Our decision-making hasn’t always been focussed enough. However, there’s still a silver lining in the cloud
As a fundamentally outward-oriented economy, Mauritius depends exceedingly on the opening up of external markets for its trade in goods and services and its economic uplift. Our existing openings to outside markets haven’t been working too well for some time, except lately for a pickup in the tourism sector. We’ve seen positive but substantively un-improving economic growth rates for quite some years now. We don’t appear to have a clear answer about what a pragmatic forward-looking orientation of our economic activities should be in the given context.
Given the grip of uncertainty affecting several of our traditional external markets, we haven’t been able to make further inroads on those markets. Prevailing tense social conditions in those markets due to the blind operation of the market system haven’t made it easy, either. In quite some countries, people now suspect globalised free trade to have worked against their interests.
As if to add to these unfavourable external situations, we’ve kept spending our energies on misdirected internal ‘Made in Mauritius’ sterile controversies. We didn’t scale up to the heights the situations called for. We prioritized instead petty struggles for power at diverse levels within the country. Given the scale of the challenge we are facing on our external markets, the priority would have been to fine tune our existing economic strengths and occupy whatever economic space we could despite the little scope outside markets are offering in present circumstances.
For some reason, local business is also not making additional breakthroughs in this respect, thereby giving a fresh lease of life to our economic activities. External market conditions are not helping, either. But they are not here to help. It is for us to put our act together to overcome whichever difficulties spring up from the external angle.
Sizing up external issues
What exactly are those difficulties? They are coming from many fronts and gathering pace, making it more difficult for a small economy like that of Mauritius to overcome the hurdles. One can list out two of these: a tendency for countries to foreclose their markets, and a disruptive technology leap posing a challenge to customary market production systems.
Excessive concentration of wealth is giving rise to serious political upsets in our market countries. In 2016, Oxfam, an international charity, issued a report stating that 62 billionaires (in dollars) had amassed as much wealth as had all the bottom half of people in the world. It rectified this figure early this year at the meeting of business and political leaders in Davos, revising down the numbers of the richest elite actually owning as much wealth as the poorest 50% of global population – mostly women – to only 8 rich billionaires. A recent newspaper report puts the number further down now to only 5 such billionaires.
This kind of ongoing social imbalance is reflected in enduring poverty, lack of job opportunities, stagnant wages and falling economic prospects for masses of people in rich and less rich countries. All sorts of tensions have come up consequently within countries and among nations, raising the risk of “de-globalisation” which effectively means curtailing international trade. Recent examples of the fallout from such tensions are Britain’s Brexit vote last year, the election of the last American president and, lately, the success of the extreme right wing in the German elections of 24th September last.
People want to do all they can to protect local jobs in all these places, our customary markets. Nationalisms and communitarian instincts threaten to shake up the old order. Our objective should have been to witness this situation but still get over it in a bid to protect our market access. A lot more thinking should have gone into it than the serial trivial matters being tackled here week after week. What we need now is economic competence to turn the situation around in our favour.
The second hurdle is more serious inasmuch as techniques and tools of production and even market delivery systems have been changing and are going to change much more with time. Here is an advert appearing in an international magazine about this new transforming wave from the firm ‘Oracle’: “No Human Labour – Half the Cost – No human Error – 100 times More Reliable”. In other words, digital technology is killing jobs as we know them.
In the face of such job-effacing digital technology advance, we could have adopted a technology which, instead of reducing employment, would raise it. But we have a gap in our system which needs to be bridged for us to effectively join the emerging mainstream of technology driven markets. A major transformation of our production structures should help us to do that and for which investment in physical and human capital needs to be overhauled. For more than a dozen years, we have played in the hands of commercial interests and not invested in knowledge and its application. We still can do so by getting technology alliances with genuine partners who can help raise our production possibility frontier along with the quality of our human resources.
Converting threats into opportunities
It is evident that we have to catch up. Our decision-making hasn’t always been focussed enough. However, there’s still a silver lining in the cloud.
As we attempt to bridge the gap, we can team up with people and talents which would help us make the necessary quantum jump, transforming for the better our production processes. It is important for us to cultivate an edge if we want to access more markets and deal with a situation to catch up with certain of our markets which are otherwise receding. This is what we could aim at.
Although the situation has not been getting exceedingly predictable at the global level, there is hope that we can still tie up with old and new partners to lift the economy. As matters are progressing now, we do not appear to have an alternative than to respond more effectively to changes affecting our markets. Once the emphasis changes to more positive work on the domestic front, we might find ourselves swimming once again with the international high tide.
* Published in print edition on 13 October 2017