Pierre Dinan, economist: “Budgetary measures must not fall within the limited horizon of elections”

The Minister of Finance's speech expected within a week provides a budgetary orientation focused on social, economic and environmental resilience. However, according to economist Pierre Dinan, these measures should not be dictated by short-term electoral considerations, but rather by a long-term vision of governance to ensure the sustainable well-being of the population.

The Minister of Finance, Renganaden Padayachy, made it clear that his next Budget will focus on three themes: social resilience, economy and environment. Is this a good strategy?
We will know once he finishes his Budget 2024-25 speech. It is worth remembering what the fashionable term means: resilience. To me it means endurance. Certainly, since the role of the Ministry of Finance is to provide the government with the means to fulfill its mission for the sustainable well-being, if not the well-being, of the entire population, the resilience that the minister promises must concern not only the social, but also the economy and the environment. This is why the measures to be taken must be part of a medium- and long-term governance perspective, and certainly not within the limited horizon of the next elections.

How can government promote social resilience? What measures do you recommend?
In the social field, the obvious objective is to help those who are experiencing major financial difficulties to cope with the realities of life. The examples are well known and our country has, for decades, adopted practices generally linked to the welfare state, such as free health and education, without forgetting pension benefits for the disabled or elderly, having little or no means of subsistence. Generally, these facilities offered by the government are available to those who request them. The system does not include an automatic aid formula based on predefined criteria and without reference to the means of the potential beneficiary. As for other citizens with personal means, they can choose to use private and therefore paying services. These practices used for decades have proven their worth. Certainly, operational improvements would be welcome, and this is what our leaders should focus on.

What is the impact of the aging of the Mauritian population on government social spending and what are the forecasts for the coming years regarding this spending?
What has been new in recent years is the universal granting of pensions to categories of people, especially characterized by their age. Given the aging of the population and the consequent reduction of Mauritians in full capacity for economic activity, this exposes the country to increasing financial obligations. There is therefore reason to fear that government social spending will increase. Moreover, the forecasts published last year already reflect this, with Rs 51.1 billion during the current financial year, Rs 59.8 billion in 2024/25 and Rs 65.5 billion in 2025/26.

National education has no other choice than to put itself at the service of the young people of this country, who must be adequately trained to manage all the new digital technologies resulting from this global revolution.

What measures can help boost the economy? What do you actually recommend?
The strengthening of the Mauritian economy, its resilience, will materialize when all its resources are put to use and operate at full capacity. What are these resources? Let's start with the Mauritian population as a whole. Let us know how to get to work, according to our physical and mental health, our gender, our marital status, the financial means available to us, the studies we have completed, the training we have received, and so on. And above all, let us convince ourselves of being capable of accomplishing these tasks at the national level, because our compatriots in the 80s have, thanks to their determination and tight and disciplined governance, succeeded in relaunching the Mauritian economy which had suffered two devaluations of the national currency and suffered damage caused by a series of cyclones. These compatriots of yesterday even managed to reduce to 11 the number of public holidays which had reached 26. There were no protests in public places in the country.

And what about the other resources of this country?
The land space which no longer provides us with the varieties and quantities of vegetables and meat required to feed ourselves and the tourists, the maritime space which does not provide us with enough fish and seafood, the cities without particular attractions to attract tourists with significant financial resources, museums whose renovation continues. Third, let's prepare for the future. National education has no other choice than to put itself at the service of the young people of this country, who must be adequately trained to manage all the new digital technologies resulting from this global revolution.

The environment will be another key focus of the next Budget. How to protect ourselves against the effects of climate change?
We must be concerned about building sustainably, both buildings and houses as well as drains and rainwater evacuation channels. It is not so much the execution of the work in these areas that is lacking, but rather the decision to build them. Secondly, rigorous monitoring to maintain and repair them, if necessary, is essential. You will have understood: the primary responsibility lies with public authorities, in particular the Ministry of Public Works, municipal councils and districts. Two behaviors of responsible citizens should be considered: obtaining advice from competent and honest professionals before embarking on a construction project, and systematically denouncing the effects of announcements. In short, we can only address the damage caused by climate change if we behave as responsible citizens.