lutchmeenairoo wizard2

This week we got a glimpse of a key component of the Financial Wizard’s trick to conjure a second economic miracle*: turn Port Louis into an enormous filling station for ships. Noting that not many ships transiting Mauritian waters stop here to refuel, has he spotted an amazing new opportunity to transform our economy?

In fact, the idea isn’t even his! He is simply repackaging a policy that was promoted by the previous government to turn Mauritius into a petroleum hub. There are legitimate reasons why we feel this mega-project should not and hopefully will not proceed.

Looking at the cargo ships that pass us by in the night, it becomes obvious that the ones that come closest are on the route between Singapore (the busiest port in the world) and Durban (the busiest port in sub-Saharan Africa), with many continuing to South America. The reason that most of them don’t refuel in Mauritius is simply because they don’t need to.

2013.04.16.Global-Shipping-Routes

If your car’s petrol tank is still half full, are you going to stop to fill it up at a pretty filling station even if it does have a duty free shop next door? Time is money in the freight business and unnecessary stops increase costs. It makes more sense to refuel at the same place you load and unload your cargo. Durban, with direct access to the whole of Southern Africa by road and rail, is the natural choice for large vessels.

If Sithanen’s dream of attracting Chinese industry to Jin Fei to manufacture goods for the African market had worked, then a dramatically expanded port might have succeeded. In the end, China preferred to bypass us and set up shop in continental Africa. There is no reason why cargo ships shouldn’t continue to do the same.

Another reason that Vishnu’s plan is idiotic is that every ship that approaches our shores increases the risk of a catastrophic oil spill and/or collision with our reefs that could devastate our coast line. Has he forgotten how important tourism is to our economy? Does he not remember the Panamanian ship that ran aground at Poudre d’Or in 2011? Fortunately it was only carrying rice. Imagine the consequences if that had been an oil tanker on its way to supply the new bunkering hub…

panamian-ship-3_2

Yes, it makes absolute sense to attract more cruise liners and make Mauritius a more accessible destination for ocean-going yachts but how picturesque is a marina next to an enormous filling station for gigantic container ships?

Finally, how many jobs is a bunkering hub going to create? Compared to the textile factories of the 1980’s and 90’s, very few. Are the benefits work the risks?

News source: le Mauricien

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* Note that the (first) Mauritian economic miracle had its origins in Great Britain where it is simply known as the Industrial Revolution. At independence, the UK urged Mauritius to set up export processing zones which Sir Seewosagur Ramgoolam duly did and they actually worked… for a while. Unfortunately, there was little foreign investment in factories until Hong Kong stopped being an attractive place to manufacture textiles. The US and Europe, afraid of being swamped with imports from developing countries, imposed onerous duties, dramatically slowing their own industrial revolutions. Fortunately, they gave desperate countries like Mauritius duty free quotas and our textile industry boomed… again for a while.

Textiles is always the first industry to develop in agricultural societies because the skill requirements are low. Since the start of the industrial revolution, every other country, from UK to China, then moved on to more advanced industries. Successive Mauritian governments failed to facilitate this transition. Now we are trying to leapfrog into the service sector, but our education system is failing to properly prepare our youth for lucrative careers and hence expatriates take the best-paid jobs. We need a real change in strategies, not just personalities.