The Wealth Drainers

By Samad Ramoly

Since the 1980s, Mauritians have been brainwashed into believing that unless governments pick “winners” to bake the national cake, no prosperity will trickle down. To ensure the effectiveness of the process, citizens have been summoned to bear with the retreat of government “hands” from the marketplace and also with the loosening of social safety nets. There have been some feelgood flashes, but now that the dream sold to them is vanishing, citizens are waking up to a corporate republic where the “winners” picked take all, or leave insignificant crumbs for them.As the sirens of doldrums crescendo to a haunting level, a multidimensional reassessment of our development strategy becomes a matter of survival. Quick fixes and half-baked measures have reached their moment of reckoning. So has the pro-growth propaganda whose mainstay is the expansion of the Gross Domestic Product (GDP) at all costs. GDP is akin to gross profit of a business, it says little about actual (mis)allocation of resources. No wonder behavioural economics are such a hot research topic today.

King of Pain

There may not be evidence in all situations that some politicians, business tycoons and media pundits conspire against citizens, but what is obvious is that toxic policies are crafted under their patronage. Nor should “trickle-down” economists go unscathed, even if for them, gratification is more likely to come intellectually. Nonetheless, no other colour matters more to networks of patronage than that of money. They unwittingly expose all the symptoms of vile neoconservatism under the garb of liberalism.As it is currently run, the economic and political game is rigged against authentic entrepreneurs and progressive citizens. What is shocking is not so much the cynicism with which local or foreign oligarchs and speculators manage to tweak policies and market conditions in their favour, but how casually the guardians of the State enable them. The betrayal is no stranger to the growing apathy of ordinary citizens.It is foolish to expect change to come through the Hall of Shame that constitutes networks of patronage. Unless a sudden scientific breakthrough makes it possible to reignite the insular cortex – the tiny part of the brain related to the feeling of empathy – and to adjust the dopamine regulator to a risk-taking bias. Change will either come when the existing system collapses under the weight of its deception, or when enlightened members of the business world, civil society, including the media, and even the political class back grassroot initiatives that empower Mauritians to claim back their citizenship.

Pro-Market, Not Pro-Cronies

When citizens do not challenge unfettered capitalism, it turns on them dramatically. Capitalism works when it is guided by governments that are resolutely pro-market. That is, when they strive to create a level playing field where healthy competition and innovation thrive. The drift starts when the relationship between government officials and businessmen gets too intimate. Crony capitalism is indeed the main driver of the growth strategy that inflates bubbles after bubbles, even after they burst.Networks of patronage could not express more openly their ambivalence as in their zealous embrace of the Integrated Resort Scheme (IRS), where resource depletion, market distortion and confidence busting reign supreme. In a bid to somehow salvage the elusive “economic democratisation” agenda, the Real Estate Scheme (RES) followed suit to cater for property development on a smaller scale. The “Maurice Ile Durable” project would be mere hallucination should the levers of development stay put. Vision stems from leadership. If you fail to develop an inclusive environment where the goals are visible and the route to them is clear for all to see, then you are not a leader. Mauritius is far from being a poor country. The problem is that wealth generated collectively is being captured massively by mightily connected businesses and governments, separately or when their interests overlap in public procurement. The bottom line of banks and the dubious costing of the State Trading Corporation, for example, speak volumes. As do the success stories of the preying Aid Industry, championed by the International Monetary Fund and the World Bank, and the Consultancy Industry, that boast of holding silver bullets capable of simplifying the real world’s complexity.Our politicians will prove their worth when they stop sheltering behind idiocies such as “belt tightening” and “empty coffers” and, inter alia:

– Rescue the education system that is , simultaneously, a producer of thousands of dropouts with a potential to be social offenders.

– Reinvent the shabby healthcare sector.

– Guarantee non-stop water supply nationwide.

– Devise a long-term plan that connects the country with a value for money railway service.

Transparency, the Road Less Travelled

Resorting to ideology to resist messianic posturing and dissent bullying is vain. An alternative system can only emerge through idea-rich and ideology-free activism. Instead of managing the structures, information flows and reward systems, our illusionary development strategy has badly polarised the country and left an unenvious legacy of world-beater in terms of diagnosed and undiagnosed prevalence of diabetes (and possibly AIDS too), drug addiction, road accidents and so on. Whereas in some areas, correction, prevention and repression will have to be evolutionary, in others they can only be revolutionary. The overriding aim of political action must be to promote human collaboration that creates the trust on which both democracy and markets depend. A smartly trained, motivated, and informed population is our single greatest competitive advantage to meet today’s tremendous economic challenges. Without civic scrutiny, it is impossible to contain clientelistic relationships, where loyalty is traded for benefits. A new lifestyle is key to stopping national and household debt spin out of control.The following areas require urgent attention:

– Democratic platform: A dose of proportional representation (PR) is being suggested as a panacea to resolve our democratic deficit. But, what is the point of enacting the PR if it has to overpopulate the Parliament? Worse, if instead of delivering alternative voices, it turns out to be another public relations (PR) exercise for networks of patronage. At this stage, regulating electoral funding seems much more pressing.

– Business environment: The competition watchdog is a salutary move to deter economic rent-seeking. Mauritius has a lot to learn from countries like Norway, Germany, South Korea and Switzerland in the way they energise small and medium-sized businesses. Today, their nimbleness rests on the inventiveness and vibrancy of that sector in the world market, rather than on endemic currency depreciation. Our capital market also needs to be less risk-averse, to say the least.

– Civic empowerment: The implication of the Freedom of Information Act goes deeper than the disclosure of information or records held by government bodies, it can inhibit rogue practices too. The Equal Opportunities Act also can help to boost citizens’ morale. Moreover, the possibility of including class-action lawsuits must be explored to unleash consumer and (small) shareholder activism as they permit efficient resolution of legitimate claims of numerous parties by allowing the claims to be aggregated into a single action against a defendant that has allegedly caused harm.

Merely introducing new mechanisms of control, legislation and tax incentives, however critical, will bring little relief if our institutional deficit is not addressed. We kid ourselves when we confuse means with end, and vice versa. The credibility of institutions is linked to citizens’ perception of the integrity of women and men representing them.

Without strong rule of law and leadership by example, everything is wishful thinking. The prerequisite for a green Mauritius is a clean and lean Mauritius with discerning citizens.

* Published in print edition on 13 July 2012