Friday, December 30, 2005

Waiting For Rama?

If you can’t stand the heat, get out of the kitchen.
Harry Truman

Of course not. He has already shown his mettle and it is not difficult to see that he has a strong action bias and has uplifted what has otherwise always been a dull ministry. I am, of course, speaking of Rama Valayden.
The story with the other Rama, the one everybody was waiting for is entirely different. One of the most important ministries in the government – remember that the Ministry for Financial Services has also been merged with the Ministry of Finance – is close to becoming invisible after having gone to sleep for the past couple of months.

This is all surprising for a lot of people because the job of Minister of Finance is the only reason why Mr. Sithanen is in politics. We also remember how he switched sides overnight in September 2000 when he found out that he would not be part of ‘l’àccord à l’Israélienne’ or the so-called Medpoint accord.

And at least one person has regretted the absence of Mr. Sithanen from national decision-making quarters for more than a decade. The same people would also have us believe that Mr. Sithanen is among that small group of people who share a few other characteristics that are so godly that future generations of the beautiful people of Mauritius would be immensely grateful if members of that group would donate a chunk of their DNA in the hope that modern medical science would able to get a clone up and running after the day they get transformed into blue energy. It is not clear, however, if their egos should be sent to Harvard for study in the meantime. So much for Antoine St Exupery’s notion of ‘Murdered Mozarts’.

So you would have thought that the new Finance Minister would have come out of the starting blocks with a bang and with an urgent desire to sink his teeth into something meaty right away. Nothing of the sort really happened.

Tell us something we don’t know!
I don’t mean to say that Mr. Sithanen has been absolutely quiet. Far from it. The problem is that for the past 5 months only one clear message has been repeated ad nauseam – we are in a bigger mess than we thought we were (that’s his insider’s view). And he even marked an unnecessary pause for discussing the content of the Article IV Consultation which unsurprisingly added nothing new to public knowledge. We should also not forget that for the last 10 years he was out of Parliament, Rama Sithanen never missed an opportunity of painting a very gloomy picture of the economy often with his darling of ‘la méthode des quatre quarts’.

And who is interested in being constantly reminded what the previous government did or did not do? Didn’t the people already express their opinion on the overall management of the affairs of Mauritius between September 2000 and July 2005 and on Phase II of the Medpoint Accord? Rama Sithanen should instead tell us what he intends to do given that he is now in the driver’s seat.[1] A to-do list with deadlines and outcome measures is a good place to start.

Switch Ramas?
Maybe Mr. Sithanen is more interested with Electoral Reform and the Constitution? Or maybe he simply doesn’t have a clue of how to get us out of the small mess in which we are? In either case, the kitchen is not a good place for Mr. Sithanen to stay in. I suggest he moves to the living room, grab a good book on comparative analysis of electoral systems and relax comfortably in an armchair. Although, we have to note that it is with our current electoral system that we managed to prove Meade wrong.

In the meantime, the Prime Minister should proceed with a reshuffle. I personally think Mr. Valayden would very likely make a far better Minister of Finance as his energy level compares very favourably with that of Rama Sithanen and he understands that deciding is not doing – implementation is everything. There is, of course, another very strong contender for the top finance job in the cabinet: Navin Ramgoolam himself!

A recipe for doing almost nothing.
That’s what emerging from the performance of Mr. Sithanen since his return to his favourite manifestation last July. Write a little statement (a high-school-level essay) about what to do to set the stage for robust growth; brand it in a silly package such as ‘insider view’; appear really full of anguish on national TV and then go into hiding; sporadically come out to say ‘see, the World Bank too thinks we’re in a mess’ or ‘Moody’s confirms what I’ve been saying all along’. The latest ingredient is to hire someone from the World Bank (WB) as Financial Secretary who promises to be an ‘action man…’ for World Bank orthodox policies.[2] Time, of course, has not been waiting for Rama Sithanen: in a couple of weeks, six months or a full 10% of this government’s mandate would have elapsed.

Two questions.
Given that Mr. Sithanen is about to embrace the folly of WB Mantras it is most fitting to ask him a couple of questions.

Q1. What percentage of the success of a country like Singapore can be attributed to World Bank Policies and what percentage can be attributed to a visionary leader?
Q2. Is the story different for Dubai, the United States of America and other successful countries?

Until we hear his answer, let us deeply meditate on an alternative recipe:

In a different world we need to find a niche for ourselves, little corners where in spite of our small size we can perform a role which will be useful to the world. To do that, you will need people at the top, decision-makers who have got foresight, good minds, who are open to ideas, who can seize opportunities like we did. My job really was to find my successors. I found them, they are there; their job is to find their successors. So there must be this continuous renewal of talented, dedicated, honest, able people who will do things not for themselves but for their people and for their country. If they can do that, they will carry on for another one generation and so it goes on. The moment that breaks, it's gone. The World Bank report's conclusions are part of the culture of America and, by extension, of international institutions. It had to present its findings in a bland and universalizable way, which I find unsatisfying because it doesn't grapple with the real problems. It makes the hopeful assumption that all men are equal, that people all over the world are the same. They are not. Singapore shall be forever a sovereign democratic and independent nation, founded upon the principles of liberty and justice and ever seeking the welfare and happiness of the people in a most and just equal society. Even from my sick bed, even if you are going to lower me into the grave and I feel something is going wrong, I will get up.

This is of course Lee Kwan Yew’s idea of running Singapore. Clearly, this mantra can readily be used to assess our leaders.

Our leaders should always stick with those policies that are good for Mauritius irrespective of whether they are good for the politician’s future. The selfless leader would not hesitate to execute policies that are good for Mauritius even if it means making his re-election more difficult as the interest of the country should always take precedence. There are, of course, many policies that are good for both the politician and the country. I hope they appear pretty quickly on Mr. Sithanen’s to-do list.

Person of the year
Attributed to Navin Ramgoolam on account of his massive political achievements in the General and Municipal Elections in 2005.

A note to the readers of The Jag!
Thank you for your very encouraging comments and support. I wish you all Happy Holidays!

Comments: density@intnet.mu

[1] Mr. Sithanen should also tell us pretty quickly what we should be doing to avert a downgrading of our risk rating.
[2] Apparently, Mr. Ali Mansoor holds exactly the two degrees Mr. Sithanen has as they have both studied at LSE. This gives you an idea of the likelihood of an interesting cross-fertilisation of ideas. So much for the value of an orthogonal knowledge set. I have also been made to understand that Mr. Mansoor may be able to help us look at waste from a different angle.
No. 3 December 2005
© Sanjay Jagatsingh, 2005

Saturday, November 19, 2005

100 Days After

Poetry is a net with which to catch reality.
Spinoza

Another major event follows the historic victory of July 3rd: Labour and allies grab all 5 municipalities. That of course includes Port-Louis, Curepipe and Berenger’s stronghold of BB/RH. Of course most of the credit of this massive political achievement goes to the new man in charge of Mauritius: Navin Ramgoolam. Let’s look at a couple of reasons why it’s massive.

1. No political leader in our short political history has staged a comeback by presenting himself as PM for five years. And this without any exit clause.

2. For the first time one of the three major political parties managed to beat an alliance of the other two winning a very comfortable majority.

3. It’s been a long time since we’ve had such a very strong PM in place. That was certainly not the case during 2/5-of-a-term Prime Ministership of Paul Berenger: MPs had just to threaten of provoking a bye-election to get the ear of the then PM and more.

4. All of this has been achieved quite disrespectfully of the divine signal: “The Guy Must Go”.

Naturally, the past few years has confirmed that skin pigmentation is no driver of stellar economic performance – a fact not unknown to anyone not living in the 18th century Mauritius.[1]

What’s left on Ramgoolam’s shopping list.

This is not dissimilar to Michael Jordan travelling up his own little list of 50+ point performance at Madison Square Garden after his return to the ‘game of basketball’ in 1995.

1. Rama Valayden gets elected in Rose-Hill in 2010 or whenever general elections get called.

2. Labour and allies take all the 3 seats in Rose-Hill.

While the first item was already an intriguing possibility before July 3rd, the results of the last general elections in No. 19 have confirmed that very little is left to be done (less than 1200 voters need to switch allegiance). And that was of course before the October 2nd municipal results.

Those who don’t study history…

What happened to the MMM and the MSM this year happened to other parties before: no succession planning.

1. Labour in 1982: (Although, SSR did publicly hint about his successor in 1979).

2. MSM in 1995: Lutchmeenaraidoo and Dulloo were denied their go at the top party-job by being conveniently sidelined.

3. MMM in 2005: Berenger has been around for 36 years with only two as PM. For comparison, Stalin and Brezhnev were in the driver seat for 28 and 17 years respectively.

A Tale of 2 ages.

With the recent change of government we have left the ice age way behind to step into the... stone age. It’s a huge improvement: a sleepy D-350 has been replaced by a vigorous D-14000 (the reach in km of our economic diplomacy), we don’t consider ourselves the best managed country in the world and Prime Ministerial missions are not silly attempts to compete with National Geographic documentaries anymore. But it’s not enough. Here are a few things we should really worry about:

1. Rama Sithanen, Finance Minister, gives the impression that he does not believe in Financial Markets – there was nothing for Financial Markets in his recent statement about setting the stage for robust growth. That’s not good news especially after the overregulation and lethargy witnessed over the past 5 years and given that it’s one of the few pillars where lots of growth is still possible. Deeper capital markets will add up to 200bp to our growth rate and is one of the instruments par excellence for the democratisation of the economy.[2]

2. There is no doubt that this government is well-intentioned. It clearly does not indulge itself in the mathematics of hate. The problem, however, is that an integrated approach to problem solving has not been adopted. Richard Feynman, the daddy of quantum mechanics, among others, rightly observed that “everything is related – you just need to find the link”. For instance, our education and transportation problems are linked for obvious reasons. It’s not because this was not considered in the ‘rattrapage’ Obeegadoo that we need to forget about it.

3. We unfortunately don’t have a measurement culture here. I am sure you heard about “what gets measured gets managed”.[3] This goes even further: what is not measured technically does not exist. And the greatest ignorance-reducing strategy is measurement.

And where are we with the ‘branding Mauritius’ project? Are the neurons of our leaders connected here or are we outsourcing our thinking to the World Bank?

Comments: density@intnet.mu


[1] One may read Malcolm Gladwell’s Blink (2005) and then Antonio Damasio’s Descartes’ Error (2005) for interesting insights on human decision-making including the benefits of a healthy ventromedial prefrontal cortex.

[2] It is no surprise that Mark Anson, CFA, Chief Investment Officer for CalPERS has been voted “Most Influential” in the current issue of the CFA Magazine. We will return to California in subsequent editions of The Jag!.

[3] Which can be thought of as the modern equivalent of Lord Kelvin’s reminder of knowledge of the “meagre and unsatisfactory kind”.

No. 2 November 2005



© Sanjay Jagatsingh, 2005

Tuesday, September 13, 2005

Setting the Stage for Robust Growth: A Note

Nature has established patterns… but only for the most part.


Leibniz, 1703

Welcome to 1st edition of The Jag!, an occasional letter written to and for the beautiful people of Mauritius. I would be glad to have your comments and thoughts via e-mail at density@intnet.mu. Happy Reading!

Sanjay Jagatsingh


Setting the Stage For Robust Growth: Statement by the DPM and Minister of Finance and Economic Development, Hon. Rama Sithanen – A Note.

The much awaited statement was delivered on August 30th and is available at under ‘news’ (by the way, I think the heading should have been ‘new’ instead of ‘news’). I went through the 174 paragraphs of the 21-page document and I provide my comments below.

In a nutshell, Government has declared war on red tape and has decided to set up a Committee to make sure big projects don’t get bogged down. It is definitely good news that this committee is to be chaired by the PM given the very clear signals that Navin Ramgoolam has been sending that the new Government means business.

Government will also set up an Investment Climate Improvement Committee essentially aimed at making it easier to start and run a business. I believe that this along with the ‘principle of silent agreement’ whereby if after filing applications a business entity does not hear from the authorities within a time period it can safely assume that it has been approved is a positive development.

The change in air access policy is also in line with the Government’s contention that quick dividends can be secured in the Tourism industry.

However, I have to note that very little has been proposed for the Financial Services sector in the DPM’s statement. In fact, all of the three little paragraphs concern the offshore sector. Not a single word on developing the local capital markets. Nothing either on Pension reform.

To be sure, Pension reform does not simply boil down to means (or is it mean?) targeting like the previous government had done. And simply reversing this badly inspired policy will not save us from the time bomb we’re sitting on. Pension reform will take years and a good time to start is now. But the benefits will include deeper capital markets and higher GDP growth (up to 2%). For starters, I think the NPF should be re-engineered and provisions should be made to appoint a CEO while the current investment committee should reappear in a new manifestation – as a Board.

The statement should also have contained outcome measures and main drivers of performance. Hope has never been a strategy.

Finally, I would like to humbly recommend to the DPM not to believe everything that the World Bank and the IMF say, let alone seek assistance from one of them for branding Mauritius Inc. Mauritius is not exactly a poor country and I am sure we can afford a couple of great ads on CNN.

Go Mauritius! Go!

No.1 September 2005
© Sanjay Jagatsingh, 2005