Each word of the new World Bank Country Economic Memorandum falls like a ton of bricks, cutting through the benumbed senses of a nation reeling from non-stop propaganda. It is not as if we didn’t know that we were being led through a crisis by inept people who are incapable of organising their way out of a paper bag. We knew all this but the World Bank confirmation was still sobering.  

A quick look at the report will alert you to the concerns raised by the World Bank that the government’s policy has been a series of knee-jerk reactions which are unlikely to have any positive effect in the mid let alone long term, that raiding the Bank vaults is unacceptable, was not done anywhere in the world and that we will pay for it for a long time to come! The report also stresses that the problems were not created with Covid-19, which puts an end to the government’s spin that all was well and rosy before. As for public debt, the World Bank is clear: “The debt to GDP ratio rose from 66.2 to 82.8 percent over the course of the fiscal year 2019/20 as a result of the high deficit and contracting GDP” and may I add, a laissez-aller typical of a government where there is no accountability and where competencies are few and far between: “The key missing link is the results-based monitoring of outcomes and rigorous evaluation of policy implementation that would create the ability to learn from implementation pitfalls and adjust course where needed.” There!

The biggest blow perhaps comes from the old-age pension. First, the memorandum highlights that “the bulk of social spending, more than 50 percent, is currently on the basic retirement pension (BRP), which is increasingly costly, poorly targeted, and creates adverse labour market incentives for early retirement.”! Worse, “Further increases in BRP would threaten the financial sustainability of the entire social protection system and do not seem justified from an equity point of view. It should be noted that the BRP at Rs9,000 per month already puts Mauritius among the highest paid universal benefits in the world with respect to average wage, and a move to Rs13,500, as envisaged […] would make it the highest paid universal benefit in the world.” And before those responsible for this start thumping their chests about how well they care for the elders, the World Bank is blunt about the motivations behind such insane increases: they “were largely based on political considerations”. Political bribes if you prefer.

As if this humiliation were not enough, there is more about the suggested infamous Contribution Sociale Généralisée (CSG). The World Bank sees it as first unfair: “Inequities between public and private sector workers and between private sector workers who have already reached retirement age and those who have not also need to be resolved. To achieve this, it could be considered to deduct CSG benefits from the contributory public sector pension benefit, and a similar system could be applied for those with pre-existing entitlements under the NPF, to avoid duplication of benefits.” Besides, while the minister of finance kept pontificating about how little his opponents understood his magic solution, it would seem that the World Bank didn’t either: “Key implementation details are still pending and will be critical in determining the outcomes of CSG.” And, “the fiscal costs are initially lower, but increase continuously and quickly threaten fiscal sustainability.”

What this goes to show is that an electoral promise, perceived as a bribe, has placed us in a very precarious situation that is threatening the sustainability of our entire welfare state. Greed and cynicism have done the rest. Today, we are paying for a system which has been identified as not targeting the poor or the needy but a cynical vote bank. A system which is above all unsustainable. Funny that even the World Bank could see through that! But the spin continues!