By Sen Narrainen

In the nineteen sixties, Mauritius was a so-called third world nation seemingly destined to become a blithering basket case. But it came out of the economic doldrums, escaped the low-income trap, and made notable social progress with an assortment of right socio-economic policies and political decisions taken since the sixties through the nineties. This impressive performance earned Mauritius high marks internationally for its economic management and development model. Over the years, Mauritius also became famous as a paradise island. Nonetheless, since the nineteen nineties social precariousness started to settle in.

Paradoxically, the turning point from social progress to social precariousness can be traced to the years when the unemployment rate was declining (late eighties and early nineties) to eventually reach a low of 2.5 percent. During these years, faced with the prospects of severe labour scarcity and surging wages, enterprises responded with a fairly rapid shift in their production mode. As a result, the country’s industrialisation paradigm changed from labour-intensive to capital-intensive and subsequently became also technology and knowledge intensive. While such a paradigm shift was logical and inevitable, it unwittingly sowed the seeds for the existing social precariousness starting with a widening of the income gap between the rich and the poor, which in turn triggered a new economic pathology – that of dualism, otherwise known as une économie à deux vitesses, or even worse “a multi-speed economy”.  

Rising tides did not lift all boats. It is clear that the rising economic tides have not lifted all boats. This is because the population of Mauritius is on different boats sailing on different seas. The richest 20 percent of the population (who receive close to 50 percent of the country’s national income every year, which in 2023 would have amounted to close to MUR 300 billion) are actually sailing on seas with gently and pleasantly rising tides. In contrast, the poorest 20 percent of the population are sailing on incessantly rough and turbulent waters with only about 5 percent of the country’s total income. There is a growing sentiment among individuals in the bottom 20 and even 40 percent of the income group that the economic bandwagon has left them behind.

Economic dualism

A number of factors underlie the social precariousness. First, as just mentioned, the widening of income and wealth inequality, which is due mostly to the high concentration of the ownership of capital, technology and knowledge among a small percentage of the population. Consequently, most of the economic growth has accrued to them. Little, if any, has been achieved or is being done to foster a more equal sharing of income and wealth. Policies to democratise the economy and promote inclusiveness never got off to a good start. The development model is therefore condemned, at least for the next decade, to be in a ‘trickle-down’ mode. In other words, as has been the case in the past two to three decades, Mauritius will have to continue with policies that benefit the big corporates and wealthy individuals in order to lift the standards of living for all. Such a status quo can only further widen inequality and increase social precariousness.  

Policies to democratise the economy and promote inclusiveness never got off to a good start.

Second, and absolutely critical, is the increasingly exclusive education system. That the education system has been exclusive since the eighties cannot be overstated. And it should not be understated. Branding the education system as being exclusive is decidedly justified by the large number of children that it has been evicting. Worst of all, children have been cast off at the tender age of between 10 and 12. Forsaken by the system, these children have been branded as “CPE drop outs” when they were actually “dropped-outs”. Only a handful of children who join primary schooling make it to post-secondary education. It behoves the State and the various responsible institutions to concede the exclusiveness of the education system and to somehow confess this national sin so that solutions can be finally formulated.

Third, the mushrooming of social ills. For the sake of brevity, a number of prevalent social issues are grouped under a composite cluster that can be termed as “Mushrooming Social Diseases” (MSDs). The MSDs include such social ills as the proliferation of drug trafficking and use, increasing the level of criminality, and deteriorating safety and security including on the roads, among others. 

Fourth, a large segment of the population is suffering from a number of disconcerting realities. There are many examples. There does not seem to be an end to the water shortage situation. Round the clock water supply is not for the near future. Climate change is taking its toll on the population and country with its adverse impacts manifesting in a number of ways, ranging from frequent flash floods to food shortages, surging food prices, beach and soil erosion, warming of the ocean as well as the agricultural soil, among others. There is a large and growing backlog of social dwelling units. And a new fear of high inflation has become deeply entrenched in the psychology of consumers and businesses.  

Fifth, there is a complete oversight of major risks to which Mauritius is highly exposed. Besides more frequent natural disasters, there is the high level of food and energy insecurity. These risks, which are literally existential threats, require greater attention and urgent solutions.  

The future being shaped does not meet the aspirations of the country’s youth.  

Retrospectively, we can assert that the seeds of social precariousness have germinated and grown at a rapid and accelerating pace. Prospectively, we must be worried about their potential to explode in a major social debacle. The outcomes of social precariousness are already manifesting in various undesirable and worrisome ways. One of them is the draining of the country of its young people. Many of them are feeling hamstrung in a society that is becoming increasingly exclusive and a labour market that is stifling their creativity and enthusiasm. For many of the young people, social life in Mauritius is becoming mundane. The future being shaped does not meet the aspirations of the country’s youth.

The rise of social precariousness and the economic dualism have been straining the social fabric so much that a most common reaction to the heralding of Mauritius as a paradise is: paradise for whom?  

But Mauritius is reputed for riding out crises. It is time to think of an alternative development approach. Mauritius urgently needs a long-term plan to lift the standard of living and quality of life for the population in the bottom 40 percent of the income distribution. It is now widely accepted that the most reliable indicator of shared prosperity is the growth in the real per capita income of the bottom 40 percent of the income distribution. 

No progress can be made on the inclusiveness vision unless the poorest people benefit more from economic growth.

Dr Streevarsen Narrainen
Dr Streevarsen (Sen) Narrainen was a Senior Economic Adviser at the Ministry of Finance and Economic Development and a member of the Monetary Policy Committee of the Bank of Mauritius.