Modern Economic Paradigms underwent intellectual abortion when the current systemic crisis combined a nightmare scenario of financial instability,  jobless growth stagnation, environmental economics challenges to green sustainable development, and central banking regulation loopholes to rampant round tripping offshore funds which destabilise normal financial investment flows and monetary equilibrium in the monetary system.
Sustainable development is effective when it emerges from macroeconomic and financial stability, thus creating conducive environment for robust growth and a productive economy. The low growth and high unemployment bubble and future prospects of jobless growth infuse great uncertainty that saps business confidence index and investor optimism.
The twin-policy mix of demand boost and supply-side reforms essential to boost productive capacity of our economy remain a viable scenario for achieving long-term sustainable development. Engineering Policy buffers to maintain resilience of our economic system retains priority rating. A consolidation of national resources for concessional lending to cushion the volatility of export earnings and the imports currency cost mismatch is a twin palliative to exchange rate overvaluation. Welfare social safety netting is a thin line that defines survival and catastrophe mode. Social protection is an investment in sustainable development.
Mauritian Economic Abortion Pill
Corporate Business Sectors have a built-in DNA that suggests that they are in perpetual assistance mode – the usual levers to lobby Policymakers are legendary: Repo Rate, Special Credit Lines, Depreciation of the National Currency, minimal wage rate increases not indexed to Inflation, and Additional Stimulus Packages with zero accountability.
Pricing on local markets are dollar indexed [sticky pricing upwards], and subsidy is being sought for weak euro exchange rates which challenges profit margins [excessive] and which is combined with a reprieve on the bank rate at each crisis window. In one word, risk-free business scenario with gains and no pains. The spectre of job losses often hold Government at ransom to acquiesce to fiscal stimulus with no rigorous strings to demand high value added performance and transparency from our private sector efficiency ratios.
Overvalued Mauritian Rupee benefits the population at large, and mitigates inflationary pressures. Mauritius Exports are not uncompetitive due to a strong Rupee, but due to poor combined productivity ratios – capital, labour, and total productivity ratios.
The Mauritian Banking Sector is risk averse, and not supportive of start-ups clusters, and SMEs. There is no easing of interest rate cartel pricing in commercial banking, and business re-engineering to fund restructuring with banks as strategic partners. Banks are focused on profitability and avoidance of toxic assets and insolvent ventures, and their risk profile hampers business entrepreneurial energies which underpin economic growth in a democratisation process to dilute an oligopolistic structure model.
The realignment of the strong rupee is not a sufficient condition to ease our exporters’ woes. Structural weaknesses and managerial inefficiencies need to be re-engineered and lame ducks denied fiscal serum – Abortion prescribed!