Six months in the year of 2020, and who would have thought Mauritius would be in its first recession since the early 80s, and not any type of recession. A severe and very deep recession for Mauritius at a time when the island is economically very vulnerable, not just because of Covid-19, but more so because the country’s balance sheet is weak and on top of that it is so unfortunate to see that we unfortunately don’t have the leadership to steer us out of this crisis.
The eagerly awaited budgeted was presented by the Minister of Finance beginning of June, and what a missed opportunity. Before I even delve into the budget, I have never seen a budget being so poorly received by stakeholders including the private sector who tend to remain quiet. But this time, the private sector stepped forward via various institutions, accounting firms, and even the likes of MCCI (which is perceived as being close to the Minister of Finance, as he used to an economist working at MCCI only 2 years ago) and Business Mauritius, to basically voice out their concerns about the budget. In a nutshell, these are a few examples as to how the budget was labelled by stakeholders: a self-destructing budget, the worst budget over the last 4 decades, a budget with no head nor tail, a budget mentioning new world and yet sticking with failed recipes from the old world. On the one hand I feel sorry for the Minister of Finance, as he had to present a budget clearly in one of the biggest crisis ever, and on the other hand, I am not surprised by the lack of vision of this budget and lack of practical solutions for this “new world new normal” mantra.
The Minister of Finance is banking on construction to drive growth over the next couple of years. And yet he has to be reminded, that over the last 5 years, his predecessors came out with the same recipe and got the public sector to inject a lot of money (debt) in the public sector led infrastructure projects, but the bottom line is the boom in the construction sector over the last 3 years with growth rates peaking at 9.5%, contributed to nothing in terms of our GDP growth as the latter averaged around 3.8%. The worst is in 2019 the GDP growth rate was much lower at 3.0% and lower than the 3.7% in 2014 when the construction growth rate contracted by 8.5% in the same year of 2014.
The Minister needs to understand the new normal is Industry 4.0/5.0 and what we need is digitalisation of the whole Mauritius, internet super high-way, training of every single Mauritian to be IT and digital literate, rather than another stadium or another brick and mortar project that doesn’t create value. The chart below clearly shows how Mauritius is lagging in terms of Internet speed. So how can we claim to be the Cyber Island, the new norm, when Mauritius is way behind Madagascar in terms of internet speed? We should be ashamed!
The Chart below shows the Top 10 countries providing the fastest internet speeds in the world.
So my suggestion to the Minister and the government, instead of being obsessed by the ease of doing business ranking which is currently at number 13 but didn’t do anything in terms of attracting more Foreign Direct Investments (FDI) nor increase our GDP growth rate, let’s rather be in the Top 10 in providing our citizens the fastest internet speed, and also democratise internet anywhere around the island irrespective of whether one lives in Bel Ombre, Quatre Cocos, Curepipe, Grand Baie. Make the whole island including Rodrigues totally accessible in terms of high speed internet. Clearly as the chart below shows, we can get to the much needed increase in growth and quality growth if we equip our citizens to get ready to enter into this New World New Normal.
Let’s take heed of Estonia, which is a small country of around 1.3 Million people and which over the last 2 decades have become a leader in this digital (r)evolution…So let’s not invest in another brick and mortar, what could turn out to be another “white-elephant” development in Cote D’Or, but rather let’s put the money where it is badly needed, the real infrastructure to connect all our citizens domestically and to the bigger world. Let’s make Mauritius a place where global nomads can choose to settle down in Mauritius because we invested money in what they need. From there on, everything else could fall in place. Else am afraid, we will see good money being thrown out of the window and this time, we don’t have the luxury of wasting more money. So this is a great opportunity for the government to do the right thing. God Willing…
