Budget 2021-22: My hypothetical speech in Parliament

22 juin 2021, 13:43


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Budget 2021-22: My hypothetical speech in Parliament

Here is the speech that I would have delivered on MONDAY 21 JUNE 2021, had I been a Member of the Mauritius Parliament: “For his second Budget Speech, Mr. Padayachy has presented another document replete with hollow announcements; another document with no concrete measures to address the real challenges that Mauritius is facing; another document that betrays our people and demonstrates government’s lack of vision and foresight, a sure path to failure.

I had sincerely hoped that Government would have presented a plan to unleash the economy – unfortunately, a shattered hope now –; to combat corruption and wastage of public funds; to reduce the greatest debt burden in our country’s history and introduce intergenerational justice; to end and prevent wastage of scanty funds in wrongly prioritised areas; to re-establish our credibility on the international scene as Mauritius cannot be left in the infamous list of “autocratic countries” as well as on grey and black lists; a plan to incentivise investment in new areas like Artificial Intelligence, Cloud computing by creating an innovation ecosystem not by persisting in a real-estate rut with a mini-skyscraper.

This government has had months to think through and come up with relevant solutions to squarely address the challenges of the day. Most recently, they had the services of the IMF, free of charge, to guide them in a logical financial policy to offset the amateurism of an inexperienced appointee occupying the seat of one of the key institutions of this country. But to no avail. (…) How effortless it is to sit down in Cabinet and flip on the lockdown mode, while Mauritians have made lots of sacrifice since the outbreak of the Covid-19 pandemic.

Many have lost their jobs. Many more see joblessness staring at them mercilessly. Sadly, many died. I am here thinking of the 15 dialysis patients who died. Some of our economic sectors will be decimated. (…) Mauritians were expecting a budget that would chart out a plan for a reasonably good future; they were looking to the Government for hope! But this budget does not instil in Mauritians a sense of accountability or the importance of pursuing excellence through professionalism. On the contrary, the Prime Minister has introduced a new culture of irresponsibility since HENCEFORTH no one is responsible for anything at all. No one is responsible for the BETAMAX catastrophe!

I now come to the issue of the quality and the dire state in which our institutions find themselves. Let me at the outset state the obvious: the higher the quality of government institutions, the better the economic and social development. (…) Unfortunately, apart from the failure and inefficiency of our national institutions, a very disquieting situation has emerged in the Prime Minister’s answer to the PNQ on ICTA’s half-baked consultation paper. His reply has created a culture of irresponsibility where the board of a government institution is not accountable for anything it does. (…) Besides this lack of accountability and “new culture of irresponsibility”, the major problem of this government is its complete lack of vision, strategy and a clear action plan regarding the re-engineering of public institutions and state enterprises. This has left the door open to projects with extremely low economic return; projects which are not useful to the population at large, thereby resulting in birthing white elephants with no relevant socio-economic goals and which will be an unbearable burden for our economy and the future generations.

In the past our public institutions as well as our state-owned enterprises have played a crucial role in the competitiveness and attractiveness of our economy. It is unfortunate that in Mauritius, the signals sent by our institutions, such as ICTA, Bank of Mauritius, Landscope, STC and others, to the local and international business world are completely negative, thus contributing to plague or even rot the business climate. Mauritius is no longer a competitive and attractive place for investors because of the scandals affecting our institutions and destroying their effectiveness. Further, it should be noted that in many institutions the gap between the mission they have set for themselves, and their performance is staggering. (…)

This government got a severe but well-deserved slap on the face from the IMF. The IMF in no uncertain terms mentioned that we need to restore the central bank’s credibility (what a diplomatic way to convey the message that our Bank of Mauritius has no credibility!). Such a strategic institution like the Bank of Mauritius was given all the latitude to play with our monetary policy. In which country have we seen that Rs 28 billion are treated as an advance against unknown future profits and distributed outright to Government? I am sure that the Mentor must have grieved over such disrespect for a crucial institution.

Fiscal consolidation

What is the plan of the government to stop this “descente aux enfers” of our public institutions? Does this government understand that any country is as strong as its institutions? The pillar of any democratic state is trust in efficient, transparent, and accountable public institutions. Trust in our institutions can only be built through efficiency, competency, and accountability to reassure the population that these institutions are delivering value for money. (…) In its report, the IMF specifically mentioned, “The government should prepare plans for fiscal consolidation to stabilize debt in the medium term once Mauritius has firmly emerged from the pandemic to preserve fiscal sustainability and build buffers given the substantial increase in public debt level, which is likely to exceed 90 percent of GDP in the wake of the crisis.”

Where is this plan for fiscal consolidation in this budget, where is this plan to build buffers in case the country faces a calamity? Instead, the Bank of Mauritius is transferring Rs 28 billion to Government as advance against future profits. Is this the way to prepare the country to face future shocks and calamities? I am sure that the Mentor would have seen that instead of preparing the future, this government is compromising the future of our children and grandchildren. (…)

Another important policy recommendation from the IMF was: “The mission recommended prioritizing programs that are consistent with medium-term development needs and broader social and environmental goals, such as digitalization, inclusion, and climate change mitigation during the recovery phase.” In plain English, this quote means that government does not know what the priorities of Mauritius are and that they are instead wasting public funds on white elephants. IMF recommends that the government should focus on digitalization, inclusion, and climate change mitigation. Where are the adequate policy-responses in this budget which looks more like a shopping lists of vague ideas? (…)

While listening to the Budget Speech, I did not feel that the government has understood that Mauritius can no longer afford non-priority infrastructure projects like Safe City, Landscope Waterfront shops, Côte d’Or Multi-Sports complex, Data Technology Park, extension of Metro Express, which will never be profitable, and a 50-storey micro-skyscraper, especially in a situation of excess of commercial and office space.

Another IMF policy recommendation is: “The mission recommended “prioritizing programs that are consistent with medium-term development needs and broader social and environmental goals.” How then is government going to prioritize its programs and projects? (…) The light rail will not be the only white elephant of this government. (…) A new road, hospital, multi-sport complex, tramway, or useless project such as Unsafe City that costs billions of taxpayers’ money cannot be the result of a political hobby or the figments in the childish dream of an ill-informed Prime Minister.

In the wake of the 2021-2022 Budget Speech, it is now a national priority to use taxpayers’ money wisely and pass a law making it compulsory to carry out socio-economic assessments for all public investments and establishments such as Landscope, CEB, etc. and imposing independent second opinions for projects exceeding Rs 100 million. Such a law exists in all democracies and in nearly all African countries! (…) This government decided to embark on the Rs 19 billion Safe City project by blindly assuming the effectiveness of the equipment and no other alternatives such as increased police personnel and additional patrols to combat crime.

Yet, the evaluative work of British, Australian, and Swiss criminologists converges in their conclusions: the effectiveness of video surveillance and its impact on the decrease in crime is not only negligible but very variable depending on the type of crime, the places monitored, the quality of the equipment and the training of the operators responsible for viewing the images. For example, only 3% of robberies in the streets of London were solved using CCTV footage, even though the British have more cameras than any other country in Europe. (…)

Today, the general feeling is that the installation of the Safe City system has had no effect on Mauritians’ sense of security. On the contrary, Mauritians know very well that behind the 4,000 surveillance cameras, there is NO police officer watching over what is happening to be ready to trigger an intervention at the slightest criminal or delinquent manifestation. When crimes or delinquent acts are committed every day in front of Safe City’s 4,000 cameras, without any intervention being deployed at the time of the crime, on the contrary, it creates a feeling of insecurity and anxiety. It is worth quoting what the AUDIT REPORT 2019-2020 had to say on the Safe City project: “Lapses were also noted in the normal procurement proceedings of Ministries and Departments. For instance, the contract for the “Safe City Project” for some Rs 16 billion was awarded directly to a private company on an operating lease model for a 20-year period. No evidence was produced to National Authorising Officer to the effect that an assessment was made to ascertain the fairness of the lease payments made by the Police Service under the contract, and thus that the procurement was undertaken in the most economical manner.”

Dilapidation of public funds

Never in the history of government administration have we seen a report from the Director of Audit so negative with a series of shortcomings and dilapidations of public funds from this present government. The 498-page report of the National Audit has drawn attention to the considerable waste of public funds in diverse ministries. Huge amounts have gone to waste; system of procedures have been bypassed, noncompliance with legislation and many losses are due to dereliction of duty and absence of adequate follow up on projects. Major deficiencies have also been noted in contract and asset management. (…) This report has confirmed to a large measure the veracity of the various allegations levelled in relation to the emergency procurement of drugs and equipment in the wake of the first lockdown in March 2020.

For example, lapses were noted in the procurement of medical equipment and supplies in the context of the Covid-19 pandemic. These lapses included absence of proper documentation at the different stages of the emergency procurement process, non-compliance with legal requirements and inadequate assessment of fairness and reasonableness of prices quoted by suppliers. Moreover, medical disposables to the tune of Rs 850 million were purchased from private companies, which had no previous dealings with the MOHW in such goods. The average prices paid for some medical disposables were up to 67 times higher than the last price paid for.

However, we should not be surprised that all our institutions have either come to a standstill or are taking the wrong decisions which will compromise the sustainable development of Mauritius for the next generations as the government has catapulted at the head of these institutions appointees more occupied with doing government’s dirty work than achieving the objectives set in their statutory mandate. These institutions now only welcome in their midst people with no relevant skills or experience. Those who have an independent mind cannot stay long, thereby further accelerating the decay of these institutions.

The result is that within our institutions everyone has given up. Contaminated by the deleterious climate, a certain form of fatalism prevails in our public institutions, ministries, and public enterprises. There are those who get their hands dirty to keep their jobs, others do it to get rich with impunity and still others, helpless in the face of the inevitable, watch their institutions flounder without flinching.

For instance, what has the EDB, which is supposed to be the think tank of the country, produced recently in terms of development strategies to embrace new economic sectors like Artificial Intelligence, Block Chain, Cloud computing? If per chance they have produced anything, was it done in a collaborative manner involving those who either are operating in such technical sectors, specialists or is it another half-baked ICTA consultation paper produced by some amateurs? (…) Without competent people at the helm of our institutions with a robust and clear strategy, Mauritius will not be able to face the numerous challenges ahead and embrace a sustainable development. We will continue to fool ourselves with an illusion of an economic miracle that never happened since a large part of what has been fallaciously described as an “Economic Miracle” is logically reasoned as the advantageous congruity of economic factors. It is the sheer consequence of the delocalisation strategy of firms which at that time was purely based on cost. Competitiveness is no longer cost-driven or even solely dependent on the ease of doing business. Mauritius will not be able to attract investors in the Data Technology space just by providing office space and some fiscal incentives. (…)

The Prime Minister makes me think of a young boy whose father won the lottery. The proceeds of this lottery have unfortunately been squandered by him. Now, he thoughtlessly presumes that by simply jogging to the next “tabagie” and buying another lottery ticket he will, like his lucky father, win the lottery again. I only hope that this time the Prime Minister will not blame luck. Luck has evaporated for this government as it has relied too much thereon since 2014.

99,000% cost overrun

I now come to the question of cost over-runs of projects. This is a government who can start with a pilot project intelligently estimated at Rs 5 million and end up with a total spending of Rs 19 billion rupees. “L’appétit vient en mangeant», so they say. May I add «La gourmandise et la cupidité viennent en mâchant ?» I have heard of cost overrun of 100% but never one of 99,000%! In the case of the grossly unutilised Côte d’Or Multi-purpose sports complex, the project started with a project value of Rs1.2 billion to end with a total cost of Rs 5.5 billion, a cost overrun of 360%, which is more acceptable than the 99,000 per cent cost overrun of the Safe city project but the maintenance costs are estimated at Rs 250 million per year. The fate of this prestige project will most probably be the same as Anjalay stadium, which is grossly underutilised and has been left to rot.

Another risk facing Mauritius which has unfortunately not been ad- dressed in the Budget Speech, which I wish to reiterate is a heterogeneous list of half-baked ideas, a clear testimony to the Minister’s obtuse thinking and hollowness. All Mauritians have been until 2014 extremely proud of their country. Mauritius was also well respected in the international arena. But lately, Mauritius has faced a series of reputational risks, blacklisting, listing as an autocratic country and downgrades. This government came to power in 2014 promising to eradicate corruption. But surveys carried out in 2020 by independent bodies reveal that corruption, instead of decreasing, has increased during Pravind Jugnauth’s term of office. Mauritius has lost 5 places in the Corruption Perception Index, ranked 52nd (47th in 2014) far behind Seychelles and Botswana.

After having seen its rating downgraded by Moody’s from Baa1 to Baa2 and after being placed on GAFI’s grey list, then on the European Union’s blacklist, and after having dropped sharply by 25 ranks in the Global Financial Centers Index, after the IMF’s slap and advice to restore the Bank of Mauritius credibility and with the awkward moves of ICTA which could result in Mauritius being blacklisted by Google, Mozilla and Apple. The latest downgrade has emanated from the MO IBRAHIM FOUNDATION 2020 African Governance Index Report. The 2020 Ibrahim African Governance (IIAG) states that, “although Mauritius still ranks at the top of its list – measures of human rights have deteriorated over the reporting period. Mauritius is moving in the opposite direction with Mauritius’s Overall Governance score declining at an increasing rate, driven by weakened social protection and deteriorated human rights.”

The Minister of Finance has not included any policy measures to address Mauritius’s poor performance in terms of the above various rankings and gradings. Yet international rankings are a critical tool used by international actors and potential investors to assess a country’s governance. The chronic bad practices and malpractices of the Government of Mauritius and its performance will continue to be under international media scrutiny and will be judged by several high-profile indices, including assessments of its levels of corruption, quality of its democracy, creditworthiness, media freedom, and business environment.

I am amazed by the absence of reaction and clear strategy of our government with regard to how Mauritius will improve its ranking in these various indices and improve its international public image. I am in no way encouraging Government to embark in such useless image building and branding exercise as the Mauritius Tourism Promotion Authority did by signing a Rs 400-million three-year partnership deal with Liverpool Football Club (LFC) as the club’s official tourism and economic development partner.

I am speaking of a meticulous work to assess the reasons why Mauritius has fallen in its ranking of the various indices and an action plan with a timeline to improve its ranking. As an example, it is important for all Mauritians to understand Mauritius down- fall in the Global Financial Centers Index as the country took a nose dive from 63rd to 89th rank in the world – the worst performance in Africa! Up to now no one has explained such an unprecedented downfall.

Let me conclude by saying that whether in terms of fiscal irresponsibility, the unsustainable explosion of public debt, the squandering of Bank of Mauritius funds, the waste of billions of rupees on useless projects, the mismanagement of public enterprises, Pravind Kumar Jugnauth will go down in the country’s history as “patient zero” of bad governance.