Has government lost it?

Cats cannot be set among the pigeons. How can the newly created Economic Development Board (EDB) have a majority of 6 out of its 8 directors from the private sector?

Has government lost all notion of its paramount and unalienable role in the country? Or is it another crying sign of its desperation? How can the newly created Economic Development Board (EDB) have a majority of 6 out of its 8 directors from the private sector?

As per the enabling legislation approved by the National Assembly in July 2017, the Chairperson of the EDB is appointed by the President on the advice of the Prime Minister after consultation with the Leader of the Opposition, whereas the other directors are all appointed by the Prime Minister. This is the more preposterous as the ambitious role of the EDB is to ‘group and streamline under its purview such key state institutions as the Board of Investment (BOI), the Financial Services Promotion Agency (FSPA), Enterprise Mauritius (EM) and the Mauritius Africa Fund (MAF)’. The mission of the EDB will be carried under three directorates dealing with (1) National and Sectoral Economic Development Planning, (2) Investment and Export Promotion (through the integration of BOI, EM, FSPA and MAF), and (3) Business Licensing and the implementation of an e-Licensing business platform.

The flabbergasting approach adopted by government raises fundamental questions of principles. There is no mandate from the people for such an approach. How can a government so totally abdicate on its vital role of ownership of the national policy framework and its role of arbiter between national and public interests and private sector interests, in keeping with the underpinning ethos of our democracy and seminal values and pledges independence was fought and won on?

Lock, stock and barrel

How can such important elements of the national policy framework be delegated lock, stock and barrel to basically the private sector? National priorities and business interests are divergent. Every country is faced with the constant dilemma of arbitrating between conflicting interests to promote the common good. They do not shy away from this cardinal responsibility.

Cats cannot be set among the pigeons. The hegemony of the coterie over state institutions and companies is already taking its toll. Roles have to be clearly demarcated. Government must ensure that the policy framework, enabling business environment, export market access, financial and logistic support, etc., facilitate business. The role of the private sector is to be innovative and competitive economic actors and entrepreneurs. They are expected to take initiatives, undertake, innovate, invest and create employment and growth. They cannot be national or sectoral economic development planners.

Exporters promote their products. They do not generically promote the country. The role of promoting Mauritius Inc. has to be under the authority and responsibility of government services. Mauritius needs to astutely build a strong Mauritius brand by building notoriety around its business friendly environment and policies as well as its diverse strengths as a business hub and a Mauritius high quality label conferred to exporters only after a thorough quality audit. Business licensing has to be independent from the process of approval of projects to ensure rigorous oversight and checks and balances. Putting all these institutions together under directorates can rationalize and streamline operational costs. However, government cannot trade off and relinquish ownership of long-term national strategic thinking, of charting the economic development policy framework and the key responsibilities of promotion and licensing entrusted to the EDB.

The model of economic liberalism championed with the private sector by successive governments over the past decades has significantly widened the chasm of inequality in the country instead of bridging it. Despite the rhetoric of improving the standards of living of people, this model of development has basically clamped down the salaries of large swathes of the workforce. Official statistics show that 61.4% or some 262,600 of the 427,700 employees in 2016 working principally in the private sector received salaries of up to Rs 15,000 per month which means that a substantial number of employees were earning even less. 80.7% or some 345,150 employees earned up to Rs 25,000 per month. These eye-opening statistics showcase the hardships faced by so many in the country to make both ends meet against the backdrop that the average cost of the household basket of goods and services is some Rs 27,000. The Negative Income Tax or the Minimum Wage granted to the most vulnerable cannot mask this galling Mauritian reality.

The elimination of sugar estate camps initiated in the 1985 Action Plan for the sugar industry was finally completed last month, 32 years later. This belatedly puts an end to an ignominious chapter of our history.

Cannot be judge and party

No wonder that the last 50 years since independence have witnessed a huge concentration of wealth and assets in fewer hands. All big corporate groups have a very broad business footprint in almost every major pillar of the economy. Their interests are aptly represented by structured organizations such as Business Mauritius or the Chamber of Commerce, etc., geared to consistently uphold their interests. They cannot be judge and party. Good corporate governance cannot mean only paying lip service to it. It inter alia means staying away from any situation which could create conflict of interest.

Quite a few aspects of Mauritius need to be reformed through appropriate policy directives.

Our commitments under COP 22 and the adverse impact of climate change on Mauritius and vulnerable island states require that we immediately start diminishing (not increasing) and replacing the use of highly polluting coal, which represents the highest (41.6%) source of energy generation in the country by renewable sources which stand at some 21.8% in 2016. Owing to falling cane output, the share of bagasse in energy production has fallen to some 16%. There is also a need for land reform to address the crippling problem of access to land resources faced by economic actors and citizens in the light of the vast concentration of land assets in the country. Inequalities must be urgently narrowed. Inclusiveness and shared prosperity must be the leitmotivs of a fairer socio-economic order. We must also ensure a level playing field for merit based access to jobs in both the public and private sectors of the country. Government must also ensure that all projects including the diverse smart cities provide as deliverables jobs for the qualified young.

We also need to benchmark and enhance the quality of tertiary education, encourage pointed research in diverse fields and link them with start-ups, incubators and funding sources to create a new breed of young innovative entrepreneurs. This can be a game changing pathway to address the problem of employment of the qualified young. The ownership of such overdue policies and a host of others has to remain in the hands of the State.

Think tank

It is evident that there is an urgent need for an imaginative national and sectoral Economic Development Planning and a game changing rethink on Investment and Export Promotion. We must recall that the abolition of the portfolio of Ministry of Economic Development as from 2000 has left the country without any long-term strategic thinking and economic development planning to provide a clear outlook on the future of the country. The makeshift programmes concocted by political alliances for the purpose of general elections probably largely explain the poor growth performance over the last decade. Vision 2030 has not yet improved prospects.

It is therefore high time to set up a pluri-disciplinary think tank of well qualified and innovative Mauritians from various professional backgrounds including academia to brainstorm multifaceted and ground breaking strategies for a bright future for all. These strategies should not only aptly address the host of outstanding issues highlighted above but also define new pathways of inclusive development which takes on board game changing developments in the world. Their role would be to continuously hone their strategic thinking to bring about transformational reforms which consistently improve the future prospects of the country. The ambition of Mauritius cannot be trapped in the straitjacket of narrow parochial interests. The mandate of the EDB has to be entrusted to the professional expertise and independence of such a think tank while ensuring that ownership of all policy and strategic decisions remain with the State and that licensing decisions are transparent.

Tomorrow’s world has new priorities. Major technological advances and scientific research will fundamentally change the world we and our children will live in. These include the forecasted replacement of humans by more efficient machines through developments in artificial intelligence (AI), cutting edge research in marine biodiversity, new sources of renewable energy, gene-editing as a tool to cure disease, WI-FI as a power source for internet devices, robots that can teach each other, cloud services, etc. They will require staying constantly tuned and on top to adjust the policy framework accordingly.

Let us free our loftiest ambitions as a nation for the benefit of all.

* Published in print edition on 19 January 2018