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How free is free?
By Surendra BISSOONDOYAL
Economists keep reminding us that there is no such thing as a free lunch ? somebody has to pay for it ? even when they are candidates at general elections and have to pamper the electorate, when the taxpayer has to pay for it. I was in India in the 1990?s just before elections. One political party had promised that, if it came to power, it will fix the price of rice at one rupee per kilo. Some consumers had put up a huge board on which was cynically written: Next election rice will be free.
This is the great weakness of democracy, which is not confined to developing countries only. The bidding and outbidding to win votes takes no account of the ability of governments to foot the bill. The compulsion to offer something for free is part of election manifestos.
As a former colony of Britain, Mauritius has tried to model its social development on the British pattern, irrespective of its economic development. The Welfare State was a great achievement but British governments from Margaret Thatcher?s onwards have had to review to some extent the scope of free some social benefits to keep them within affordable limits.
But there is a price to pay for such social benefits, some of which are justified, but not all of them. Access to free education at the primary and secondary levels is highly desirable. But can we afford to have free tertiary education? Should we not make soft loans, scholarships and bursaries available instead. Was it necessary to provide free transport to all students and pensioners? Making them pay half the fare was good enough. Targetting those in greater need of additional benefits would have made the financial burden more bearable.
However one has to be careful about ?targetting?. The previous government learnt at its expense the disastrous effects of targeting people for old age pension benefits, humiliating many old people in the process. Targetting 80% of the population for eligibility is unjustifiable and administratively very heavy. ?Targetting? people earning up to Rs 7 500 for payment of exam fees of 8 to 10 thousand rupees and leaving those earning Rs 8 000 on their own is an aberration.
Similarly our ?free? health service is bursting. But no political party wants to take the bull by the horns. A system can be put in place in order not to deny access to hospitals to anybody, but encourage those who can afford it to benefit from an element of subsidized care. This policy can even be implemented in the field of education, encouraging the setting up of partly subsidized fee paying schools.
Economic development has to go hand in hand with social development. But politicians need to be prevented by law from making wild promises which have not been properly costed and budgeted for. Otherwise it is the poor minister of Finance who will have to juggle with figures to fund pre-electoral promises. And if he is not imaginative, do not ask for whom the bell tolls?.
Somebody has to pay for whatever is given as ?free? by government. But the minister of Finance made a big mistake in trying to get all the funds at one go, even taxing savings and residential property, triggering clashes and ?. ?malentendus?. An overdose of medicine will kill the patient, not cure him.
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