In his book The End of Alchemy, former Governor of the Bank of England, has warned that the world is on the cusp of another crash because regulators have failed to reform the financial system. He notes: “Governments and regulators have been hyperactive at the national and international level but bankers and regulators have colluded in a self-defeating spiral of complexity”. Here, in Mauritius, it seems that collusion takes place amongst a range of stakeholders within, not only complex, but opaque frame- works, often to the detriment of the ordinary citizen. One wonders how much of “illicit wealth” has been accumulated, with some hiding under the “confidentiality clauses” of the Banking Act. How can we reconcile legislations and/or other “mechanisms” used to protect whistle-blowers with the Banking Act, especially in an era where there is an increasing talk of transparency but a continued absence of a Freedom of Information Act?

It is rather distressing to have confirmation from the World Bank that the Mauritian middle class is, in fact, shrinking. This, and its associated dangers, were highlighted quite a while back. Sadly, when certain TRUTHS are told, one is taxed as “demagogue” or “antipatriotic” or “repugnant” or all of these together.

Our rapidly dwindling middle class, in a context of growing inequality and rising poverty, is a manifestation of lopsided development, of insufficiently human-centred growth. More importantly, the latter has not trickled down in an equitable manner. We should, therefore, shift from the narrative that we need to grow first and then redistribute. We need job creating, wage-led productivity enhancing growth and not real estate/smart cities - Foreign Direct Investment-led jobless growth, which will lead us into an endless inegalitarian spiral with a big risk that the middle class fritters away completely. It is a big shame for Mauritius, which has come so far in less than half a century of Independence, to now have to grapple with incompetence, greed and lack of direction, resulting in the Mauritian citizenry getting poorer. Some fellow citizens are unable to access basics such as electricity, clean water, food and education.

Dwindling Middle Class

The notion of middle class is slippery since it’s a rather relational concept: the middle is relative to what lies above and below. When the top or bottom layers move higher or lower, the bounds of the middle class will also change. This variability makes the definition of middle class both time and con- text dependent. As Hacker, in his book The Rich and Every One Else, rightly says: “there cannot therefore be a universal definition of the middle class”. Categories such as occupation status, levels of education, income levels, consumption patterns, as- set holdings are often used in defining and discussing the middle class. While there may be no universal definition, there is consensus that the growth of a middle class in developing countries is significant, as it represents a group of people, unprecedented in size, becoming more economically secure and with greater capacities to ensure their own well-being and that of their children.

Mauritius’ success story and the social mobility experienced by various segments of the population are largely a result of the policies adopted by leaders who were largely inspired by “Fabianism” in the immediate post-Independence period. Successive governments have worked to improve the conditions of the working class. But most of them have failed to curb the greed of a handful, to keep a check on their unethical behaviour and to make sure that growth is truly inclusive. The latest aberration of our system is the “Goldfinger affair” associated with a “VIP” described as a “man of vision” while hundreds of families struggle to make both ends meet.

Inclusive growth should be one that has a high “elasticity of poverty and inequality reduction” but the Mauri- tian story clearly does not illustrate this. To make matters worse, what the preliminary study/the “Marshall plan” is proposing is bound to create greater poverty and inequality

In explaining rising inequality in the developing world, the United Nations Development Programme (UNDP) Report Humanity Divided: Confronting Inequality in Developing Countries, states that: “economic progress in these countries has not alleviated disparities, but rather exacerbated them. Increases in inequality over the last two decades were mainly on account of trade and financial globalisation processes that weakened the bargaining position of relatively immobile labour vis-à-vis fully mobile capital.” No doubt, the UNDP will have to include the follies, greed and corrupt acts of some influential people, within the catalogue of rea- sons provided to explain the rise of inequality and poverty.

Where is the Ethical Man?

A few weeks before the elections I wrote an article: Let us Keep the Interest of the Nation Foremost on Our Minds making a plea towards the urgency of reinventing political and socio economic governance, but when L’alliance Lepep came to power, we comforted ourselves because this option was better than “immorality” and arrogance. The jubilation and the little ray of hope have worn off. We are caught in a trap – not only the “middle income trap” of being stuck and not able to grow our economy further, but also a political trap. Labour party leader described as representing “un boulet” for the party; the MMM still struggling to reinvent itself, PMSD perceived as “opportunistic” and tagging in with whoever they see as most advantageous at particular political junctures, the MSM leader’s fate in the hands of the judiciary for now and an ailing Prime minister whose political calculations may cost the nation a very high price.

Conclusion

Persistently blaming individuals is counterproductive for a society and can lead to disastrous outcomes. We must instead urgently challenge and contest the monstrous policies that are being put in place. It demands only “un peu de bon sens” to know that Heritage City is not a priority and that it will not create affordable housing for the middle class. The education reforms proposed have been decried by a number of experts and pedagogues. We should stop and revisit these instead of jeopardising our children’s future.

Allow me to borrow a term from Hillary Clinton – “making America whole again”. We need to make Mauritius whole again. To do so, we must first stop the greed, the excessive consumption, the destruction of our environment, and develop a strong Mauritian identity and through these, reduce the fracture between the rich and the poor. Food, energy and economic security should be central to our model of development. As the government prepares for Budget 2016-2017, consideration should be given to how to orientate our fiscal policies towards closing the growing divide.

A more progressive tax on capital and big business can go some way in assisting towards this. The government should not succumb to the pressures of the private sector. The latter should be prepared to make some sacrifices as well. The banking sector, with their enormous profits, should be revisited so as to develop and encourage a culture of savings so that the latter can in turn offer a stable springboard from which to begin a path to formal financial inclusion.

It is perhaps worth re- minding ourselves of Bill Gates’ words: “High levels of inequality mess up economic incentives, tilt democracies in favour of powerful interests and undercut the ideal that all people be treated equal.” It is our collective responsibility to stop the growing poverty and “inequality spiral”.