This week, Weekly talks to Lindsay Rivière, former editor in chief of Business Magazine, former president of the Media Trust and political observer, about the mood in the country following the MedPoint judgment and the Chagos ruling. He also offers his opinion on the economy and the forthcoming election.
We have had a couple of exciting weeks with the MedPoint and the Chagos. Now that the furore is over, what is the mood in the country?
We are in exciting times indeed. It’s a turning point for Mauritius in the Chagos issue. And with Pravind Jugnauth now off the hook with the Privy Council judgment, he will have to concentrate on his task as prime minister. It’s a good thing for him and the country too.
Is it a good thing for the country that the law lords said that one of the things that led to their decision was the Independent Commission Against Corruption (ICAC) suddenly changing its position?
That struck me as odd too. But then that’s not the only point of contention in that judgement. Taken as a whole, it’s a good thing for Mauritius and allows us to concentrate on the essentials which is economic development and paving the way for the next general election.
What is the economic situation like as we speak?
I think the economic situation is quite worrying and I don’t think we are focusing as much as we should on this. The sugar industry is just a shadow of its former self. We now produce just 375,000 tonnes of sugar and are still struggling. So, this looks like a sunset industry. Manufacturing is going down with important companies relocating, production costs are going up, markets are shrinking and jobs are being lost. The situation is very bad and this may well be the other sector going overboard in the next few years. The offshore sector is going through troubled times and is not looking as good as it was before the India-Mauritius treaty revision. Tourism is in single digit growth whereas before it was double digits. And the nature of tourism is changing too: now it’s going towards cheaper tourism and the hotel occupation rate is not as good as it was last year. The trade deficit is almost unsustainable at nearly Rs100 billion. We are importing 50 per cent more than we are exporting and this has to be taken seriously because it impacts our balance of payments.
What about our national debt?
Our national debt is now inching closer to 70 per cent of GDP which again is a dangerous limit. So wherever you look, there are worrying signs and not enough direction towards the larger picture which requires new strategies.
Is it not late now to change direction now this government is nearing the end of its mandate?
We lack thought leadership and long-term planning that we had with people like Rama Sithanen back in the day. It seems that now Mauritius is abandoning long-term planning for short-term policies and that’s a bad sign for us. Wherever we look now, it’s always patching up things here and there. We are still under four per cent growth. More importantly, the world is going from bad to worse. Except for the US, the rest of the world is slowing down. Africa represents a lot of potential but in areas where we in Mauritius do not have expertise and cannot take advantage of opportunities like mining, trade and so on. So the air corridor to Singapore is not working.
Was that a good policy?
Well, Megh Pillay always told me that it was not smart and he was right.
It was announced by the then-prime minister as a big strategy that would solve the problems of the country.
Yes, but that’s the problem. We don’t walk the talk. It’s all talk and no action. So there are big announcements but the reality is that no new sector has emerged successfully. It’s all just talk for the gallery.
Is it worse now, with traditional sectors dying and nothing done to help them?
Things are being done but given the size and nature of the problems, there is not much that Mauritius can do and this is where we realise how small Mauritius is in the world order. We suffer from a lot of conditions without being able to do anything about them. It’s not just the lack of thought leadership, which certainly is a problem, but it’s also all short termism. My worry is that Pravind Jugnauth is spread too thin; he is all over the place because of the team which is not performing. He wants to show that he can handle everything; that’s a mistake.
Don’t you think he spends too much time with socio-cultural organisations and is engaged in useless activities just to build his image?
He has to and wants to. He has an image problem. Remember that power was thrust on him and he came to the job poorly prepared. Also, it’s a huge step for him going into the shoes of Sir Anerood Jugnauth, who was a powerful leader. He has to show leadership skills, authority, imagination, that he cares for the people, the economy and economic players because he is also the finance minister. So I think he is spread too thin. Remember he lost Xavier-Luc Duval, who was a performing minister, Anerood Jugnauth who has stepped back, Vishnu Lutchmeenaraidoo, who was supposed to run the economy... He has lost a number of people who were supposed to work for him and I think he lacks a good team. That’s the major problem. And he has to work on his image. We are almost one year away from the election that is going to be a very, very tough. Navin Ramgoolam wants to be back and he will be back with a vengeance. It’s going to be very tough for the Jugnauths to face up to Ramgoolam. So he has to go out and emerge as a leader in two capacities; one as a national leader where he will compete with Ramgoolam, and his father will take a back seat. And two, as a rural leader because one goes with the other. You cannot be prime minister without having the rural areas behind you. So he has to win the hearts of the rural electorate plus the other groups to become a national leader. Now people in Mauritius talk about elections all year round. We have to go back to the basics: becoming a prime minister means winning 37 seats in parliament and 45 per cent of the million votes at the minimum. That means providing a fair and just representation of the nation in communal and social terms. It means you have to come across as a fair and just leader, so you cannot just work on rural votes. So he will need an alliance, because I will say this till the day I die: Mauritius can only be governed by alliances. So he will have to come up with a credible and workable alliance.
Apart from the Koze Kozer, Pravind Jugnauth has also been generous with populist measures. Aren’t these going to come back to bite us one day?
It will partially. I am not trying to excuse Pravind Jugnauth but only trying to look at things objectively. The government is substituting itself for the private sector in stimulating development. That’s another problem in Mauritius. The private sector is running out of breath, investment opportunities and is heavily indebted. We spoke of public debt, but think of private debt. The hotel industry is in for a Rs35 billion debt. The government is doing whatever it can in infrastructure, but the other thing that needs to be said is that the private sector too is not up to expectations.
But the private sector normally waits and watches. If the government creates opportunities for investment, they will invest but if the government is campaigning all the time what will they invest in?
Not always. We should be doing far more in the private sector. We are still in the sectors we were in 15 years ago. I think our private sector does not like foreign competition, and I am being very prudent here. We have a private sector that’s too provincial. We don’t get many partnerships, not many foreign investors who are supported. Eighty per cent of FDI is in real estate, which will run out in a few years. Foreign companies are not encouraged to join in shareholding of the large groups or to join the boards. Look at the board composition. Look at the investors coming in in sectors already occupied by the local private sector. Mauritius has to open up more to the world. One of the problems is this: we are very self-centered. We think we can achieve everything on our own. We all talk about foreign investors but we do nothing that actually attracts and encourages foreign investment.
Is this not a job for the government?
No, it’s a job for the private sector. I have been in PwC as a partner and dealt with foreign investors. I was a foot through the door. I am telling you, a lot of them go back complaining about the nature of our private sector which has its comfort zone and I don’t think the government should be blamed for everything. I hope the Economic Development Board goes out of real estate and tries to bring in real investment. For now, nothing seems to be working: regional headquarters for Africa, ocean economy, Freeport, smart cities, etc.
Coming back to politics, some people are predicting an election this year. Do you share that view?
I believe an election will probably take place at the end of December. I think it was rightly pointed out that there are a lot of events at the beginning of next year that would make the atmosphere right for an election. If that is the case, it will probably be announced in June-July after the budget.
So we can expect another populist budget that would make us indebted even more?
Perhaps. But why December? Well, one, it’s the end of the year and an election held at the end of the year is always good for the government with the end-of-the-year bonuses and people being more relaxed. If the old age pension is increased to Rs10,000, then all the seniors will get Rs20,000 with the bonus. The Pay Research Bureau (PRB) report could be ready before December and the Metro Express’ first phase will be inaugurated. |Prime Minister Narendra Modi will have visited. The Supreme Court will be inaugurated. I think we are moving towards an electoral budget and any sensible government would look to use the budget to the fullest.
How would a sensible government put the country in more debt if, as you said yourself, we are indebted by nearly 70 per cent of GDP?
‘Elections’ and ‘sensible’ are words that don’t go well together. Pravind Jugnauth cannot afford to lose. He simply cannot; the Jugnauths are in survival mode. I think they will go all the way to make life extremely difficult for Ramgoolam. So there will be an electoral budget and sweets distributed all around. Last year’s budget contained a few economic measures but in the end they did not re-launch the economy. This one will be a populist one leading up to that election.
What about the country?
You know, politicians like to think that their re-election and their policies equate to national growth and well-being. They intimately think that they should be in power for the next five years to get the country moving.
Economic Eric Ng said recently that under this government, the economic situation has become much worse and that our debt has reached unsustainable levels. Do you agree with his assessment?
Then wouldn’t a populist budget make things worse.
It may well do but survival will always take precedence over the interest of the country.