<B>Economist</B>

<B>A poll commissioned by ‘l’express-dimanche’ reveals that most Mauritians are satisfied with the way the government has started its mandate and quite confident in the future. How do you explain this “feel-good factor”?</B>

What looks evident is that the poll results confirm that the government has the support of people in dealing with the social and economic situation. However, I am not sure the term “feel-good factor” is right here; to be honest, I am not even sure what this phrase really means although it is used very often these days.

But I believe the satisfaction of people and their confidence in the future could have different explanations. First, the government is benefiting from the goodwill shown to it for implementing the measures mentioned in its programme. They did not waste time in coming up with measures such as old age pension, free transport, and price reductions. The drop in the price of medicines for instance was not an easy decision but they overcame the obstacles and did it. People trust in the government and its ability to enforce decisions. They are convinced that the government means business.

<B>People are happy because they feel their lives have changed. Aren’t the popular measures dangerous for the future? Won’t they harm an already high budget deficit?</B>

It is a fact that there has been continued and marked deterioration in the economic situation over the past few years. The growth rate went from 6% between 1996 and 2000 to less than 4% between 2000 and 2004. The performance for 2005 might be even lower. There is a growing budget deficit and an increase in public debt. In his speech in Parliament, the minister of Finance stressed on these problems. The deficit will lead to more pressure on the rupee and has to be monitored closely. The government will have to balance social and economic measures. This is at the core of economics. When it gained power, it declared it wanted to put people first. Its main concern, it says, is people’s welfare. With that in view, it has to carefully cost the impact of such measures on the economy.

<B>Are economists as optimistic as the citizens? Should we not be more cautious in view of the tough economic situation?</B>

Economists are often said to be “doomsters” I experienced that when I warned about the dangers of the World Trade Agreements for small economies like Mauritius. But my answer to the question is yes, definitely. We have to make sure that the balance between popular social decisions and economic ones is respected. But I am confident that the minister of Finance and the government will take the right decisions and be responsible enough not to jeopardise the country’s future.