While watching this video, I realised how “Nul n’est prophète en son pays” is so true.
In a Vanity Fair article (found using Google I swear), Joseph Stiglitz, Nobel Prize winner in 2001, writes: “When the American economy enters a downturn, you often hear the experts debating whether it is likely to be V-shaped (short and sharp) or U-shaped (longer but milder). Today, the American economy may be entering a downturn that is best described as L-shaped. It is in a very low place indeed, and likely to remain there for some time to come.”
Living in a country like Mauritius where the economy is relatively solid is precious.
So very true!
But I would have thought that the global economy; Mauritius included is feeling the effects of the downturn, at least according to the news which we get in the Uk, this is impression which we are getting.
Harish
Your last sentence is untrue. Mauritius relies on the global economy. If Europe or US are doing bad, Mauritius will do worst.
The US is in recession because of the consequences of the toxic loans bank made to US citizens. We don’t have such things here i.e. the economy is “more real.” The Government and most financial institutions (including banks) here agree on this.
Of course, we’ll suffer but not as in the US and in Europe. In fact, the Mauritian economy is in good shape (4.5% of economic growth predicted this year.)
@Avinash – Yours is a rather simple way of analysing the situation, don’t you think? After all, these banks you are referring to lend money on a global scale, and Mauritius will not be getting part of that because of the credit crunch.
With the weaker economy, people in Europe and the US have less purchasing power. Guess what? They spend on trips to Mauritius and/or apparel produced in Mauritius. If Mauritius exports less, the economy suffers. To make a bad situation look even bleaker, consider that what is left for europeans and americans to spend has be spread on imports from not only Mauritius but all its competitors.
In hindsight, mine is also a simple way of analysing the situation, but at least I am not looking through pink-tainted glasses. The truth is, things move so slowly in Mauritius that changes that would be sudden in Europe and the US (like stock values being wiped in the millions in a few seconds) take time to propagate to there. Until now, Mauritius has been lucky in that such movements of the global economy have been countered before they have any real impact on the island, but this global recession is looking to be a lasting one and I think it will have an impact on Mauritius before it is over.
4.5% of economic growth in these times would really put Mauritius up there. But I doubt it.
Eddy.
Hi Eddy,
I am not doing any analysis (I can’t in fact as I am just an amateur for anything concerning finance.) I’m just relaying the official position of the Government and what a number of reputable financial institutions have said (including the MCB a few days ago.)
Of course, Mauritius will suffer: the tourism industry for one. But here many people believe the economy is *relatively* resilient. In fact, no big Mauritian firm is in financial trouble right now compared to what is happening in the US and in Europe.
This is also a consequence of us having a relatively small and diversified economy.
Well, I am not an expert in any way either, but when I see countries all around the globe going into recession, I have to be suspicious of anyone’s claims that their economy will grow by that much.
Eddy.
When the crunch hits Mauritius in the big bad way, the people will take to the streets. Alleluiah ! …
Only the Min of Energy is thinking ahead and taking practical steps…
We are not self sufficient in anything in fact our staple food is rice and bread yet we don’t grow rice or wheat, our sugar is going the dodo way, we have no natural resources, we have a ‘skilled’ labour force which is turning green at the prospect of going ‘green’ aka go back to agriculture, we rely on tourism heavily which is soooo vulnerable, we have an IT dream but still sleeping on our ears, we have a disfuntional basket of politicians, we are heavily indebted to our so called ‘indian’ ‘white’ ‘african’ ‘chinese’ roots because of our origins to which our ‘mother country’ gives a deaf ear and we fail to understand the concept of ‘motherland’, we are in deep cultural identity crisis, we are still slaves of our past colonial masters ( Cambridge, IB ?), …and the list goes on.
But we are a power house of copying, maybe we could copy the best model and make it work for ourselves ?
money, can’t we grow it on trees ? the climate is good, the soil fertile … any takers ?
sur quel nuage vis tu Avinash? any rosy pink puffs ? …. do you have a room full of gold bullions?
anything below 5% is considered slowwwwwwww in finacial growth terms. There are floating investments worth 10 billions a day in India which gets it at 9% which is the fastest ….. do you think Mauritius can go any close to a 7% even ? How ?
A la Houdini way …by Cyber parks extolling call centres with Mauritian shares of 40% only !
I know it seems bizarre to say that the Mauritius economy is relatively “solid” but I’m just basing myself on (i) what I’ve read lately and (ii) what some friends working in the private sector have hinted when I asked them.
Of course, this is exactly what the “opponents” to Peter Schiff kept repeating… so who knows? You may be right after all. Let’s wait and see.
Just want your readers to be aware of something…
Even with all the troubles facing the American economy, this is still the best country in the world to live, work and raise a family.
In every county on this planet, there’s a waiting list of visa applicants who want to migrate to America. No one in the USA is on a waiting list to migrate to China, Russia or where ever. This to me is ample proof that most people still regard this country as the best and with good leadership, this recession will be soon behind us.
Interestingly, I was reading an article the other day in an Indian magazine which was saying that this year the number of returning Indians from the USA exceeded the number of migrating Indians… But I agree. The USA must be a great place to be. But maybe not right now in the middle of the recession.