Monday, April 17, 2017

Wong Had Little to Do With Massive Amount of Poverty Created

Because he was not Finance Minister (FM) during any of the past eleven years when by far the most backward policies -- top tax rates were set too low and this broke the economy -- our country has known were implemented. For sure he has been a member of Cabinet during the last two and half years and as such has to accept part of the responsibility of the mess we're in because he could have vehemently asked for the end of the worship of the golden calf. Or at least distanced himself from it. Besides he was until recently a member of a party which has two interesting words in its name: Social Democrate.

XLD, Less So
Of course Xavier-Luc Duval (XLD) has a lot more to do with all the poverty created over the last decade because he was in the driver's seat for quite some time -- close to three years. But before we look into this let us not forget that poverty and the fight against it is heavily dependent on two quantities: the size of the economic cake (GDP) and how it is shared. From the 2012 household budget survey (HBS) -- which tells us about the sharing -- we know for a fact that the poorest two-tenths of Mauritian households saw their shares shrink by 10% to 15%. That's their smallest shares in at least two decades if you care to know. So we don't exactly get bonus points here. And what about GDP?

Decomposing the Sithanen Toohrooh
A disaster of epic proportions. As we've shown before a Rs927 billion GDP gap had accumulated over the eleven years ending in December 2016. This gap aka the Sithanen Toohrooh gives us an indication of the serious damage that that politician with a massive skills mismatch has inflicted to our economic machinery and which others who followed didn't fix. This is captured by Chart 1 which shows how the close to a trillion-rupee GDP hole can be split among the six Ministers of Finance we've known since 2005.