Ramgoolam Statements That Don't Survive A Fact-Check

1. Your shopping trolley was full when I was PM (2023 onwards). Depends for whom. Let's see what the data shows.

2. When we were in power we didn't allow pump prices to go as high as they did on world markets (2024). The APM indeed reduced the volatility in oil prices. But let's see what happened when they crashed during the Great Recession.

Why Tax Policy Should Be Detailed in Affidavits

Charity is a cold grey loveless thing. 

If a rich man wants to help the poor, 

he should pay his taxes gladly, 

not dole out money at a whim.

Clement Atlee, Former British Prime Minister

Which affidavits? The ones candidates and political parties in the forthcoming general election will swear before we shortlist them as worthy of our votes. We’ve seen how irresponsible income and corporate tax cuts implemented since 2006 have extensively damaged the economy and the social fabric under three different PMs. While Navin Ramgoolam’s position on taxes during the past five years has oscillated between lowering them further to 13% for women and not raising them should he return to power. This is kind of worrying because it is the most urgent and important thing to do to avoid a significant degradation of an atmosphere that’s already pretty bad. So until we have recall elections and statute referendums we need affidavits and debates on their contents. Because politicians put something in their manifestos and then do the exact opposite.

PJ Says No to More Women in Parliament

MPs from the PMSD and the Labour Party told the PM in parliament recently that if he presents a separate bill for an increased presence of women in our National Assembly (NA) they will vote for it. This is a very positive development given that we do pretty badly on this yardstick. According to the Inter-Parliamentary Union at the start of 2019 four african countries ranked 12th or better as far as the proportion of female ministers in a cabinet go. Mauritius is 150th out of 178 spots while Rwanda takes position number six. We do slightly worse in terms of the percentage of women in parliament (156th out of 191 while Rwanda is first). But sadly the PM would have none of it replying that he can't see why he should do something these MPs failed to do when they were in power. A pretty lame excuse but no surprise here as female representation is part of the wrapping of a poisonous electoral reform that will make throwing MPs out of parliament a lot more difficult.

Not a Lot of Business Done

Since the moronic World Bank's Doing Business rankings were put on a pedestal by a couple of bean-counters and our taxation structure flattened starting in 2006. See the promised 8% growth over the last 13 years should have produced a little over six trillion rupees of national output. But as chart 1 shows Mauritius generated only about four and half trillion rupees of GDP. The difference – the Sithanen toohrooh – should cross the trillion-and-a-half-rupee mark by the time you play a famous U2 song a couple of minutes after 23h58 on the last day of 2018. Breaking down this shortfall yields important political insights.

Thoughts on Electoral Reform (6)

A political rape of democracy
SSR on the Banwell Report, 1966

Enn komeraz sa

SAJ on PR, Rodrigues, 2015 

We know that our excellent First Past The Post (FPTP) system generates results that are sometimes too lopsided. But electoral reform cannot ignore fundamental facts. We've looked at a number of them in the first five parts of this series of articles (these have appeared in the Forum section between April 8, 2014 and December 22, 2016). We'll consider a couple more here, revisit a few and offer some fresh insights on three electoral proposals. But first let us have a look at a useful decomposition of the FPTP system.

Recall Elections Are Key To Better Political Outcomes

A recall election is a constitutional tool to eject an MP from Parliament anytime between general elections if enough of the voters in her constituency sign a petition to that effect. A by-election is then organised. Given the performance and the behaviour of some of the MPs that we've been sending to Parliament over the past 15-20 years we voters clearly need a way to make them work in our national interest throughout a whole term and not just a little bit at the start and another little bit at the end. Recall elections do precisely that.

Had we had this system in place since 2005 we would have been an entirely different country by keeping elected politicians on their toes. In at least four situations. The first one is in February 2007 when Sithanen took the country hostage because he wanted to second-guess the prerogative of the PM with respect to the appointment of the Governor of the Bank of Mauritius. He then went on to cause extensive damage to our economy for three whole years. With a recall election he might have been out in a few months. A by-election in those days would have cost around Rs20-25 million. A trifle really compared to what he has set in motion: a trillion-rupee Toohrooh. 

Elekter Kontinye Redesin Terin Politik

An desam 2014 elekter ti konpran ki Ramgoolam, Berenger ek Sithanen ti pe rod fer nu pei vinn enn repiblik bananyer. Alor zot finn fer Ramgoolam perdi puvwar ek so siez, finn gard Sithanen an deor parlman pu omwin sink an ankor ek mank tigit Berenger usi ti pwal dan karo kann. Ek la dernye eleksyon parsyel finn montre nu kuma li top kan nu vot zis pu enn kandida par sirkonskripsyon -- single member constituencies (SMC) an angle: bann parti politik met bon kandida, kalite deba buku pli bon ek pa tann bann betiz kuma 'vot blok' uswa 'si zot ule minis zot bizin vot 3-0'. Mazinn enn kut dan ki kalite bon latmosfer nu bann eleksyon zeneral ti pu derule si nu ti vot pu enn sel kandida dan sak sirkonskripsyon. Anfet li ti kumsa an 1959 ek 1963. Nu tiena karant SMC. Li pa etonan ki sa finn fer nu gayn bann bon depite ek apre bann bon minis kinn fer nu pei mari avanse. Li ti pu bon pu Moris si nu ti return ek 40 SMC.

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?

Lev Pake Reste Turns 10

Yes. Already. A recap. So Ramgoolam nominates Bheenick as Governor -- one of his best decisions ever but that too after a year and a half of doing God knows what -- but Sithanen is unhappy so he threatens to resign or maybe he does. The PM is out of the country at the time but makes an appeal to the Minister on national tv. The latter eventually changes his mind -- after about a week -- when his pick as the BoM chief gets the SBM chairmanship. But not before swallowing something that's not exactly a grass snake and creating an urgent need to amend one famous Chevenement formula.

That was a really strange week. See if a Minister cannot be present at his office there has to be a colleague who steps in for him. We've seen this so many times: another member of Cabinet will answer parliamentary questions on behalf of the officeholder when the latter is out of the country. If a Minister resigns our excellent constitution takes care of that seamlessly. And that too without the PM having to be at his desk. The Ministry can also be reassigned to another colleague. For example SAJ held the Ministry of Finance for a few months last year. So did Ramgoolam in 2014. But none of those happened back in February 2007.

Thoughts on Electoral Reform (5)

Elections in Mauritius Are Seldom Referendums

Vote share doesn’t matter that much in Mauritius. We instead have competitions in 21 unequal ridings and the party which grabs anything more than half of the contested seats earns the right to form government. Our first-past-the-post (FPTP) setup is a system which works and has served us really well. And that too for decades. Making it an important part of who we are. Just like progressive taxation and a high savings rates have until 2006. Important matters of the state need to be given the appropriate consideration. It’s definitely not a bad idea that we let ourselves be inspired by examples of profound thinking. Like what Feynman told us about hardware reliability of the Space Shuttle: the necessary redundancy was provided by several independent identical computer systems.

Thoughts on Electoral Reform (4)

At 60 miles an hour the loudest noise in this new Rolls-Royce comes from the electric clock.

David Ogilvy headline

We Already Have the Rolls-Royce of Constitutions

Our constitution through its excellent First Past The Post (FPTP) system has enabled voters to proceed with five seamless changes of government since independence. Three of which happened after consecutive elections. And most of our governments have been stable. This has been a key ingredient for our early successes. Our FPTP system has allowed us to focus on solving difficult problems which many back in the 1960s had rightly considered as almost unsurmountable. We also appreciate the quality of our constitution when political alliances break down: new ministers are appointed swiftly. And when we see how the absence of a good enough constitution in other countries hold them back. But it's not perfect. It has a slight clicking sound. Which needs to be corrected soon. In a mindful fashion.

Why Poverty is Winning

Because so much of it has been created over the past 10 years. Some people have been getting out of poverty for sure but a lot more have been falling into it. Of the pool of 126,200 poor people in 2012 a staggering 33,000 had joined it over the last decade. That's more than one in every four poor Mauritians. This has happened because our economy has not grown fast enough and whatever wealth was created has not been shared properly.

Massive Policy Failure

Which in turn has mostly been caused by dismal policy-making and the lack of dynamism of our economy. External events have certainly played a role but given that they were beyond our control we shouldn't have spent that much time crying over them. We should also acknowledge the fact that there has been a wide variation in the way poverty has expanded. Chart 1 captures that by looking at how it has progressed over a fifteen-year period. Which coincided roughly with three different governments and in one case with major policy changes.

Vishnu Will Not Deliver A 'Second' Miracle

Because he is now Minister of Foreign Affairs. He was unable to deliver it in 15 months which by the way is exactly how long Pravind Jugnauth was FM in the third Bleu-Blanc-Rouge government. And just like Mr. Lutchmeenaraidoo the leader of the MSM had promised a second economic miracle. Vishnu's departure from the Ministry which made him a legend will be a personal setback for many people who voted for Lepep because they associated the first 'miracle' with him. And had wanted to witness the making of another. Live and direct.

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.

Eski Sithanen Enn Kosmar Pu Popilasyon?

Kestyon bet, non? Kosmar disparet ler uver lizye. Parkont lanfer so bann politik ekonomik kontinye fer u lavi vinn margoz pandan buku banane. Sithanen finn reponn a sa kestyon la resama avek kat kestyon. Anu analyz zot.

1. Linn dimande si pa enn politisyen de long dat kuma Ramgoolam ti pu pran enn risk vinn tir li depi kot liete si li tienn kosmar. Anfet Ramgoolam pe pran enn mari gro risk reprezant Sithanen kom minis de finans apre sa bann gro gro dal ki linn fane ant 2005 ek 2010 (nu tu finn remarke ki lalyans pep tuni pann gagn sa kantite plis dimunn ki lalyans papa piti dan miting nasyonal le duz oktob). Me kan de parmi trwa pli gran parti zwen sa amenn suvan bann gro skor dan elekyson: sa lalians la gagn lao 50 siez. Me pa tu letan (ek sa eleksyon ki pe vini la pa enn eleksyon ordiner ditu sa). An 2005 Ramgoolam ti gagn enn viktwar istorik ler enn gro parti ti bat 2 gro parti.

Anfet telma Sithanen ti fann dal kom minis de finans -- avek so kamwad Ali Mansoor -- ki Ramgoolam finn bizin ed Pravind Jugnauth eli dan No. 8, donn enn segon manda prezidan SAJ pu finalman fer lalians ek MSM ek pa donn tiket Sithanen. Parksi Ramgoolam ti kone si ti donn li tiket kitfwa Ramgoolam mem ti pwal manz feyaz. Sithanen pann gagn tiket ar Berenger usi byen ki Berenger -- papa kominalis syantifik sa do -- ti dir ki Ramgoolam finn fer fos ek bann Tamul-morisyen parski Berenger kone ki elekter pa kas latet ar kominote bann faner dal.

Mauritius Edging Dangerously Towards Plutocracy

Have you ever really asked yourself why taxes were flattened to 15% between 2005 and 2010? Probably not. That was done because it made the wealthiest segment of the population a lot richer. Not because of some bogus Triple External Shocks argument. And some politicians would want to do this because the opaque financial contributions they receive would get larger. A lot larger. Even if it meant killing savings in the economy or throwing a lot more people into poverty. This is called a plutocracy. Not a democracy.

Indeed Household Budget Survey (HBS) data tells us that there were an extra 500 or so poor people in Mauritius after the first term of Navin Ramgoolam. But that by 2012 there were a record 22,000 more people that were thrown into poverty – bringing the total of poor Mauritians to 126,200 – compared to the preceding five years. Which coincides pretty much with his second term and the start of the reforms. That's like increasing the speed at which pockets of poverty are created by 44 times.

Sithanen Worried About Savings Rate, Again

So he said in an interview in the Mauritius Times about a week ago. It's not the first time he is worried about our savings rate. In 2005 he was worried sick about how much we were setting aside as a country. Just before starting his 'reforms'. It is a fact that over the 15 years before 2005, Mauritius enjoyed a healthy savings rate that averaged more than 26%. But between 2006 and 2010, that is a few years after bean-counting had taken centre stage, our savings rate had collapsed by 7.5% to an average of 17.1%. He didn't seem especially worried about that while he was in the driver seat. But he is now. Isn't that funny?

He's also worried about poverty and inequality. Let's look at how the poor's biggest enemy -- inflation -- behaved during the first few years of Paglanomics: average inflation was 70% higher than what it was under the government that preceded him!

The most recent HBS (Household Budget Surveys) numbers have also confirmed what anyone who understands the effect of reducing top tax rates has on inequality. And yet flattening the tax structure was the biggest plank of the economic mess of Mr. Sithanen. It didn't only make Mauritius more unequal: it also reduced our growth rate significantly.