Why Savings Collapsed Despite Surviving Three Intense Cyclones

Essentially because a bean-counter started taxing bank interest as he needed to find other sources of government revenue after he reduced top tax rates before flattening the tax structure to 15%. The flat tax was supposed to generate growth rates of 8% every year since 2006 but as we’ve clipped rates far lower than this – 2019 will be the ninth year they are under 4% – savings, as expected, have never recovered. 

As the chart shows this is very different from the rebound we experienced after Danielle, Gervaise and Claudette visited us. Removing the battery of exemptions that a whole nation had used to patiently craft their long-term financial plans over several decades and the record inequality the unsustainable and crazy tax policies created didn’t help either. But there was more than injury. 

Berguitta To Spend Day in Mauritius

It's been almost eleven years since a significant rotating air mass made it to our Met's cyclone Hall of Fame. For a visit of an intense cyclone you have to go back eighteen years when Connie checked us out for three days at the end of January. Only about 10% of cyclones actually go over us -- Berguitta would be the sixth since 1945. The last chick to do this was Christelle, a moderate depression, twenty-three years ago. It gets even more interesting if you want to find out when was the last intense cyclone that crossed Mauritius. This singular honour goes to Claudette which ruined Xmas 1979 and threw Mauritius into an economic depression -- GDP contracted by 10% in 1980. This was a scary time to grow up. Especially if you had tasted another pretty little thing called Gervaise four years earlier.

Given that it's been thirty-eight years since a cyclone got to know us up close and personal there is a good chance that one in every six Mauritians will experience something new in the next twenty-four hours. Oh yeah one last thing. As the airport will be closed tomorrow, Berguitta has organised her own means of transportation.

Where Were You On February 6, 1975?

Because that was the day a pretty little thing called Gervaise spent the day crossing Mauritius. If you were old enough not to have been in diapers then you probably ate some faratas on that day.

The damage to our economy was extensive as you can imagine. You may also wish to take a look at a manuscript that Mr. Padya filed about one aspect of the intense tropical cyclone here.

So 1975 was not a boring year at all: February we get Gervaise and three months later students are on the GRNW bridge.

What the IMF Does

It's a one-product institution according to Sebastian Mallaby: help countries having balance of payments (BOP) problems. Well at least in theory. Mauritius for example had to go knock on their doors in 1979 for a structural adjustment programme when economic hell broke loose on our mostly monocrop island.

The MMM, Berenger and Sithanen have used this episode as an indication of apparently typical Labour mismanagement. And an important section of the press has successfully drilled that in the heads of many of our fellow citizens over a couple of decades. They have also tried, this time rather unsuccessfully, to broadcast the lie that external factors are unfavourable only when Paul and Rama are in government. We've called this bluff recently.

It is interesting to note that when the Mauritian flag was raised for the first time sugar represented about 95% of our export earnings. While that was reduced by 20% over the next 7 years as the economic diversification program got underway our economy was still pretty much vulnerable when Gervaise visited us a week before Valentine's day in 1975 wiping out 30% of that industry's output (sugar represented 24% of our GDP in 1975 and 65% of export earnings in 1979).

Neither do we ever hear the fact that the UK was, as per Krugman, forced to accept loans and advice from the IMF -- a humiliation usually reserved for Third World nations. And they took that bitter pill in 1976, that is three years before Mauritius.