With the omertà attached to his former role as Governor of the Bank of Mauritius (BoM) lifted, Ramesh Basant Roi opens up, in an exclusive interview, about his two mandates at the helm of this powerful institution. Over the years, the scourge of political influence on the BoM has made headlines. As a matter of fact, the first ever governor of the BoM, Aunauth Beejadhur, worked under sir Seewoosagur Ramgoolam, having previously served as one of his ministers and even heading the pro-Labour newspaper Advance. However, Basant Roi has always aimed to avoid those comparisons like the plague. For him, the paucity of intellectual debate on the worth of our financial institutions and our economic strategy is what should be our primary concern. With an experience spanning over more than a decade heading the BoM, the former governor has a lot of ground to cover. From the MCB-NPF case during his first mandate to the BAI affair in his second mandate, Basant Roi shares his unabated views on what went wrong and what could have been done right. However, there is more caution when discussing Yandraduth Googoolye, his successor at the BoM. Basant Roi deems it “inappropriate” to discuss his performance but is keen to wish him luck and offer a few words of advice. After all, with only two years left on this government’s mandate, it is continuity that is sought and not disruption. Once Basant Roi gets into the heart of our vulnerabilities, there is an inexorable degree of pessimism that gains ground. From the discrepancy between salary increases and rise in productivity to inflation rates, economic growth, lack of budgetary provisions to pay Betamax or Super Cash Back Gold clients, excess liquidity and dependence on foreign goodwill for capital inflows, the former governor sets the record straight.

This was your second mandate as the Governor of the Central Bank. How do you compare one to the other, with special reference to the 2 largest ‘happenings’ of these two mandates: MCB-NPF and the BAI Group?

If you wish to have my opinions about the two ‘happenings’, allow me to start with a famous line, “I know what is ‘legal’, not what is ‘right’. And I’ll stick to what is ‘legal’”. This line is often heard in Courtrooms. Bank of Mauritius (BoM) is not a Courtroom but a central bank also mandated to maintain monetary and financial stability. The best, as is said, is often enemy of the good. There may be a flawless legal framework for financial crisis resolution but not necessarily a perfect one. Compellingly, the BoM had to take the ‘right’ stand for the economic costs to society of most financial crises are staggeringly high as we have later seen in the BAI Group case. Disregarding the sudden surge of grudges of the crowd, I decidedly took some cold and calculated stands. Economic and financial stability considerations had overwhelmingly prevailed in both the ‘happenings’ under my watch. At the time of the ‘happenings’, the MCB Ltd and the BAI were both systemically important financial institutions. Things were happening in these two institutions for as long as ten years or so. In the case of the MCB Ltd, I had understood that none at the top management had ever suspected of wrongdoings in the bank on such a large scale for so many years. It sounded like a sordid story about breaches of trust. As far as the NPF side of the story is concerned, I am less inclined to believe that a public sector entity that manages a pension fund as big as the deposit base of the big banks in the country was not aware of the irregularities. The BoM had asked for a forensic examination to be conducted by nTan of Singapore on the MCB Ltd. But no full forensic examination was conducted by any independent body on the governance failures at the NPF. The MCB Ltd falls under the regulatory purview of the BoM. The BAI Group did not, except for one of the many companies, the Bramer bank; it fell under the purview of the Financial Services Commission (FSC). MCB Ltd was not bankrupt but BAI Group was. The Group’s liabilities were in excess of its assets by far, very far indeed. A mismanaged financial behemoth by local standard, the BAI Group was privately known to be an egregious financial basket case. The insiders must have been aware that the Group was clinically dead. An air of bankruptcy had wafted out of the Group and whispers in the halls of power and in private meetings that this corporate group would definitely collapse with tragic consequences for the economy were heard of for years. Once the Group collapsed, it instantly assumed a political dimension with volleys of cross-party accusations. I left the politics to the politicians and listened to my silence for several days while focusing on the substance. I explained the regulator’s position once the hurly-burly subsided. By contrast, when the irregularities at the MCB Ltd were made public, there was an instant surge of grudges arising out of what the US Treasury Secretary, Tim Geithner, years later referring to 2008 financial crisis referred to as the ‘Old Testament vengeance appeals to the populist fury of the moment’. The shareholders of the MCB Ltd paid for the missing ‘deposits’. Unlike the BAI Group’s balance sheet, the bank’s balance sheet had more reserves than were needed to pay for the missing amount. In the BAI Group case, losses were in billions of rupees as revealed in the nTan Report. Taxpayers, not the shareholders of the Group, are bearing the brunt. Temporizing half measures made it more expensive for taxpayers. And the story is not over yet. The MCB-NPF case imploded whilst the BAI Group was bankrupt and foundered. The FSC ducked down and someone full of promises of pie in the sky awfully unskilled in crisis resolution occupied the centre stage. Fortunately, the BoM, and not the FSC which is the regulator of the BAI Group, brought in nTan from Singapore for an independent forensic examination. Thousands of hits on the BoM website for the nTan Report, the subsequent stands taken by me and explanations given by myself in my public addresses are suggestive of something important. No wonder the BoM was awarded the Central Bank Governance Award by a prestigious London-based magazine. The Government let go a unique opportunity to discipline our household sector. If you protect risk-takers, gamblers and excessively greedy people from losses today, their risk-appetite will of course balloon dangerously thus giving rise to more crises. Protect the pyromaniacs, you end up with more fires. This political attitude did not sit well in a strategy for creating a clean, healthy and robust financial jurisdiction. We hardly won a penny in the gamble but we did lose a pound in the bargain. Both the ‘happenings’ had finally morphed into a kind of nasty family politics on a national scale. Criticisms were abundantly levelled against the regulator and the MCB Ltd and many of them were like the touch of insanity in a well-bred family. Truths were twisted and tortured. Fake news were massaged into believable narratives with evangelistic fervour. The orchestration of smears with racial overtones had stoked the fires of hatred. In the MCB-NPF episode, attempts to burn the citadel in order to capture it had reached the height of audacity. Despite the powerfully subversive forces at work, a run on the MCB Ltd with disastrous consequences for the economy was skilfully avoided. In the case of the Bramer Banking Corporation Ltd, depositors’ interests were fully protected. In the MCB/NPF case, top officers of the bank were arrested. In the BAI Group case, not a single officer was held accountable. There is so much about these two events that taught me a lot about people and our society. So many stories – the good, the bad and the ugly – are better left unsaid.

In these two happenings, what did you find the most challenging to tackle in order to preserve financial stability?

Economics, banking, finance and the regulatory role of authorities anywhere and everywhere in the world are areas of our everyday life that are very demanding to explain to the uninitiated citizens. In the context of those two ‘happenings’, the most challenging task was to decide on how best to communicate with the public in order to avoid slippages that could undermine confidence in our financial industry and threaten monetary and financial stability that the BoM is mandated to preserve. I had to bear in mind that, in the digital age, a run on banks no longer requires physical running as in the past; a click of the mouse or a phone call does the job. And once you realize that we are in an age of deep-seated unreason, the communication skills required turn out to be all the more challenging. When deep-seated unreason settles as a permanent human condition, central bankers are in for troubles regarding effective communication. In the MCB-NPF case, a colourful range of people from the punditry class, including those heavily indebted to banks and habitual delinquent borrowers, had seized the opportunity to settle scores and feasted to their fill for months. We cannot produce an aspirin for our own headache and, yet, so many street guys had turned into crisis resolution experts overnight. The detractors attracted more imposters than Elvis Presley conventions usually do. In both the MCB-NPF and the BAI Group cases, the public and even professionals demonstrating a suffocated capacity for clear thinking, stubbornly confined themselves to their own comfortable worldviews. Very selectively, they picked up only those facts that shielded them from inconvenient truths. Misinformed people refused to change their minds even when exposed to the truthfulness underlying the situation. Facts did not cure misinformation. The kind of rumours bandied around engendered among people a kind of “stupidity” impossible for facts to penetrate. Facts had turned out to be like underpowered antibiotics; they actually made people cling to misinformation with still greater conviction. After all, we live in a society saturated with infectious gossips, fake news and misinformation spun out of the noise machines of partisan rumourmongers. How does a central banker tackle a situation where people only receive the information they agree with – isolating themselves into self-reinforcing echo chambers of spin-doctored fake news? I, however, tried and did tackle it.

Do you regret having taken regulatory stands that did not seem to have pleased politicians in your two mandates?

No. Not all. I resolutely stood by a number of reasoned decisions that were received with suspended disbelief by a discontented few. After all, it’s expected of a central bank Governor. The MCB-NPF case had to do with only one regulator. Importantly, I was given latitude and full independence to resolve the crisis. And I can claim to have done it without much ado and saved the country a consequential financial crisis that would have spilt over into an economic crisis. If I had to make an admission, I would say that the Alvaro item and a few other issues made me a politically damaged goods. With what I am fully aware of, it’s a kind of damage that, instead of hurting me, conferred upon me a mark of distinction. The two episodes have been edifying spectacles about the errant behaviour of so many – pedestrians and professionals included – in our society. I certainly have no regrets, none at all. I had twice seriously contemplated resigning the post but I was advised by friends who care for our jurisdiction to stay on.

You have had the opportunity of working up close with your successor, Mr Yandraduth Googoolye during your two stints as governor. Who is the man being put in charge, what are his strong points and weaknesses, how will he be different in his approach and do you have any word of advice for him?

The newly appointed Governor is pretty well known for what he stands for. The crowd appears to have formulated an educated opinion long before his appointment. How well the crowd in our financial industry has digested the appointment is more important than my personal opinion. Your question seeks to put in my mouth words that are attributable to the ‘wisdom of the crowd’. It’s inappropriate for me to talk about his weaknesses and even more inappropriate to mention his strong points. I wish that he does even better than all his predecessors. Word of advice? Yes, I do have. The National Payments Bill is ready. The Deposit Insurance Scheme Bill is ready. The Bank of Mauritius Bill, inclusive of a crisis resolution framework, is ready. The Asset Management Project is where it stands right now. These infrastructural improvements initiated at the beginning of my second stint in 2015 that are intended to strengthen the resilience of our jurisdiction need to be urgently done before 2019. The National Payments Switch, targeted to be implemented by May this year, is expected to bring about a revolutionary change in our payments system. We must not fail in all these endeavours as Mauritius is lagging quite behind other jurisdictions seeking to become a financial centre.

Salary increases in Mauritius have been such that unit labour costs have, for a long time, been progressing faster than improvements in labour productivity. Thus, the average annual improvement to labour productivity over the decade to 2014 has been 2.9% whilst unit labour costs were 3.4%, on average, between 2001 and 2007 and 4.3% between 2008 and 2014. These figures pre-date negative income tax, minimum wage, latest PRB, etc… How long can this be sustainable?

There are two kinds of productivity. The first kind is where you produce more because you have new skills and you can do your job faster and better than before and produce something better and more of it. Your personal output rises and the aggregate output of the economy rises. That’s the good kind of productivity. At the national level, everyone ends up being better-off and a clear winner. The other kind of productivity is where you end up doing the job of three people because two others have been fired. Your output rises. But your increased work load doesn’t mean the economy is using resources more efficiently or producing more goods and services per person. Cost cutting that entails firing people improves productivity. But there is no more value-added at the aggregate level. It rather causes a loss of welfare because of undue stresses and strains on the worker. It does not increase wealth. At the individual firms’ level, the shareholders are the winners. That is not a kind of productivity increase that benefits society directly. We happily brought down trade barriers and embraced trade liberalization. We happily went for financial sector liberalization, including full exchange control liberalization. For quite some years, we are an integral part of the world economy characterized by ruthless competition. Yet, we have retained a number of institutional arrangements that do not sit well with the new global economic and political settings. The focal point in policy making must necessarily be productivity of the ‘first kind’ I mentioned earlier. Wages and salaries must rise if we have productivity increases of the ‘first kind’; they cannot rise regardless of prevailing economic conditions. We cannot multiply our national cake by systematically dividing it. For the last quarter of a century, fiscal rectitude appears to have been a forgot- ten concept to our decision makers. Whatever we have been up to is outright unsustainable. In fact, we have been fishing for troubles for years. But, so far, we have been saved by capital inflows. Worst, we seem to take it for granted that capital inflows will keep bailing us out for ever. No one owes us a living.

The June budget made no explicit provision for the latest payments of Super Cash Back Gold (some Rs 6 Bn ?) or the arbitration costs of Betamax (4.2 Bn) and the budget deficit was then estimated at 3.2%, having benefitted from the ‘one-off’ closing down of two special funds worth Rs 5.7 Bn (1.2% of Gross Domestic Product – GDP). Should we be worried?

How do you un-kink a corkscrew? Finally, a variety of chickens, and ostriches too, seem to be coming home to roost and the fiscal space has apparently thinned out. If the claims are met, one should obviously expect our budget deficits to widen and central government debt to rise as a result. Any housewife can make it out. We have reasons to be concerned about the state of our public finance. We have a budgetary situation that reminds me of the Canadian Government chronic budget deficits that had assumed dangerous proportions. At some point in time, the Canadian Government finance was even perceived as a basket case of fiscal irresponsibility. How the deficits were successfully tackled by the former Prime Minister, Paul Martin Jr. is intellectually well articulated in a paper published by himself years after he had left office. He provides Finance Ministers with great and bold political ideas about how to bring about sweeping fiscal reforms and fiscal discipline that drastically reduced deficit and debt. His experiential learning, if executed tactfully, could play the trick. To this day, fiscal discipline is religiously maintained and the economy is performing well. As in every similar endeavour, it requires strong commitments and honest economic and financial advisors. Get the paper and enjoy the read.

«…the economy has gradually run out of steam. The arrested development syndrome is perceptible. Our problems are entirely of our own doings.»

If a family or a company spends more than it earns, it can only survive by borrowing whilst hoping for better days. Government has been running a budget deficit for decades and its debt is piling up, currently reaching the worrying level of 65% of GDP. What happens if ‘better days’ do not materialise? The recent three year strategic plan 2019-2010 issued with the latest budget is based on growth rates of 4.1% in 2017-18, 4.5% in 2018 to 2020 and 4.75% the reafter. Do you see these growth levels on the horizon?

Bear in mind the following narrative: way back in 1983, the ratio of public sector debt to GDP was as high as around 73 per cent. Mauritius went through a turbo-charged upswing phase of economic expansion in the second half of the 1980s. Economic buoyancy was palpable. Income levels across all strata of our society had sustainably improved. Taxable income grew deeply and widely and at quite high rates. Government benefitted from buoyant tax revenues. Within a very short while, we had started repaying our external debt before due dates. Debt to GDP ratio dropped quickly. Are we in a similar economic setting today? Government revenue is already showing a declining trend. Do we expect a turbo-charged upswing in economic activities that could allow for debt repayment without inflicting pains of austerity on society in the foreseeable future? With Government debt at 65 per cent of GDP today, Mauritius needs sustained revenue-generating growth rate of well over 5 per cent for quite a few years down the road. But be careful: we may end up having relatively higher growth rates that do not necessarily generate sufficient taxable income. For instance, a foreign investor who brings his funds, machines, tools and equipment, construction materials as well as his own army of labour for the construction of, say, a building does not necessarily generate sufficient taxable income. We end up having a building that forms part of the value-added to the economy and an external debt as its counterpart. Will the building and similar G-to-G financed projects generate sufficient taxable income and exports for the servicing of the external debt? National accounting will of course show relatively higher GDP growth rates which do not necessarily mean much in terms of taxable income and Government revenue. It certainly won’t improve Government’s capacity to service the debt. Quality of growth matters. Every now and then successive Governments have had recourse to massive spending to boost up growth. It’s like having a flat tyre while driving your car. You inflate the tyre and drive for a while. It gets flat again. Inflate the tyre again and drive for a while. It gets flat again. Of course, you cannot keep driving safely and without trouble for long. The point I want to drive home is that we have not been able to generate sustained organic growth at desirable rates for years. A repeat of ‘take-off’ into self-sustained growth has not yet taken place yet. Problem is that a gradual ‘hollowing out’ of the Mauritian economy started in the 1990s. Students of economics must be aware of the well-known Stolper-Samuelson theorem. It has been easier for our owners of capital to move their production units to countries where labour is cheaper than to identify areas of businesses in Mauritius worthy of risk taking in so ruthlessly competitive a world economic environment. The sugar industry and manufacturing for exports have both shrunk. The tourist industry has maintained its tempo. The last time we came up with a new economic sector was the offshore financial sector way back in 1989. Nothing meaningfully new ever since, although the economy has gone through a long period of sustained exchange rate and price stability. This era of stability is an opportunity lost. The ‘hollowing out’ of the economy has, meanwhile, continued. End result: the economy has gradually run out of steam. The arrested development syndrome is perceptible. Our problems are entirely of our own doings. The bearer of bad tidings is often the very best friend or ally that one may ever have.

What is your definition of price stability and why don’t we have an inflation target in Mauritius?

One would ordinarily say that, if properly measured, an inflation rate of zero per cent sustained over a long period is what could be considered as an ideal state of price stability. But for the central banker, there resides a problem in this definition. With zero rate of inflation, monetary policymakers would be ill at ease to lower the “real interest rate” below zero. A little inflation provides monetary policymakers with some scope to stimulate the economy by causing, if needed, short-term real interest rate to drift to the negative territory. In technical terms, price stability could best be stated as a situation in which expected movements in the general price level don’t cause businesses and households to alter their decisions. For the layman, in relatively simple terms, I would say that price stability is an enduring state wherein inflation is so low that people do not even pay attention to expected changes in prices when making economic decisions. This is the kind of price stability we have had for two decades, the 1950s and 1960s. With regard to the second part of your question, I have a simple and straight answer: you will recall that in 2015, after I took over as Governor of the Bank of Mauritius (BoM) I did say that there was a serious disconnect between the repo rate and the structure of interest rates in the economy largely due to a massive amount of excess liquidity. Nor was there a developed market for government papers. We do not yet have a benchmark yield for our government bonds like other financial centres. The transmission mechanism of our monetary policy was extremely poor. The Monetary Policy Committee members and the staff of the BoM are fully aware of the exceptional efforts made to develop a more appropriate monetary policy framework. I, along with other economists, tried a framework for a similar economy in the Western Hemisphere and it worked. I wanted to replicate the same framework here in Mauritius but did not succeed because the BoM deplorably fell short of some decidedly important discretionary powers with regard to the weekly auctioning of treasury bills. Gunslinger or not, if the path between your gunshot and your target suffers from a serious disconnect, why should you at all shoot the conventional way and why should there be a target explicitly defined when the chances of missing it regularly are clearly high? However, as long as the inflation rate is stable in the range of 3 to 4 percent, which is not far above the weighted inflation rate of our major trading partner countries, we have to be blissfully happy.

How have you been dealing with inflation over the last three years?

As far as possible, the Bank has used its interest rate policy to check speculative capital inflows potentially detrimental to price stability. But, admittedly, we have been favoured with relatively low world commodity prices and a stable exchange rate of the rupee.

Why didn’t you sterilize all the remaining excess liquidity?

It was one of my first initiatives in 2015 to sterilize the huge volume of excess liquidity. In fact, the BoM sterilized over Rs 70 billion that’s costing taxpayers over Rs 2 billion annually. Still, excess liquidity has persisted due to capital inflows. By the way, this is yet another reason why I have been against capital inflows of questionable character. I could have very easily done it and claimed to be a champion in monetary management. But the cost would have been not only staggeringly but disastrously high. And I would have passed on the problems of an extremely weak central bank balance sheet to my successors. Worst, I would have passed on the far bigger problem of injecting capital to the BoM to the present and future governments at a time when the fiscal space has thinned out. “Après moi, le déluge” is not the right approach. This would not have been responsible central banking.

Do you think that your successor will use interest rates or exchange rates to achieve an inflation rate target?

Of all the questions you have set to me so far, this one is really the toughest. I’m not gifted with oracular powers.

The latest Article IV report of the IMF signed by Amadou Sy, on 7th November 2017, looks like it criticises the monetary policy of the BoM by stating that it is not following “world best practice”. What are they explicitly referring to and how do you react to same?

Back in the days of apartheid, people wielding power would put flaming tyres around the neck of dissenters in South Africa. One of the weekend papers seems to have been used to vainly tuck a flaming IMF necklace around my neck days before the announcement of my replacement as Governor of the BoM. Because the BoM had fallen short of the discretionary powers with regard to the weekly auctioning of treasury bills, I had myself asked the IMF mission to look into this area and highlight ways and means of overcoming the hurdles that BoM faces in the development of a secondary market for bills such that the transmission mechanism of monetary policy impulses to the economy is improved. In the Report, they rightly conveyed the BoM message in their own subtle style. I have taken the IMF observations with an immense sense of satisfaction. I can only say things to the extent that transparency in modern day central banking allows for. In fact, the IMF is absolutely right in making the statement about “world best practice”. I read it approvingly. The first one is about an inflation targeting regime which I explained earlier and the second one is about our exchange rate regime. If you are accustomed to correctly interpreting IMF statements in Article IV Reports, which are public documents, reference is inexplicitly made to the preferential exchange rate arrangement made for the export sector. It’s public knowledge that any departure from the standard exchange rate arrangement is tantamount to discriminatory currency practices. The Articles of Agreement of the IMF do not approve of it. It’s a public document; you may wish to check it. This is also not considered “world best practice” by member countries of the IMF. This point seems to have been well registered after the event. The flaming IMF necklace fits whoever was involved in the decision-making. Do you get it now why, in my last address to the BoM’s Annual Address to Economic Stakeholders, I had referred to a “deplorable basket of fake economists, self-seeking advisers and imposters in the veiled pursuit of self-interests”?

Why does the central bank not publish performance analyses of its reserves, like many central banks? What explains the latest doubling of income from forex reserves?

 In 2015, over US$4 billion were being managed in the same passive manner as were the far smaller foreign reserves years ago. A new Division responsible for foreign reserves management led by two highly capable senior officers with the right expertise was created in 2015 for active rather than passive management of the reserves. For the first time in the history of the BoM, the Board of Directors, as is the best practice in central banks the world over, was called to give broad outlines regarding the management of our foreign reserves. An Investment Committee as well as a Risk Committee chaired by the Governor were set up. This division, like some other departments, has done a marvellous job, I should say. As and when the legacy investments phase out, the return on our reserves must improve. The latest doubling of income from our foreign reserves are thanks to the initiatives taken in 2015. I may say that foreign reserves management is far less opaque that it used to be. Eventually, the BoM must go for transparency. Principles of governance obligent.

Our forex reserves keep progressing because the foreign inflows which compensate the large negative trade and current account balances of the country (about 20% and 6% of GDP, respectively) are substantial. They are being more than financed by capital inflows thus causing an excess rupee liquidity situation in the system. Shouldn’t we become less dependent on foreign goodwill and what are indeed the dangers of this goodwill reverting at some point in time in the future?

Our economic system is flushed with foreign currencies and excess rupee liquidity. Why on earth do we need to opt for external borrowings? Preferential rates of interest? What about exchange risk? Will the exchange rate of the rupee be the same years down the road on the due dates of the debt repayment? You remind me of a massive long term Malaysian ringgit denominated loan benevolently extended to the government for housing projects in the 1990s. As the then Director of Research at the BoM, I had advised against the borrowing on the ground that the Malaysian economy was growing fast; the ringgit would appreciate as a result. I was overruled. At the time of repayment years down the road, government had to fork out more from taxpayers than what the preferential rates of interest had suggested initially. The rupee had depreciated significantly. Check the date of the borrowing and dates of repayment from government finance report. You will be flabbergasted at the size of exchange risk undertaken by the government in the 1990s and the re- payment cost inclusive of valuation due to the depreciation of the rupee.

«..consumption expenditure is the steam that blows the whistle but does not move the engine of growth»

As a citizen that is more informed than most and as you take your exit bow from the BoM, what do you think are the country’s biggest worries in its search for better quality lives for all? The economy? The quality of education? Political interference that is slowly destroying the independence of our institutions? The absence of meritocracy? A growing polarisation of earnings as illustrated by the GINI coefficient? Ecological challenges? Anything else?

Your question marks have the answers built-in. Impossible to respond in a few lines. Let me respond briefly to only the first part of the question: In the Keynesian view, rising consumption expenditure gives traction to growth as it does in resource-rich countries. Given the specificities of the Mauritian economy, consumption expenditure is the steam that blows the whistle but does not move the engine of growth without eventually hurting our external payments position. Say’s Law, after Jean-Baptiste Say, an 18th century French economist, states that supply creates its own demand. What Jean-Baptiste meant is as follows: you create your own purchasing power and future demand by producing goods that you can sell. Those goods you sell generate your income and that income becomes the source of your consumption. Demand stems from people having an income, that is, money to spend to begin with. All economic prosperity comes from producing things of value and selling them. If you don’t produce efficiently, you forget economic prosperity. We do not seem to realize that we are in the dying days of an era where people think wealth comes from consumption. Why does the government keep on encouraging consumption without production via handouts? Sustainably better living standards can only be achieved if our economy is geared toward producing goods and services for exports which is the primary source of income generation for a small economy like ours. What to produce and how to produce require a broad set of pre-conditions. Of course, I would put the quality of our human capital stock as the most important determinant of our economic well-being.

«It’s sad that people have fallen out of touch with the act of thinking. Along with the decline of thought, there is also a remarkable decline of respect and erosion of values (…) Honest people are increasingly seen as aliens.»

The final word is yours: What else do you want to convey or repeat to our readers?

Our society resembles a hyper-active active noise machine for misinformation that creates obedient “repeaters” blindly running around and echoing whatever is the latest sound bite in town. It’s sad that people have fallen out of touch with the act of thinking. Along with the decline of thought, there is also a remarkable decline of respect and erosion of values. Indiscipline is ubiquitous. The “mental tone” underlying people’s actions across the country leaves so many of us, including visitors, uninspired. Honest people are increasingly seen as aliens. The vast majority of people care not of real issues; they are entirely dislocated from economic realities, local and global as well. Excessively pampered by a panoply of welfare services that are widely believed to be “free”, the majority has also given up on accepting personal responsibility for taking care of themselves. The more they turn to the State for welfare services that have now assumed a very elastic definition, the more they have committed themselves to a life never truly lived. This is a common feature of a society that is tending to ruin itself. Increasingly, people seem to find comfort in their respective bubbles that walled them off from inconvenient truths. It would require mega-apostolic abilities to cure the society of its sicknesses. It’s not too late to wake up – and smell the coffee.