Figures recently published by Statistics Mauritius indicate that the unemployment rate has reached almost 8%. This has given rise to some controversy regarding the credibility of the statistics with the Minister of Labour observing that they do not reflect the actual reality since some registered unemployed are in fact working and are looking for better job opportunities.

While this is true, the other side of the coin is that some unemployed do not register at all. It is difficult to say in which direction is the bias. However, Statistics Mauritius has always done a professional work and we have no reason to doubt the veracity of the statistics. We cannot imagine that unemployment will decline given the economic moroseness of the past 18 months. The statistics are not surprising at all, albeit alarming.

The economy inches by about 3.5 per cent a year, which is inadequate to generate substantial employment. Between 2003 and 2015, net employment creation by large enterprises has just exceeded 1,000 jobs annually. It is thanks to small enterprises that we have been able to cushion the impact on unemployment; they have created 53,900 jobs during the same period, i.e. three times as much as large enterprises

We can ascribe the current situation to a multitude of factors. The bottom line is the low level of investment. The private sector is still adopting a wait and see attitude as the Prime Minister observed at a meeting with key stakeholders. Moreover, in a context where political priorities predominate at the expense of economic exigencies, we do not expect much progress on the economic front. The expected economic revival has not taken place.

Certain decisions have impacted on business confidence and investment. To start with, we had the BAI saga a year back. Whatever be its merits or demerits, it shattered business confidence and impacted on investment and employment. While last year’s budget and the Economic Mission Statement announced a number of projects, they are proceeding at a snail’s pace. In the meantime, the economic situation hardly improves. Another factor which surfaced belatedly was the conflict within government ranks and with the resultant shift of the Minister of Finance to the Ministry of

Foreign Affairs. We cannot minimize the significance of such a mutation since the Minister of Finance is supposed to be the driver of economic development. This cannot be an offhand occurrence. With hindsight, we can say that tensions must have been latent and building up over months at the expense of real focus on our economic development. Furthermore, another element has come into play recently, the renegotiation of the non-double taxation agreement with India which will have an adverse impact on our financial activities and our economic performance no matter what assurances people may strive to give. In such a situation we hardly expect the economy to pick up from its sluggishness with the natural consequence being an upward unemployment trend. The bitter truth is that unemployment has not had the priority it deserves.

It is imperative to integrate the youth into the world of work.

The profile of the unemployed should be cause for concern with the youth being particularly vulnerable. They represent 21,200 unemployed or a disproportionate share of 46%. The unemployment rate among the 16-24 age group was 21.6% for males and 32.7% for females yielding an average of 26.3%. One in three young females is unemployed. Those holding a tertiary level qualification number 9,000 and another 14,400 either have passed SC or HSC. We have a serious problem of inflation in educated unemployed. This is a waste of valuable human resources and the dimension it is taking is dangerous and opens the avenues for other social and economic problems.

It is imperative to integrate the youth into the world of work. We devote much attention to physical resources and tend to neglect human capital which holds the key for our future development. While we are ready to spend billions in mega projects we should be able to devote a fraction of such sums to human capital formation with probably more positive results. In the short term, to promote employability, structured programmes for the acquisition of training, practical experience and development of skills should be envisaged with the involvement of the private sector. In the long run, our educational and training system needs to be revamped with the role of key institutions reviewed.

The economic challenges are enormous. It is an opportunity for the new Minister of Finance to provide the economic leadership and work towards greater policy coherence and, as a leader of a political party, ensure better cohesion among his troops. It is necessary to identify the right priorities for our economy without putting into question the vision of the Government. Concentration on projects is good but concurrent focus on key sectors is vital for our economic growth. Building new pillars is good but existing pillars should not crumble. We need a balanced approach rather than a lopsided one. We cannot be indifferent to the low growth recorded in 2015 in agriculture (-0.1%), manufacturing (0.2%), export-oriented enterprises (-1.4%), wholesale and retail trade (2.7%) and the negative growth of construction. We should diagnose the real causes and react accordingly to instill new dynamism in these sectors and tap on their growth and employment potential. In this respect, the next budget should mark a departure from the past refrain and be innovative in terms of strategies, policies and actions, both national and sector-based. Otherwise, we will miss the boat.