Friday, July 23, 2021

Guy Who Left Behind At Least Three Pairs of Oversized Shoes is 90

Kher Jagatsingh who was born nine decades ago today left a massive legacy. We look rather briefly at some of his accomplishments and offer clues as to how he managed to do so much so fast. 

He left a job in the colonial civil service to co-found The Mauritius Times at 23 (see timeline). That’s a pretty daring move if done today. Just imagine in those days. But the voracious and curious reader that he was obviously had other plans and a big part of these was to serve his country to the best of his abilities.

These initially took the form of a series of battles in his weekly to retaliate against all forms of injustice and to steer national debates in a direction that was good for Mauritius. One such battle was the “Down With PR” campaign so that Mauritius ended up with a far superior electoral system, the FPTP system. 

KJ was quickly noticed by that team-builder extraordinaire, one SSR, and he was soon standing as an LP candidate in the general elections of 1959 to taste his first electoral victory. SSR must have been quite impressed by his protégé to have the 28-year old as Secretary-General in such defining times two years later.

After an electoral setback in 1963 he returned to parliament after the oh-so important 1967 independence elections and was sworn in as Minister of Health. That was a crucial time to be in charge of that Ministry. The demographic bomb – a topic he wrote extensively on – was being defused. And going through his speeches in that period – a good example is when the SSRNH was inaugurated in August 1969 – leaves us with the unmistaken impression of someone who thought very deeply about public health.

His next stop was a five-year stint at the Ministry of Economic Planning & Development ending in 1976. KJ again used his beginner’s mind to look at economic development and pioneered a new approach, launched the much talked about RDP and in the process, we learnt from Manou Bheenick’s excellent 1999 Memorial Lecture, transformed the ministry into a superministry.

World Bank President Robert McNamara 
and KJ shared the view that bean-counting
 has little to do with development.

The Ministry of Education and Cultural Affairs was KJ’s final cabinet position. Everybody knows who implemented LP’s 1976 electoral pledge for Free Secondary Education. What may be lesser known is who put it in the manifesto.

The then 45-year old considered it his biggest challenge yet. Many schools were built, the MIE produced schoolbooks that were more suitable for the 10-year old nation and several components of the education sector were integrated into a coherent whole to help push Mauritius to greater heights.

Widely considered as the best Education Minister Mauritius has had, his hard work in that capacity has been acknowledged by many players in the sector and his interesting ideas are still being looked at.

His excellent work has been recognised by many.

Kher Jagatsingh has lived a very meaningful life. He took on the mighty, educated the masses and strengthened the Labour Party with his off the charts organisational skills, charm and intelligence before delivering solid performances in three different ministries at junctions that were crucial in the history of a young nation. A non-negligible part of this impressive track record can be traced back to the fact that he and his biggest fan, the great leader of the LP, happened to be on the same wavelength on most national issues. These included progressive and sustainable taxation, the FPTP system, the importance of a good welfare state and the necessity of building great teams so as to be in the best possible position to handle difficult problems.

But a lot of his success came from working on himself, travelling extensively, meeting the great men and women of his time (Sarvepalli Radhakrishnan, Chou-En Lai and l’Abbé Pierre during a 17-month 1950s trip), not letting too much schooling get in the way of a first-rate education (a precious perspective in these times of disrupted schooling), putting in long hours and staying very humble and empty. 

Keeping the fan base happy.

SKJ with his comrade-in-arms and fellow pillar of the Labour Party, Sir Harold Walter (on the right), in the VIP Lounge at Plaisance Airport.

Petals of Dust which gives us a good idea of how much KJ loved his fellow compatriots was published in 1981.

Sunday, July 04, 2021

Dis Plas Kot Bizin Komisyon Danket

Byin bizin komisyon danket dan sa ban plas swivan la parski sa fin kut nu estra ser kom pei ek ena ladan fin mem fer nu koste ek fayit. Bizin komisyon danket pu nu sosyete konpran kin arive ek ki nu met ban zafer an plas pu ki zame sa pa arive ankor. Dayer Ptr ti propoz en Economic Offenders Act dan so manifest electoral pu eleksyon zeneral 2019.

1. Linpak flat tax 15% Sithanen lor sitiasyon mari katastrofik dan ki Moris retruv li. Dapre se ki ti pe dir dan kanpayn elektoral 2005 ek apre (li pu zener en krwasans 8%) GDP Moris pu 2020 ti bizin 914 milyar rupi. Tiena COVID-19 an 2020 non? Pena problem anu pran prozeksyon GDP pu 2019, 837 milyar rupi, pu kav dir tir COVID dan diskisyon. GDP aktyel pu 2019 ti 498 milyar rupi. Donk zis pu 2019 mank 339 milyar prodiksyon domestik (pu gayn en lide, pandemi fin kut nu 100 milyar rupi GDP an 2020). Ant 2006 ek 2019 ti mank 1,780 milyar rupi GDP u 312 fwa sa 5.7 milyar ki fek pey Betamax la. U preske 18 fwa seki pandemi fin kut nu an 2020. Ava bon osi kone kisana in profit plis sa striktir taksasyon insutenab la ek ban lezot desizyon insanse.

2. Kifer sevings fin ekrule dan Moris kumsa ek an plis zame li fin refer? Zame fin ariv sa dernye swasant an malgre ki plizir gro siklon in deza kraz nu lekonomi ek nun travers dan de sok petrolye. Sevings se meyer indikasyon rezilians en lekonomi ek en ingredian esansyel kreasyon larises. Ala en perspektiv istorik

3. Linpak ban kontra IPP lor Moris (kalite ler, lanvironman, konpetitivite, stratezi, etc). Navin Ramgoolam ti truv zot abizif ek an Novam 2007 li ti dir ban morisyin ki sa pa kav kontinye ek ki li ti pu sanz so non si li ti pu les sa ban kontra la kontinye abiz lepep. Mem lepok Paul Berenger usi ti truv ban randman ki ban IPP ti pe fer ek sa ban kontra la tro elve ek ti propoz en randman 10%. Kav sa si ti tro elve. Resaman Ramgoolam fin kalifye kontra Betamax de ‘an bon e di form’. Li a kav vin fer nu konpran kuma tu sa ban kontra IPP la diferan ek parey. Berenger usi kav vin eksplike.

4. Pert ejing Air Mauritius. Zame nun kone kin vreman pase. Purtan MK in perdi buku kas. Par milyar. Par kont ti tan buku deklarasyon sirprenan. Komisyon danket ava ekler nu. Li kav usi dir nu kifer nu konpayni aviasyon otan dan difikilte zordi ek egzamin ban dezisyon kuma Air Corridor ek asa avion.

5. Pert ejing STC. Byin drol sa parski STC ti ena en Automatic Pricing Mechanism a lepok e donk li pa ti ena pu fer ejing. Bizin kon tu ban detay lor la i konpri ki kalite kontra finansye ti servi. 4.7 milyar rupi ti perdi ladan.

6. Leta nu system sante piblik. Avan Covid-19 pasyan dializ ti pe pas buku mizer. Apre plizir fin desede resaman. Ena en komisyon danket lor la me ena plizir lot problem ki revin a la sirfas konstaman. Li pu bon konpran byin parski nun truv rol mari inportan ki nu system sante piblik fin zwe pu gard nu vivan dan pandemi ek pu konpran kifer otan pasyan ankor bizin al swiv tretman deor. Ti bizin osi kone ki ban politisyin u zot fami ki ena kik lintere dan ban system sante prive pu evalye ban konfli dintere reel u potansyel.

7. Leta nu lanvironman (i konpri kalite ler nu respire). Bizin konpran ki fin ariv nu lanvironman depi lindepandans. Pe kup montayn, tuy sovsuri par milye, kup en ta estra zoli pye, prodir tro buku dese ek nu fin vin mari vilnerab sak fwa gayn de gut lapli.

8. Tentativ privatizasyon CWA ek CHC. Bizin rant an detay ladan. Bizin ran piblik rapor labank mondyal lor sekter dilo pu lepep konpran kifer ti pe rod don kontra afermaz en konpayni prive. Bizin kone komye kas konpayni la ti pu gayne sak fwa lapli tonbe. Ek kone kifer in les sa zafer la dren nu ban lenerzi nasyonal pandan otan letan. Mem zafer pu CHCL.

9. Lev pake reste. Bizin kone ki egzateman ti arive an fevriye 2007 ler minis finans ti pe rod fer santaz ar promye minis akoz nominasyon guverner labank Moris. Eski nu pei ti rul san minis finans pandan plizir zur ki en zafer ki pa sipoze arive?

10. Inplikasyon proze politik lalyans Ptr/MMM an 2014. Ek sirtu ki bizin fer pu elimin/redwir sa kalite risk la.

Friday, June 04, 2021

World Bank Not Shutting Down Yet, Publishes Another Sloppy Report Instead

The Country Economic Memorandum (CEM) for Mauritius that came out recently is typical of the dumb reports that the World Bank (WB) dishes out non-stop. Skimming through it immediately brings back to mind Lee Kuan Yew’s famous observation:

What Harry Said 
About the WB
“The World Bank report’s conclusion 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.”

The WB is a controversial institution that should be closed for the good of humanity as it has messed up several countries. Or at least converted into a food court where falafel can become a reality with a good enough circular migration programme. Take Indonesia for instance. Sebastian Mallaby reports on page 190 of his excellent The World’s Banker – trade unionists and other progressive voices in Mauritius should definitely grab a copy – that the first thing that James Wolfensohn, the WB President at the time of a 1998 trip to Indonesia, told Dennis de Tray, its country director, was “You’ve really [expletive deleted] this country up”. 

What the World Bank 
is Particularly Good At
Definitely creating famine. Like in Malawi. Google up one 2007 New York Times article (Ending Famine, Simply by Ignoring the Experts) and you’ll find out about another big poop nicely summed up by Jeffrey Sachs as “the donors took away the role of government and the disasters mounted”. The CEM wants to do that too. It has “priority actions that could be launched immediately under the FY21/22 budget to kickstart the process”. That’s interfering with our sovereignty if you ask me and it’s serious enough to get the local WB office closed down. It’s a lot worse than the episode with the WHO representative at the beginning of the year. The other thing is that we’ve been told that the CEM has been crafted by 20 experts. Experts in what? Massive Economic Poop? Thanks, but no thanks. Been there, done that with Bretton-Woods Ali (Mansoor) who told Mauritius back in 2006 after getting the job of Financial Secretary from his university buddy and toxic bean-counter that he would be adapting the practices of the WB that have worked elsewhere to our country. 

Driving Public Finances 
Over a Cliff is Another Core WB Skill
This essentially took the form of an extreme version of trickle-down economics that was supposed to generate GDP growth rates that would oscillate around 8% by slashing already-low corporate and top income tax rates to 15% flat. As expected we never got 8% growth in any of the last 14 years ending in 2019 which is before COVID-19 started creating trouble. In fact and as the chart shows we didn’t even get 7% or 6% in that period (the average being barely above 4%). No wonder then that 67-year-old Sithanen has been out of parliament for 11 of these 14 years (79%) and that too because we didn’t have recall elections back in 2006 (we unfortunately still don’t and PJ would make his first serious bit of history by adding them to our constitution). 

Good At Killing Savings Too
We know what happened to our savings after bank interest was taxed, double-digit inflation was created and our rupee was rapidly depreciated in the first few years of Paglanomics. According to recent and conservative calculations the savings missing between 2006 and 2019 exceed 1 trillion rupees.* That’s a million million rupees. Speaking about a trillion rupees did you know that according to Sithanen/Mansoor trickle-down policy our GDP was supposed to cross that threshold by the end of this year? Without COVID-19 national output would have been around Rs557 billion. In other words there would have been a GDP shortfall of nearly half-a-trillion rupees for one year. And it would have got worse every year as long as we stood on the wrong side of compounding. All of this obviously makes the job of our Finance Minister really simple. 

Padayachy’s Easy Decisions
Bring back corporate taxes to at least 30% which is roughly where they were before bean-counters started messing up Mauritius really badly with their economic snake-oil (aka WB best practices). So that we defuse the debt bomb and government doesn’t sit on its hands (while keeping busy with unnecessary distractions like the annoyance law and the ICTA proposal) and ruin the country along with its world-famous environment. Introduce a wealth tax. Very large dividends of several hundreds of millions of rupees should be taxed at 95%. End the wealth-destroying depreciation of our national currency and the corresponding bean-counting with the SRF. Solve real problems. There are quite a few of them. Don’t confuse wastage with GDP/revenue shortfall. By the way, there’s wastage in the private sector too. Or screw-ups with reforms. And...

Solidarity Never a 
Substitute For Sustainability
When tax rates were 70% public finances were sustainable and we built a decent welfare state. Still there was plenty of social work that was going on because we were a left-for-dead country and the economic seas of the 1970s were quite choppy. These were done in an era with no social media. Plenty is still being done away from spotlights. But the current tax structure is simply not sustainable. No amount of solidarity can make up for that. Unless an expensive villa, a bundle of hard currencies, an optional dialysis machine, cleaner air, upward social mobility, a respect for nature plus a million of other things is delivered along with each food pack. There was already Rs1.8 trillion of GDP missing between 2006 and 2019. It’s way better for the 10% richest households (and for everybody else) to get 27.8% of a larger cake like in 1991/2 than 31.2% of the smallest of cakes that’s incompatible with nature like in 2012. Which is why in 2011 wealthy French saw their dreams come true: pay more taxes. Wealthy Germans had asked for the same thing two years earlier. 

Jagatsingh, S., Budget 2021/22, Republic of Mauritius, Analyst Report, forthcoming. 

Sunday, March 29, 2020

Padayachy is Two Budgets Late

He should have presented one early in January to put back corporate and personal tax rates on a sustainable and progressive path – raise maximum personal rates to 40% or more and the corresponding numbers for corporates not below 30% – because fourteen years of trickle-down economics were about to send our economy crashing into a wall. As chart 1 shows GDP for 2020 was expected to reach Rs530 billion before Covid-19 appeared on the scene instead of the Rs918 billion needed to keep the regressive tax code. That’s a shortfall of Rs388 billion. 2021 was supposed to be the year our GDP crosses the Rs1 trillion mark. That was not going to happen and our economic output would have still fell short of that milestone by a lot even in 2024. In fact the gaps between the two variables would have kept on increasing with GDP in 2024 less than half where the Sithanen flat tax had promised to bring it.

Rs78bn of Government Revenue 
Missing in 2020, Rs89bn in 2021
These shortfalls can be translated into missing government revenue once we pick a reasonable number for the latter expressed as a percentage of GDP. Let’s be conservative and pick 20% - the actual budget estimate for 2020 is 23%. As chart 2 shows there was going to be Rs78bn of revenue missing in the government coffers this year if tax rates were not brought back to sustainable levels (the figure for 2019 is Rs67bn). This amount which is roughly 15% of our pre-Covid-19 2020 GDP could have been used to take our public health system to a whole new level. After it was seriously patched up. Weren’t we recently reminded by the President of the Renal Disease Patients Association that there are on average three dialysis machines in each dialysis centre that’s not operational?

A Second Budget in March
Then this month he would have presented a massive supplementary one to deal with the Covid-19 problem. A bit like what Singapore did. Instead Padayachy wasted precious time by putting the dumb and controversial Doing Business rankings (DB) on a higher pedestal. For sure he cannot talk about average growth rates of the past five years – the sole purpose of bringing tax rates to 15% was to get 8% growth rates but which we never did in any of these years – as they have been the lowest of the past thirty-five years. The snag is that as chart 3 shows changes in our DB are uncorrelated with our economic growth. And do we need to even bother calculating its correlation with the conditions in which several of our public medical staff are working to keep us safe from the pandemic?

Monday, December 30, 2019

How to Make Saying No to Drugs Easier

I’ve never abused alcohol. I’ve never done drugs. 
I don’t smoke. And I exercise. 

Halle Berry revealing her biggest beauty secret 
on Entertainment Tonight, 2010. 

The best policy on drugs for yourself is no first-use. 

Mark Rutte, Dutch Prime Minister,    
to high-school students in Ottawa, Canada, 2018

Looking at the experience of one famous scientist with mind-altering substances will provide important clues.  

Meet Richard Alpert, 
Anxious Harvard Professor
A psychologist born in 1931 who considered himself to be very mediocre but was driven enough to land an assistant-professorship at Harvard in 1958, be very successful by any objective measure and who started collecting things which included antiques, a sailboat and a Cessna 172 plane. But Alpert (RA) feels his life is too empty because it lacks enough meaning and the concepts he had learned and was now teaching didn't free him from his neurosis. Trying marijuana a few years earlier thanks to his first patient and in an irregular fashion after that didn't help either. Neither did spending $26,000 and five years in psychoanalysis. Or drinking heavily. 

Enter Timothy Leary, Disruptor
RA bumps into Leary (TL) at a nearby research centre where the latter had been hired after making quite an impression on the centre's director in Italy. They become drinking buddies and a couple of years later decide to travel south with the first stop in Mexico. Tim gets there first and eventually tries nine Tionanactyl, the Magic Mushrooms of Mexico, and tells his friend that the six-hour experience is a bigger eye-opener than his fifteen years as a shrink. Their plan is scrapped after TL realises that traveling inside his mind would be far more interesting.

Flesh of the Gods Synthesised
A few months later RA is invited by Leary to try 10mg of psilocybin, a synthetic of the Magic Mushroom crafted by Sandoz, and soon enough he sees the different layers of his ego flash in front of him one after the other not unlike what people who've had near-death experiences have reported. His body then disappears bit by bit. He starts to panic as he thinks he's dying because nothing in his upbringing has prepared him for this. But he notices that his awareness is still there witnessing everything with eerie calmness even though the body is gone. They take some psilocybin again weekly a few more times and also give it to a wide range of healthy people asking them to fill a survey at the end. Patterns start emerging highlighting the importance of set and setting (expectation and environment) in conditioning the reactions to the drug. But the main problem is that these new states of consciousness don’t last for more than a few hours. 

Shifting to LSD 
And Taking it More Often
RA then tried LSD, a more powerful hallucinogen, after TL had sampled it. He even took doses every four hours – about 2,400 micrograms every day – for three weeks with five other people. This allowed them to plateau at a very high level but they were frustrated to come down a few days after they stopped taking the drug. At around the same time they were introduced to relevant eastern spiritual literature. A 2,500-year old book, the Tibetan Book of the Dead, stood out. It had been used for centuries by Lamas to help go through the 49 days between death and reincarnation by describing them and surprisingly these turned out to be extremely accurate accounts of their drug trips. This prompted RA to think about going to India to find out one of the guys who knew what these other forms of awareness were. Even though TL and a few other people who were experimenting with psychedelics had done that but hadn’t returned with all the crucial answers

Not As Good
As Meditation 
Alpert eventually tags along with a guy he had walked through some LSD trips and who was off finding holy men in the east. Their journey began by looking for Sufis in Teheran, found one but didn't feel anything. They then headed to Afghanistan, that Graveyard of Empires, then to India visiting Benares and Kashmir but they were still searching although one holy man they had given LSD told them that it was 'good, but not as good as meditation'. The despair had become huge – RD had even stopped taking LSD so as not to make it any worse – and they were now in a restaurant in Kathmandu on their way to Japan when a guy, Bhagwan Dass (BD), walks in and sits at their table. As he feels that guy 'knows' he follows him back to India and eventually meets BD's Guru, Maharaji Neem Karoli Baba (NKB). 

Where's the Medicine?
NKB is somewhere between a devotee of Hanuman and the deity himself. The American quickly understands that the Guru basically has a copy of his life and thoughts in his head. So for example when RA thinks of asking him about LSD, some hours later a messenger brings him to Maharaji. The saint eventually gets Alpert to open his bottle of LSD and put three 305-microgram pills – a very big dose – into his palm before swallowing them. But RA is stunned that NKB has no reaction whatsoever for the whole day. That's because the guy has no ego so there are no layers to decompose. 

The Training Can Start
Our psychologist then gets a solid training in different strands of yoga, goes back to the United States, returns to India and soon becomes Ram Dass (RD) or servant of God. A few years later, in 1971, he publishes Be Here Now (BHN), an iconic book which chronicles his personal transformation, contains a guide to yoga and meditation as well as an interesting list of references. We're now in 1972 and a teenager who had started smoking marijuana regularly two years earlier will soon be heading to the expensive Reed College, a private university that was on Leary's college tour to popularise the use of LSD in spiritual discovery succinctly captured by the famous mantra "turn on, tune in, drop out". 

Steve Jobs said this profound book transformed him.

More Meditation Than Acid 
That teenager is Steve Jobs (SJ) and soon after arriving at Reed, as Issacson tells us in the iBio, he befriends Daniel Kottke after discovering that Be Here Now had had a profound effect on both of them and that they dropped acid (take LSD). Jobs and Kottke share more books on eastern spirituality – these will later play a large role in informing the sleek design of Apple products – and set up a meditation room where they appear to be implementing recommendations from BHN. They ingest LSD there but not as often as they meditate.

Copying Ram Dass
A couple of years later when SJ is at Atari he organises a trip to India to find his guru and get enlightened essentially repeating the journey of Ram Dass. He goes to several interesting spots including Manali and Nainatal where NKB used to hang out. Unfortunately for Jobs the saint had left his body a few months before his arrival but he gets the opportunity to visit Haridwar right in the middle of the Kumbh Mela. In all SJ spent seven months in India. That's long enough for her to figure out what to do with him. In 2015 Kottke was asked if Jobs took psychedelics after Apple was launched. He replied in the negative saying SJ focused all of his energy on making his company successful.

Iceland Rolls Back 
Substance Abuse
An interesting article in The Atlantic informs us that in 1998 42% of teenagers in Iceland aged 15 and 16 had been drunk the month before, 23% lit up cigarettes every day and 17% had tried cannabis. That was besides being among the heaviest teen drinkers in Europe. Thanks to adapting ground-breaking research by Harvey Milkman from Denver, Colorado the island nation was able within two decades to cut these numbers to 5%, 3% and 7%. How did they achieve so much so fast? By drilling good and frequently-updated data from questionnaires put to their teenagers that led the authorities to design after-school classes of music, art, hip hop and martial arts. This provided healthy stress-coping mechanisms to the surveyed to prove that life was fun. Parents were brought into the loop via some ingenious ways as time spent with them was along with frequency of organised activities participated per week two crucial factors that determined whether a teenager had one or more unhealthy habits. 

Mauritius Can Too
We should note that marijuana served as a gateway drug for both Ram Dass and Steve Jobs. LSD and other drugs amplify your senses which means highs are higher than in a normal and drug-free life but lows are lower as sketched in the chart. Lows can be fatal for substance abusers – Whitney Houston (WH), Chester Bennington (CB) and Robin Williams (RW) to name just three. Meditation and yoga can provide interesting highs without the dangerous lows at very little or no cost. Introducing them in schools as early as possible will solve problems now and later especially if they are accompanied by a drastic toning down of rote-learning – a fuel for substance abuse – and interesting after-class activities that hook our teens on healthy journeys.

1. Be Here Now, Ram Dass, 1971. 

2. Steve Jobs, Walter Issacson, 2011.

3. Dying To Know: Ram Dass & Timothy Leary, documentary, 2014. 

4. How Iceland Got Teens to Say No to Drugs, The Atlantic, January 19, 2017. 

Tuesday, November 05, 2019

Sithanen Statements That Don't Survive A Fact-Check

1. No country invests more than 50% of their reserves in gold. Saying otherwise is pure folly (2009). Really?

2. We’ve been hit by triple external shocks – sugar, textile and oil (end of 2005 or early 2006). Sugar was already a sunset industry in 2005 representing a mere 4% of the economy or half of what it accounted for twelve years earlier. The contraction in the textile industry was reaching its end in 2005 after 22,660 jobs had been lost between 2001 and 2004. The rise in the price of oil was different from those of the oil shocks of 1973 and 1979 in that it was demand-driven while those of the seventies were supply-driven. Furthermore by 2005 the efficiency with which we use oil had increased by quite a bit. The rise in the price of that commodity was in fact a big plus in the sense that it brought in a lot more revenue through VAT and the automatic pricing mechanism (APM).

3. We shouldn’t put someone who doesn’t know how to calculate debt and the link between growth and tax rates in charge of the Ministry of Finance (2009). He made this statement when it was looking increasingly likely that he might be replaced as Finance Minister (FM) – perfectly understandable after doing so much damage to the economy. There is definitely a link between taxes and growth but the link is mostly that taxes don't hurt growth if they are below 70% but above 25%. There's no advantages to be had from lowering taxes from like 25% to 15% flat like he did in the mid-2000s.

4. We should be able to clip growth rates of 7/8% by 2008 (2005). As chart 2 shows we never got these kinds of growth rates. In fact average growth rates have been about half the 8% growth rate promised by the bean-counter with growth rates of the past eight consecutive years below 4%.

5. I am worried about inequality (Ongoing worry). Let's look at how the share of GDP for groups of households changed after each of his stint. The household budget survey, done every five years, which ended in 1997 or year and a half after the end of his first term shows – see chart 3 – that all households except the richest saw their share fall with the poorest being hit the hardest. That too after pensions were doubled by Ramgoolam after his landslide victory in 1995.

The picture for five years of his flat tax that ended in 2012 shows more or less the same kind of pattern. The more vulnerable of the household groups got clobbered the strongest. Talk is cheap. He's worried about inequality. 

6. We created an average of 10,000 jobs thanks to the reforms between 2005 and 2010 (2010 and after). We need to wonder what kind of jobs were created for savings to maintain its freefall and for growth to stay so low for so long. Have another look at chart 2.

7. The stimulus package saved 4,700 jobs (2009). Why do you need a stimulus package after you say that your reforms are creating 10,000 jobs every year or about 5,000 in each six-month interval? You just have to sit on your hands and let the economy work for you. We know how controversial this stimulus package has been. 

8. We’ll get the high growth rates after the recession ends (2009). The recession has ended ten years ago and still no trace of 8% growth to maintain the ruinous 15% flat tax with eight of the last years below 4%

9. We reduced oil prices as far as we could (2008). That was after the collapse in oil prices. Given that there was an automatic pricing mechanism in place pump prices should have fallen a lot lower reflecting the sharp drop on the world market. They did not.

10. I have removed subsidies on rice and flour because I don’t want tourists to eat subsidised dalpuris (2006). How many dalpuris were sold to 788,276 tourists who stayed on average for like 10 days compared to what 1,200,000 Mauritians that are here for 350 days bought? Besides how many pairs can the typical tourist stomach once she gets rid of her jet lag? Was he thinking about locals when floodgates for speculative FDI were opened so tens of thousands of Mauritians are priced out of the real estate market for good?

11. There was a hedging loss of about Rs5 billion at the State Trading Corporation (STC) (2008). How can there be a hedging loss when the STC doesn’t even have a risk exposure to oil given that it passes all oil price changes to us through the automatic pricing mechanism? No details about which financial instrument was used and who was involved so that at least it serves us as a five-billion rupee lesson was ever given. 

12. I'm worried about savings (Ongoing). He is? What did he think removing exemptions that we had used for a long time to build our long term financial plans would do? Along with taxing bank interest, implementing a flat tax and tampering with our basic welfare state that keep 20% of us out of poverty? Savings are now at a 55-year low. 

13. We're facing a food crisis (2006). And his response was to remove subsidies on rice and flour and have tons of concrete poured on hectare after hectare of agricultural lands?

14. Reforms worked because they increased government revenue by 20% in the first year (2019). Revenue of government can increase if at least one of four things are increasing: tax rate, GDP, price of goods and number of people/things being taxed. Tax rate went down so it must be the last three factors. As GDP didn't increase by 20% the price and the number of things being taxed must have increased. A good chunk of the increase must have come from skyrocketing oil prices which even hit USD147 per barrel at one point in time. There were also new taxes on bank interest. But the most intriguing part of this statement is why he stopped at the revenue for first year. He should tell us what happened in each of the fourteen years since the tax cuts were introduced. So should Renganaden Padayachy. As chart 5 shows there has been a government revenue shortfall in each of these years because growth rates never reached 8%. The shortfall for 2019 alone was Rs68 billion while the corresponding number for 2020 will be Rs78 billion.

14. I expect the LP/MMM alliance to win by 60-0 (2014). That alliance won only 13 seats. That’s an error of more than 500,000 votes. 

15. Ethnicity is by far the biggest factor in general elections (2014). Guess if he left no.18 for no.13 in 2014 the ethnicity was more favorable for him there. And he returned to no.18 in 2019 because the ethnicity was now better in BR/QB again. But it wasn't as favorable in 2017 for the by-election. Of course he had already ‘left politics’ at that time. Boolell though has been heard in 2017 saying that Sithanen was campaigning for him since day 1. There’s also 2010 when he was not given a ticket. 

16. I’m lucky to know how the economy works (2017). Reread the first fifteen points or go through Bean-Counter Who Broke the Economy Says He Understands How it Works.

Monday, November 04, 2019

Who Do We Send To Parliament Now?

Houston Mauritius,
We Have a Problem
Because we're in a huge mess and three other parties/alliances are brain dead. It's good to remember that proper political projects are essentially about baking a cake and sharing it – see chart 1 – while not considering nature as an afterthought but as a priority at every stage when solving pressing problems. The cakes we’ve been baking since 2006 have been the smallest of the last thirty years and their sharing the worst. That's before using the value of our currency to further check their quality. In fact the cake baked by the Lepep government is the same size as the one cooked by Ramgoolam in his third mandate after adjusting for term length but while the distribution is slightly better our rupee has lost 16% against the USD over the past five years. Overall the situation has become a lot worse because the idolatrous economy initiated by Navin has metastised. 

Making Nature 
Our Slave?
We haven't shown nature the kind of respect she deserves either. Maybe too many policy-makers think that driving a car in their Havaianas through sugar cane fields to a casino on Mars while smoking a cigar is the ultimate goal ( Fortunately the majority of us disagree. 

The Current Situation
The flat tax has basically been driving us towards bankruptcy since it was implemented ( Public debt has increased tremendously, procrastination and creative accounting have become national pillars while urgent problems have either not been solved or the horizon for their resolution extended substantially – the replacement of 1,600km of leaking water pipes will now not be completed by 2023 as initially targeted but more likely in 2032.

And I'm not even talking of issues that have not been recognized as matters requiring our immediate attention. By one conservative estimate, at the end of this year there will be close to Rs1.8 trillion of GDP missing – the infamous Sithanen toohrooh (ST) – and a shortfall of Rs360 billion of government revenue with respect to what these irresponsible tax cuts were supposed to generate since 2006. 

Reforms Have 
Failed Spectacularly
If making the rich pay the tax rate of the poor had worked we wouldn't have seen government go after Bank of Mauritius funds, extend the retirement age to 65, take on a lot more debt and disconnect local pump prices from their international levels. We would certainly not find it trying to sell national assets. On the contrary it would have announced that it's buying more assets, reduced our national debt and upgraded our basic welfare state. 

What You Can Do 
To Make Matters Worse
That's easy. Just vote indiscriminately for one of the parties/alliances that have given us our Prime Ministers so far. They will not do what needs to be done and the ST will technically more than double to Rs4.4 trillion in 2024 bringing the cumulative government revenue shortfall to Rs880 billion. If there's Rs68 billion of government revenue missing for this year alone by 2022 the corresponding figure would have crossed the Rs100 billion mark. Getting to 2024 might not be the smoothest of rides. 

There's Nothing in 
Their Manifestoes
The MMM wants to save the sugar industry because it's been with us for ages and because it believes it's a growth industry. It plans to save it with some really potent measures – read injecting public funds, depreciating our already very weak rupee and probably grant tax waivers to fuel more land speculation. The MMM has obviously not looked at a chart of the weight of sugar in our economy for a long time. It's true that in the past few years this right-wing party has been busy establishing itself as another political dynasty.

Contributing currently only 0.5% to GDP (twenty times less than in 1990) sugar is a sector that cannot be saved. Militants should ask themselves a few simple questions. Since when do we save a growth industry? How many good jobs can that industry create? How will it do if our currency reverts to a very reasonable 25 rupees to a dollar? They might also want to watch The Future of Sugar

Labour Not Any Better
So Ramgoolam wants to perform 'Riptir' with Sithanen? Thanks, but no thanks. He also wants to eliminate municipal tax because it brings ‘only Rs300 million’ per year – that's after promising to cut the flat tax for women to 13%. There's no idea more irresponsible than this given that Mauritius hasn't been able to pay for her own basic things for years now because of other massive tax cuts that occurred on his Rolex. See it's only after the deadly floods of 2013 that we discovered that the weather radar had been broken for years. The PM at the time then went to Japan to ask for a Rs400 million radar or roughly what the municipal tax brings in these days. 

Saving 180 Lives
We shouldn't forget that he has the worst road safety of all of our PMs – Pravind Jugnauth would have about 753 fatalities or three less than him over a five-year period. Every cent is needed to bring down these numbers to as close as possible to zero. A reasonable target over the past five years would have been to lower the fatalities by the fifth year by a third. This would have saved 180 lives. Nothing of the sort happened with fatalities in each year higher than the 137 we clocked in 2014. No progress will be recorded with more tax cuts. Far from the contrary. But it's perfectly fine for Ramgoolam to work hard to leave a legacy that will be sneezed at but nobody is forcing us to have any of it. 

Where's the Second 
'Economic Miracle'?
Lepep won the 2014 elections because of the devastating effects of the flat tax, the other regressive policies and the wicked plan to turn Mauritius into a banana republic (BR). It has maintained them, added more tax cuts and offered more indecent incentives to fuel further real estate speculation. It has also tried to pass its own version of a BR but thank God it didn't have the supermajority to do that. Giving the outgoing PM his first mandate would not get us out of the woods because the status quo is not an option – the ST will grow to levels that see people take to the streets like in France and Chile a lot more often – and because he also plans of selling public assets. 

So, Who Do
We Vote For?
Definitely not for politicians who have switched sides because their only concern seemed to have been which alliance that will bankrupt Mauritius, install a Big Brother and screw up our democracy was more likely to win the elections this time. Shouldn't we consider instead, as Emmanuel Blackburn has asked in his "Elections 'Koupe-Transe': Lalit porte seul les valeurs de la gauche..." on October 29 in Forum, giving our first vote to Lalit on 7.11.19? In fact the list of 62 candidates that would make sense to vote for I had just built before reading his article was, interestingly enough, created by first selecting the 24 candidates of Lalit, then picking a number from Les Verts Fraternels (10), independent candidates (9), Forum des Citoyens Libres (7), Party Malin (4 and congratulations to Malin for pulling that giant crowd in Plaine Verte) and a few more from other parties. 

Why Lalit?
It seems like the obvious choice when we look at how they stack up against the three parties – see chart 2 – on a number of crucially important issues ( For example they're the only party that suggests we don't save the dead sugar industry but instead grow food. This should produce a bigger national cake, a better land use, improve our balance of payments problems and our resilience at the same time. In turn ensuring we all become richer through a stronger currency and making it obvious which industry is strategic. It also scores big points for being for sustainable taxation which would reduce inequality ( and the risk that we go bankrupt. 

No to Car/Bus 
Ratio of 100
Lalit also wants a Ministry of Plan back. Another good position given that we've become a planning disaster – the current horrific car/bus ratio of 77 will rise to 97 in 2024 if we do what we did in the past four and a half years adding tremendous pressure on the environment. Bet you Sophia the robot didn't tell you that. Mind you not all is perfect with Lalit. Just like the other three parties they are for a dose of proportional representation which would create two forms of political uncertainty. How big a risk is it voting for them? Probably a million times less risky than voting for the other three. Plus they are strongly for recall elections which will allow us to throw them out of parliament well before 2024 if they do anything stupid like an affermage contract for the CWA or not raising back taxes for the rich. 

Who Should
Vote For Them?
Many people won't find it difficult voting for them. People who like Soldat Lalit Militant given that their positions will reduce social injustices unlike those of the MMM. People who are fans of SSR as they are against stupid privatisation, for a top public health system and for solving problems. People who feel that the three parties have betrayed the values that had initially attracted them. People who don’t want their neighbourhood to morph into a favela. That’s a lot of people. And Malin is likely to bring much-needed dissent to our National Assembly.