Think of it like the fox offering to investigate the chicken coop. The government has said that it will look into how the Financial Services Commission (FSC) has given out licences to shady characters. And the list of such characters is only growing: Jignesh Shah, Quantum Global, Sobrinho, Nigel Greene, the Crocianis and so on. The current minister of Financial Services, Sudhir Sesungkur, blames his predecessor, Roshi Bhadain, for having doled out these licences. The FSC board itself is composed entirely of government bureaucrats. The government played a big role in hollowing out the FSC, and now the government promises to investigate. Charming, if it wasn’t so tragic. 

But of course the government alone is not to blame. After all, this is the logical fruit of the state-as-business facilitator ideology and the constant demonisation of robust regulation as just so much ‘red tape’. For nearly two decades now, this ideology has held sway as successive governments reinterpreted the function of state not as ensuring a level playing field or protecting the economy and its people from unregulated capitalism, but rather single-mindedly as one of ‘facilitating’ business by hollowing out regulation and ‘red tape’. Corporations liked it – fewer regulations meant fewer costs of compliance and time – and allowed them much greater leeway to diversify their activities. In return, they bribe (or give ‘campaign contributions’, if you want to get technical about it) politicians, see their campaign war chests grow, can boast of climbing doing business rankings (not if it leads to investments, mind you) and since many are from the liberal professions themselves (lawyers, accountants and so on), future career opportunities with those doling out the cash. Within this apparent win-win situation, the regulatory bodies themselves are allowed to shrivel up or are simply kept on a tight government leash: for when the government needs something fast tracked, or when it needs to negotiate the next campaign contribution. 

But of course like all apparent win-win situations, this is an incredibly short-sighted ideology, even for those it is supposed to benefit. Mauritius is a special kind of economy, caught between the dirigisme of a historic bourgeoisie and the avarice of a state bourgeoisie. Between these two, the rational choice would have been to opt for a strong, independent regulatory regime that would slap down any hint of state patronage or favouritism. Instead, insisting on business facilitation regulators have been kept weak and toothless, allowing the state bourgeoisie far greater freedom and discretion to translate its proximity to political parties into gains for itself. Sobrinho et al come in as a bonus. Nobody stops to think why such regulation and red tape came into existence to begin with. The state is embarrassed, corruption thrives and, increasingly, Mauritius is seen as a tax haven. Who wins in the long run? Aside of course from characters like Sobrinho or those close to whoever happens to be in power at the moment. 

Self-delusion is not an option. Crying and moaning about Mauritius’ reputation won’t change the fact that Mauritius has had more than its fair share of shady dealings. And it’s becoming harder and harder to explain this all away as a mere coincidence or a foreign plot. What we need is an independent, strong and robust regulatory regime. And yes, a hefty amount of red tape too.  But first we need to forget this state-as-facilitator nonsense. We have tasted its fruit. And it’s bitter. 

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