Who's the Better Cake-Cutter?

We can get an idea if we look at the Household Budget Surveys (HBS) that our highly-esteemed CSO publishes every five years. Let us proceed the same way that a clock ticks and start comparing the 1991/92 data with that of 1996/97.

Lutchmeenaraidoo vs. Sithanen

These are quite interesting years as they coincide approximately with the last year for Vishnu Lutchmeenaraidoo as Finance Minister and the end of the first mandate of Rama Sithanen. It gives an indication of how the cutting of the economic cake changed from Minister to Minister. In this case from cousin to cousin.

As Table 1 illustrates every single group saw their share of the national cake fall except the richest one. The poorest 10% -- that's the group which is more vulnerable in case you have forgotten -- had their share reduced by 13%. The other thing you want to note here is that the ratio of the share of the wealthiest to the poorest which was 12.09 when Mr. Lutchmeenaraidoo left increased to 15.40. Which means increased inequality and that's bad for growth -- just like keeping energy prices much higher than what is reasonable, flattening taxes or creating a major structural problem by making a multi-billion rupee gift to a dead industry -- and for the general well-being of our country. Please note that these were both ministers under SAJ. And I guess you will be hard-pressed to find even traces of a savat-leponz-gato-pima effect in the 1996/97 data.

Why Our Youth Don't Have A Skills Mismatch

Simply because technology has flattened every single learning curve. So anybody who has recently graduated should be able to help push Mauritius forward provided a reasonable number of opportunities are available. This will happen only if certain conditions are met. Like energy prices -- a major building block of GDP -- shouldn't stay disconnected from their world prices. Something which unfortunately happened for way too long.

We want our youth to transform the skills they've acquired -- and will keep on acquiring -- into meaningful outcomes fast because otherwise they will lose confidence in themselves and their gifts will go to waste. And then it will be everybody's loss. This will also depend on the quality of policy-making at Government House. The latter just like the private sector -- large and small -- must make good bets. Because that's the way they will create wealth or value. Which is about getting out more than what is put in. For example the CEB can float a bond, invest into a power project and then make a reasonable profit. Or sell clean electricity at competitive prices which will help Mauritius Inc. make one. The Passport Office can get us our travel documents fast making us save time which is another name for money. Similarly private sector companies can create value by moving upmarket or into new industries which are compatible with the standards of living that Mauritians reasonably aspire to. Not with those of the cheapest foreign worker available.

The other side of the coin is that Government and private sector companies routinely destroy value. And they do that -- to be sure there are fans of Marx too in there --  in many ways. We've seen how the STC can mysteriously lose billions and then lose a couple of billions more. Bosses of private companies may also put the enjoyment of super cars before the survival of their firm. Or allow themselves to be infected with hubris and start believing that this time it's different and that crises like those that happened in South East Asia in 1997 and elsewhere can never happen in Mauritius. Because we're the land of the lazy Dodo. Of course.

How Bad Was Sithanen?

His nine-year-old economic reforms have been an unmitigated mess. Plenty has been written about this. For example his policies have been worse than flipping a coin. A roulette in the Treasury Building would have produced even better outcomes. Which gives you an idea of the kind of skills mismatch we're talking about here. But let's look at it from a different perspective given how sophisticated Mauritian voters have shown us they can be.

Mr. Sithanen claims that he saved the economy. If that's the case then why didn't he:

1. get a ticket from Ramgoolam in 2010?

2. get a MMM ticket in 2010 after asking voters to punish one fils a papa who had betrayed him?

3. stand as an independent candidate in no. 18 in 2010? Dr. Sithanen was after all a force to reckon with in Belle-Rose/Quatre-Bornes. Not anymore.

Because if you analyse electoral data you'll find out that the people of Mauritius are able to express a whole range of feelings. For example and as the chart illustrates Sir Veerasamy Ringadoo -- our Minister of Finance for a long time -- had no problem facing the music in 1982 and even got 20% of the votes in his riding. Because SVR knew that he had done his best. Nine years later Lutchmeenaraidoo ran as a candidate for a party other than the one which had made him Finance Minister for eight years and still managed to get 46% of the votes. Fast forward nine years again and we have voters expressing an amount of sympathy towards former Police Commissioner Raj Dayal that almost got him into Parliament.