Judging the Overall Quality of A Country's Policies

A shortcut is to chart the value of its currency over a couple of decades. And if we compare the latter to the level of exports -- let's say for Mauritius and Singapore -- we get an indication of the strength of the local entrepreneurial fibre. Of course we can use our good old policy matrix. Or have a look at the land use. Or the type of bets that are made and at what cost. Traffic congestion is also a pretty good indicator (Istanbul has the world's worst traffic). And how can we forget fiscal policy?

So I guess we can gauge the DNA of a country pretty fast, eh?

Once a Tiger, Always a Tiger

Yep. I am looking at a 16-year span in the life of Panthera Tigris:

Period I (1987-1996): Exports increased by 2.86 times while the Singapore dollar appreciated by 50% with respect to the USD. In fact, exports and the Singapore dollar rose every single year.

Period II (1997-2002): Exports keep on increasing to reach 3.78 times their 1987 levels in 2002 while the Singapore dollar is about 22% lower than its 1996 level but is still close to 18% higher than its 1987 mark. Of course, during that period, Singapore went through two major and real storms: the Asian crisis and the SARS outbreak.

And at the end of 2008 the Singapore dollar was almost back to a 20-year high while exports increased by an additional one-third over its 2002 levels.

Are They Crazy or What?

The people in Singapore that is. Can you imagine that since 2004 their currency has appreciated by about 20% with respect to the American dollar? Have they become mentally unbalanced? Do they now think that it's too hard being a global player? Have they suddenly decided that they will not have an export industry anymore?

Nope. Nope. Nope. World-beaters Singaporeans, as the above graphic shows, have actually exported 36%* more in 2008 than they did four years before despite a constantly appreciating currency. And all of this has happened quite painlessly. Shouldn't we send our cry babies on a study tour there?

*At 2006 prices.

How to Fix our BOP Problems

That's kind of simple and, no, we don't need to depreciate our rupee as one ex-Governor has again been suggesting. We just need to reduce imports and increase exports. First, imports.

In 2008, we imported for Rs8.5 billion of fish and fish preparations, Rs3 billion of milk, Rs2 billion of vegetables and fruits, Rs1.5 billion of meat, Rs6 billion of road vehicles and Rs24 billion of petroleum products. That just doesn't sound right. If you recall, our exclusive economic zone is more than a 1,000 times larger than our land area or if you prefer each Mauritian can be supported by 1 square kilometre of sea (although it would make more sense to speak in terms of cubic kilometres, right?). So am positive we can cross that one out in a few years. There is a milk project underway so imports should decrease there too. As far as vegetables go we could adopt a few of Kreppalloo Sunghoon's recommendations: subsidise fertilizers, remove VAT on agricultural machinery and create a land bank to optimise the use of arable land. Likewise I am sure we can do something about all the meat we're bringing over from abroad by getting Rodrigues into the loop. Finally, we can reduce both the amount of fuel and road vehicles we import by having a sufficiently comfortable public transportation system. Having it run till 2 a.m. everyday will also make our economy more dynamic.

As far as exports go we should favour those that will provide meaningful jobs to a maximum of our fellow citizens. We don't need entrepreneurs of the sweat-shop variety whose greed knows no bounds.

Mr. Speaker, Sir, I now commend the Bill to the House.

P.S: BOP = Balance of Payments.