FM Warns Banks Not To Mess Up With Him

And to play a more active role supplying working-capital to the many SMEs that Government wants to see created. If they don't banks should expect problems from him. Banks have responded that they have helped the development of every sector in Mauritius. Mr. Lutchmeenaraidoo also said that banks were the only sector which makes money without working hard.

A few years ago Mauritius was deemed to be held back by some pretty bad interest rate spreads.

Resources For The December 10 Elections

Who will you vote for? Well it will have to be three of these candidates.

Where will you vote? Enter your NIC# and the Electoral Commissioner's office will tell you where that will be. That's specially useful if it's the first time you're voting.

Who's the better cake-cutter? That is who divides the national cake more reasonably. I've looked at the HBS data for the past 25 years and it all boils down to who is the Finance Minister. Lutchmeenaraidoo -- at least in the data analysed -- has been good. So have Bunwaree and Bheenick. Sithanen has been a reverse Robin Hood -- takes from the poor to give to rich -- each time he's been MoF. So he's to be avoided at all costs.

Who bakes the bigger cake? Have looked at this data recently and what I've found is that Lutchmeenaraidoo baked a bigger one than the FMs who came after him; the Sithanen reforms generated the smallest cake and that Bheenick and Bunwaree hatched a cake which was slightly bigger than what Sithanen cooked in his first mandate. More on this soon.

Of course we don't want a second republic, party lists, more MPs and double candidacies.

Suddenly, Labour/MMM Alliance Promises 60,000 Jobs

Because a few weeks ago when Rama Sithanen was asked (scroll to 31m30s) how many jobs he would create in the first twelve months if he was to become the next finance minister -- God forbid -- he said he could not forecast that. He couldn't even give a rough estimation. Of course we can come up with a ballpark of how many jobs he might create because he's been FM for several years and we just have to look at his stats. Turns out we should expect around 7,200 jobs or 2.5X less than what Vishnu Lutchmeenaraidoo could create.

He also said that he would not be able to create jobs immediately. Hmm. We can estimate that too by looking at how many jobs were created in the first full calendar year -- we could look at monthly figures too -- he was in office in each one of his two terms. That number is around 8,300 jobs. But given that he messed up the economy so badly and that he increased unemployment every single year in his first mandate and in every full calendar year of his second that could be really hard to achieve.

Mr. Sithanen also says he will eradicate poverty. He said that before. I'm sure you remember he said he could do that in 7 years. The snag is that it's almost ten years since his bogus reforms have started. And far from eliminating poverty he has thrown an additional 22,000 Mauritians into it during his second term. That's about 350 people every four weeks. And his inflation record doesn't look too good.

So I guess they've thrown this number to look a lot less silly. And to try to be a bit less on the defensive. After lalyans lepep announced their 12 measures.

Who Will Be Better at Tackling Unemployment?

Some people -- who seem to have a penchant for Paglanomics -- have said that whatever Vishnu has achieved before is not doable again because the circumstances are different blah blah blah. But given that Sithanen took over almost immediately -- SAJ presented a budget in between -- from Lutchmeenaraidoo in 1991 we can look at what happened to some of the most important macroeconomic indicators when the ministerial baton was being passed. For an indication of relative skill as the environment was more or less the same. 

For example the rate of unemployment around that period offers some fascinating insights. As the chart illustrates Vishnu decreased the unemployment rate every single year from 14.8% in 1985 to 2.8% in 1990. But the story changes as soon as Rama takes over. Indeed he increased the unemployment rate every single year. From 2.7% to 5.1%. And he increased it with surprising regularity: by exactly 0.6%. Which makes it so easy to remember. 

I've also listened carefully to interviews of the two gentlemen about the economy on radio. Mr. Lutchmenaraidoo comes across as a pleasant, humble and competent person with a serious plan. And Dr. Sithanen the exact opposite.

How Many Jobs Might Vishnu Create in a Year?

We cannot know precisely but given that he's been finance minister long enough we can look at his jobs record and compute an average. This turns out to be 18,243 per year if we use data between 1984 and 1990. We can look at Sithanen's data too. As the chart illustrates it's 7,200 a year on average. That's 2.5X slower. Now if you'll please excuse me I've got something to pick up in Stockholm.

Navin Ramgoolam Joins Select Club

As the third of our Prime Ministers to also cumulate the Finance portfolio. Of course the first and most famous member of this very exclusive group is SSR who happened to be our FM at the most famous time in our history.

It's a real pity that Navin Ramgoolam did not take over that ministry back in 2005 as I had suggested when it was already kind of obvious to the trained ear that a toxic politician was doing his level best to send the country to the dogs. Especially when you consider that Mauritius not only had the best growth rates of the past twenty years during the first mandate of Ramgoolam II but the cake-cutting was also a lot more compatible with that of an avowed socialist. But it's true that PMs can sometimes, but not always, get busy. Still, he could have entrusted the ministry to a Rs5 coin and the outcomes would have been a lot better. But let's not cry over a spilled decade. And instead watch how he plays the trump card he's been dealt.

ACIM Makes Serious Arguments To MPC

They rightly wanted the repo rate to go up by 15-20 basis points because

1. year-on-year inflation is already higher than it should be and soon hovering between 5% and 6%
2. inflation hits the poor harder
3. the latest household budget survey shows that economic growth of the last five years has not been inclusive

No one in her right mind can disagree with these facts. A few comments on them:

1. one former Governor likened inflation to radioactivity
2. South Africa has calculated that the inflation that hits the poor is 3% higher
3. as expected the flat tax disease has operated like a reverse Robin Hood

Furthermore even the JEC -- not exactly the source of the most progressive economic statements since dinosaurs were wiped out from the face of the earth -- asked that the repo be left unchanged. 

How can you then explain that the Financial Secretary asked for 50 basis-point cut? And that the MPC ended up lowering the key rate by 25 basis points?

Simple: there are way too many people on the MPC and at the Ministry of Finance who don't seem to understand the scope of an MPC. That's unacceptable. Because I am sure that the cost of running the MPC is nothing to be sneezed at. We should be able to count on Mr. Alan Ganoo to find that out for us. And to apply parliamentary pressure so that the MPC works for most of us.

48% of Poll Would Pick Vishnu As Finance Minister

Compared to the 33% who would select Kee Chong Li Kwong Wing. 18% would choose somebody else.

Get A Million-Rupee-Per-Year Job Without An Interview

If you have a Post Doctoral qualification and a committee of public servants deems you have what the Ministry of Finance needs. I think the Prime Minister should take a little pause in his ongoing political romance with the MMM and put, at least, his foot down to end this farce.

Hey, someone may have great qualifications but may not have the soft skills needed to deliver. And this scheme should be open to citizens of Mauritius only: we already have a very serious brain drain problem here and many young professionals want to leave because of a disease called bean-counting. Besides who wants to take the risk of hiring someone with impeccable qualifications like Hannibal Lecter but whose special dietary preferences would not always stay unmet?

Deerpalsing Wants A Planning Unit Under PMO

Essentially for the same reason it's the PM who appoints the Governor of the Central Bank. If the latter produces too much inflation by giving in to the GLDs who love the worst enemy of the poor the former's political position may weaken. In fact that's the case with all positions of huge responsibility: we have seen how two bean-counters have squandered Ramgoolam's historic 2005 majority.

It's all about picking the right people and avoiding groupthink at all cost. Stuff that leaders should excel at.

Looks like we've regressed by half a century.

Amnesty: Ethnicity Has No Bearing on Economic Performance

The local section of the human rights organisation issued a communique condemning the statements of some ethnic-based groups saying that Sithanen should stay on as Finance Minister because he was a member of their group. Amnesty encourages Mauritians to instead discuss the strengths and weaknesses of the Minister's policies.

Which is essentially what we've been doing here.

Kozelidir's Simple Guide To Coping With The PM's Prerogatives

1. It is the Prime Minister who appoints the Governor of the Central Bank. If you don't like the person he has nominated you shouldn't cry for a whole week and/or threaten to resign. Likewise please don't use provisions of the Bank of Mauritius Act to obstruct the proper functioning of such a vital institution.

2. It is the Prime Minister who appoints Ministers. Even if you try little tricks to put some pressure on him.

Should I now come up with a simple guide to decoding the PM's not-so subtle messages?

Worst Economic Management Ever Leaves Sithanen With Little Political Choice

For months now it was clear that Sithanen would probably have to leave his old riding of Belle-Rose/Quatre Bornes and migrate to riding no. 8 or no. 13. But since Wednesday his options have dwindled considerably with the announcement of a 'Bleu-blanc-rouge'  alliance. This is because the MSM got 18 tickets and its Leader will most likely take Rama's current no. 4 position in the next government if that alliance wins the May 5 polls. 

Things got even more complicated for Sithanen with Pravind Jugnauth standing as candidate in no. 8 and pushing one of his candidates with the same ethnic profile as the current Finance Minister in riding no. 18. So ridings 8 and 18 became out of reach for Sithanen and he was left with only one option: no 13.

The snag is this is the riding where Lutchmeenaraidoo will compete in and Sithanen's would not only face more than an uphill battle but will likely make life quite difficult for his running mates and for Ramgoolam at the national level. And apparently Ramgoolam has told Sithanen that he will not get the finance portfolio in his next government and the max he can do for him is a ticket in no. 13.

Considering that Rama Sithanen has always said that he's in politics only to be Finance Minister it looks like he doesn't have any reason to stay on now. He may announce he's quitting politics in a few hours.

One Reason Rama Chickens Out of a Debate With Vishnu

And deprives us of a historic crossfire between two of our Finance Ministers who've been in the job for roughly the same amount of time. I would have seriously considered moderating this landmark event but only if Rama insisted. What a shame!

But this setback shouldn't prevent us from getting our facts right. Job creation for instance has been more robust when Lutchmeenaraidoo was in the driver's seat.* Yep. The economy churned out 127,700 jobs between 1984 and 1990 compared to 72,600 during Sithanen's two-part tenure. That's 55,000 more jobs in case you're wondering.

*Data for 1983 excluded because I didn't find them.

65% of Poll Saying Sithanen Will Not Stay On As Finance Minister

42% of the 114 voters thought Vishnu Lutchmeenaraidoo would be the next Minister of Finance while only 8% voted for Pravind Jugnauth. Rama Sithanen collected 35% of the votes. The other interesting fact is that some 13% -- that's 5% more than what the Leader of the MSM received -- are saying that someone else would get the job.

Who's Gonna Be The Next Finance Minister?

Is it going to be Pravind Jugnauth in a Ptr-MSM alliance? Or maybe Vishnu Lutchmeenaraidoo if Labour and the MMM go together? You think Rama Sithanen is to going to keep the job? Somebody else will be finance minister?

You decide and vote in the opinion poll which has just started.

Time For A Little Switch

For Ramgoolam. He should appoint Bheenick as Finance Minister if he wins the next general elections and Sithanen as Governor of our Central Bank. Bheenick will then pick a majority of directors on the Bank's board who know enough about the economy to give all the support Sithanen deserves. Here are four such people: Ashok Subron, Filip Fanchette, Samad Ramoly and Kee Chong Li Kwong Wing.

Of course Ramgoolam doesn't have to wait for fresh new elections to operate that switch. He can do that pretty quickly given that he's got so many ministers that are totally useless.

Labour Party's Easy Options

Here's what Ramgoolam can do to immediately make sure that he'll have to clear his Prime Minister's desk in 2010: present Rama Sithanen as his Minister of Finance again. Also, keeping him as Finance Minister until 2010 without announcing anything will be the equivalent of Navinchandra having to shoot himself in the foot a few times everyday. That could be quite painful for him given that the huge MK and STC bullets comfortably attended the National Prayer Service in Washington beneath his socks. Ouch!

Here's what he could have done two years ago to keep the odds of him staying in the top job for at least another mandate pretty high: 1) sack Rama Sithanen when the latter took the whole country hostage with his resignation-cum-blackmail charade for a whole week after having screwed up the country for 19 months and 2) deliver the kind of mediocre-but-not-toxic performance he did when he was around the first time.

Sacking Sithanen within a few hours of reading this post could certainly help to clear the political air a little bit but will not be enough. Ramgoolam still has to make an about turn in terms of economic policy. The good news is that that's fairly easy to do and he's got enough time to do it. The bad news is that he has surrounded himself with an impressive number of incompetent Judas. And the incompetent Judas will now do what incompetent Judas know best.

Ministers and Growth Rates: The Last 20 Years

This is what I could blog in 18 months when we go to the polls assuming we grow at 5% until then. As the table shows the average growth rate of the current government would barely fall short of 5% and certainly puts the so-called reform-induced robust growth performance into perspective: Sithanen will actually do worse than his first time around when... no reform was implemented.

And should we tag along at 3% instead it would yield the worse-performing mandate as far as that extremely limited economic statistic goes. But of course we won't go to vote in July 2010: it will be the World Cup Stupid!