DR. IBRAHIM ALLADIN
In an article entitled, “Curfew – For the Good of the People. Desperate Time Calls for Desperate Measures” published in the Forum page of Le Mauricien on 24 March, 2020, I commented on the government’s action plan and its strategy to combat the spread of Covid-19. I indicated that the lockdown and the curfew imposed was a bold measure and it was the most realistic move by the government, led by the Prime Minister Pravind Jugnauth. Over the past few weeks, the world has witnessed an incredible development, a virus that took the entire human race as hostage. As the death tolls mounts, governments are on their knees looking for solutions. Covid-19 has shocked the world, and we are now faced with the aftermath. Some countries have contained the spread of the virus better than others. How did Mauritius do and what happens next? Let me share my analysis and outlook.
Strategy of confinement
Consider the situation in Europe and the United States. It is a human tragedy with catastrophic consequences. Poor political decisions and unsound advice have got countries like England, France and the USA reeling. Then there is Mauritius, one of the highest risk nations. A tiny country in the Indian Ocean has made headlines the way it tackled the virus. While some nations hesitated or simply denied the severity of the coronavirus, others acted promptly and responsibly. For Mauritius, the experience is overwhelming, but it attacked the virus right on. It should be noted that Mauritius started screening passengers at the airport on January 22, 2020, with nine passengers isolated in quarantine by February 1, 2020, well before many countries. With the limited resources at its disposal, the government responded and the country was confined to a complete lockdown by 23 March 2020, followed by a curfew until 4 May. While critics have their own views, it was the best way to contain the scale of the pandemic. Pravind Jugnauth handled the crisis responsibly and acted with appropriate measures. During a national crisis of such proportion, there are no perfect solutions. While there were some shortcomings, the initiatives undertaken by the Mauritian government have been acclaimed by other countries.
As soon as the confinement and lockdown measures were announced, the government came up with several rescue packages and incentives to support employers and employees alike. The essential services ensured safety and security, and supermarkets operated under strict restrictions. Basic food items were distributed to the needy. A caring Pravind Jugnauth showed resolve and compassion. Compared to other parts of the world, Mauritius, a welfare state, was acting according to the WHO guidelines. But the fight is not over yet. The country has to deal with post-Covid 19. How will the government deal with a looming recession? That depends on what the government decides to do.
Putting people to work
Economists have confirmed that Covid-19 has pushed the world into a recession never witnessed before. The powerful economies like the United States, France, England, Germany, Japan and others are putting bail out plans to minimise the social and economic costs. Unemployment is soaring in these countries as millions lose their jobs due to the virus. I am not going to delve into macro-economic theories and discuss models. The financial institutions are making all kinds of forecasts and predictions.
My approach is more down to earth. The government has to reinvent itself to minimise the pain of reconstruction. This brings me to my first point that is, keep people employed and keep the rate of unemployment and inflation low. People are the biggest asset. In Mauritius, the recovery plan should take the following considerations:
(a) Release land that is not being used for agricultural purposes. Thousands of acres lay idle. Rent them to planters, the unemployed and families interested in growing fruits and vegetables. Give out low interest grants and support green houses across the country. Covid-19 has taught to be self-sufficient. This initiative will absorb many unemployed. Invest in agriculture.
(b) Invest in training and skills development. The tourists are not likely to flock back to the island in large numbers so soon. Those displaced in the hospitality and tourism sector should be given the opportunity to develop and upgrade their skills. A joint private/government partnership would ease off the short-term pain. Besides, investing in capacity building has its pay-off. The sectors most affected are tourism, hospitality, services and airlines. These areas should be beefed up immediately.
(c) Support the small and medium enterprises (SMEs). Review the financial conditions and loan repayments. This sector must become more dynamic. Covid-19 may be an opportunity for the SMEs to step in. The SME could become an important stimulus for the local economy. Encourage family businesses.
(d) Claw back public expenditures in all ministries between 10-20%. Freeze international travels and reduce per diems. Freeze salary increases and promotion for at least three years. Recruitment in the public service should be selective. Perks such as duty free vehicles for public officials should be frozen. Prepare the nation for working from home, a new post-Covid reality. Canada and the Scandinavian countries provide good models. Encourage job sharing.
(e) International conferences and meetings could be conducted via medium such videoconferencing. This is an area that need to be developed and exploited.
(f) All key government services should be available online. This will reduce bureaucracy and improve efficiency. This is another lesson learnt from Covid-19. Plan for the future.
(g) Alleviate poverty and eliminate homelessness. The scheme developed by Finland provides an interesting example. Poverty, homelessness and unemployment are often connected and cut across various jurisdictions. A joint effort is required. Time has come to innovate.
(h) Most banks are reviewing lending and loan schemes. This is a good departure. The Bank of Mauritius (BoM) should provide the lead to ensure that unemployment and inflation remain low. The “helicopter money” proposed by some is not an answer. The economist Milton Friedman, who coined this term in the 1960s, is not applicable to Mauritius. The BoM has to take a lead role and spearhead economic development.
(i) Start a school/community program. Students from grade 9-12, must get involved into community work for at least 15 hours/week as part of the curriculum. Get young people involved in agriculture, community development, rural development, environmental and citizenship education. They need practical involvement. Citizenship education cannot be acquired from textbooks. Covid-19 is reminder that solidarity and responsible citizenship are important attributes.
Facing the challenges
and looking forward
Prime Minister Pravind Jugnauth had already announced the “be measures that were forthcoming. He had already sent the signal that the economy would be affected and the global recession would impact on the country. Recently, Renganaden Padayachy, the Minister of Finance, echoed the Prime Minister by confirming that the economy will stagnate with unemployment soaring to over 17%, leading to a negative growth rate. To put it simply, the economy is heading towards an economic crisis. These are harsh realities and the country must come together to present this. The government is relatively new. Covid-19 may have altered its mandate, but Pravind Jugnauth has more than four years to “fix” the economy. His toughest challenge is that he has limited resources, and is hard strapped for cash. The huge infrastructure projects that started before the pandemic are likely to continue, but his priorities will have to shift. It is likely that the IMF and the World Bank could propose tougher stringent measures, but at the same time, many economies would be in a similar situation, so Mauritius has to look inwards and get the local economy going before external financial aid flows in. For Pravind Jugnauth, it would be important for him to maintain a strong leadership and keep his government together. The odds are in his favour. He has the support of his ministers, but some would have to perform better. He needs competent men and women around him. This government must be given the chance to correct what others have failed to do.
There is a possibility that the recession may not last for years. The global economy could bounce back as early as 2021. The European Union, the G-7 and the G-20, along with the major financial institutions are working on their rescue plans. If the recession does not linger on, countries like Mauritius would be spared. This would only strengthen Pravind Jugnauth’s position and he could push forward reforms. It is important to note that the government is not on shaky grounds. Mauritius still has the credentials to attract foreign investors. It’s not all doom and gloom as some assume. Everyone will have to adjust and adapt to the “new” normal.
The plan for Air Mauritius
Covid-19 may have struck the heaviest blow to the national airline. The airline has been struggling for years and many have contributed to its demise and today some of them are lamenting. With Covid-19, Air Mauritius is not the only airline to take a nose dive. Virgin Australia, South African Airways, Finnair, Norwegian Air, Air France, Wizz Air, British Airways are struggling, and others are likely to follow. Air Mauritius is key to the tourist industry. While the company is in the hands of administrators, this is a golden opportunity to develop a long-term plan for the airline and put in place a new structure. Hopefully, it will shed some light as to what led Air Mauritius to its downfall. Under the present context, the government must protect the airline and thousands of jobs that are at risk. There is the option to sell the airline, with the state keeping a small share, but it is unlikely to happen. The story of Air Mauritius is sad and tragic. There are only a few people who understand the aviation sector. One of the pioneers of this industry is Robert Rivalland, the former head of Rogers Aviation. Last year I had the rare occasion to talk to him and he gave an insight of the industry. Mr Rivalland, humble as he has always been, stated that we need visionaries and good leadership. Who would disagree with this wise man? For good advice turn to a wise man.
versus economic miracle
An economic miracle is unlikely. What the country witnessed during the lockdown calls for a social revolution. Covid-19 exposed some elements of Mauritian society. Those who did not follow the regulations and rules of the confinement caused indignation and dismay. This may be the waking up call the society needs to reinvent itself and take corrective measures to build a sense of citizenship and belonging. Covid-19 affects everyone. The nation must come together and fight this invisible enemy. There are social and economic inequalities and pockets of underdeveloped areas that must be recognised and they cause friction during a crisis. The marginalised class is often the one that is on the receiving end. There has to be a change of attitude and behaviour and a recognition of social and economic disparities. Some of the bad practices must stop. Good citizenship should be the norm and it starts at home with the family.
Invest in public health
According to the Legatum Prosperity Index (2019), Mauritius ranks 54th on a total of 167 nations on the quality of health care. Singapore and Japan lead the way while India is ranked at 109. A healthy population makes a prosperous and productive nation. Investing in health is investing into the future. Covid-19 is reminder of the state of public health in the country. A major public health campaign is required, along with improvements in infrastructure and delivery. Nations that have an efficient health system are coping better with Covid-19. The government must set a new bench mark for health and brings up its ranking.
Can Pravind Jugnauth lead the way? He is a survivor and has been through turbulent times and although this pandemic has altered all the equations, he is likely to get the country out of the crisis by end of his current term with almost five years before the next general election. The opposition has yet to come up with “miracle solutions”. There are none. The country should rally together and work for the betterment of the society. Every citizen has to play a part in the process of reconstruction. Covid-19 has created new challenges, but with any major catastrophe, there are new opportunities. While tough times require tough decisions, the global economy is likely bounce back. It is not in the interest of leaders like Donald Trump to linger the recession. He will be facing a presidential election in the months to come. He has already indicated that he wants the economy to be moving again quickly. If that happens, Mauritius may be spared.
Pravind Jugnauth has to come up with a strong program and work with all the stakeholders, including the private sector. The economy is fragile, he has to put in place several short-term measures that would take the country through 2020. In parallel, the government should be working on a long-term plan to get the key sectors on their feet again. A post Covid-19 Bill has already been announced, and hope it brings innovative changes. The next three years will be critical and Pravind Jugnauth must be on top. The government faces a monumental challenge like the rest of the world. The crisis has just begun. The whole world has to reinvent itself. In this hard time, John Milton sounds comforting as he stated in Paradise Lost, “All is not lost”.