Covid-19 has unfolded a gruesome chapter in the history of mankind. Economies worldwide are desperately walking the tight rope of lockdowns and many may slip into economic devastation. A lingering Covid-19, without the antidote or the vaccine to immune in time, can be cataclysmic, unfolding poverty for many in the wake of downsizing of crucial economic sectors.

In our country, the fate of Air Mauritius, under voluntary administration, has sent shockwaves and fear is gripping throats in other sectors which may follow suit. A national economic crash is unfortunately a likely event without radical transformative measures. This is not alarmism or political blame game but a realistic state of affairs that Government must address forcefully, rationally and resourcefully.

The immediate term

The silver bullet of wealth redistribution. In the immediate term, measures are required to cushion the weaker segments of the population until a new economic architecture, adaptive to a new global context, is put in place. The country has lived years of two-speed prosperity, although measures such as the minimum wage and the negative income tax have helped bridge the gap. Moreover, 20% of households still dispose of 46% of total wealth while 20% at the lowest income bracket are left with only 6%.

Today, a redistribution of income and wealth would be the most sustainable avenue forward. It should not reduce what has been amassed (although often unfairly) but a temporary measure to avert a social crisis and enable everyone to participate in the emergence of a new economy.

A Fund of billions can be constituted by converting all earnings exceeding Rs 100,000 as long-term bonds/debentures together with a wealth tax/progressive income tax, reduction of 20% budgets of civil service/parastatals/embassies, abolition of all allowances/superfluous posts in the public sector. BASIC PENSIONS SHOULD BE ONLY FOR THOSE EARNING BELOW Rs 60,000 monthly, to avoid another crash in the foreseeable future. The billions raised can then be injected as equity in appropriate sectors to cover salaries of workers for a specified period of time, probably 3 to 4 months, thus averting the dreadful prospect of loss of jobs.

The longer term

The gold bullet of economic restructuring. There is also need to salvage the country from a worst ever economic recession. Traditional measures alone will not suffice. A repo rate reduction, during economic uncertainty, only helps to ease debt repayment without a spur on investment. Stimulus packages can turn out as rent-seeking. However, low inflation makes possible Quantitative Easing. Increased Government expenditure is possible in the wake of past reasonable budget deficits. Banks, through idle loanable funds, can help ease cash flow of vulnerable enterprises while Bank of Mauritius shares guarantees and provides an interest margin.

But more, the economy must be restructured through inclusive visionary policies to do away with two-speed prosperity. It will be indecency at this time to continue providing a welfare state for all. The education system as it is today is obsolete in an era where digital learning is possible and economical for academic courses. A paid health system will channel funds for high tech medicine and medical tourism.

Worldwide there is a bloated civil service with segments producing mostly traffic congestion and air pollution. Work done partly from home assisted by Apps/video conferences will entail less travel allowances, parking facilities, overtime, board member fees and other expenses. Abolition of Ministers’ pensions, postponement of selected capital projects, freezing of Pay Research Bureau and its expenses would unleash a just and fair society.

Erecting a highly efficient economy

All posts in the public sector and parastatals should provide value-inuse, with champions at the helm, endowed with innovative thinking, proactive and rational decision-making, good governance attributes and high levels of technical skills. The education system is creating too much an elite of academic knowledge, undermining creative capabilities and technical skills. The Education hub concept linked with Science and Technology centers is highly valid for high-waged jobs creation.

The country needs more Economic Zones compared to Smart cities where fewer become smarter. The textile sec- tor will require ventilators in the wake of Covid-19. Is the Economic Development Board adequately ventilated to rescue the sector? What about market knowledge to guide market diversification to offset traditional market loss? Can the NPCC reactivate its engine to drive a national productivity programme? The Fashion and Design Institute has to be led by a prestigious personality apt to redesign the textile sector into a Fashion industry.

The Covid-19 has awakened us to the importance of self-sufficiency. It is a must to put Smart Agriculture on track to culminate in self-sufficiency. The setting up of a crop support scheme is a must. The challenge of attracting workers in the sector can be addressed by production of high value vegetables, fruits and sea food products for exports. Support of Government in training, allocation of land, funds and market intelligence would be critical. The blue economy has enormous potential alongside bunkering and new service-related sector.

Conclusion

We need to survive this Covid-19 by unlocking creative policies for a new economy. However, we will not succeed without excellence in good governance and meritocracy.