apparently doesn't know yet who is gonna be his Finance Minister in the next general elections and has refused to confirm that it will be Sithanen. That's bad news for the latter and seems to confirm that his economic policies are a big electoral liability for the current PM. Gone are the days when Sithanen was the first and only candidate to be guaranteed ministerial responsibilities by the same Ramgoolam when they were in the opposition before July 2005.

But that could be just another gimmick by Ramgoolam who is buying some time after seeing his political options dwindle as more and more people understand how Sithanen's policies have been bad for a majority of our fellow citizens. Still, I would not be surprised at all if Ramgoolam crossed that bridge with Sithanen on his back. The last bridge is of course always crossed by the voters who will then decide who if anyone of the two makes it to the other end.

World Bank As Usual

How much more of the World Bank (WB)'s costly poison can Mauritius afford to take? I don't know about you guys but I find the WB's "stick" Port Louis toll aimed at the "carrot" bus way in line with its long tradition of disconnect from the real world. It's not mere drivel, it's drivel upon stilts!