The next great leap forward
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Mauritius successfully transformed itself in the 1980s. These reforms still benefit Mauritius today. So even in the midst of the Eurozone crisis, one of the biggest global economic shocks since the 1930s with three quarters of Mauritius’ exports affected, Mauritius maintained economic growth above 3% and stable employment conditions, unlike many other countries who hadn’t undertaken such radical reforms.
Yet, it is clear that Mauritius has the potential to be so much more; a truly balanced, cosmopolitan society and economy, with full social mobility and a new environmental model that could be globally iconic. As the population becomes better informed with travel and social media, citizen expectations are rising. Change is inevitable as the Mauritian middle class demand higher performance of their leaders.
In parallel, the world will undergo some of the most profound changes over the next 30 years. These changes will be as profound as the era that marked civilization moving from horses to a motor vehicle economy, over a hundred years ago. Globally, we are in the midst of a second industrial revolution. Every industry is undergoing radical disruption, from ICT, finance, energy, transport, education, healthcare, and new multi-billion dollar industries and professions that do not exist today, will emerge. It is in this new world that Mauritius can spearhead a new socio-economic model of growth.
Several radical changes are needed to build the new institutions and muscles required, and outpace other competitors. Looking at successful models, here are five bold reforms that could transform Mauritius over the next decade.
1.The next phase of the Africa Strategy: the Asian pivot
First, it is important to celebrate the Africa Strategy which, since 2011, has shifted the focus of Mauritius’ geographic footprint. The Africa Strategy has s쳮ded in diversifying dependence on Europe and India, and building a third geographic leg to the economy. Reforms such as liberalizing visas for African citizens have been lauded internationally and positioned Mauritius as a natural partner to many businesses investing in the continent.
However, Mauritius still needs radically different ways of working in both the private and public sectors: new talent models, strategic partnerships between State and companies, consortia from different industries coming together in to invest in high priority African markets such as Nigeria, Kenya, Tanzania, Ghana. This is a radical departure from the business model of many Mauritian firms. Firms from other countries (e.g., Brazil, India, France, China) are far more advanced in such models than in Mauritius. S쳮ding in Africa must be seen as a national project, which could one day lead to several Mauritian firms in the Top 10 African businesses.
The Asian pivot. Part of Mauritius’ strength is not just exposure to intra-Africa growth but between regions. Mauritius should aspire to become a node in every major flow between regions, whether in aviation, shipping, cloud computing, governance and finance. For example, as trade between Africa and China doubles from US$200 billion last year to US$400 billion by 2020, Mauritius could seek the development of RMB-denominated trade and become Africa’s first RMB Trading Hub.
2.Economic transformation led by an EDB
With such abundance of opportunities, Mauritius could aspire to join the OECD club of nations within 20 years (i.e., moving from $8,000 per capita to $20,000 per capita). This requires over 6% annual growth and an economy that moves from $10 billion per annum to $30 billion per annum (in today’s prices). This additional $20 billion annual growth must be identified and executives held to account to deliver this growth.
For much of this incremental $20 billion, opportunities exist at three levels: in high value added niches of current economic sectors, in sectors not yet seen as economic pillars, and in completely new industries.
• For existing sectors, financial services could move toward more higher value niches such as wealth management, capital markets, custodian services; in ICT, this entails moving into cloud computing, data science, robotics, precision manufacturing; in agriculture, this includes adopting 2nd and 3rd generation technology to revolutionize domestic food production, introducing precision agriculture and developing a new wave of agricultural entrepreneurs.
• For sectors which are not yet economic pillars, they could be used strategically and develop a new wave of entrepreneurs which could be exported to different regions. For example, with healthcare and education technological innovations.
• Then there are new industries to develop. For example, the ocean economy, which is 99% of the country. This has the opportunity to radically redefine Mauritius’ fate, creating several thousand jobs within a decade if the right legal frameworks and institutions are put in place. If developed with the right expertise, Mauritius has the opportunity to become the Silicon Valley of ocean entrepreneurs.
Capturing such opportunities requires a clear economic transformation programme, driven at the very highest level of the country, and in a way that promotes social cohesion, social mobility, start-up entrepreneurs, as well as growth that is environmentally sustainable without leading to urban sprawl.
To drive such an ambitious growth opportunity, Mauritius should transform the Board of Investment into the Economic Development Board of Mauritius, as Malaysia, Singapore and Bahrain have done.
3.A powerful State holding company
Mauritius still needs to reform all government linked companies (both parastatals and other companies linked to government directly or indirectly). There are lessons from around the world on what reforms have worked and what haven’t. Taking the successful models of reform, we can look at Malaysia and Singapore where Khazanah and Temasek were created respectively.
These were State holding companies under the office of the Prime Minister, which set Key Performance Indicators for each CEO and Chairman to deliver, and for which they were held to account twice a year against these KPIs.
Such reforms do not imply a large cost-cutting drive but could in fact help government linked companies (GLCs) to develop international and regional expertise. With the right management support, Mauritian GLCs could develop the expertise to compete and run water, electricity, health and education for different African governments as some of these strategic sectors are liberalized across the continent. This would then create new economic opportunities in Mauritius for such companies and their suppliers, potentially unleashing a new generation of Mauritian entrepreneurs.
4.A public services transformation programme
As we enter the second industrial revolution, the era of ‘Government knows best’ is over. Public sector reform is critical to s쳮d in this new world.
We can think of the role of the public sector as one of nodes in a large social network, reflecting the needs and values of the population. As knowledge becomes ubiquitous via platforms like Google, the role of government will radically change, and hence the skills required of our public servants.
Looking at models of successful public services reform undertaken in the UK and by other governments, there are several core elements needed for a successful public services transformation programme:
• Top down interventions. These include delivery units and national standard setting bodies or inspectorates.
• Bottom up interventions. These include giving a greater say and co-creation of public services by citizens, business and other users.
• Greater competition and contestability of services. Mauritius should be willing to explore new models of State-funded services offered by different providers, whether in health, education or transport.
• Greater investment in leadership development. Without building new culture, team working and leadership skills, Mauritius will not s쳮d. The civil service must be seen as one of the most exciting places to work in the country for new talent (local and international).
To be truly transformational, Mauritius could go even further and assign Key Performance Indicators to all ministers, and assess the performance of Ministers against such KPIs each year. This would put Mauritius in a very elite group of nations who have done this before (UK under Tony Blair, Malaysia under Prime Minister Najib and Singapore under various leaders).
5.Next generation leadership talent
Finally, to s쳮d in this new world, the leadership divide that is starting to appear will need to be bridged. Public and private sector leaders need to proactively build the next generation of transformational leaders for the country across at least two dimensions.
First, there is a shortage of young leaders in leadership positions in both the public and private sectors, particularly from the cohort of leaders born post-independence. At the same time, there is a woeful lack of females in leadership positions. A recent McKinsey study showed that boards with more female representation performed significantly better than all-male boards.
It does not need to be the public sector alone leading on this issue. Why can it not be private sector Chairmen showing leadership by role modelling what is required by appointing at least one female and at least one person under the age of 35 to every private or public board in Mauritius?
Winston Churchill once said that “We shape our buildings, thereafter they shape us.” As we design and build the new institutions for the country’s next chapter, let’s ensure the buildings and institutions are shaped in a way that will inspire this generation and the next to take that great leap forward once more.
