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Extracts from the address by Rundheersing Bheenick, Governor, Bank of Mauritius, at the Annual Dinner in honour of Economic Operators, Pailles, 1 December 2011. For the full document – click here.

We are living in troubled and testing times. Several questions arise. Will we be agile enough to meet the severe tests ahead? What kind of growth should we seek? Should it not be more inclusive? And more equitable? We are trying hard to move into niche markets but is this enough? What else must we do to escape the middle-income trap, to be amongst the best small economies, not just in Africa, but in the wider world where our main competitors are to be found?

We have seen the likes of Malta, Singapore, Hong Kong, Ireland and others raising the bar to achieve GDP per capita, adjusted for purchasing power, more than twice the levels we have achieved despite our continued economic growth. Can we make the breakthrough? Are we prepared to do what it takes to do so?

I believe it is absolutely vital for the future of Mauritius that not only government but business as well give greater weight to innovation, quality, inclusiveness and equity. We could perhaps borrow a leaf from the book of Bhutan. How does Bhutan come in the picture, some of you may well ask? This small Himalayan Kingdom leads the world in the index of Gross National Happiness.

And, while we are about it, we must also introduce a fresh dimension in our assessment of progress: the protection of our environmental capital must be included in the equation for measuring development, and not zero-valued as in the past. This is essential to ensure that any fresh spurt of economic growth is channeled into a sustainable path and does not end in further land and human degradation.

Otherwise, we shall hand over to our children a country whose famed natural beauty has been sadly overwhelmed by infrastructure and blighted by urbanisation. Do we hear the silent cries of those lovely “flamboyant trees” planted by our forefathers, now coming into full flaming bloom, and adding to the season’s festive cheer — as they are brought down by chain-saws to make way for road-widening schemes? Or do we really wish to become like Malta, developed most certainly, but to our mind, featureless, waterless, soulless and nothing but concrete from shore to shore?

We shall never tire of saying that our people is our greatest asset. We must nurture an entrepreneurial culture. We have not fully capitalized on skills enhancement in our human resource. And we have failed to encourage R&D to turn it into a platform for creativity and innovation. We largely bring home what is fashion overseas. In sum, we are missing some of the critical ingredients of the recipe to add greater value and to move to the next stage of development. We certainly have the doers. But do we have the forward thinkers, the visionaries, the dreamers? We are in danger of falling in a pedestrian rut. We have just not dreamt big enough.

It is a scene reminiscent of Einstein’s definition of insanity, which he saw as

“doing the same thing over and over again and expecting different

I am afraid that if we stick to the beaten path, we would soon be writing our global epitaph:

Mauritius – The Home of the Dodo

Three major ideas spring to mind here: the regional service hub, innovation and excellence. The service centre or hub notion has been bandied around for years: indeed we have so many hubs thrown at us that I am beginning to lose count of the number of wheels on the wagon. The other two are vital ingredients which we largely lack: innovation and excellence. But what is really missing is an overarching vision of where we want to go and how we are to get there. Now the vision does not have to come from Government: there is a great opportunity for the private sector and the NGOs to pick up where we left off with Vision 2020 some fifteen years ago.

If we compare ourselves with Singapore and Hong Kong, the top performers in the small economies, we suffer from  structural flaws that are inhibiting our progress. I have not seen any positive reaction to the wake-up call from the Global Economic Forum this year and last year. Wake-up Mauritius and grasp your future with vision and vigour…

But now, if I may be permitted a little digression on the demographic time bomb. Its fuse is burning steadily, largely un-noticed, with dire consequences if we neglect its import. The population in Mauritius over pension age is expected to more than double over the next 15 years, and more than triple over the next 35 years. The ratio of people of working age for each person over pension age is expected to fall continuously over the next 35 years from about 7 now, to 2.5 by 2045. This demographic time-bomb, which is ticking away relentlessly, has deep significance for our economy, our pension schemes, and our society. Dealing with it must be one of the key elements of our future visioning exercise…