A Culture of Opacity

Do we really have to wait for another round of warnings from external agencies to shake us out of complacency and business as usual?

Opinion

Tit bits

By Jan Arden

Many would argue that there was a time post-independence when our political leadership, their appointees at various responsibility positions and the supporting top brass of the civil service were infused with a sense of public good and the national interest and did their best to instil those virtues in thousands of anonymous public officers who manned the ranks. Everything was not rosy or picture perfect, as much due to our own propensity to hand out tea monies or keep tabs on who could assist with procedures that otherwise could drag along at a snail’s pace, as by those wishing perhaps some compensation for their political involvement and investments in an electoral campaign. But, by and large, these were not unmanageable particularly with the advent of the POCA legislation and the setting up of ICAC as lead agency in the fight against corruption and money-laundering.

“A credible investigative agency would usually have some legitimacy to claim discretion on ongoing inquiries while communicating periodically on their general progress, but to maintain a state of opacity about the progress of high-profile inquiries contributes its share to the assessment of diplomatically worded “weaknesses” by international bodies and the current vitiated atmosphere in the country referred to a recent MT editorial…”

Controversies surrounded the agency from its inception and for years it battled to make real its “pa get figir” pledge but several affairs since 2015 implicating government ministers and VVIP nomenklatura and which are at ICAC either in sleep mode or at best dawdling along, have led to a rising disenchantment, a public perception of ingrained political bias and a quasi-general loss of confidence in a key institution that could have preserved our country reputation and functioning. There is unfortunately no credible national rating of our regulatory agencies from or by customers and stakeholders, nor are international ratings of the FATF variety concerned with the corruption of public procurement processes. Yet, it has been reported in international circles that the Covid pandemic, with its associated emergency procedures, has been notoriously rife with corruption on massive scales, often in broad daylight, by those close to power centres and benefiting from a sense of immunity.

Here too we have heard of the CEB procurement affair known as St Louis gate, the Pack & Blister saga of defective and unusable ventilators, the various health-supply contracts handled through Commerce and the STC, the Molnupiravir saga of purchases far above requirements or prices and the unknowns surrounding vaccine purchases or gifts, part of which have either expired or had to be distributed to some African states. As ICAC does not communicate on these matters, enquiries remain in “ongoing” mode for years, allowing convenient non-answers in Parliament, but failing the expectations of both the population and even international observers if the repeated IMF, World Bank, and Moody’s warnings over three years on “institutional governance weaknesses” are anything to go by.

A credible investigative agency would usually have some legitimacy to claim discretion on ongoing inquiries while communicating periodically on their general progress, but to maintain a state of opacity about the progress of high-profile inquiries contributes its share to the assessment of diplomatically worded “weaknesses” by international bodies and the current vitiated atmosphere in the country referred to a recent MT editorial. It is certainly not a consolation for the country that the culture of opacity extends to many important questions where confidentiality clauses, sometimes purely arbitrary or peculiar, are roped in to suit government’s purposes: the Rs 400m Liverpool-Mauritius promotion agreement or the renewal of Terragen (an IPP) or other public utilities contracts are cases in point. 

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BOM in the red

During the pandemic the Ministry of Finance decided to be non-conventional by dipping generously to the tune of Rs160 billion in Central Bank reserves, half of which went to the recurrent budget for the support the economic livelihoods of Mauritians. The other half went to the setting up of the MIC Central Bank subsidiary for an entirely novel role: dishing out billions of our accumulated savings and reserves in handouts to company majors or unexpected newbies, with the barest of information about the terms and conditions of such national generosity.

International agencies have repeatedly called attention to the downside risks of turning a regulatory central bank into a lending institution and the consequent weakening of the Central Bank’s balance sheet and its ability to sustain the national currency. The latter’s depreciation has stoked the galloping inflation inflicted on all Mauritians just as much as other international factors. We can assume that there was only so much those international financial institutions would stomach as Finance’s dismissive disregard of their warnings before knocking us off our perch as an investment destination: from BAA1 three years ago, to BAA2 last year and now bordering junk status at BAA3 on the Moody scale.

The Central Bank has unsurprisingly reported operating losses of more than Rs 5 billion in May this year, probably a first in its history. We can bury our heads in the sands and pat ourselves on the back that we are not yet there, but there is a price for obduracy and lack of credibility of our key financial agencies. After the recent FATF grey and EU blacklisting episodes, the last thing our financial sectors need is a degree of arrogance in being right against all expert opinion, national and international. This might not register with the Mauritian layman, but the Rupee devaluation of 25-30% against trading currencies, is biting hard on the lower and middle income classes with the belated Rs 1000 allowance barely catching with supermarket and shop realities.

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MK & SBM – Culture of Opacity

While we struggle along with our daily livelihood concerns, it is galling that government keeps up its lavish lifestyles and wastages at most departments and State-Owned or controlled companies, operating in the opacity which their status as Board-governed entities enables. Press reports have it that Air Mauritius, which has already cost the taxpayer ultimately some Rs 20 billion or more, has disposed of its Airbus fleet at unknown prices and fees last year and is now having to consider leasing of two or more Airbuses in what would be, we suspect, highly confidential transactions. None of this gallivanting and none of the fourteen companies falling under the purview of the newly created Airport Holdings, reporting to their Boards of political appointees, will be answerable in Parliament.

In a similar vein of opacity covering perhaps similar wastage the State Bank of Mauritius incurred some Rs 6 billion in vanished loans without safeguards and iron-clad guarantees, while these days, the Central Electricity Board, a profitable agency with reserves of some Rs 7-8 billion last year, is claiming losses for the coming three years to justify the significant rate increases it is pressing for. As the Audit Department will only compile and report serious deviations and deficiencies in the public sector only after they have happened, patience with our systems and processes that enable such opacity if not downright gross incompetence, is wearing thin.

At a time when the population is asked to bear with fortitude the financial and economic difficulties attributed to the Ukraine conflict, the idea that government, in important projects or expenditures, fails to walk the talk and set the example is exasperating. Do we really have to wait for another round of warnings from external agencies to shake us out of complacency and business as usual?

Mauritius Times ePaper Friday 5 August 2022