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?

Ki Piariv Nu Peyi?

Samem promye zafer enn kamwad finn dimann mwa zordi. De pli an pli dimunn pe truve ki kondisyons pe deteryore Moris. Revelasyons komisyon lor ladrog pe fer nu konpran lanpler fleo la. Konbin sa ek inegalite ek povrete ki flat tax Sithanen ek bann lezot politik pagla finn kree: 44 fwa plis dimunn finn tom dan la povrete ant 2007 ek 2012 ki ant 1997 ek 2002 – 22,000 kont 500. Ek lor 11 banane mank 1,000 milyar rupi dan prodiksyon nasyonal. Proliferasyon bann kazino ek lezot gambling house dernye 10 an finn anpir la sityasyon sirtu kinn etabli bann lyen ant rezo ladrog ek lindistri zugader. Azut depresyasyon rupi ek bann lezot politik dan dife pu u konpran kot nun arive ek kot nu pe ale.

Deza ki Moris nu ti setiem peyi kot litilizasyon lopium par kapita pli elve dan lemond. Nu bat Pakistan ki vwazin ek Afganistan – pli gro konsomater par kapita dan lemond – ek wityem. Devine kisana dernye. Pa tro difisil konpran kifer nu enn sanpyon dan brain drain. Bann seki sanpyon dan admir zot lonbri apel sa skills mismatch.

FMI truve ki lekonomi robis. Mo dimann mwa kot zot pran rasyon. 

IMF Doesn't Trust Own Currency Valuations

As has been reported by the institution's Independent Evaluation Group (IEG) before. So if the currency models of the IMF have been found wanting I don't see how the Minister of Finance can use them to justify the sneaky double-digit depreciation orchestrated by the BoM. Here's a backgrounder to see clearer.

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.

China Not In A Hurry To Bailout Europe

Listen to this very interesting interview of Jin Liqun, Chairman of the China Investment Corporation. Where he is essentially saying that Europe is not sustainable as it is.

IMF Confirms Bean-Counters Indulged in Voodoo Accounting

After carrying out a PEFA (Public Expenditure And Financial Accountability) Assessment at the request of our Government for 3 financial years ending 2009. In the report they are saying that about a quarter of the capital budgets for two fiscal years was not spent. Which is something we had already pinpointed a couple of years ago.

I also want to know who placed in this dumb request because we surely can put our public officers to better use than to duplicate work that the Audit Office does every year. Especially given that they seem to be already spending too much time -- and hence our tax rupees -- with that white elephant called -- PBB. And the bloody audit reports have been coming in with terrifying persistence.

Lagarde Appointed First Female Boss of IMF

And has agreed to continue the reform of the governance structure of the Bretton Woods institution to reflect the shift in economic power underway. She will be at her new desk the day after the US independence holiday.

DSK Taken Off Plane To Face Attempted Rape Charges

Minutes before take-off at JFK. The IMF boss apparently tried to abuse a maid as he stepped outside of the bathroom of his hotel suite in the Big Apple. Some are already concluding that he won't be able to run in the French Presidential elections due next year. DSK was way ahead in recent polls.

As Usual The IMF Didn't See It Coming

I mean the crisis that started in Tunisia and which has since spread to Egypt. See, they commended the authorities' sound macroeconomic management and the reforms implemented since 2004, which had strengthened the resilience of the Egyptian economy in the face of the global crisis in the case of Egypt last April while executive directors noted that Tunisia weathered the global crisis well, largely reflecting its sound macroeconomic management and structural reforms over the last decade and timely responses since the onset of the crisis a few months ago.

So their analysis is too bland to pick up social volcanoes that are brewing right under the surface. By the way doesn't their language sound familiar to you?

Pourquoi Ne Pas Apprecier La Roupie De 60%?

World To Grow Faster Than Dodoland in 2010

The IMF is now forecasting the world output to expand at 4.6% instead of its April forecast of 4.2%. So things are getting better overall across the world. Except in Mauritius where growth forecasts have been revised downwards from 4.6% to 4.1%. That after receiving record amounts of FDI for 4 straight years.

Are you surprised? I'm not. Have been sounding the alarm bell for a while now.

One Great Myth

That Berenger turned our economy around starting June 1982. He is supposed to have done that in 9 short months by implementing IMF and World Bank policies. What exactly did he do and what results can we precisely trace back to those actions?

While we're at it I think that the MMM-PSM alliance would not have won all the seats if it had been possible to hold the 1982 general elections six months later given that the world economy was about to rebound.

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.

Minister Damages Island's Reputation

Rama Sithanen has recently been saying that he's trying hard to prevent us from going into the IMF's ICU. That's inconsistent with a bumper crop, don't you think? And that will definitely make potential investors, local as well as foreign, quite edgy because when a country goes into the loan shark's mouth that ain't exactly a walk in the park. Do I need to elaborate on what this irresponsible statement will do to the psyche of the population already severely impoverished by the finance minister?

Of course, how could we not go into the IMF's ICU when that seems to have been the final and only objective of the man who sported the ancestor of havaianas till the age of 16. Indeed he brought in a charge nurse from Bretton Woods, opened an ICU of the riot-producing institutions in Port-Louis, borrowed billions of rupees we don't need from them and has been implementing policies that seem to come straight from a letter of intent which Mauritius never signed and which are designed to bring our country to its knees. Does Ramgoolam know he's the leader of the Labour Party?

Ransom Established At Rs357,153

Per job that MEXA will save. Sorry, try to save. That's way too much of our good money to throw after unreasonable people don't you think? If government and the bean-counter driving the crazy IMF policies really don't know what to do with our pitaye they should organise general elections right away. That takes too long and costs too much and a government is elected for 5 blah blah blah years you say? OK. No problem. Let's at least organise a bye-election in Belle-Rose/Quatre Bornes then. How soon can that be?

On a more positive note Francois de Grivel has suggested that top management in the private sector reduce their salaries. Maybe he thinks they are too high. Or he got sick of the shameless blackmailing that has been going on. It would also be good to know how the ratio of CEO compensation to that of the lowest paid worker for each company wanting public funds has evolved through time.

P.S: Rs357,153 = Rs2.5 billion/7,000 jobs.

National Poverty Council

That would be a more fitting name for the National Pay Council because it has been an important cog in the wheel Sithanen and Mansoor have been using to cheat the workers of this country. Here's how they've been doing it:

1. Create a lot of inflation as soon as possible
2. Add three controversial criteria so that the disconnect between increases in the cost of living and salary compensation is as large as possible
3. Keep inflation into double digits or high enough for as long as possible

That's despite the conclusion of Sithanen's own masters, the IMF, that increases in the average salary in Mauritius have been about 1/2 the level of inflation. As expected this has soured industrial relations given all the poverty that these retrograde policies have caused. Sithanen's opaque machinery of doling out tons of taxpayers' money to the chosen few has not helped either.

How Many Makes it Perfect?

I mean storms. On one hand he says that there are currently 7 storms hitting Mauritius and on the other he says that his priority is to avoid the perfect storm?

The other inconsistency he's been blurting out recently is that he's trying to avoid Mauritius from going into the intensive care unit of the IMF. How could that ever be possible after he brought an early harvest followed by a bumper crop to us?

World Not in a Hurry to Borrow from IMF

Or to take any of its phony macroeconomic advice. And that's in spite of IMF Chief's announcement that the loan-shark is "ready to lend quickly... based on streamlined conditionality" three days ago. Indeed, countries have been sidelining the Washington-based institution for some years now and everybody, save Rama Sithanen, knows that its loan portfolio has collapsed from SDR* 70 billion to SDR 20 billion in 3 short years with a single country, Turkey, now representing about 1/4 of that dwindling portfolio.

It also made the first loss in its history last year and that is expected to widen to about USD 250 million next year if its own numbers are to be believed. The IMF has also desperately been trying to appear as a development agency. This has failed too. Blame it on the availability of tons of money and better ideas elsewhere.

*you need about USD 1.50 for each SDR.

Is Wall Street's Meltdown a Blessing in Disguise?

As China, and to a lesser extent India and Latin America, continue to flex their muscles, the American financial debacle is very likely to hasten the demise of the unipolar world that rose from the ashes of the Cold War. However refuseniks of unfettered capitalism elsewhere should refrain from rejoicing too soon. They should instead keep an eye on the response of their local political, business and opinion leaders.

Wall Street’s meltdown has clearly exposed the flaws and fallacies of the anti-regulatory ideology. Ironically, it could also provide a lifeline for the aid industrialists from the International Monetary Fund (IMF) and the World Bank (WB) whose “expertise” has never been so widely the source of contempt, with the exception of few countries like Mauritius, where the WB has even been welcomed to set up office.

Leaders who invariably outsource their thinking unwittingly reveal their incompetence. Alternatively, the words, however presumptuous, of Singapore's Lee Kuan Yew aired on CNN – I am not following any prescription given to me by any theoretician … I work from first principles, what will get me there – typically underpin the leadership behind any iconic country, business or institution for that matter.

To put it bluntly, if a country is really willing to cope with global capitalism, neither the IMF/WB drivel nor any other “adviser” will help. The best consultants may be required for technical assistance, but never for strategy development or a turn around. Vision, foresight and capacity to implement regularly updated policies “will get us there”. Sound macroeconomics (monetary stability and fiscal discipline) are key but without smart microeconomics (synergy between households, businesses and markets) to complement, everything is nothing.

Toxic policies driven by crony capitalism and greed merely inflate bubbles that are bound to burst. Capitalism itself is not the problem but, left unchecked, its excesses can be devastatingly contagious.

Sign Of The Times

Before the Mauritian "miracle", the "gentil" Mauritian used to stroll with a comb in his pocket and usually some coins too. Now among the many "gentils" Mauritians there are also some Branded Mauritians jaywalking with cutters in their pockets and, if blessed, maybe some coins, but with a dramatically reduced purchasing power, courtesy of a World Bank/IMF-sanctioned virus euphemistically dubbed "competitive" rupee. On a positive note, crime detection has improved considerably, probably with the help of, namely, the "portrait robot" device. We have yet to see a smart and holistic vision on the preventive side. A tag line like "nous voulons montrer que nous prenons soin de nos visiteurs" is far from reassuring. Worse, translated into Morisyen it reads: nu anvi montre nu bann rezidan kuma nu fer fut ar zot!