Freebies vs. Fiscal Discipline: Resetting the Economic Compass for 2025 and Beyond

Opinion

By Jan Arden

Memos and proposals for the Pre-Budget 2025–2026 consultations, which were due by 21 March 2025 have, we assume, already been submitted to the Ministry of Finance. On the viva voce side, Junior Minister (Finance) Dhaneswar Damry, has continued the process by hearing out all stakeholders, in sessions which the PM helped kick off last Thursday. Setting the scene, Dr Navin Ramgoolam stressed the sombre situation the country and his government had inherited — “a massive public debt of Rs 644 billion, standing at more than 90% of our GDP, a budgetary deficit of 9.3%”, to which we may add a lack of new pillars to the economy and practically all State Owned Enterprises (SOEs) drained of resources, if not in dire straits (Air Mauritius, Metro, CEB, CWA, WWMA, STC, etc).

To compound matters, some of these SOEs or Departments have not even finalised or submitted their accounts and the Director of Audit’s Report for 2023-24, released last week, made further gloomy reading of annual gabegies and wastes that some of our civil servants and administrative processes seem to tolerate, as usual, without responsibility or accountability.

With a set of competencies at various poles of such an ailing crisis situation, including the likes of former Finance minister Rama Sithanen at Bank of Mauritius, Gilbert Gnany, economist Eric Ng, Dr Jyoti Jeetun at Economic development and planning and others, we trust the PM himself at the helm of the Finance portfolio has undisputably the resources to raise the patient out of the ICU ward into a more convalescent state. “We can no longer afford to live, play and spend lavishly with illusory printed monies or, much worse, forex debts, while shirking away from a society based on personal effort, meritocratic values, economic efficiency and social justice,” the PM pursued. We have here repeatedly condemned the “freebie” approach to political campaigning not to agree entirely.

Creative Freebies

India has unfortunately become a striking example of the “freebie” culture, with various regional and national parties offering free water, electricity, transport, lunch, stay-at-home allowances, and other such incentives. Many of these cannot be implemented anyway or rely on such heavy subsidies as to be utterly unsustainable. What was particularly irritating here in our own 2024 electoral run-up, was that the outgoing team had been in office for ten years and knew exactly what they had been busy hiding from us: a derelict economy with mismanagement at all floors, negligible resilience and mountainous debts to repay.

Of course, it is not always easy to draw a line between legitimate political policy pledges (say, free secondary education or free school transport) and what could be termed “freebies”, but having pondered over it, the Privy Council has handed us a guideline, which many may find wanting. Will the promised Fiscal Responsibility Bill help clarify while bringing an era of greater accountability and transparency in public procurement ?

Naturally, the population’s expectations of financial freebies that were promised during the 2024 campaign have been sobered after the State of the Economy’s blunt damning of the past regime’s legacy (which has gone largely unchallenged) and the weekly revelations of financial scams at various institutions, including the MIC (a BoM fully owned subsidiary). Moody’s ratings and the ongoing IMF consultations restrict the manoeuvring room of our finance teams, further constrained by the Trump-era tariff on our exports to the US.Read More… Become a Subscriber

Mauritius Times ePaper Friday 11 April 2025