Touria Prayag's Blog

L’express Weekly 11 June 2010

Posted in Uncategorized by touriaprayag on June 11, 2010


Privatising gains and socialising losses     Weekly 11 June

Well, the needless panic about our currency has seemingly subsided. Now that the dust has started to settle a little and people have had time to take a step back and think rationally, they have come to realize that a willed engineered devaluation of our Rupee, which export sectors were clamouring for, arguing loss of their export revenue, denominated in Euro and Sterling, is neither desirable nor advisable.

For starters, competent fi nancial management of anything, from a household to a country, requires recognizing that the economy moves in cycles (boom and bust). What goes up will come down and nothing stays down forever either – after rain, comes sunshine. Hence, popular wisdom suggests “make hay whilst the sun shines”, implying one should store hay for the wintry cold, cloudy and rainy season. Even housewives and homemakers adhere to this wisdom of constituting reserves for when times are hard, and hard times there will be. When, for years, the Euro and Sterling were stronger than now against our Rupee, export sectors raked in buckets, even truckloads, of windfall gains. Some invested for productivity gains in their sectors (manpower training, equipment renewal and modernisation, process improvements, etc); others diverted their super profi ts to investment in other more lucrative sectors, such as property development and retail. Now that they are experiencing a temporary setback because of relative Rupee strength – in reality Euro and Sterling weakness – they plead vocally for what are effectively public subsidies.

Rupee devaluation is tantamount to a transfer of wealth from the larger community of defenceless savers, wage earners, pensioners and taxpayers, to a handful of business owners. These business owners are not the only stakeholders in the economy. Rupee devaluation would cause infl ation to surge out of control. It is effectively an insidiously and perniciously impoverishing tax on the public at large.

It is known that, unless there are serious fundamental macroeconomic imbalances which dictate devaluation as a last desperate resort which, I am made to understand, is far from being the case in

Mauritius, the permanent benefi ts of currency devaluation accrue only to a handful of exporters to the detriment of the toiling masses.

Even countries which live in the backyard of the Euro zone, like Morocco and Tunisia, have allowed their currencies to free-fl oat, thereby letting market forces and economic fundamentals determine their exchange rates.

Euro and Sterling weakness are due to the daunting, some might say self-inflicted, macro-economic problems of Europe and the UK (spiralling fi scal defi cits, high public debt, private corporate debt, domestic debt, external debt; banking insolvencies and bail-outs, credit crunch, housing crisis, household debt; etc). We mostly do not have these problems here. Therefore, as Governor Bheenick rightly says, let’s not make their problems (Europe and the UK) our problem to save the skin of a few, who did not save for lean days.

Besides, even if it were desirable to depreciate our Rupee, it is theoretically impossible. Manou Bheenick talks about the impossible ‘trilemma’: an open capital account, a free-fl oating currency and an independent monetary policy. ‘You cannot have all three in the same world,’ he sums up.

As Nobel economist Joseph Stiglitz puts it in his recently published book Free Fall, speaking of the lessons of the recent banking crisis, we ought to be leery of falling into the trap of “privatizing gains and socialising losses”. This is exactly what the exporters want the Government and the Bank of Mauritius to do for them. No way!


Editorial: L’express Weekly, 4 June 2010

Posted in Uncategorized by touriaprayag on June 4, 2010


Basta!!!! Click to read L’express Weekly (PDF)

Until such time as robot-operated newspapers are invented, asking the press to be totally independent is asking its journalists to let go of their humanness. When it comes to expressing opinion, a degree of bias is inevitable in every position editors take, in every thought they express, in every word they lay on paper. This degree of bias in opinion does not absolve us of the responsibility of being fair, of tackling issues instead of criticizing personalities, of making sure that the information presented is objective.

The tug of war between the political leaders currently holding the levers of state power and La Sentinelle is most saddening. Accusing us of making mistakes is a criticism we are happy to accept, and learn from. Claiming that our opinion leaders have a political bias is something I am personally not prepared to refute. It is not out of character as human beings. But for a press group to be the mouthpiece of one particular party, which is what we are being accused of, all its editorialists should have a demonstrable affinity with that party. Can anyone who has been reading our editorials since the beginning of the campaign honestly look us straight in the eye and say that all our editors have expressed the same views and/or biases? Can anyone even suggest that we have written about the same issues?

While my colleague Raj Meetarbhan expressed his confidence that Pravind Jugnauth will do well as minister of finance because of his track record, my recollections did not give me the same comfort. While he, based on the information he was receiving from his journalists, was talking about a “close fight,” we were depicting Navin Ramgoolam as “the most popular politician in the country” and Darlmah Naeck was chastising Paul Bérenger for his “communalisme scientifique”. Rabin Bhujun and Gilbert Ahnee were dealing with totally different issues.

Jean-Claude de l’Estrac, the chairman of the board of La Sentinelle, has never denied his past or his present and his views were unequivocally expressed in his editorials. Apart from that, he was receiving the newspapers at the same time as our readers. Some of our views he may have liked, some he may not, but had he dictated what we should be writing about or how, we would all have dealt with the same issues in the same way at the same time.

Assuming all the criticism levelled against us is warranted, there are only two ways to keep us in check: our columns or our courts of law. Anyone who feels wronged can take legal action. And we did open our columns to our readers to express their views –uncensored. Some took the opportunity to vent all their anger at us. We have published their comments verbatim. That is the only legitimate way to fight back in a democracy. Not by ostracising journalists; not by cancelling a parent’s school invitation on the grounds that she is the editor-in-chief of a newspaper run by La Sentinelle and sending her child home in tears and incomprehension; not by withdrawing l’express from public libraries; not through boycott.  And certainly not by denying journalists access to government property at a very official ministerial press conference.

I think it is time to say “Basta!” Pravind Jugnauth has crossed the line. La Sentinelle is over 600 employees trying to make a living for their families by informing the public of matters of interest to them. Depriving them of information, quite apart from being a blatant violation of democracy – which is grave enough in itself – puts their livelihood at stake. This flies in the face of every democratic principle this country has fought for!

L’express Weekly: latest news from Mauritius

Posted in politics by touriaprayag on April 30, 2010

L’express Weekly, your newspaper in English, brings you news and views on the latest happenings in Mauritius, every Friday.

Read L’express Weekly, 30 April 2010