Lessons from current Global Events

A lot of what is happening in all the centres of global influence has its springhead in policies of inclusion and exclusion adopted by different governments — By Anil Gujadhur

The new American President was elected on a campaign to “Make America Great Again”. This slogan implied that America would have fallen behind where once it was and needed to be brought back to the prime position.

Last week, the US Senate adopted a tax bill which proposes, amongst others, a reduction of the US corporate tax rate from 35% to 21%. It is seen by proponents of the Bill as a key plank for infusing a new surge of investment by US companies and hence fitting with the objective to bring back investments and jobs at home. Other analysts predict that it will eventually bring a backlash against the population by building up a huge fiscal deficit through excessive giveaways to the corporate sector, eventually making the economy heavily indebted and weaker.

There are always differences of opinion on policy matters. Time will tell whether substantive American companies will be fetched back home as a result of such a decision. But the new American administration is also busy going over past agreements the US has made with other nations.

This includes challenging multilateral trade agreements such as NAFTA and, lately, threatening with retaliation countries that would vote in favour of a UN Resolution against the US President’s decision to recognize Jerusalem as Israel’s capital. Undeterred, a big majority of UN members voted against the position taken by the US last week.

The message being conveyed is that America will triumph if it looked primarily to its own interests, irrespective of what happens to the liberal international order linking together the world economy it has helped to foster over decades past. It remains to be seen whether the primacy of a US in a world torn apart into small bits and pieces will count for very much. It should be clear however that small countries like Mauritius will hardly have much say in this kind of an emerging international order in which everyone aggressively defends his own interest first and foremost.

The same illusion of power in “splendid isolation” visited upon Britain in mid-2016. Perhaps truly unable to steer its own course as a member of the EU and increasingly overwhelmed by a flow of migrants in the midst of generally weak economic conditions for workers over a fairly long stretch of time since the Great Recession of 2008, a good number of British citizens felt that “enough is enough”. They decided to snap ties with the EU.

It is only after this decision was taken in the referendum that it would have dawned on voters in Britain how big a gap separated it from the dreamt-of standalone “glorious days of empire” and the concrete need now to seek alternative trade partners. There is no longer the confidence that Britain would easily ride over the storm single-handedly. As if sending a clear message how unconvinced they have become of brighter prospects of late, British voters have, in the last elections of mid-June 2017, given the Conservatives the reins of a minority government.

An emerging chaotic world order

Add to this demands for separatism elsewhere. Not content with the large influx of migrants into Germany and Europe, in the sequel of mismanagement, wars and unstable regimes in the home countries from which the migrants are coming, European voters have reacted by voting increasingly for far-right parties. As a result, Europe which was in need of even stronger unity and clearer direction in the face of the new American isolationism, is not quite in position to assert this kind of unity.

Elections held last week in Catalonia confirmed the tussle for secession of this region from Spain. We do not know how far this will travel but clearly the Catalan people’s feeling of being unfairly taxed by Spain and their unwillingness to participate in the State’s redistributive role are the factors which haven’t been attended to in the eyes of the majority of the people of Catalonia, let alone identity politics.

This kind of chaos is favourable to the emergence of new dominating forces at the global level. Mr Putin of Russia has been pursuing this agenda for long, as Russia was not being given a high enough position at the international table. He must be rubbing his hands in glee at the distance building up between America and Europe but also within his neighbour, Europe itself. Similarly, China which has global ambitions would find all of this a good enough distraction of the powers that be from its own consolidation as a new centre of power at the global level. A new shape of things is in view.

Lessons for Mauritius

A lot of what is happening in all these centres of global influence has its springhead in policies of inclusion and exclusion adopted by different governments. The result is that the sense of cohesion that has customarily supported national unity through taxation and social insurance systems has, at some stage, tilted offensively in favour of the few, the 1%. The majority of the population feels seriously aggrieved for having been taken for a ride.

The sorry thing is that, in retaliation against this sort of situation, they often vote fake populists to power whose real agenda is not truly the greater welfare of the masses. In 1967, when voters in Mauritius gave 44% of the votes against independence, little did they suspect that they had in fact cast a vote to defend the interests of those endowed with riches already, who felt seriously economically threatened by the prospect of independence. Sometimes, perceptions created are bigger than reality, especially when supported by immediate ground realities.

This fractured voter base has kept throwing in governments which haven’t been as strong as circumstances – especially international – have demanded. To get the trust of all, the country can avoid the extremes of selective inclusion and massive exclusion. Good governance comes in handy to deal with such matters. Public institutions and the way they conduct themselves create perceptions and need therefore to be in strong hands. Mauritius’ democratic setup is a precious instrument in the preservation of the respected state and it would help if, as time goes by, decision-making is publicly seen to be democratic enough for differences, if they arose, to be hammered out smoothly instead of being allowed to culminate in disruptive confrontations.

*  Published in print edition on 29 December 2017