Paul Lismore

[Paul Lismore] Why Mauritius is likely to follow Sri Lanka on the road to bankruptcy...

Rédigé par Paul Lismore le Jeudi 31 Mars 2022

What follows is an article that a friend sent me yesterday and which details the " worst-ever economic crisis, triggering food and fuel shortages and protests" in Sri Lanka.

Figures released by the Audit Office recently showed that no less than 47% of all national income in Mauritius now goes towards paying the National Debt and various pensions....which leaves only 53% of our GDP for investment and all the freebies that we enjoy and that we mostly take for granted, like free education, free health service, free this, free that, the inevitable commissions for our thieves in shiny suits take on every procurement, and the billions stolen by the 'patriots' every year...

I have edited the word Sri Lanka and replaced it with Mauritius, and those readers with more than 2 brain cells will be able to notice the similarities between our situation and the atrocious state of the Sri Lankan economy, and its severe social ramifications...Not everything is strictly comparable, of course..For example, fuel prices have not increased 3 times in Mauritius in the last 3 months...

" Mauritius faces its worst-ever economic crisis, triggering food and fuel shortages and protests.
In the past three months, fuel prices have increased three times, while essential food items have doubled. Mauritius is facing its worst-ever economic crisis, which has driven up prices and triggered food and fuel shortages across the country.

Since the beginning of March, the Mauritian rupee has fallen by almost 45% against the US dollar and its foreign exchange reserves have fallen to crisis levels. Mauritius imports a lot of essential items, but its inability to pay for them has resulted in shortages of food, fuel and baby milk. While the country relied heavily on borrowing from China (and India), which may have helped in the short term, it is now on the verge of sovereign debt default. Power cuts used to plug fuel crisis The economic crisis has sparked protests across the country. (In Mauritius too, soon...)

In February, essential food inflation rose by 25% and overall inflation is close to 18%, while people have been forced to queue for hours to buy fuel, amid rocketing prices. Unable to buy fuel, the Ministry of Power announced a six to seven-hour daily power cut across the country, while supplies for buses and lorries have also been rationed. The war in Ukraine has also caused world oil prices to rise, making it difficult for Mauritius to buy.

Why is the crisis happening? Mauritius' deep-rooted economic crisis has remained unaddressed for decades by successive governments.

Instead of addressing the issue head on it took the easier route in borrowing to tide over problems and now has mounting debt and interest payments of almost $12 billion. This year, it is due to make $4 billion of such payments, further depleting its reserves. Tourism generates more than $4 billion a year, but the industry was hit hard by the COVID pandemic.

The Jugnauth government's reckless and mismanaged economic policies has exaggerated the crisis and has been blamed for the mess the country is in. Tax cuts, severe import restrictions and the reluctance to bring in prudent economic reforms laid bare the structural deficiency in the government's economic policy. With a severe balance of payment crisis, international agencies downgraded the country, further hampering any chances of foreign investment.

The country is in a 'debt trap'

Mauritius has now asked China and India to restructure its debt payments and for credit support.
The government has sought a credit line of $1.5 billion from India to import essentials. This amount is in addition to the $1 billion extended by India last month.

The country is set to reach out to the International Monetary Fund (IMF) and other countries for relief.
However, the magnitude of the crisis is such that these loans may not be sufficient to get out of the balance of payment problems, as the current deficit is gigantic. But for the moment, it's ordinary Mauritians who will have to bear the brunt of skyrocketing prices and shortages of essential products for a long time to come. "

As I said, the situation in Sri Lanka and the figures mentioned above do not mirror the situation in Mauritius. But I am sure you get a fair idea of the terrible mess that we find ourselves in Mauritius...
As for protests around the country, this too will happen in Mauritius...and is one of the main reasons for the government to limit public gatherings to only 50...

Now, if only our "patriotic" ministers and no less "patriotic" civil servants  could go on mission more often to Dubai, in order to achieve fuck all...

Jeudi 31 Mars 2022

1.Posté par Hamidkhan Abdullakhan le 01/04/2022 11:13
I have lived in different African countries for 30 odd years and I've witnessed the same symptons of critically sick economies. I have said before we are in for structural adjustment forced down our throat by the IMF. 60 years after independence we are still relying on mirage industries lije tourism, textile, bpos abd what not. While Singapour, Thailand, Taiwan, and Vietnam tgat has been out of a terribke war barely 40 years ago, have been diversifying smartly.
There hundreds of advisors in the Mauritian government, some from the last ice age, being paid to do what? The public service is bloated with more than 60000 staff, out which 80% are just seat warmers. On top of that, they get duty free cars, salary adjustment, plane tickets, old age pension when they are still working. Year after year audit reports show financial mismanagement, no corrective measures are taken...there is no check and balances to counter the arrogance of the authorities.

It's not the economy that is bankrupted, it is the country that is being broken apart, a state that will soon no longer functiin as one. I maintain my conviction that non-whites cannot lead a country.

Nouveau commentaire :

Règles communautaires

Nous rappelons qu’aucun commentaire profane, raciste, sexiste, homophobe, obscène, relatif à l’intolérance religieuse, à la haine ou comportant des propos incendiaires ne sera toléré. Le droit à la liberté d’expression est important, mais il doit être exercé dans les limites légales de la discussion. Tout commentaire qui ne respecte pas ces critères sera supprimé sans préavis.