<I>Risk Advisory Services Partner</I>

<B>The rise in the prices of many essential commodities is becoming a major concern for the population. Minister Rajesh Jeetah said it is inevitable. Do you agree? </B>

I do agree it is inevitable. The rise in prices does not really depend on us but on the present economic situation. As all essential commodities in a society of consumers of products often come from outside, the prices will rise! Secondly, our currency is low. Our rupee keeps on depreciating. Therefore, if we keep on importing, prices will rise. When minister Rajesh Jeetah says the rise of prices is inevitable, he is partly right - he is well placed as minister of Commerce. But, on the other hand, we should be aware that some prices will go down because customs duties will decrease to harmonize with the trend of the World Trade Organization.

<B>What might be the consequences of the rise in prices ? </B>

There will be inflation as the price of raw materials will go up. We can take the case of bread due to the increase in the price of flour. But we need to see the rise of prices in a global way. Hence, on the social side, the rise of prices is compensated to a certain extent because the budget comes with other measures. For example, it simplifies the fiscal system. The government has set up tax reform, which means that many families who were paying tax before will not do so anymore. Therefore, we can see this as a ?give and take? situation.

<B>Some people think that the rise in prices will help improve our economy, which is facing a difficult time. What is your view? </B>

Certainly not! As I said, the rise in prices is due to an international conjecture. For example, when the price of diesel was increasing abroad, the State Trading Corporation did not raise it here. We started accumulating huge debts. So, the one who will pay for this is the government. And indeed, the previous government used other measures such as the increase of VAT. If the STC does the same thing again, it will become like the DWC. Then, the government will have to take drastic measures.

<B>The government has talked about incentives to promote big organizations and businesses. What do you think about this? </B>

In the last three years, if we look at the statistics, investment in comparison with our gross domestic product has fluctuated. There are many factors that have caused this. One is that businesses do not have incentives to invest. Decreasing the fiscal base to bring it back to 15% will enhance our economy. The investment will help create employment. And employment will create a good market in Mauritius.

<B>The government has talked a lot about democratisation of the economy. Some people are sceptical. Is it a myth or reality? </B>

We have no other choice than to believe that it is reality. Other governments have tried to do it in the past. I believe that it is not through big organisations that we are going to be successful in the democratisation of the economy. Small and medium enterprises could be more successful in the long run.