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"Resorting to pension populism threatens the very survival of the welfare state”

Interview: Vinaye Ancharaz, International Economic Consultant

‘The government has the means to deliver a ‘budget labous doux’ – some people are even calling it a ‘budget diabète’!’

* ‘Why would the government sacrifice its cash cow? Why will it cut taxes on petroleum products, which bring in millions?’

* ‘It is clear that the education reforms of the MSM government aren’t working, and yet our policymakers seem impervious to it’

Economist Vinaye Ancharaz makes a realistic overview of several issues of immediate and long term concern while commenting on the Budget. He advances his reasons for thinking that it will follow the populist trend like previous ones, and expresses concern about the continuing high inflation rate that will impact the purchasing power of the vulnerable in particular, the failure of MSM’s education reforms and the need for a radical re-orientation of that sector including at tertiary level, the demographic changes and the increasing burdening of the pension system, etc. Read on:

Mauritius Times: Budget 2023-24 will be presented today. This comes at a time when politics may be more important than economics for the government as it’s getting nearer to the end of its mandate. Do you expect therefore it is that consideration that will prevail in a big way in this budget itself rather than in the next one – that is if the government alliance is still at the helm?

Vinaye Ancharaz: In the democracy that we claim to be, only the PM knows when the elections will be held. But if I were to take a cue from the recent amendment to the Local Government Act to extend the life of the municipal councils, the elections may not be for this year. Unless the amendment is a ‘trompe l’oeil’ or the Privy Council verdict in the Suren Dayal case turns out to be damning for the government…

However, if you follow the philosophy of the Budget over the past three years, you’ll notice that politics has always trumped economics. All the Budgets since the pandemic year of 2020 have put a premium on the social; they have been populist Budgets. The 2023-24 Budget will be no different, especially since expectations among the people are exceptionally high, and the Government too has upped the ante by stoking rumours of a rise in the basic retirement pension, possibly to Rs15,000 and a consequent realignment of the minimum wage to the same level. Read More… Become a Subscriber

Mauritius Times ePaper Friday 2 June 2023

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