Understanding Our Recent Budget Deficit Numbers

Did you notice that the bean-counters are crying on every roof that our budget deficit is under control at 1.8%? Presenting it as a proof that the so-called reforms have worked. It's quite easy to disagree with that.

Remember that the silliest idea of the reforms was to slash tax rates by half promising that we will grow faster. We know our economy didn't clip the required higher growth rates. In fact the reforms have ushered in a string of persistently low growth rates. So the small deficit numbers didn't come from better growth rates. We know it did not come from reducing wastage either: we just need to read the audit reports to strike this one out. So where did these low deficit numbers come from?

Well that's easy. By not spending budgeted funds and other essential monies that prevent the country from going to the dogs. And by doing other stupid things like keeping oil pump prices at unreal levels so as to pocket billions more in VAT and making us pay for a strange multi-billion-rupee hedging loss at the STC that seemed to get bigger as the toxic bean-counters got craftier.

Think of it this way: for many years hyenas have been trying to make an easy-going tiger run faster but instead of cutting the fat they’ve been taking out the muscles of Panthera Tigris. For personal consumption. And unsurprisingly this has badly crippled the big cat.

Pourquoi Ne Pas Echanger Lutchmeenaraidoo contre Sithanen?

La Crise Financiere A Bon Dos

Souhaitons Que Le Stimulus Package N'entraine Aucun Abus

2010: The Year in Review (Q4)

October: Father of test tube babies wins Nobel. Last hurdle preventing the Lutchmeenaraidoo/Sithanen debate cleared. Additional proof that you've been taken for a bean-counting ride presented.

November: Brazil elects first female President. Pamela asked to leave radio. 41% of poll says MMM would take 3 towns. STC's abnormal hedging loss increases by almost Rs2 billion.

December: Simpler process makes Passport Office really cool. Wikileaks reveal purpose of Marine Park. Bunwaree gets opportunity to be bold. Kozelidir Person of The Year 2010 attributed to the Forum page of Le Mauricien for providing a healthy space to the Mauritian Civil Society.

Read the review for Q1, Q2, Q3.

Water Problems Confirm Ramgoolam's Economic Model is Junk

Abusive electricity and petroleum prices over the last five years brought a lot of money to the government till. Especially as the VAT rate was kept at 15% during a period oil prices went through the roof and their subsequent collapse was not passed on to us. Rs4.7 billion was mysteriously lost at the STC which doesn't have any oil price risk to hedge.

Record amounts of debt was borrowed -- including Rs9 billion from the World Bank -- while government did not build schools on a scale we saw between 2000 and 2005.

And Ramgoolam did not solve our recurring water problems: he was too busy making speeches while waiting for robust growth rates which never arrived.

STC Hedging Mess is Rs1.7 Billion Bigger

So we were told a few weeks ago. That's 57% more than the huge Rs3 billion figure supplied in Parliament two years ago. And quite fishy too because the STC doesn't have any price risk to manage: it just passes it on to us through the APM. Besides, two years that's an awful long time for so many eyes to be fooled.

My hunch is that the STC never had any billion-rupee hedging losses but that we were forced to pay abusive gas prices to make up for the fiscal shortfall created by the Sithanen-Mansoor's flat tax experiment given that the proverbial robust growth rates never arrived. 

This aspect of Shaitanomics has already played a part in preventing us and our economy from participating in the global rebound underway by making a dent in our overall competitiveness. And Pravind Jugnauth's intention of increasing excise duties on petroleum by 10% will make sure it will have another one to play in keeping us in our economic slumber. He should instead increase the special levy on banks or nudge corporate taxes upwards.

All of this doesn't look good for Mo Ibrahim's poster child for governance, does it?

Pump Prices Remain At Unreal Levels

Almost two years after they collapsed on world markets. The green line represents the evolution of IPE Brent oil after adjusting for the MUR/USD exchange rate while the red one charts local pump prices complimentary of early harvest and bumper crop.

And that's supposed to:

1. have made us more resilient during the financial crisis? 

2. be an external shock?

Beats me!

Here's One Place Transparency Mauritius Can Help

It should concentrate on finding out how the hell the STC lost Rs3 billion on hedging. Because more than a year has gone by and we're still in the dark as to how so much of our money was lost. Besides the STC doesn't have to undertake any hedging because it passes whatever it paid for petroleum products to us, along with a margin, through the Automatic Pricing Mechanism.

And I don't remember hearing de Navacelle when some people were saying that the public ought not to know who was getting money from the very controversial stimulus package Mauritius didn't need. Shouldn't he have been the first one to speak out and ask for a little bit of... transparency?