Wednesday, April 11, 2012

POLITICAL TURMOIL AND ITS IMPACT ON BUSINESS...

Much has been said and written on the political turmoil that is apparently hitting Mauritius. It’s true that the moves were spectacular – the President of the Republic of Mauritius resigns and plunges back to active politics.  He proposes to be the next Prime Minister to rescue a country on the downfall!  As the architect of the modern Mauritius, Sir Aneerood Jugnauth (SAJ) was (and for many he is no longer) a much admired personality. Controversial many a time; but then this is expected from every determined leader that leads a nation with a vision and ambition.  Resigning from the most gratifying retirement post in the country (Presidency) to again face active politics and its bruises: you’ve got to have strong reasons. Many of us do not agree that the country’s progress is the main motive behind the move.

We’ll leave the political motivations and other strategies for some other time.  I’ve been thinking on the impact that a political turmoil might have, particularly during this actual worldwide economic crisis, on Mauritius.  Bear in mind that this is not a scientific analysis of the situation, but my personal opinion based on observations made by a common layman, which I am.  You may be deceived, I warn you.  You won’t find any economic theory or political analysis of our system, depicted in heavily colored illustrations and charts. Neither will you find a post-mortem report of local history.  I leave this to the more learned people around!

To me, political stability has been one of the key factors of our progress so far.  My definition of political stability lies not in having the same governing party over a long period of time. I’d rather define stability as the coherence in vision among successive leaders and the smoothness of the transition processes.  So far we have seen that most leaders share almost the same vision. There a visible consensus on the resources we have (and don’t have), the industries we need to develop and the way forward. We all agreed that the country’s ambitions should not be limited to the size of its surface area, we all agreed that we have the potential to play leading roles in the region and on the world scene – we all agreed on these and have been working towards these. We still agree, and so do the leaders.

It is the duty of the opposition party to shout and cry out on every opportunity it has.  The actual leader of opposition, Mr Berenger, is famous for his hysteric statements, so much that he makes me laugh (I give him a big LOL!) whenever he says anything. I'm sorry, but even if he's right, my brain can't focus on him anymore. Maybe if one day, he gets the Prime Minister's chair, I will think differently; but then, that's a different story in today's context.  Decades back, we would rely on the information opposition parties would relay to consider whether a particular transaction or event could be qualified as scandal.  Today, we have different  means to obtain information; internet, blogs, forums and private radios.  Thank God!  When the opposition party shouts high and loud that the country is in a catastrophic state, I tend to smile and say "there he goes again!". I only say to myself that the guy is doing his job - honestly and to the best of his abilities.  He has the habit to utter strong words like 'etat d'urgence economique' (when he himself was holding the reigns of the country and was panicking during the financial crisis) or to treat others with discriminative nicknames 'Lake lerat' (rat tail), or to qualify people as 'intellectually limited'.  Sorry for this long paragraph but I had to write this to make my point: I simply can't take on his words, unless he shows some concrete things - which he hasn't done so far, in my opinion.

Now he has convinced SAJ to join him and save the country. To save from what?  The only thing I can see the ex-President saving is his son, Pravind, completely drowned in the political ocean and about to be completely erased from the local political scene.  Now you can refer to the last sentence of my first paragraph and read again.

Having said all this, I do not foresee any major upsets in the business environment. In fact, I do not even foresee any upsets at all! I may be wrong; I'm not a political expert. But I can't help myself thinking that this is another tune from the same trumpet. In fact, the leader of the opposition shouted on every roof that we will soon see major developments, through the resignation of SAJ, yet again the so-called major developments are yet to come.  The resignation of SAJ was the talk of the town for two days and all the excitation has faded and reduced to petty gossips. 

I don't expect any impact on business environment.  Our economy allows for freedom-of-business, if I may define the principle in these words. As long as you observe the rules and regulations in force, you are pretty free to run your enterprise.  We don't have a sensible stock exchange which fluctuates with the tides, human emotions, or whatever other non-economic & non-financial reasons traders usually put forward.  Politics has very little effect on business in Mauritius, unless it leads to major regulation changes (tax system, regulatory conditions, etc.). Obviously, when the government changes, there is an observation round. Investors are less reactive, they stand on the watch-out mode but stay ready to shoot when the signal turns green. It turns green when people get back to work again and the general excitation is over. 

In Mauritius, you shout, cry and shout again...for some hours or days, and then you realise that you need to feed your family so you get back to normal life again. Back to work or to your business.  There is a minority who has nothing to lose and who looks for every opportunity to get back to popular movements on the streets.  It has never lasted long, never gathered any big momentum, save on Facebook. 

As someone running his own business, I always keep an eye on the external factors that may affect my company; and politics is one of them.  It never had any major impact on my business.  Yet this business of mine is deeply connected to the political-social-economic equation.  If the government stops encouraging foreign investment, or removes business incentives (low tax rate, user-friendly procedures, etc) – my business would definitely hit a low and I would need to restructure my service grid.  It hasn’t so far as successive governments have understood the importance of foreign investment and the need for a simplified business framework.  Entrepreneurship is encouraged and local people given ‘almost’ every kind of nursing to help realise their business projects. I can’t see this stopped by any future leader, well I really don’t.  If it happens, it will be a Kamikaze at the head of the country.

All brings me to the final remark that politics is more related to soap operas.  You know that the actor will fall in love, will marry the actual actress, will fight with her, ask and get divorce and then fall in love with another one.  The scenario will keep on revolving with some new twists and turns… that’s exactly the case in Mauritius.  When the show is over, switch off the TV - get back to work, until the next episode starts.
Warning: Soap operas can be addictive and are injurious to family life





           

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