For a small centralized state like Mauritius, the announcement of the government budget is predictably one of the highlights of the year in political terms. It is the occasion for citizens to renew their engagement with public affairs – the scrutiny and discussion of policy by the public is, after all, a fundamental characteristic of the free republic we purport to be.
This year, the significance of such an exercise is heightened by the unfortunate concurrence of the ongoing recession and of the COVID-19 health crisis. We must, therefore, at the outset acknowledge that the government did not, and does not, find itself in a very easy position. It remains, however, that the current circumstances call for an exceptional ability to maintain simultaneously a degree of stability while looking at the causes of the recession in the current system, and to seek to innovate accordingly.
Mauritians are no doubt aware that the coming years will constitute a test for both social resilience and social cohesion. The health crisis represents an external threat that can all too easily be internalized and disrupt the usual course of social life, while the recession is no doubt partly due to the endemic stagnation and lack of innovation in the major industries of the country.
One would have thought that, in view of these combined threats, the government would have led the way towards innovation and lateral thinking, and opted for a more integrated approach, involving the constant participation of all stakeholders. We are not privy to the secrets of government and it could well be that such consultations are on the agenda, if not already ongoing.
However, we did not see any evidence of any integrated approach in the budget. Predictably, it had some of the features of an emergency budget, particularly in terms of its provisions towards social solidarity and of the exceptional funding of government expenses (by the Bank of Mauritius, no less…). It is hard not to see the latter as an act of feathering one’s electoral nest.
On the other hand, we cannot help thinking that this solidarity levy is not going to encourage or incentivize those who are likely to contribute the most under the new fiscal regime. Or that it is truly going to help the disadvantaged beyond the current cycle. How is the change from being a low-tax to a high-tax jurisdiction going to help the economy in the short and longer terms? We can only guess but this uncertainty is compounded by the fact that nothing was said about the duration of this new regime – is it going to be temporary or meant to be more permanent?
The correlation between the solidarity regime and the unemployment problem is also not clear at all – will the government expect any returns from the beneficiaries; what will be done to ensure their potential reinsertion into the job market? The rather paltry contribution towards the support of the tourism industry, in this respect, leads us to wonder at the modality, if not the possibility of such a reinsertion in the short term.
It is undeniable that the great construction projects on public infrastructures represent an investment in assets of non-negligible value for the country in the long term, and the government is right to pursue them with vigour. However, it is to be hoped that it is principally local companies and local workers who will benefit from this drive.
The government is also right, in terms of sustainability and food self-sufficiency, to bring up the issue of food production and smart agriculture. Over-dependence upon food importation is a real threat to developing countries. This is one of the areas where the hypothetical integrated approach mentioned earlier could be fruitful in terms not only of reducing dependency but also for job-creation and bringing together the perspectives of the different sectors of our economy to bear upon the efficient use of our land resources.
Given the importance of this question, we need to go beyond the insufficient and often purely theoretical pieties of the diversification drive, and seek out innovatively sustainable alternatives, to involve both the private and public sectors, all citizens (especially the chronically unemployed) in what could be truly a national project of self-dependency and food sovereignty.
One could fault this budget for being a bit too programmatic – a “wish-list” budget, as someone or other may have put it. The mettle of this government will doubtless be proved on its capacity to use this budget to bring the country back to some measure of growth and stability. Of course, only time will tell whether these measures or the general policy orientations adopted will contribute to social cohesion.