Let us start with the elephant in the room. It was extremely courageous to challenge the status quo of the ‘Pension at 60’ institution. Assuredly, the sacred symbol par excellence. This is why the first budget of the new government is even more of a missed opportunity. A balanced (and even reasonable) Budget? Yes. Rupture? No.
Due to a brave, unsurprisingly controversial measure (others are less emotional and therefore less impactful on the psyche of the population), we cannot this time blame a part Labour government of their usual ‘Tax and Spend’ approach. However, those who were hopeful of a definite move towards more efficient government through much needed structural reforms – ie. ‘une reduction du train de vie de l’Etat’ – remain frustrated. What would have made a relatively ‘good’ budget really ‘great’?
SEIZING THE OPPORTUNITY OF A PERFECT STORM – A clean 60-0 mandate means that the population was implicitly bracing itself for courageous measures. The dire state of our public finances could, for once, be very clearly blamed on the catastrophic legacy of the previous government. They knew nothing about Economics – and were not even remotely interested to learn, only too busy flip-flopping on the gravy train. Moreover, the ‘honeymoon’ period of a first budget constituted the ideal timing to really push for bold structural measures. It was a matter of communicating well whilst showing that government too would make some highly symbolic sacrifices re:the lavish perks of politicians. Sadly, we saw neither.
A CLEAR VISION – Contrary to what many think, a Vision is neither a Whitepaper of dozens of pages or even a Plan. It is a highly emotional and sincere statement which becomes a contagious dream. Inspirational words to galvanise forces the moment they are uttered. Like JFK’s ‘A Man on the Moon’. Paradoxically, sometimes, the situation is so critical that a Vision Statement is not even required. In the 70s, we all knew that it was a matter of sheer survival (SSR). In the 80s, it was about our aggressive industrial push (SAJ). Then we lost our way, there was no Vision anymore, ie. nothing compelling to make us act differently. This budget has very commendable measures but the Vision is not clear.
COMMUNICATION – This is not just a layer of varnish, applied as an afterthought. There needs to be substance for credibility. The ideal, obvious way would have been to reduce the already lavish perks of politicians to balance the sacrifices required from the population. Salaries of Ministers, their generous pensions and those of Presidents and useless Vice-Presidents, duty-free limousines, per diems, etc. A reduction in those would have provided the very strong signal required for the population to accept ironically… even more sacrifices.
REVIEW OF PARASTATALS – We all know what happens to plans. Consultants (esp. of the foreign variety) are paid millions of USD only for… public nominees themselves to then reject the measures. Why, for example, do we have a Ministry of Tourism, the Tourism Authority and the MTPA? Marketing has always been a foreign language to government officials. Closing a few parastatals in the first few months should have been just what the Doctor ordered. After all, he closed down the moribund DWC 20 years ago, in far less challenging economic circumstances.
ARTIFICIAL INTELLIGENCE – AI is no panacea. For the past 30 years we have been talking about ‘this hub’ and ‘that hub’ without anything to show for it. Singapore or Switzerland, anyone? The Seychelles are better than us in a few areas. AI is the new ‘hub’. When some government services are not even digitalised… Mr Subron seemed so surprised to suddenly discover stacks of papyruses in the caves and dungeons of the Social Security office. Maybe we should start using computers, invented 50 years ago, first? Just a weird idea. We all know what will happen to those beautiful AI wishes. Civil servants will be the first to resist any change. Elon Musk, love him or hate him, laid off 80% of staff at Twitter (now called ‘X’) without any glitch in its service. And these were high tech Silicon Valley types, not exactly civil servants waiting for their pension.
WHAT RUPTURE MEANS – Examples of real rupture from the past:
- The closure of some parastatals and a warning to others that if they do not perform, the services would be privatised within 12 months.
- The recognition that free ‘education’ has failed. It is, in fact, merely free ‘schooling’. The proof is the private tuition mega industry.
- Meritocracy in the public sector together with a freeze in recruitment and pay, until a performance appraisal system is in place – together with a thorough process review.
- The removal of totally free healthcare except for the most deprived. If ‘customers’ are made to pay even 10% of the care costs, they will demand value for money.
- Neither pay nor pension for Presidents – and their clueless Vices. The perks are more than enough.
NO DEFICIT REDUCTION – The result of the above means that the enormous budget deficit is not even planned to be reduced, in absolute terms. We are relying on ‘economic buoyancy’ with growth of 3-4% annually.
To move the state pension from 60 to 65 years old required a Statesman, not a politician. If not, it would have been done in 2014. The population voted a resounding 60-0 because they now know the difference. It is thus so much more of a pity that we shied away from the very promise of ‘Rupture’ – which the population voted for. Ironically, there would be less controversy if all were impacted to some degree. What is good for the goose is good for the gander. Let us hope the ‘studies’ mentioned (the Blue Economy, AI, review of parastatals) quickly turn to best practice. But with our civil servants and the vested interests of politicians and public nominees (same thing), the odds are against a swift and successful implementation. “Culture eats Strategy for breakfast”.
FOUAD DIOUMAN
