STC Offering Lower Basmati Prices

According to a report on national TV yesterday, it had already imported some 200 tons of two types of the popular rice and is making them available at prices that are 23% cheaper. The Industry Minister was also heard saying that some importers mixed Basmati with lower quality rice.

We apparently import some 50,000 tons of the tasty stuff and the Government is standing ready to supply the entire demand at more reasonable prices.

Good move. There is plenty of scope for many more interventions like this. Because there are simply way too many goods and services that are of poor quality and yet they are sold at prices that are totally out of sync with international prices.

When will the STC import sugar?

State Attempt to Clamp Down Free Speech Backfires

And angst-ridden Sithanen releases grants of consumer advocacy group ACIM in a hurry. You will recall that these were withheld for a year when the latter protested against the abusive petroleum prices that the good people of Mauritius were being fleeced with. The official explanation is that the STC lost Rs3 billion on hedging operations and that the organisation has to recoup the shortfall by making us pay for it.

The snag is that with the automatic pricing mechanism the STC didn't have to do any hedging as pump prices should inextricably reflect international prices. Rs3 billion is a lot of money. Government could have used this sum to make the SC/HSC exams free for several decades. And Sithanen still hasn't told us how all this happened.

Aren't you happy you're gonna vote soon?

How To Find Out if You Are Biased

Here are a few pointers.

1. You don't want to find out how Rs3 billion was lost at the STC.
2. You don't want to know how the STC ended up paying the subsidies on rice and flour after these were initially cancelled.
3. Only one or two sections of the Bank of Mauritius Act interest you. You never heard about article 5.2a although you are aware that people have become poor in our country.
4. You find it normal for someone to say that his room for manoeuvre is small although a few days later he announces that he has Rs5.3 billion more than expected.

Mauritius Rich Enough to Solve Traffic Problem

If we assume for just one second -- though I fully understand that this could be a leap of faith for most of you -- that the Rs25-30 billion rupees Sithanen says we need to fix the traffic problems are correct then we don't need to borrow one cent from abroad because we are rich enough to do it with our own cash.

In fact if government had started to put money to solve this important problem back in 2005 our traffic problems would certainly have been reduced to more reasonable levels. See, the audit report tells us that about Rs5 billion is wasted every year or Rs25 billion over a 5-year period. So that if we had managed to cut a quarter of that waste and add the Rs5 billion gift that Sithanen wasted on the dead sugar industry and the Rs3 billion that were mysteriously lost at the STC that would have provided us with about half the amount he's looking for. Government could then have budgeted an equal amount in its capital budget spread over 5 years. After all, Sithanen did brag about putting Rs14 billion in an opaque and useless stimulus package, right?

Of course as the traffic would have become more fluid we would have saved on petrol consumption and pollution while seriously improving living standards of almost everyone at the same time.

But almost absolutely nothing was done to make this problem any smaller in spite of what a fiery Ramgoolam promised exactly a week before the last time we voted him into power. Berenger is certainly not any better. He promised us that a metro was on its way for five whole years. Talk is cheap. We need new leaders.

Global Recession Less Harmful than Sithanen

So far. That's what more and more voters of Belle-Rose/Quatre-Bornes are concluding. And they are perfectly right. I mean can the Finance Minister tell us what's the link between toxic financial assets almost breaking the US economy and the STC losing Rs3 billion on hedging exposures they don't even have?

Just like MK can't really blame factors beyond its control for its trouble. They got themselves in a mess because of a flawed commercial policy and because too many board members don't know what board members are supposed to do. And nothing much is going to change because they're not doing anything different.

Shouldn't FDI Numbers be Adjusted?

The Finance Minister mentioned in a press conference yesterday that FDI for 2008 was Rs11.4 billion. I just wanted to know whether that figure includes money that left the country in relation to the twin hedging mess at Air Mauritius and the State Trading Corporation. If not what is the adjusted number and who signed the cheque and when.

The other thing I don't understand is how come the cumulative inflation rate from July 2005 to December 2008 is 29.85% although he claims we received some Rs30 billion over the same period. Is there some special economic rule that no one but him is aware of that for every Rs1 billion FDI that we receive we should also get 1% inflation?

Hedging Mess Could Exceed Rs10 Billion

If oil prices go where they seem to be going: $20 for a barrel or less. How did I get that huge number which is as big as our average capital budget -- announced but not actually spent -- of the past few bean-counting years? Well, I started by adding the Rs5.47 billion expected loss at MK with the Rs2.9 billion one at the State Trading Corporation (STC). That should give you Rs8.37 billion, right? Then I grossed up MK's loss by one third which is by about how much it should grow to if the distance I am expecting oil to travel over the next little while is indeed covered. So the number I get is Rs10.2 billion.

This is a conservative estimate because I haven't grossed up the STC loss. By the way, I am not buying that part -- there are other parts I'm not buying either -- of the last press conference of the PM that his finance minister didn't know about the hedging mess. Are you?

Nicky Tan Needs to Be Brought Back

I mean if we paid him Rs70 million to investigate a fraud of less than Rs1 billion, shouldn't we bring him back to investigate the multi-billion blunders at both the STC and MK? I am sure we could get a hefty discount per billion squandered investigated especially if we get our top negotiators involved.

Maybe, maybe not. But at least a fact-finding committee should be instituted at each one of these corporations to find out what really happened. And I think we can count on the magnificent statesmanship Navin Ramgoolam has shown throughout his prime ministership for this to happen with lightning speed. After all it's no secret that he likes speed, isn't it? And he did promise before July 3rd, 2005 that he would bring NTan to wrap up some unfinished business.