2011: The Year in Review (Q3)

July: Audit report confirms PBB is an eyewash. Jugnauth announces second miracle on its way. Minister loses son in accident. Hanoomanjee resigns followed by other MSM Ministers. Ramgoolam gets chance to measure up to the Gods of the Labour Party: do plenty with paper-thin majority. Mauritians experience their excellent constitution one more time.

August: US votes on debt deal hours before going into default. Seetaram crosses floor to give Ramgoolam breathing space. MSM leaves government without delivering new miracle. Mansoor wants Mauritius to pay for bean-counting mess, again. For Paul and Pravind it's still love at first sight. Our Parliament found already too big. Manou re-explains BOM's role to MEXA.

September: IMF confirms bean-counters indulged in Voodoo accounting. Jamaica 100m relay team too strong for world. Universe gets new Miss: Leila. Interest rate spreads hurting our competitiveness. Team-builder extraordinaire turns 111. Debt service to exceed education budget by 40% in 2013. Palestinians rejoice as Abbas requests UN membership. Sugar syndicate unhappy world not frozen.

Read the review for Q1, Q2, Q4.

Manou Re-explains BOM's Role To Mexa

Which is the pursuit of price stability. The Governor also enumerated how the Central Bank has been assisting economic operators as of late. He also explained the consequences on our public finances of doing what the Swiss National Bank did to try to counter appreciation of the Franc. That was on Thursday.

In a similar vein Fed Chairman remarked on Friday that US public finances could spin out of control if current fiscal policies are not reviewed. Put differently it will make them overdependent on unrealistic growth rates.

Why The Stimulus Package Didn't Save 4,700 Jobs

First of all Sithanen claims that the economy has created some 40,000 jobs since July 2005. That's roughly 8,000 jobs per year. If our economy is creating jobs this fast then we didn't need to save any because it would have created 4,700 jobs in 7 short months -- about 700 jobs every month.

Secondly, did these companies need to be saved? Does not paying your rent for several years although you operate in a booming industry related to the global financial meltdown?

Thirdly, didn't we hear a few greedy bosses wanting stimulus money but indecently saying at the same time that they didn't guarantee they could save any job. We've also heard worse than that.

So for all of this I am not buying into the argument that the stimulus package saved nearly 5,000 jobs. You shouldn't either.

How To End MEXA's Blackmail

Create an employment insurance program like Canada's. That won't take too long to set up. After all we did come up with 4 jours a Paris when hell broke loose back in the 1970s. And this time around we're a much richer country.

The other thing we should do is to go back to our progressive taxation system: that's a wonderful antidote to greed and inequality. And corruption.

What Could He Have Done?

To avoid the 22,660 jobs that were lost between 2001 and 2004 in the export-oriented industries. Very little I'm afraid. If he gave away the amount MEXA has recently asked to try to save each job that would have cost Rs8.6 billion.

No, there is not much Rama Sithanen could have done against the industry dynamics that swept our textile industry in those 4 years with two years accounting for over 80% of those job losses.

How do I know that? Well for one, about twice more jobs were lost in 2006 when he was in the driver seat than in 2005 when he was there only as from the second half of that year. For another more than 5,000 jobs were shed in 2008 the year of the so-called bumper crop. And finally he wasn't able to hold back the British Investor, was he?

Why Some Mauritian Firms May Go Under

Here are some reasons:

1. Bosses have been taking out too much money via excessive salaries and other perks such as gas-guzzling limousines
2. Dividend policies are or have been at unsustainable levels
3. Products are not competitive enough or haven't changed for ages
4. Return on invested capital they are seeking are outlandish for the industry they are in

Obviously the last thing these kind of companies need is taxpayers' money. As a country we're better off to let them die. Given that Sithanen has said that there is no guarantee we will ever see the money disbursed via the controversial additional stimulus package again, I suggest a much better route. Provide Rs357,153 -- which is how much MEXA wants for each job it will try to save -- via a combination of grant and loan to each of the workers whose livelihood has been placed in limbo for them to start their own company. That's a much better deal.

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.

Patrice, Serge, Francois et les Autres

Patrice, Naiade Resorts boss, yesterday said that layoffs are out of the question and hinted that he may even pounce on a couple of hotels in the Seychelles. Serge, Soniawear's managing director said recently that he is confident that he will recoup any losses he might sustain now and then by raising his game. Francois, Miniature Models chief, thought big when he said a couple of years ago that he's gonna remove the little sugar cane he's got and expand because that doesn't earn anything. Kind of refreshing from the crap we're hearing from MEXA these days, don't you think? 

Thanks George, But I Think We'll Pass

I am referring to what looked like an assurance given by the economist and MEXA boss this afternoon on a private radio about the apparent prudence with which the National Pension Fund (NPF) invests workers' money. He was up against Ashok Subron who knows infinitely more about how the economy of Mauritius works than Sithanen and his university buddy, Mansoor, lumped together.

Indeed, standard corporate governance practice suggest that the people of this country be provided with all the information and given the opportunity to make that determination by themselves. That should be relatively easy for the Financial Secretary, who chairs the investment committee of the NPF, to do: the cost of disseminating information is close to zero nowadays. 

Besides, there's a moral obligation for the government to rapidly become more transparent in this and some other areas given that the MCB-NPF scandal is still fresh in everyone's mind. There are also so many great models for pension fund governance. Click here and get ready to say Wow!