Back to the economic miracle

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It’s a fantasy that has been killed many times, but it never stays dead for long. In the Mauritian psyche is etched a deep belief that there was an economic miracle in this country and that it can be re-edited. Though many economists and scholars have tried to explain the objective factors that led to our economic prosperity, some politicians found it convenient and beneficial to keep the narrative of a miracle alive.

There is little harm in the narrative itself. Except that it leads to a mindset which is prepared to accept anything from officialdom as gospel and a culture where a widespread belief is that something can come out of nothing. Keeping this belief alive and encouraging it at times has been to the advantage of successive governments. It has however been to the detriment of the country.

More than ever before, the notion that miracles are possible is leading to our downfall. It is being entertained through a lot of spin-doctoring. In fact, the narrative of a miracle has evolved to embrace not one but several miracles. Whether those peddling it are so embarrassingly naïve and ignorant that they truly believe in it or they are consciously trying to fool us is not clear. And I don’t know which one is worse. What is clear is that the result is the same: that we are swimming in a cesspool of lies so fetid that it’s virtually impossible to know what is true anymore.

A non-exhaustive list of the miracles we are invited to believe in is that when times are hard and you find yourself in a real difficult economic situation, you continue to spend money as much as you did in the past, you squander it as much as you like as if there was no tomorrow but you will still have money to spend. That you can take money from the reserves of the central bank, use it with impunity without that having any consequences on the economy. That you can devalue the rupee to replenish the reserves and create the narrative that we have plenty more where it came from, while the banks are prioritising who to sell foreign currency to. That you can dip your hands in the kitty of government entities such as the Central Electricity Board without this having any consequences on the consumer or the country as a whole. That you can brandish the figures you want for growth, public debt, inflation, GDP etc. and everyone will believe you. That miracles exist!

There comes a time when someone eventually calls your bluff squarely. That time came with Moody’s downgrade – a terrible blow on the international scene to our country’s prestige and the credibility of our economy. In any other country, the minister of finance and the governor of the central bank would have been dismissed immediately to show that the country intends to redress the situation. Over here, another miracle took place: the downgrade was spun into something really positive and the self-congratulations continued unabashed and shamelessly! Other figures were tossed at us, consolidated by Statistics Mauritius, whose independence has been impugned. The story spun is a miracle in itself: we are still spending money on grand projects that are worsening our deficits, we are borrowing even more money to plug holes and embark on more such extravagant projects, we have not streamlined any of our parastatals, we are still using the central bank as if it were a branch of the Ministry of Finance and devaluing the rupee to hide the bottom of its draining vaults but, by miracle, inflation is not a problem nor is our foreign exchange situation! We are singularly defying economic laws of gravity and rewriting the rule book of ‘the dismal science’!

I don’t mind believing in this miracle. It keeps anxiety away. The only little problem I have is how to get international financial institutions like the World Bank and the International Monetary Fund and agencies such as Moody’s to embrace the same belief and naivety next time they strike. Another miracle in itself!  

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