Much ado about nothing

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According to MCB Focus, our economic growth this year will be 3.7% which is lower than the official projected growth of 3.9%. It is surprising that such a marginal decline has provoked a vehement reaction in some quarters; it is like a storm in a teacup. It is like the messenger in Macbeth who is blamed for bringing bad news.

What is not surprising, however, is that our economy has been moving at a snail’s pace since 2012. We are unable to break the 4% mark. Some have even aired the opinion that a 4% growth is within reach. Even if it does, which is highly improbable, it will only be a cause of consolation rather than jubilation.

Statistics Mauritius is the sole institution with the competence, resources and mandated responsibility to collect and compile statistics and it does so in a professional manner. As far as National Accounts are concerned, Statistics Mauritius publishes estimates four times in a year. The figures are updated as more information is gathered on key sectors of the economy, the latest one was in September 2018 with a projected economic growth of 3.9%. An evaluation of our growth does not mean Statistics Mauritius is wrong. It just shows that recent economic developments make it unlikely to happen.

We are all users of these statistics and in the light of observations of more recent trends we draw certain inferences. We can therefore with some confidence analyse whether a target may be attained or not. Obviously, things have not remained static since September 2018. Just to take an example. The Mauritius Chamber of Agriculture has recently revised the sugar production estimates from 330,000 tonnes to 324,000 tonnes, a drop of almost 2%. This shortfall no doubt has a negative impact on the already negative growth of 7.9% of sugar production. It also affects sugar milling activities which further dampens the dismal manufacturing growth.

The official estimates are not cast in iron. If, for one reason or another, there is a big surge in tourist arrivals in this peak period, obviously it will have a positive effect on growth. We should not be unduly concerned with a marginal decline or expansion or find something sinister in an objective analysis; after all, in Economics we are always in the realm of the margin. Instead, it should provide us with food for thought as to how can we do better. It is well known that we are not doing well enough.

We should not be pennywise and pound foolish. We become so engrossed in defending a decimal that we forget that we should concentrate on a more ambitious target. We should not be content with a 4% growth. On the contrary, we should aim at a growth of at least 5%. The question is not who is right or wrong or for some to defend the indefensible. What is important is for all stakeholders to put their heads together, analyse the constraints to growth performance and take appropriate measures for higher growth. This should be the right approach. The pertinent question is how conducive are our policies and how effective are our relevant institutions to deliver the goods. We need not live in a fool’s paradise and refuse to see the bitter truth. Some institutions need to be more professional in approach rather than making a mockery of professionalism elsewhere. We have to accept, respect and commend the work done by an institution in pure objectivity and there are only a few nowadays.

We also have a crisis of expectations with promises unfulfilled. On the one hand, we have great expectations and on the other few achievements to show. In 2015, the Vision Document promised a growth rate of 5.5% as from 2017. This has not materialised, like many other of its projections.

It is important to recall that the incumbent government promised a better economic performance. In the beginning, it was easy to attribute the blame for our economic performance to the previous regime as a legacy it has inherited. This no longer holds water since the government has been in power for four years. We have to do our own mea culpa and shake things up. We badly need a paradigm shift.

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