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.
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.
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%.
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.
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.
