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.”

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.

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.