The United States, with the aid of its economic and political influence, has encouraged other nations to adopt the schemas of post cold-war capitalism. But this approach, the alleged Washington consensus, has often yielded substandard results. Several economies in Latin America, Eastern Europe and elsewhere are sluggish or backsliding, and most of the world’s poorest economies show very few signs of new life. Nevertheless, the American mold should not be abandoned. The American economic sanctuary stems from this particular model and is one of the most successful models ever adopted. However, some development economists advocate that the American model needs to be enhanced, in order to neutralize the drawbacks of the current template. The latter fails to mimic a vital element of the U.S economy: support for entrepreneurship.

The United States has a high rate of new business starts; it breeds a constant stream of new high-impact firms, the kind that creates value and fuel growth by bringing fresh ideas to markets, be they new technologies or new business methods. These entities do not appear as a natural derivative of free market institutions. Nor are they the outcome of any distinct factor. Rather, the United States has evolved a versatile system for fostering high-impact entrepreneurship, an arrangement that, with accurate development policies, might be cultivated in many other countries as well.

Such an approach has been absent so far. The Washington consensus focuses on macroeconomic rudiments such as trade and finance, along with general institution building. Nations are urged to craft good banking systems, levelheaded interest and exchange rates and steady fiscal structures. They are expected to privatize, deregulate and empower infrastructure and basic education. Private enterprise, meanwhile, is only considered as an afterthought and in piecemeal fashion. An emergent nation cannot prosper in the long run by depending solely on outsourced effort, which has a disturbing tendency to migrate to still lower-cost locales. Genuine opportunities arise when a nation is the architect: a breeder of new firms, based on new ideas that add unique value.

The Mauritian landscape does not have much to offer either. The entrepreneurship catalogue in our domestic economy leaves much to be desired. The Mauritian financial sector is one that is subject to too high a magnitude of government interference and not enough leverage to adopt optimal and efficient policies. For instance, the existing gap between the loans rate and the savings rate is a lucid indication of the risk-adverse nature of our banks. The Mauritian economy has adopted the American template per se and has emerged as a developing nation full of promises. However, entrepreneurial propensity in Mauritius has to be enforced if the latter wants to enroll in the global economy with adequate artillery to sustain the new era of globalization.

<B>Nitish Benimadhu

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