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AfricaMoney | June 28, 2017

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Mauritian economist skeptical of growth and investment plans under Budget 2015

Mauritian economist skeptical of growth and investment plans under Budget 2015

Pierre Dinan raised a series of questions on the ways in which the government intends to realise the grand socio-economic ambitions laid out by Minister of Finance. (Image: Kashish Jadoo)

Renowned Mauritian economist Pierre Dinan raised a series of questions on the ways in which the government intends to realise the grand socio-economic ambitions laid out by the Mauritian Finance Minister.

He was a panelist at a discussion forum organised by the Mauritius chapter of the Association of Chartered Certified Accountants (ACCA), that was centred on the budget presented by Finance Minister Vishnu Lutchmeenaraidoo on March 23, 2015.

The discussion forum, convened at the BPML Conference Hall, Ebene, brought together a panel of experts to analyze the key issues arising from the Budget and to debate their impact, wherein economist Pierre Dinan critically assessed the budget from both a financial and social perspective.

At the outset, Pierre Dinan noted that the Budget speech was overwhelmingly positive, as the document encourages growth and Foreign Direct investment.

However, he raised a series of questions on the ways in which the government intends to realise the grand socio-economic ambitions painted by Minister of Finance.

“The capital outlay for these 18 months is only Rs 13 billion, which leaves one wondering how are we going to fund the construction of 8 smart cities? For 20 years, our average growth rate was under 5.5%, so how do we intend to achieve growth rates in excess of 5.5% going forward?”

The economist expressed his skepticism on development projects such as the construction of smart cities and expanding the harbour in Port Louis, even as the investment rate remains low.

Moreover, he noted that no mention at all was made on demographic patterns and their impact on the labour force, as in the long run, a diminishing labor force and less active youth can create intergenerational issues.

Pierre Dinan also analysed this budget from social perspective, as for him this budget evidences that the government is expecting the private sector to undertake socially responsible initiatives. Accordingly, private companies will be the major players that will provide financial support for the development of the various smart cities.

“I think this is a smart step taken by the government, as we usually speak about Public Private Partnership from a financial perspective but we should also go in for Public Private Partnership on social issues,” the economist noted.

In conclusion, however, Pierre Dinan ended on a note of doubt, questioning the Finance Minister’s aim of reaching 5.7% growth in the year to come, as no concrete strategy was announced by the Minister for funding the ambitious growth plan.

- By Kashish Jadoo

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