Smells Like Rotten Tomatoes

Voici ce que rapporte Le Monde du jour dans l'article "Les dangers de la ruée vers les meilleures terres d'Afrique":

"Un rapport intitulé "Accaparement des terres ou opportunité de développement?" appelle à la consultation des populations menacées et à une meilleure prise en compte de leurs intérêts dans les transactions. Il souligne un manque de transparence constant dans les processus de décision et les circuits d'investissement. De quoi alimenter les craintes de corruption ou de transactions contraires à l' intérêt public."

Je vous invite à reporter l'avertissement sur Dodoland avec ses IRS, RES, Tianli, etc. et à méditer sur leur impact tout en intégrant l'étroitesse du territoire et les inégalités criantes.

Independent Study: Coin Beats Minister Hands Down

Read the study here.

How to Calculate Average Growth Rates

Let's do that for the previous government. It's a two-step procedure. First, you download the growth rate data from our highly esteemed Central Statistical Office (CSO) for the years they were in power and add these up. You then divide that sum by the number of years their mandate lasted. Now, given that governments are not sworn in and kicked out at exactly the beginning and at the end of calendar years we have to be a little bit careful with our computation.

The numerator. We add the growth rates for 2001-2004 together and get 17%. Then add half the growth rate for 2005 (because elections happened in middle of the year) and a quarter of the growth rate for 2000 (because recall that when the Federation II took over there was about a quarter of the year left). Half of 2005's growth rate is 1.15% and a quarter of the growth rate for 2000 is 2.43% (9.7%/4). New total: 20.575%.

And the denominator. That's easy. Four years (2001-2004) plus half (2005) plus a quarter (2000). 4.75 years. Got that?

The result: 20.575%/4.75 years = 4.33%. Which is the number I have been broadcasting for over a year now. That number is of course different from the intellectually dishonest 2% growth rate that Sithanen and Ramgoolam have been consistently ascribing to the previous government. They just cherry-picked the low growth rate for 2005 even though they were in power for half of that year!

If we were to follow their own line of reasoning then I guess that Ramgoolam's recommendation to voters is that they only remember 2009's low growth when they go to pick the next government.

A Flawed View of Competitiveness

Here's is what competitiveness guru Michael Porter has to say about the growth strategy Dodoland has embraced:

"The most intuitive definition of competitiveness is a country’s share of world markets for its products. It also underpins policies intended to provide subsidies, hold down local wages and devalue the nation’s currency, all aimed at expanding exports. In fact, it is still often said that lower wages or devaluation “make a nation more competitive".

Unfortunately, this intuitive view of competitiveness is deeply flawed, and acting on it works against national economic progress. The need for low wages reveals a lack of competitiveness, and holds down prosperity. Subsidies drain national income and bias choices away from the most productive use of the nation’s resources.

Devaluation results in a collective national pay cut by discounting the products and services sold in world markets while raising the cost of the goods and services purchased from abroad. Exports based on low wages or a cheap currency, then, do not support an attractive standard of living."

Why the Poor and the Middle-class Will Not Rebound When the Recession Ends

Simply because it wasn't the global recession that threw them into the recession back in 2006. Nope. It was Sithanen and his university buddy Mansoor implementing Bretton Wood policies that any Prime Minister with two-and-half grams of good taste would have abhorred.

Another Non-event

That's what Friday's budget is going to be. Just like the previous ones. People are so fed up with the truckloads of lies that Sithanen has been dumping on them with such regularity that they've stopped listening to him for a long time now. And that reduction in interest has also spread to journalists across the board. For instance, many of them didn't even tune in to listen to his carefully choreographed appearance on MBC's Dossier last Wednesday. And it's kind of difficult to blame an overwhelming majority of us who feel this way.

While he certainly did appear quite pathetic on that programme the saddest part of his bean-counting policies is of course the unnecessary misery he has inflicted on the weaker segments of the population while making the richest ones richer.

The Importance of Sharing

That's some of the nice feelings I take away from reading Patrice Hardy's interview in today's Week-end. The Naiade boss is taking the slowdown in business in his stride and is looking forward to optimise his brand new 4-star hotel in our sister island. He also reports a stable turnover thanks in part to having moved upmarket in the hospitality business.

A few days ago, GFA Insurance announced the sharing of 20% of its profits with its employees. Even CMT's Woo was seen on TV saying it would be indecent for him to go ask for money from Sithanen's controversial additional stimulus package and that he only expects a significant reduction in his profitability.

All of this is in sharp contrast with our professional whiners also known as GLDs (gourma lamin dipin), don't you think?

Did We Need One in the First Place?

An additional stimulus package that is. I don't think so when you realise that our two largest banks have cashed in record profits in 2008: Rs3.7 billion and Rs2.1 billion for MCB and SBM respectively. That's an increase of 53% and 41% over the preceding year and twice their 2005 levels. I've already addressed why our banking industry has been spared (read this). So there's no trouble here unlike what has been going on in the United States and in the UK.

What we need instead is a government that solves problems. And that's the most important yardstick to measure the performance of any country. For instance previous governments did defuse the demographic bomb, implement free education and create the middle class. We need these kind of governments and not governments that have substituted brilliant work with dumb MBC reports.

Guarantees in Politics

They are as likely to be honoured as hyenas promising one morning to become vegetarians or Nosferatu suddenly announcing that he prefers soya milk to haemoglobin. It is funny that the last time such a guarantee was offered the political landscape was almost identical: Ramgoolam was PM and he was made to believe that Federation I was dead. The person offering the guarantee was to get to hole up at Le Reduit had Labour won the 2000 elections.

Surprisingly, Ramgoolam's strategy at that time didn't include some basic scenario planning that would have allowed him to carry on with his mediocre style of leadership for another 5 years. I am not too sure he has gotten any wiser since then. Anybody for some game theory?

Depreciating Our Way to Chaos

Rajesh Jeetah once said that the textile industry was not a place for whiners. I couldn't agree more with him especially when you realise that our rupee has systematically been depreciated against the British pound over the last 24 years. That must have been a bonanza for the so-called export-oriented enterprises which saw the pound move from about Rs20 in 1985 to over Rs60 in 2007 as the above graphic shows.

What I don't understand is why some people from that group have been complaining non-stop for at least a decade about a strong rupee and their lungs seem to get larger by the day. What would they have said if they were operating from Singapore where the local dollar has pretty much appreciated against the USD? How would they have behaved if their operations were based in Canada which unlike us don't stigmatise their workers as lazy bones before allowing into the country foreign workers that will work for the smallest possible pay and endure the harshest working conditions which deprive their unluckiest citizens of a facade of dignity. Besides if the textile industry has been so bad, why the hell did they stay in there for so long?

The other interesting thing in the above graphic is that we clearly see the consolidation that the industry went through between 2001 and 2005. Bean-counters of course call that a shock.

Talking' Bout a Revolution

Arianna Huffington, co-founder of groundbreaking The Huffington Post, an American internet newspaper launched in 2005 as a progressive alternative to conservative mainstream media, reminds us:

Don't forget: our media culture failed to serve the public interest by missing (with a few honourable exceptions) the two biggest stories of our time: the run-up to the Iraq war and the financial melt­down. We've had far too many autopsies and not enough biopsies. And online news is well suited to obsessively follow a story until it breaks through the static. We need to also remind ourselves that the mission of journalism has always been truth-seeking not, as it has often become, striking some fictitious balance between two sides.

As things stand, it is fair to say that the "two biggest stories of our time", that is "Mauritian miracle" and "reform", have failed media scrutiny too. But reality rarely fails to bite deception.

What's the next verse Tracy?

... people gonna rise up
And get their share
... people gonna rise up
And take what's theirs

Time to Sing Along

Let the People Speak

Ramgoolam should organise a referendum about whether abortion should be legalised given that he's sticking to his policy of never having any strong opinions about anything except maybe that he should be Prime Minister forever. That's probably about the only way people might miss him if he loses power or his seat in the next general elections.

How to Make the Stimulus Package Less Opaque

Here are a few basic ideas:

1. All the names of the beneficiaries should be published as well as a snapshot of their financials (including past profits and gross margin, dividend policy, top management's salaries and other perks over a five year period)
2. Summary of the reasons why taxpayers' money was dished out to them
3. The names and resumes of the independent financial analysts involved should be made public
4. The parameters that are going to be monitored have to be available and the circumstances under which the state will pull out
5. The government auditor should evaluate the program on a monthly basis and its report should be placed on the net

That's a start of course.

Failed By Their Own Standards

Sithanen's bean-counting reforms were supposed to set the stage for robust growth and reduce poverty. Instead, and as expected, it will produce the worst economic performance in at least a couple of decades. When we go to vote average growth will likely slump to at about 4.26% compared to 4.33% for the medpointers (we are assuming growth rates of 2.5% and 4% for 2009 and 2010) while average inflation is expected to increase to at least 7.87% (if inflation rates for 2009 and 2010 are 7% and 5% respectively) or if you prefer 54% more than the rate Federation II delivered.

More importantly Mansoor and Sithanen have made Mauritius a more vulnerable and unequal country, soured industrial relations and did not solve even one major problem. They have failed miserably.

They're Back!

La république monarchique

Pour ceux qui doutent toujours de la pertinence du journalisme citoyen, Vijaya Teelock, historienne et professeur à la University of Mauritius, apporte une nuance limpide:

"La presse mauricienne est libre, mais elle est aussi victime d'autocensure de la part de ses journalistes. On n’entend pas assez la voix du peuple, les journaux ne reflètent pas les réalités mauriciennes. Et cela doit changer…"

D'autre part, à la question "Pourquoi ne prenez-vous pas la parole plus souvent sous forme d'opinion ?", le philosophe Michel Serres, professeur à Stanford University, répond "La réponse est double : on ne prend la parole aujourd'hui que si on est invité à la prendre. Posez donc la question à ceux qui invitent à prendre la parole".

Vous avez dit "pensée unique"?

External Factors are Unfavourable Only When Berenger and Sithanen Are in Government, Right?

Wrong. Take sugar for example. It's one of Sithanen's Triple External Shocks and one of the reasons he's put the middle-class and the poor on a strict diet for almost four years now. But sugar was already a small sector back in 2005 -- 4.2% as the above table indicates and close to 2% this year -- so that the initial 5% reduction in the price we sell our sugar at would have reduced growth by about a fifth of a percent. Not a lot you will concur.

Compare that to 30 years ago when sugar represented close to 19% of our economy and was hit by a pretty little thing called Claudette. That led to a sharp contraction in our national production in 1980 with the sugar sector responsible for over three quarters of the 10% decline in output. That year also witnessed the second oil shock with the real price hitting a level that was to be surpassed only last year. And as if that was not enough a new chairman of the Federal Reserve by the name of Paul Volcker took office and stopped targeting interest rates. The latter of course were to go through the roof and plunge the world economy into a nasty recession.

Not A Black Swan Event

Sithanen on the next-to-last page of his additional stimulus package document said that Mauritius was experiencing a Black Swan Phenomenon and has been repeating this lie along with a string of others quite often since December last. Nothing could be further from the truth because for an event to be classified as a Black Swan it must not only have a big impact but it must also be highly improbable.

The mess Mauritius got itself into was highly predictable (we've been writing about this since 2005) and has been essentially the work of two little men: Sithanen who has been collecting blunders on a hugely toxic scale and Navin Ramgoolam who has demonstrated languid leadership at best in failing to stop the bean-counter.

Black Swan event? No. Black Paul event? Yes.

Ti Fer Pou Soufler Ek Anpandan Kuma Balon Sa?