Before it came to power, the Labour party (LP) had promised rapid key reforms to put the economy back on track. However, the country has had to wait almost a whole year before it could see a broad set of changes emerging.

The 2006-07 budget has set the scene for a radical transformation in the economic landscape of the country in the wake of the stiff challenges that are looming ahead. Bold measures have been announced, but there is still some concern about the time it took before giving them shape. And, one year is a very long time in the face of urgencies, some observers remarked.

The Finance minister, Rama Sithanen, was expected to deliver on a number of key issues regarding public finance and our growth model. He seems to have met these expectations in many ways. The Labour government is putting forward aggressive pro-growth policies to rekindle economic activity. This will be achieved through higher investment and a wider scope of opportunities to build new businesses and develop existing ones.

<B>Irrelevant labour laws</B>

The government is confident that, with the reforms, gross domestic product (GDP) will start growing at a 6% rate as from 2008. The challenge is to allow the economy to gather sufficient pace and momentum so that it can perform without preferential markets in the medium to long term.

Reanimating the economy means quickly turning around two ailing sectors, namely sugar and textiles, whilst developing new industries. A greater diversity in the economic base allows a better resistance to shocks and a greater stamina to sustain a higher growth trajectory.

The government has announced audacious ideas to open up the space for business and reform labour markets. Changes in labour laws will make it easier for profitable firms to hire workers and less efficient ones to reduce staff to remain afloat and avoid complete collapse.

Our labour laws have become irrelevant to the new economic context whereby all our safety nets in world markets have been eroded. There is a definite need for more flexibility in the employment market to allow a better allocation of resources.

Our export industries are gradually losing their edge in world markets because our cost structure is not competitive. Our labour costs are trailing productivity gains in most sectors of the economy. Our exporters have to wage a battle for higher productivity and efficiency as well as deploying better-quality products that can fetch a premium price from foreign buyers.

Government wants to make this happen through policy and institutional changes, among other things. The dismantling of the tripartite forum to grant annual salary rises and reforms of labour laws are part of the package.

There is also a new stewardship intended to encourage industries to grow. Enterprise Mauritius, for instance, is playing a very active role in helping businesses develop new products and services and finding new markets and niches overseas.

A lot of the budgetary measures are about investment facilitation. Someone with a bright idea should be able to start a business without the bureaucratic hassle. There is now a greater space for business to emerge and grow. There is a high emphasis on attracting foreign talents, money, ideas and technology to Mauritius, which is set to transform itself into a regional investment platform in many areas, including financial and business services, IT-enabled services and seafood hub.

Small and medium firms will also find greater opportunities to do business in this new investment environment.

<B>A ?realistic? congress</B>

Instead of a noisy party, the 67th LP congress was a sober celebration. One year after his election to the head of the country, the prime minister, Navin Ramgoolam, wants to set the example and this starts with such events. He made it clear that no member of his government or his nominees should play with public money. It is with this in mind that the government has reduced its number of ministers and private parliamentary secretaries. Sacrifices should be made at all levels including government. But he also wanted to clarify government?s stand on the protection of vulnerable groups. Labour remains a left-wing party and has been keeping its electoral promises. Even if a number of budgetary measures have not been understood, the PM assures that the country and its citizens will be the winners through these hard measures in the long run. LP supporters religiously listened to their leader and enjoyed the cultural programme that followed. A minute of silence was observed in memory of the late Sir Satcam Boolell?