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Thursday, December 7, 2017

TAKING A LEAF FROM MAURITIUS

Tucked off the east coast of Madagascar is the sunny little island nation of Mauritius.

Insulated from the continent’s chaos by a 4 hour flight from Johannesburg, Mauritius has achieved the transformation of their economy that African nations can only dream about starting with much less natural endowment than most countries on the continent.

From a standing start in 1968 the country has managed to not only grow its economy almost 20-fold to its current $12.2b in 2016 according to the World Bank. In 1976 – the earliest year for which the World Bank has numbers, the country’s economy was listed at about $700m.

This may be half of Uganda’s economy but it caters for a population of 1.3m or about 30 times smaller than our own. This is why the per capita GDP of the island nation is at $9,627. In 1976 Mauritius per capita GDP stood at $779 about where we are currently at $779.

During a recent study tour sponsored by UNDP, to investigate how Mauritius has made it work. 

Following meetings with officials at government agencies and the private sector this mission came with a few ideas about how they have achieved this under-reported miracle. Below are few but n ot all the findings.

1.      The independence constitution is not a copy and paste of the Westminster model.

Mauritius was colonised by first the Dutch and then the French and eventually the British. At the time of Independence while the island population was divided mainly between the landowners and the labourers, they negotiated a constitution over 23 years which took into account the country’s unique immigrant population and a desire to equitably share the future spoils of development.

"As a result while they retained the parliamentary system with an executive prime minister and titular head of state and have provisions for coalition governments they also included seats for underrepresented minorities who are nominated through A Best Loser System. They have also retained clear separation of powers between the executive and the arms of government...

The net result of this is while they have had 11 elections and seven changes of governments since 1968 they have not suffered the upheavals that characterised mainland Africa’s population over the last half century.

2.     There is strong partnership between the public and private sectors

But Mauritius development could not have been underpinned by the good nature of its key players over the years. Pragmatism and real politick are more to blame.

The economy is dominated by handful of families who have lived on the island for decades. These however are the minority, mostly of French origin. The majority population are those of Indian descent who then drive the politics. They have a symbiotic relationship with each providing a counterweight to the other’s power.

"As a result the diversification and transformation of the economy from initially a mono-crop economy, where sugar accounted for easily 70 percent of the GDP to the current situation where they have diversified into textiles, light industry, tourism and financial services, and where sugar now accounts for less than one percent of GDP...

The development has been driven through negotiation between the private and the public sector, the public sector’s interest being to create jobs for its people and the business community’s desire to continue to remain viable.

This partnership was important because with a population that has remained steady around a million, a population that cannot support huge industry, support was needed to break into foreign markets and attract investment to the island.

More investment meant more jobs for the islanders – officials claimed there was virtually full employment in Mauritius today, but just as important the revenues from increased economic activity could be used to finance an ambitious welfare system like no other on the continent. Education and health services are free, and in addition the state provides a host of social benefits that range from basic pension, unemployment benefits and benefits for single parents.
3.     
  The welfare state is sacrosanct

Despite the huge cost the country’s welfare system places on government revenues, it is now recognised as a right so much so that when Mauritius needed to undergo some World Bank/IMF sponsored structural adjustment in the 1980s the continuation of the system was non-negotiable.

"The island’s elite recognise the system is necessary to help smooth inequalities in income that may exist and also to forestall social instability that may result from these. Of course the welfare system is also a way for government to support industry by ensuring continuous demand for their products...

It is clear that the partnership between business and public sectors is critical. If your bureaucrats look on the private sector with suspicion or worse as a source of bribes. And if the private sector just the technocrats as leeches and out of step with times and a happy middle ground is not found, its near impossible for development to happen, even if a country shows improving growth every year.

And it is this continuous give and take between the business and government and politicians that can lead to improved welfare for the general population.


However if the power relationship is lopsided as it is in most Africa, with the government lording it over the business community and they in turn looking to subvert government initiatives at every turn then the result is the chaos, stagnation and even regression of the African continent over the last half century.

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