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.

IMO 2015 Starts July 10 in Chiang Mai

And ends a day later in the beautiful northern Thai city. IMO is the International Mathematical Olympiad which is an annual event -- it began in 1959 with 7 countries -- where high school students find out how they measure up by answering two sets of questions. More than a 100 countries participated in last year's edition which was held in Cape Town. And won by China. Which won it 13 times in the last 16 years -- it came second in the other three years. Mauritius has yet to participate in its first IMO. Unlike Tunisia and South Africa which have gone to 23 of them.

Participating in an IMO is quite straightforward. It's high time we get into this. And see if we can do better than a 56th place. 

BoM Revokes Licence of Bramer Bank

Cites seriously impaired capital, conducting business which is detrimental to depositors and systemic risk and inability to show it can fix its liquidity and capital problems. The Prime Minster also held a press conference about an hour ago where he announced that his government has uncovered a huge Ponzi scheme in excess of Rs25 billions and has consequently acted quickly as Bramer Bank and BAI Co. were going to crash. Two conservators of BAI Co have been appointed while one newsgroup mentions that arrests on departure and on arrival have been lodged.

How Inflation Routinely Kills People

The first way is by making many people poor enough that their life expectancy falls because of degraded living conditions. Besides poor people have a lot less access to the kind of medical options that richer people have. For example because he had a Gulfstream V Steve Jobs was able to seek a liver over a much bigger distance -- wherever his plane could take him in 6 hours -- than someone without a jet.

Inflation is also a key driver of inequality. Especially that we now know that the inflation of the poor is about 3% higher than the headline number. Inequality will bring people to the streets -- like in the Arab Spring and elsewhere -- and clashes may cause loss of lives.

Of course if inflation is very high things can get very ugly. And that too on a horrendous scale. Like in 1930s Germany where hyperinflation helped put a little guy with a moustache in power. And the world eventually went to war: between 50 and 85 million people died in WWII.

No wonder then that Central Banks have been setting inflation targets for more than 25 years now -- roughly the period of time Lutchmeenaraidoo was not Finance Minister. With the blessings of their governments. As inflation is a major reason why politicians lose power. In fact we owe it to Governor Basant Roi for one of the best descriptions of inflation so far -- he likened it to radioactivity. Which makes it all the more interesting to check his inflation record. And compare it to Manou Bheenick's.

Deepika Highlights Choices of Women

First Vishnu Budget in 25 Years Now Available

Given that it was supposed to be a 75-minute budget I listened to most of it. It's a lot more pleasant than those that were presented between 2005 and 2010. There are a number of interesting things like gaming houses leaving city centres and the ban of plastic bags. Which has been in force for over nine months in Rodrigues. And they have increased their lead having recently announced the sorting of garbage like some countries do. Promising to implement the report which looked at making banking practices fairer is also not a bad idea.

Of course it's not a no-tax budget. Government has already quietly depreciated our rupee -- 12.8% as of today's speech -- and kept petrol prices higher than they ought to have been. The steady depreciation will make sure that Mauritius doesn't benefit from the collapse in oil prices. Again.

There are also other problems with this budget. Like inequality is likely to persist. More on this later.

What did you think?

LKY Dead At 91 As Singapore Turns 50

How To Build A Plutocracy in 2 Steps

1. Reduce top tax rates -- rates paid by the richer segments of our population -- to get more political contributions. This may require more and larger safes to stash the cash away. It's even better to flatten the tax structure. This will provide even more enticing incentives for useful idiots to make the wishes of their financial masters come true. But will require even bigger safes.


2. Screw up our excellent constitution with an electoral galimatia to include party lists so that the link between voters and MPs is severed. Party lists will also allow political donors to enter parliament and cabinet -- to enact their own dangerous laws -- without voters really choosing them.

Top tax rates were reduced in 2006 before the tax structure was flattened. And then a wicked electoral reform was proposed with the blessing of Navin Ramgoolam at the start of 2012. But that was massively rejected last December. Now Mr. Lutchmeenaraidoo has an opportunity to strengthen our democracy on Monday.

Vishnu is Lucky, Again

To be Finance Minister these days. After almost a quarter of a century. Because that's after almost 10 years of the worst economic management -- Paglanomics -- our country has seen and started by Rama Sithanen with the help of Bretton Woods Ali. And of course with the blessing of Andrew Scott and one pseudo-socialist, Navin Ramgoolam. So improving things should not be that difficult. For example increasing pensions has helped compensate the lack of reasonable progress that the weakest groups of our fellow countrypersons have registered with the toxic bean-counters. And there are many more low-hanging fruits to pick.

But monetary policy was definitely not one of them. So it was quite surprising that Manou Bheenick was asked to leave. And replaced by depreciation-obsessed Basant Roi. Who unsurprisingly since returning to the BoM less than 80 days ago has presided over a double-digit depreciation -- 12% as of today -- of our national currency against the USD. After our central bank had issued a communique on January 30 informing the nation that there would be no MPC meeting in February because Lutchmeenraidoo's budget was due March 16. Or 45 days later.

Hopefully the Minister of Finance who keeps on insisting that he will deliver a 'second miracle' understands how to assess the quality of economic policies. Computing our real GDP growth in USD for the current quarter might be quite enlightening.

Chinese Economy World's Largest, For 50 Years

After which it could be India's turn to grab the top spot. If we extrapolate the assumptions used in one article which appeared some four years ago. Of course forecasting over such long periods is usually fraught with errors. But that doesn't look too outlandish when we remember the size of the economy of 1960 China. Besides India had the world's largest economy for 1,700 of the past 2,000 years. And Lonely Planet reminds us that Pataliputra with a circumference of 33.8km was spaceship Earth's biggest city of the Mauryan empire. 2,500 years ago.

One bet looks safer than others. It's going to be Chindia for a long time. Which makes it all the more necessary for the two giants to sort out the problems on their 2,100-mile border.

Lawyers Unhappy DPP Attached To AG's Office

As per a cabinet decision on Friday. Unhappy enough that an urgent meeting of the Bar Council has been called for Monday 16h. Essentially some members of the legal profession don't think that such a major change is a step forward because the framers of our excellent Constitution had thought it through and recommended that the process of prosecution be isolated from political influences. For obvious reasons. Like it doesn't make sense that the AG and the DPP share staff and budget. Besides healthy debate is essential when the spirit of our Constitution is challenged.

Incidentally, one of the framers of the supreme law of our land was none other than Stanley de Smith who is remembered as a scholar and legal writer of exceptional quality. So I guess it wasn't a big surprise when the beautiful people of Mauritius chose our current set up over the constitutional equivalent of a badia mal frir.

Why Scrapping of Point System Looks Sloppy

Because it doesn't seem to be backed by a rigorous analysis of the impact the current system has had on the safety of our roads. Minister Bodha might want to replace it with a "simpler" system of 7-8 serious road offences but I think he is confusing a simplistic system with a simple one. And this could be bad news for all road users. Well, save one.

When people have looked at the effect of such a system elsewhere they found -- like in Spain -- that it saved 618 lives over the first 18 months of its implementation. That's a reduction of 14.5% of the number of road fatalities. Of course experiences will vary across countries which is why we need to know the hard facts of our own. Especially since we have about the same amount of people dying on our roads as Norway. Which has four times more people than us.

The last time Mauritius tried the "simpler" route for something fundamental was in 2006 when one toxic bean-counter -- in the name of robust growth rates -- flattened our tax structure to 15%.

FM Warns Banks Not To Mess Up With Him

And to play a more active role supplying working-capital to the many SMEs that Government wants to see created. If they don't banks should expect problems from him. Banks have responded that they have helped the development of every sector in Mauritius. Mr. Lutchmeenaraidoo also said that banks were the only sector which makes money without working hard.

A few years ago Mauritius was deemed to be held back by some pretty bad interest rate spreads.

Taste Genius At 60 While Apple Expected To Upend Electric Car

Jobs would have turned 60 today. USPS had promised a stamp for him this year. Hopefully they will have it out today if it's not already. I wonder which pic they will use. I have a preference for the Steve Jobs at the time the Mac was initially launched. Mozambique already has a nice set of them since ...2011. Hungary too did something after he died in the last quarter of that year. Plus now there is an Erno Toth-designed statue in Budapest. Nothing on the Apple website right now. But this could change later today.

And yeah the magicians at 1 Infinite Loop are apparently working on an electric car. Vroooommmmmm!

Stray Dogs To Be Put To Sleep

The Ministry of Environment has identified 42 public beaches where these loose dogs are a problem. So they are going to catch them and euthanise them after three days if they are not adopted. Stray dogs are not only a problem on beaches. They are literally a problem everywhere in Mauritius.

But aren't there any alternatives to killing them so fast? Maybe not for those who have rabies. The rest could benefit from what has been done elsewhere.

Government To Destroy Biometric Database

This piece of good news was announced yesterday in the 2015-2019 Programme Speech. Along with a number of laudable intentions like

• making SC/HSC exams free;
• an SME bank which will invest Rs10 billion over the next five years;
• a minimum wage bill;
• focus on job creation for Mauritians: 15,000 will be created every year with many in the public sector;
• a football academy will be set up;
• ensuring competitive energy prices;
• setting up a vascular surgery unit to reduce the number of amputations;
• and organising referendums on crucial national issues. 

There are also some very vague promises such as 'inflation will be kept under control'. Hmm. An inflation target is a must for two reasons: one to preserve the hard-won anti-inflation capital and two to keep depreciation-happy Basant Roi on a tight leash. Government also wants to include a dose of PR in our electoral system. That's a dangerous proposition that needs extensive debate and a referendum.

Let's see how well this plan is implemented.

Basant Roi Back, Rupee Down By 3%, Already

By yesterday our currency had lost 3.28% of its value against the dollar. In the mere 18 trading days since Basant Roi has been back at the BoM. He is known to have a strong and silly depreciation bias. In fact if you had to chart the number of times he has asked for a lower value for our rupee -- when he was not in a position to sink it himself -- you would literally have to use a log scale.

I hope Mr. Lutchmeenaraidoo's idea of a "second economic miracle" doesn't involve making Mauritius increasingly insignificant in the world. And keeping local pump prices artificially higher after oil prices collapsed is kind of contradictory about making SMEs the backbone of our economy. And is oblivious to the fact that he is presenting a budget in a few weeks. Besides we've been suffering from such a disconnect for way too long. And for very wrong reasons.

All has not been bad though. Swiftly increasing pensions to Rs5,000 will surely help restore some disposable income to those who need it the most. And that cannot do our economy any harm.

World On Display in Milan, For Six Months

Beginning May 1st for the Universal Exposition. Over 130 countries are going to showcase their answer to the expo's theme of "Feeding the Planet, Energy for Life". It's a hell of a great opportunity to brand a country -- or to get inspired how to do it.

Many Africans countries will be there -- including the Seychelles, Rwanda and Ziwbabwe -- but I didn't see Mauritius in the list. Too busy with the Mo Ibrahim index? Or is it the Doing Business index?

If you're not heading to Milan you might want to get busy trying one of these 123,506 recipes.

Fans Shocked Gerrard Leaving Liverpool

For sure at 34 he doesn't have the legs he used to when they won the 2005 Champions League in Istanbul. Carrying the Reds almost single-handedly for several seasons will wear you down. And I don't think it's reasonable to expect him to keep on doing that to compensate for weaknesses elsewhere in the team. They could have adjusted their game to keep him playing as a deep-lying midfielder like 35-year-old Andre Pirlo is for Juventus.

I'm not too impressed either by the recent signings of Brendan Rodgers. The Reds have been playing some really sloppy football recently. At times it seems they can't even manage some really basic passes.

What's the Deal About Pesticides?

We sometimes hear that way too much is used in Mauritius. And that doctors in Singapore know we are from that cute Indian Ocean island just by looking at our blood tests. Friends will often recommend that we don't buy vegetables which appear to have been photoshopped. Or that we wash them thoroughly. But is that all we can do?

I don't think so as we are aware that an overuse of these chemicals will have more people developing cancer. And ruin our habitat. It shouldn't be difficult to at least have an audit trail. And start producing great vegetables on an appropriate scale. That will not hurt our trade relationships with the rest of the world.

Any thoughts on this?