Mauritius’s relentless pursuit of high-income status resembles the eternal struggle of Sisyphus, as every setback threatens to undo its progress. The country finds itself grappling with the challenges of pandemic recovery, inflation control, and fiscal stability, all while remaining far from its pre-pandemic levels with a 9% decrease in GDP compared to 2019. The formidable obstacles of high public debt, an unpredictable geopolitical landscape, and reliance on traditional sectors further compound the situation. Finance Minister Renganaden Padayachy will need to exhibit ingenuity and resourcefulness to revitalize the economy.
Mauritius’s struggle for high-income status can be likened to Sisyphus’s eternal toil of pushing a boulder uphill, only for it to roll back down again with each new wave of bad news. This unfortunate cycle mirrors the country’s attempts to overcome the pandemic while striving to maintain a delicate balance between stimulating recovery and curbing inflation while also attempting to restore its fiscal position.
Despite encouraging signs of recovery, Mauritius is a far cry from its pre-pandemic levels. The latest economic outlook report from the MCB, which has sparked a surge of discontent within the Government House, anticipates the real GDP growth rate to hit 5% this year, slightly higher than the IMF’s projection. This means that the nation’s GDP is, in dollar terms, 9% lower than in 2019.
This is the season of fresh hope and renewal as we herald the unveiling of a fresh national budget that promises to bring life and prosperity to Mauritius’ economy.
The government is confident that the country is experiencing a ‘feel good factor’ and heading in the right direction as the Minister of Finance, Dr. Renganaden Padayachy, is set to present his fourth national budget in June. “The next budget requires a lot of intelligence. The economic indicators are good, and we ask for everyone’s cooperation. It will be a budget that will bring a boost to development in the country,” he said at the opening of pre-budget consultations.
This “intelligent budget” should be consistent with the three budgets he has presented since June 2020. Amidst a raging pandemic, Dr. Renganaden Padayachy flipped the switch and unveiled the first budget of the government elected at the end of 2019, basing the new economic normality on “The Economy of Life (2020–21)” and proposing to transfer Rs 33 billion from the Central Bank’s reserves to the public treasury, sparking controversy among many. Who knew a pandemic could cause so much commotion? The budget focused on three main objectives:
- Unleashing an ‘Investment and Economic Recovery Plan’.
- Pursuing extensive structural reforms.
- Ensuring sustainable, equitable growth.
At this time, the Medium-Term Macroeconomic Framework, Fiscal Strategy, and Debt Management Strategy predicted a contraction of real GDP at constant market prices of 7%, but it will be revised a year later to -5.4%.
The Economy of Life budget was the catalyst for the next one, the three Rs. Not the mundane ‘Reduce, Reuse and Recycle’, but the much more exciting ‘Recovery, Revival and Resilience’. What could go wrong? Well, the projected 9% growth rate for 2021/22 was lowered to a measly 6.9%.
“With the People and For the People” was the motto of Budget 2022 – 2023, though it was not written by the people. A growth rate of 8% was forecasted for 2022/23.
It is unlikely anyone will wager on that since the new budget is likely to revise it downward.
While the government insists that the Mauritian economy is booming, the reality is quite different for those experiencing it firsthand. Upon closer inspection, many can detect signs of economic underperformance and weaknesses, raising doubts about the efficacy of those budgets. At the same time, Mauritius continues to depend on traditional sectors such as tourism, financial services, textiles, and seafood exports. Only with the right combination of resources, policies, and creativity will Mauritius break free of its present economic situation and reach high-income status. Only then will the boulder stay atop the hill, and Sisyphus will be able to rest.
With just a smidge of time left on the clock, the government is desperately trying to outdo the economic carnage of 2020. With the uncertainty at the global level, it runs the risk of leaving the economy in a worse condition than when it took office in 2019 – like a house party guest who trashes the place as they leave.
Instead, we can find solace in the words of Albert Camus, which suggest that the effort in and of itself is a reward in his philosophical essay, ‘The Myth of Sisyphus’. “One must imagine Sisyphus happy,” says Albert Camus. So maybe we should take comfort in the knowledge that the struggle to reach our goals is the only reward we can hope for. But the human condition is a fickle one, and one should note that Camus’ take on Sisyphus is in no way the standard interpretation.