Vijay Makhan: “This country is on borrowed time! Lack of foresight and economic vision has led government to lose its fiscal space.”

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Weekly speaks to Mouvement Militant Mauricien’s (MMM’s) stalwart Vijay Makhan about his take on the recent budget and the results of the election of his party’s Central Committee. With his usual no-holds-barred approach, Makhan shares his opinion on the proposed sale of nationality and passport, discusses whether we have the means to implement the measures announced in the budget speech and gives his answer to those claiming that the MMM has become a ‘family party’. 

Since the budget speech, there has been a lot of talk about the sale of the nationality and passport to wealthy foreigners, what is your take on this measure as a diplomat?
I have termed this as the Sale of the Century. It’s an unexpected announcement and, if anything, it is in stark contradiction with what we want to project Mauritius to be. In fact, it is yet another regrettable announcement which will further attract the attention of regulatory international institutions on our shores for the wrong reasons. I use the term announcement and not decision because we are now told that the upcoming finance bill to give effect to the budgetary measures contained in the speech will not include the sale of our nationality and passport to wealthy foreigners.

Our laws already make provisions for circumstances under which a foreign person can be granted a local passport and nationality. So what will this measure change?
This present announcement will lead to a simplification of procedures. Government has placed the mantle of businessman on its shoulders. Put cash on the counter and take a passport or citizenship! Government will become a merchandiser. It is not the business of government to do business, for God's sake! And not with something that is dear to the Mauritian. Our citizenship commands a natural and emotional solidarity to our motherland. The prospective foreign acquirers have no such connect to this land. They would have purchased a commodity!

What do you mean by attracting ‘the attention of regulatory international institutions’?
We are already on the radar of the relevant regional and international bodies with respect to our offshore and global business sector. We are constantly, though quite unfairly, accused of being a financial haven. Don't you think that joining the category of countries that have adopted this easy way to fill their coffers will place us right in the middle of scrutiny, biased or unbiased? We shall run the risk of attracting all sorts of characters who will only have as bona fides, their wealth. Do we have the means to vouch for the cleanliness of such wealth, especially when we consider the Alvaro Sobrinho affair? We could be running the risk of losing the visa-free regime that our passport holders benefit from a number of countries, more prominently, the Schengen group of EU countries. How would our partners in such regional organisations as SADC and COMESA view that, given the advantages that citizenship of member states enjoy?

You must concede, though, that this is a good way to attract Foreign Direct Investment…
Come on, is that all the advisers could think of to boost Foreign Direct Investment? It's a confession of incompetence!

Still on the budget speech, there were a lot of arguments between Paul Bérenger and Pravind Jugnauth about the figures. Can you shed some light on that?
I believe Paul Bérenger has been quite explicit in his intervention in Parliament on that issue. Any government that manipulates and fudges budget deficit figures and finds ways of concealing sovereign indebtedness does so at the expense of the country. Does Greece ring a bell? If we are not careful and continue to paint such a skewed picture of the actual situation on only those two counts, we are in for trouble around the corner. The tune that has been played to us is that despite the recurring budget deficits, public sector indebtedness has declined! Whereas we know that government has been borrowing massively in order to finance such deficits. And don't forget the commitment taken to bring down the debt to 50 per cent of GDP! To demonstrate that the debt level is going down, recourse is being had to the Special Purpose Vehicle at the State Bank of Mauritius (SBM), where borrowings are lodged. Such monies are not included in the budgetary figures thrown at us! Beat that. 

But to be fair, the budget was not entirely negative, was it? Some people think it has quite a few measures aimed at promoting social justice. Would you agree with that? 
It would be dishonest not to acknowledge that some measures contained in the present budget have a positive social thrust. However, a responsible government should have a holistic approach to the issue of economic governance. For the past years, since the advent of this government, there has hardly been any serious attempt at bringing the country onto solid macroeconomic fundamentals to render the economy more resilient and sustainable. This country is on borrowed time! Lack of foresight and economic vision has led government to lose its fiscal space. The recurrent budget has grown to an alarming point that has suffocated government finance already. 

Isn’t that alarmist?
No! Take the Rs3.5 billion bridging finance in the Super Cash back Gold (SCBG) saga that was obtained from the Bank of Mauritius. Information is that it was never serviced and a request for its conversion to a long-term loan at a concessional rate of interest has been made. It appears that government has already defaulted on its debt repayment and the SCBG debt to the Bank of Mauritius has grown to Rs4 billion! So, social measures granted but at what future cost? Have we carefully balanced our finances to ensure that we do have the means to sustain the measures announced? I dare hope that it is not through the Sale of the Century that government projects to honour its commitments!

There is some talk that this might be the last budget because of all the labous dou measures you mentioned. Do you agree with that assessment?
On the face of it, it may appear that the sugar-coated measures are building up towards a pre-determined political agenda. I don't think though that the public has welcomed the budget as enthusiastically as presumably forecast by the cooks of Government House. Scandals continue to run galore! And the slightest of these is enough to put to rest any euphoria that may have been triggered by the budgetary measures. As we speak, another stink seems to be emerging from the sale to foreigners of a leasehold of Pas géométriques in the region of Grand Baie! And as is said, all the perfume of Arabia, however much may have been brought in by our local Sheikh, will not suffice to clear the stink from the Lepep stables. Bearing this in mind, I find it difficult for the government to venture into snap elections! It was voted to the helm in December 2014, and normally its tenure lasts until December 2019. Ah yes, unless the MedPoint affair, a kind of sword of Damocles hanging over the neck of the prime minister, acts as an accelerator.

Turning to your party, the election of the Central Committee of the Mouvement Militant Mauricien (MMM) has yielded three members directly related to the MMM leader. Is this not the kind of politics you used to criticise? What has changed?
I sincerely believe there is an unfair innuendo in your question! But then we would be acting ostrich-like not to recognise that this element was bound to be the focus of attention at least for some time, all other issues taking back stage. Whether you like it or not, one has to recognise that the MMM is the only party which is transparent and runs on democratic norms. Before the internal elections, when the list of candidates was confirmed, the candidacies of those you target were duly registered. As far as I know, there was no criticism of that fact. All attention was focused on the candidacy of Joanna Bérenger! The speculation then was what kind of showing she would make! Fair enough, being the daughter of the leader, one would say. But please remember that those you mention are and have been 'militans' for a number of years and active within their own regionals. Two of them were already members of the outgoing Comité Central, one of whom was also a member of the Bureau Politique of the party. Another was an elected member of Parliament and has served as PPS in a previous MMM/Mouvement Socialiste Militant (MSM) government. They were assiduously involved in the recent by-election. Above all, they have been voted in by the MMM branches island-wide. They have the right as any other person to stand as candidate and be elected or rejected. They have been elected by what we call 'la base' and not designated by the leader! In that perspective, the results of the recent elections to the Bureau Politique are quite revealing....

What do you make of the perception that the MMM has become another family party where the leader and his relatives are active members at the same time?
Unfortunately, such criticism is free! I have just explained the circumstances which have brought about this development.

There are former members of the MMM who are now on the way to constitute a new party and are very critical of these elections and of the leader and the party. Is this not likely to weaken the party even more?
Of course, this is an episode that we could have done without. But we live in a free society and everyone is free to determine his or her course of action. They have adduced certain reasons for their behaviour and distanced themselves from the party. Now whether they are going to create a new party or not, I am not privy to that information. Personally, I am not convinced by their arguments. What astounds me is the fact that some of them have been active members of the party for a number of years and have been more than happy to assume different positions within the party on the basis of their election by the same branches that they now decry. Yet, for this election, the branches have been streamlined and downsized to reflect the reality on the ground in each constituency and ensure that no fictitious branch exists. I think it's unfair that the moment a member has a serious difference of opinion with the leadership, it has to end this way! Look, I have had my differences of opinion with Paul Bérenger, it is not a reason for me to heap all the ills of the world on him. Like everybody else, he has his shortcomings but he is a true leader.

What are his shortcomings? I can’t let you off without asking you now that you’ve mentioned it, can I?
That's an unfair question and you are pulling me on slippery ground. I shall keep my opinion to myself, for what I may perceive as a shortcoming can also be construed to be a plus trait of character.  Sorry for the disappointment.

Bérenger said he was surprised by the results of the election of the politburo. What’s so surprising?
I think that's a question best put to him.

Well, what do YOU think of the results?
To be honest, I think that there has been some form of lobbying, not necessarily based on aptitude, but more likely on the basis of preferred closed lists. If I am right, that would explain the rankings of some members who could have found themselves on more than one list with the added consequence that some could not make it! The issue of lobbying is not an exclusive phenomenon to the MMM, though it is not something I approve of. People should be voted in on the basis of competence, commitment and conviction. But we don’t live in an ideal world!

Be that as it may, many political observers are talking about a crisis within the MMM. Many of the close supporters of Bérenger were either not elected or scored very badly. How do you interpret that?
I think that 'crisis', as we interpret such a term, is rather inappropriate to describe the current situation. As I have just said some lobbying must have taken place with the consequence that certain expectations of Bérenger did not quite materialise and hence the difficulty in assigning office bearer positions within the Bureau Politique.

Bérenger is taking his time but will end up co-opting to the politburo members of the MMM who were rejected by the militants. Admittedly, the party constitution allows him to do so but doesn’t that show a complete disregard for them and for party democracy?
At this point in time, I have not heard of anyone having been co-opted. But a leader needs to ensure that he feels comfortable with the team around him and, in that perspective, he may feel inclined to invite, within the politburo, some who may not have been elected but who, according to him, would contribute positively to the deliberations within the party by virtue of their acquired specific expertise and experience. But, of course, strategic considerations are also part of the equation.

What exactly is the future of the MMM? Where do you see it in 2019 when time for the election comes?
The MMM is a party which will be celebrating its 50th year of existence in 2019. It has withstood many an upheaval and surely it is likely to face quite a few more as it moves on. It remains an undeniable fixture on the political scene. It has over the years developed strong relations with like-minded parties abroad and belongs to the International Socialist and the Progressive Alliance of which it is an elected member of the board, through my person. It is a serious party with a history and a future. The recent internal elections have seen the entry of a number of new faces. I do not worry about the future of the MMM. Of course, we shall need to remain alive to the changing circumstances of the times and make necessary adjustments as we move on. Politics, I do not tire to emphasise, is dynamic and one needs to act accordingly. But I shall refrain from venturing into forecasting what will happen in 2019 for I do not possess a political crystal ball. Rest assured, the MMM will be there to be counted and anybody who tends to dismiss it only does so at his own risk.

Can a possible alliance with the MSM be dismissed? How seriously should we take Bérenger’s denials?
As seriously as the present circumstances dictate. Having said that, I am not a forecaster and will definitely not venture into the unknown and uncharted political waters.

So you are not ruling out the possibility of your party joining hands with the ones you say yourself are destroying the country and leading it to bankruptcy, are you? 
I have said my piece, and I shall stick to that!

If you were to defend the track record of this government. What would your arguments be?
That's embarrassing! I have to declare my incapacity to undertake that exercise. I gauge a government's performance on the basis of what it bequeaths to the generations to come. In this case, apart from some popular measures, I am afraid I cannot honestly put up any defence. Some time ago in an interview to Weekly, I had opined, on a question put, that the government is a 'Ramassis United'. Nothing has evolved to make me change that classification.

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