MAURITIUS: SPEECH OF THE PRIME MINISTER ON THE BUDGET ON THE 02/06/09
The Prime Minister: Mr Speaker, Sir, first of all, let me start by thanking you and the Deputy Speaker for having presided over these debates, with great tact as usual and great patience.
Mr Speaker, Sir, first of all, I want to look at the context of the presentation of this Budget. We should all know, and I put emphasis on all, by now that the world economy is experiencing its worst slowdown for nearly 80 years. Since 2007 the world economy has deteriorated and has continued to deteriorate. Problems that originally started in the United States mortgage market have spread and undermined the global financial system. These deep seated problems in the financial system have in turn produced a major macroeconomic crisis.
What was a major financial crisis has turned into a worldwide economic crisis. The world, Mr Speaker, Sir, is now experiencing its worst global recession - even worse than the Great Depression of the 1930’s. This unprecedented recession in turn has brought about a sharp fall in world trade which has spread the recession even to countries which were not involved in the original financial crisis and that includes Mauritius.
It is clear, Mr Speaker, Sir, that we are experiencing a long lasting change in our external environment and it is inevitable that Mauritius will be affected by this continuing - and I put emphasis on continuing, Mr Speaker, Sir - slowdown in the world economy. All the economies of the world have been affected or are being affected, from rich to emerging, from developing to poor. All the economies in the world are being affected. Even China, India and the countries of the European Union have been affected. Mr Speaker, Sir, if countries of their magnitude suffer from the downturn, it is obvious that we cannot be forever spared as the world economic recession deepens for we live as we all know in a globalised world. Unemployment has been rising worldwide. According to the ILO, 100 million people will lose their jobs this year. Another 100 million will fall below the poverty line, dramatically increasing poverty worldwide.
What is worse, Mr Speaker, Sir, most experts not only they did not predict this unprecedented global economic crisis but none can predict how deep it will be or when it will end. There is continuing uncertainty, there is heightened volatility and there is no clarity - nobody can see ahead. The World Bank, the IMF, the OECD, the African Development Bank, the Ministers of Finance of different countries, are all changing their forecasts regularly.
I said during the debate on the Additional Stimulus Package, even the British Chancellor of Exchequer, Rt Hon Alistair Darling himself admitted recently that he was wrong about the length and severity of the recession and that he has been forced to tear up his economic predictions. For members who perhaps do not know, the British Chancellor of Exchequer, has an array of economists - not one, not two - at his beck and call. Not any economist, this is no ordinary team in the Treasury, Mr Speaker, Sir, yet they all got it wrong. And everybody understood this in the United Kingdom, for everyone is aware that there is lack of clarity ahead.
Even as I have said before, Mr Speaker, Sir, Mr Larry Summers, the economic Tsar of President Obama, a former secretary for the Treasury, who was a great believer in the market, who believed that markets should be left alone and that they can be relied upon to regulate themselves, has now changed his views and is urging for massive Government spending to help the banking institutions and various industries which would otherwise close leading to further massive unemployment.
We do not see that everybody in the United States say that “no, no, we should not do that, we should distribute money all over the place.” This is why I find it difficult to understand the logic of the economic arguments of some Members of the Opposition.
Mr Speaker, Sir, who would have thought that General Motors, the icon of the auto industry in the United States, would file for bankruptcy one day, with debt amounting to nearly $55 billion? Not million, but billion dollars, Mr Speaker, Sir. Who would have thought? That’s exactly what happened yesterday with dramatic consequences for employment not only in the United Stated of America, but also in the UK, Germany and Belgium, because General Motors has plants in these countries. People are going to lose their jobs in these countries because General Motors in the United States have filed for bankruptcy.
This is what happens in a globalised world. We are living in a globalised world. I find it hard to believe that Members of Parliament themselves do not realise this, Mr Speaker, Sir. That is what I find difficult to believe. Maybe we do not say that everything we say is right, but there are certain facts that remain facts, Mr Speaker, Sir. Even in Canada where there is no General Motors plant but they are closing down this plant which manufactures parts in Canada. They are also losing their jobs.
Mr Larry Summers -nobody here I am sure will say that is a fool - is known and has a reputation in the United States and worldwide. When Mr Larry Summers was asked: how could he explain that he who believed in the market, that the market was, can be allowed, can be relied upon to control itself, to regulate itself. How can he come around and say that Government should help to put money in banks so that banks can lend to people? Unheard of! And when they said how he can explain this 180˚ change, he simply said “when circumstances change, I change my opinion”.
That is why, Mr Speaker, Sir, we need to be able to abandon old mindsets, live in the real world and adopt a flexible attitude and not resist change to changing circumstances. And that, I find, I must say not all, but most people are not realising this.
We have all seen Mr Speaker, Sir, how the markets failed to regulate themselves in the midst of this major global downturn.
There are indeed many lessons to be learnt about market failures, but it was President Obama who, in his Inaugural Speech, eloquently zoomed in on the fundamental lesson that we must learn and we must keep in mind. Let me quote from that memorable speech. He said –
“The question before us is not whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control – and that a nation cannot prosper long when it favours only the prosperous. The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity on our ability to extend opportunity to every willing heart – not out of charity, but because it is the surest route to our common good.”
That was in his Inaugural Speech, but then, with circumstances that have developed, he has seen to it that there was an urgency to help failing enterprises in the United States, Mr Speaker, Sir. We have to adapt to the changes that are happening in the world.
 Mr Speaker, Sir, we, in the Labour Party, could not agree more with what President Obama said. In fact, this is exactly what the Labour Party has stood for ever since its inception and this is precisely what we have been saying and have been committed to, all the way back to the days of SSR who was a convinced Fabian.
The idea that we have to keep a watchful eye on the market – I said the other day, I coined this phrase: Replace the invisible hand of Adam Smith by the guiding strong, firm hand of the Government. And that economic policy has to reach out to the many and not be restrained to the few. It is also encapsulated in our campaign theme of the 2005, that is, democratisation of the economy.
Mr Speaker, Sir, although what is happening to the world economy is beyond our control, we must continue to adapt our policies to minimise the impact of the world recession on our economy.
For instance, the policies that we have pursued since we were in Government aimed at improving the state of the economy and public finances have helped us weather the early stages of the crisis well.
Everybody knows, Mr Speaker, Sir, that we inherited an economy in serious decline. We have taken bold steps, started bold reforms which have stood us in good stead. Without these reforms, Mr Speaker, Sir, we would have been in a deep recession already. I noted what hon. Cuttaree was saying, because he does not agree with this, and I will come back to that later. We have been ahead of the curve and we have been congratulated by many institutions for having been not only pro-active but also speedily reactive. Reforms have really, we believe it, saved this country from economic chaos.
Although, because of the continuing global recession and we are the first to admit it, we have had to downgrade our growth forecasts for the economy from over 5% to around 2%, this is a smaller decline that most countries are experiencing. In the United States, in the European Union, in China, growth has fallen by substantially more than 5%. Further, because we achieved a decline in Government debt relative to GDP we have in this Budget and the Additional Stimulus measures previously announced been able to create the fiscal space to offer support to firms in a focused effort to try and minimise any increase in unemployment.
Mr Speaker, Sir, let me here say a few words about the assistance we are giving to firms who are experiencing difficulties. The Government, as was pointed out, I think, by the hon. Vice-Prime Minister and Minister of Finance, by others I think also, is not there to dish out money to anyone who asks for money. I think the Vice-Prime Minister and Minister of Tourism, hon. X. L. Duval, said it clearly, the firms should come to Government as a last resort. And when they do, we do not just dish out money, because they are asking for money, we analyse their case and we put conditions. I can tell you that the hon. Vice-Prime Minister and Minister of Finance has had cases where people have asked for money and their demand was rejected. There is no free money to give. This is tax-payers’ money. There is no free money to give. There are conditions attached to giving money, Mr Speaker, Sir.
Now, we know, some may think that this is a golden opportunity to get money from the Government. We are aware of this. There are those, you know, who always complain - always cry wolf - they are always in trouble. Recession or no recession, they are always in trouble. As hon. Duval says, if you have a hotel which is not paying his way for five years, what kind of hotel it is? What kind of business are you? You cannot run your business properly! There are these people, we know this, we are aware of this. Not everyone will do this, but we are trying to help and, of course, there are risks involved. If you do not take any risk – suppose in America President Obama decided: no, no, I am not going to give money to the banks to lend to others, they have been making huge profits, I am not going to help General Motors not to put so many people out of a job, because these are taxpayers’ money, but this is precisely why we do it, because we need to ensure that people, first of all, are not thrown out and do not lose their jobs. This is the most important factor that is pushing all Governments in that direction, Mr Speaker, Sir,
However, let me say this – those who think they can make a quick gain and then disappear – we take guarantees, as well, assets, of course, there are risks. Of course, at the end of the day the assets might not match what is being given, we do not know what kind of tricks have been done with all this. But those who think they will make a quick gain on the back of the taxpayer and disappear, I will ask them to think again, because they will be put on a black list. And believe me, they will find it very difficult to do business again, whoever they are. I don’t think I should say more at this stage, Mr Speaker, Sir, but we are looking at this as well.
This global downturn reinforces in my mind two key lessons, Mr Speaker, Sir –
The first is that economic policy is about long-term changes and development. Precisely, because the economy can be so volatile it is important that Governments plan for the long-term and not just on the basis of what is happening today. It is because we have tried to do this, in fact, that we can offer support to firms and individuals in these difficult times.
Rather than add to the volatility of the economy we have been able to protect people and firms from the economic storm. It is only by pursuing the long-term interests of the economy that we can help people as much as we can in the short-term. Throughout this slowdown and throughout the next upturn it is my intention to continue to build the long-term health of the economy, together with the very able team that I have with me, Mr Speaker, Sir. This will bring again renewed prosperity, but also, more importantly, maximise our chances of surviving the worst global shock the world has known in the last 80 years or so.
The second lesson that has been reinforced is that economic success in Mauritius comes from cohesion. It is important that not only the fruits of economic success are widely shared but so too are the downturns. It is inevitable in the midst of a global recession that profits will fall - inevitably. We have to help firms through this period and make sure that our long run economic success is not jeopardised. But if we help firms we have to make sure that they help their workforce as well, and that is one of the conditions that we have put. I have been encouraged, Mr Speaker, Sir, that the private sector organisations recognise that workers too need protection from the slowdown and this is why in this Budget we have announced all the measures concerning saving jobs and all of which are intended to preserve as much job stability as we can in these challenging times.
This Budget is an Action Plan to face the very daunting challenges of this world economic recession for the next 18 months. I heard hon. Ganoo saying late yesterday, I must say: what kind of Budget is this? It is an Action Plan. No Budget should be an Action Plan! Of course, a Budget lays down the overall strategy of Government, but also lays down the plan ahead, more specifically an Action Plan to save jobs, protect people and prepare for recovery. For recovery will come! Make no mistake! And I hope we are there when the recovery comes, Mr Speaker, Sir.
It is a balance between these three major objectives, this is what we are trying to do -
(1) contain the adverse impact of the continuing recession on our economy
(2) protect the most vulnerable groups in our society, and
(3) protect our environment through the Maurice Ile Durable programme.
We have put Rs4 billion to save jobs, Mr Speaker, Sir Rs2.4 billion to protect people Rs2.7 billion to prepare for recovery.
Given the back for the world economy, Mr Speaker, Sir, it was not an easy feat for the Vice-Prime Minister and Minister of Finance. Our priority has been to protect jobs as I said, to protect the most vulnerable and to prepare Mauritius to take full advantage when the recovery occurs.
This meant that we had to control the fiscal deficit as far as possible. Had we not done so in the past: putting the deficit on a downward trend from 6% of GDP in 2005 when there was no world recession to around 3%, we would have today had no fiscal space to allow us some, if I may call it, “breathing” space in this crisis, Mr Speaker, Sir!
In spite of all this, the fiscal deficit – because we have moved to that stage - is forecast to be 3.9% of GDP now. It is forecast to rise to around 4.8% in 6 months’ time and 5% in 2010 and to fall to 3.3% in 2011 – well within reasonable parameters in such circumstances, Mr Speaker, Sir. Look at what is happening in other countries! They have deficits of 12%, 15% and they are going on bended knees to the IMF. And I say, Mr Speaker, Sir, this is no mean feat, in the face of such unprecedented global crisis. We could have done otherwise. We could have allowed the deficit to run over 6% and do as the Opposition has been saying – give money away to this, to that R10 m here R200 m. there. We could have done that and spend, spend and spend. We could also have done that, especially we are coming to the fourth year of our mandate, we could have done that, but that would be irresponsible and it would not be in the long term interests of the country.
We have been ahead of the curve Mr Speaker, Sir, and we want to stay ahead of the curve. Global capital markets are increasingly not funding large deficits. That is why, as a precautionary measure, we want to secure access to the Flexible Credit Line of the IMF. Now, the IMF, I should say this for some Members, perhaps they don’t realise, has just introduced this contingent credit line which is available to Governments which have met certain criteria, not to any Government. We are in that position precisely because we have managed the economy well.
The access to the Flexible Credit Line of the IMF if we ever need it, Mr Speaker, Sir, is much better than having to go to the IMF in a crisis. We all know what conditions the IMF imposes in such cases. We just have to look around. Look at our neighbour next door, Seychelles! The IMF has imposed radical solutions on them, cut in subsidies amongst others – all sorts of cuts. They had no choice because they were in that precarious situation. We are not in that position, Mr Speaker, Sir, that is why we want to have access to it, if need be. Not only that, the very fact that we have access to it, reassures others that we would not have had access had we not been in a terrible situation.
Not only, Mr Speaker, Sir, we are acting responsibly not to allow our fiscal deficit to rise sharply, but we should also remember that as Governments abroad have intervened to support their banking systems, they are insisting that banks reduce their overseas lending and focus on domestic firms. We have foreign banks here. This is what is happening.
They are being asked to cut the lending in foreign countries and to focus at home, in the domestic market. The result is a sharp fall in foreign lending and this has led to severe problems in many emerging markets as countries like Dubai, Central & Eastern Europe, but Dubai. Go and see what is happening in Dubai, Mr Speaker, Sir!
In fact, the Managing Director of the IMF, Mr Dominique Strauss-Kahn, had predicted that this would inevitably happen and that FDI would dry up for developing countries.
And we should not forget, Mr Speaker, Sir. We seem to forget this. We should not forget that Mauritius is a small open economy, dependent on world trade, exports and investment in the tourism sector. It is in this difficult context that we have presented this Budget. And while acting responsibly, we have made it our priority, as I have said, to protect jobs, to protect the most vulnerable in our society and to prepare us to take full advantage of the recovery.
Mr Speaker, Sir, the best way to fight poverty is to ensure that people have jobs. It’s the best way. We know the saying, Mr Speaker, Sir: ‘don’t give a hungry man a fish everyday, show him how to fish!’. We won’t even have to give him that fish. The Opposition seems to think that we should have given a full compensation in line with inflation for everybody. That is what they are saying.
I must say, perhaps they know they are not saying it, the employers were advocating a total freeze in the wages. Many economists were advocating the same thing. In Singapore, Mr Speaker, Sir, wages were not frozen they were actually reduced because times are difficult. Here, in spite of the unprecedented world recession, we have agreed to abide by the findings of the National Pay Council and those who get up to Rs12,000 have had a wage increase according to a well-known formula, Mr Speaker, Sir, which takes into account both inflation and productivity.
Now, it is essential that we do not compensate just on the basis of inflation. It is not sound economics whatever anyone would say. Mr Speaker, Sir, it is not just a question of income to individuals. The payment of wages and salaries has an economic role that goes beyond the provisions of income to individuals. The Opposition seems to have forgotten how many experts were invited to Mauritius to look at wage compensation. I remember hon. Soodhun who was Minister of Labour then, he was kind enough to invite me as Leader of the Opposition and listened to the experts from Singapore - we all know, there are reports and reports, I don’t know how many in all there are – what they had to say about this ludicrous way we were doing things and they recommended that we should change, we should mend our ways. Surely the Opposition knows of the vicious circle of wages chasing prices – chasing wages – chasing prices. It is a vicious circle and if you just look at inflation on its own, you are just stoking inflation, in fact that is basic economics.
If wage increase is based solely on inflation, it prices people out of jobs and we lose our competitiveness, Mr Speaker, Sir.
That is the naked truth of this. Nobody is going to invest in a country where you compensate workers on the basis of inflation alone without taking into consideration productivity. Don’t forget, as I say, we are a small open economy.
We are far away from the main countries where we export to. Investors do not come to Mauritius because they like the sand, the sea and whatever else. They will go elsewhere if they find their profit is going to be diminished. And firms will close and people will be out of jobs. If we do this compensation just based on inflation, we will achieve two things, Mr Speaker, Sir. They will lose jobs and inflation is going to go up. We must break that circle, and that is what we are doing and in a reasonable formula. We should not be even doing this in normal times, but even more so in such precarious and uncertain times, Mr Speaker, Sir. What we need to do in such times is to ensure that jobs are saved and that enterprises, as far as possible, do not close down. There are some enterprises which do not manage properly, which have a very low productivity, which are now trying to see if they can get help from the Government. They will not, because we are not going to save firms just for a short while. What we want is to help firms which can actually recover and continue to operate. That is why, Mr Speaker, Sir, we must continue with our policy to democratise the economy because I believe very strongly that we have to have more players in the economy and allow more competition. We have named the members of the Competition Commission just a few days ago. We must extend the economic base because that is the way to increase prosperity. Everybody must be a stakeholder in the economy. That is the way forward. That is why we have set up a new Fund, The Saving Jobs & Recovery Fund. As I said, Mr Speaker, Sir, we have put Rs4 billion just to save jobs and Rs2.7 billion to prepare for the recovery.
The Vice-Prime Minister & Minister of Finance has mentioned in his speech all the measures we have taken to assist the Small & Medium Enterprises and our main export industries. I don’t want to go through that list again. At the same time, once again, we have catered for those who are most vulnerable. And, Mr Speaker, Sir, when we speak of those who are most vulnerable, people don’t realise that many women fall in the vulnerable groups. That is why we have made a special effort on our gender-based policies, not only to help those who are vulnerable, but also to empower them.
(1) The allowance, for example, for single mothers has been increased by 40% from Rs700 to Rs1000, that is, 40% increase, Mr Speaker, Sir. And they will continue to benefit from social aid as before with a cut off naturally at Rs7,500 which is exclusive, I must say, of this allowance, and again also we have raised the age limit for the child, which was 5 years to 7 years
(2) The allowances payable under the social aid to abandoned women and their children has been increased by 10%
(3) We have increased income support by 15% and I can tell you, we have worked out the figures, around 100,000 people are going to benefit from this
(4) We are accelerating the training and re-skilling of women through the National Empowerment Foundation. I can say that since 2005, when we started this, more than 7,000 people have actually benefitted from this
(5) I am amazed to say that everybody - on both sides I must say - is saying that we have not increased universal pensions for the old, for the widows, orphans and disabled. Even my good friend, hon. Jhugroo, was saying that I had said that I would double it. He was reading the wrong newspaper, that was in 2005. But we have actually increased the pension. That is what I said. We have increased it, perhaps not as much as some would like, but we have actually increased it, Mr Speaker, Sir.
(6) We have also helped the CHA occupiers to become owners. Mr Speaker, Sir, very nearly 20,000 people have benefitted from this measure and this includes people in Agalega. We have also given money to improve the infrastructure of the NHDC housing, also the one, I should say, in Rose Hill.
(Interruptions)
I am saying that even though it is in the hon. Leader of the Opposition’s constituency, we have done it, because we are not going to treat people because of constituency, as hon. Lesjongard, sometimes believes. We look at people - when they are poor, they are poor – wherever they are. We cannot treat people differently by constituencies because they voted for the Opposition or whatever. Poor people are poor people! We have to help them wherever they are! This is to name, but a few of the measures we have taken, Mr Speaker, Sir.
Similarly, Mr Speaker, Sir, for those who are in the Agro-Industry. I will not go through the items, but I want to say because very often I hear about these 60 tonnes that we have taken away from tax relief and the 4 x 4. There is a constant – even my colleague tells me this - reminder that this is wrong. I will come to that later. But we have done other things. It is a balance, as I say.
(1) We have put Rs700 million for small planters – for irrigation, derocking and land preparation
(2) We have reduced by 20% the contribution of small planters to cess because we think it was unfair. This is equivalent to about Rs60 m. over two years
(3) The Food Security Fund will contribute Rs350 m. to fund various projects for small farmers, breeders and fishermen
(4) Government is introducing a Food Crop Insurance Scheme for small crop planters – Rs15 m. are being provided under this scheme which will benefit some 2,000 small food planters
(5) Rs45 m. have been provided for the setting up of three dairy farms and we expect that they will produce about 700,000 litres of milk by 2010
(6) We have provided nearly Rs300 m. for pig breeders. After the swine fever epidemic, lots of things have been done for the small breeders
(7) The Fishermen Investment Trust will finance new activities for artisanal fishermen. Furthermore, Rs28 m. will be provided to finance fibreglass boats for off-lagoon fishing
Rs45 m. have been earmarked to finance various medium-sized projects such as fish processing, aquaculture and purchase of fishing boats, and
(8) The Maritime Training Academy will be extended to Rodriguan fishermen. While Rodriguans will also share the benefits that we have in Mauritius. Eleven measures have been mentioned by the Vice-Prime Minister and Minister of Finance for them.
One thing that I noted when the hon. Leader of the Opposition said it, I think it is a good – I am not going to give any indication – suggestion because we did it at the time in essence of modernizing things. But the agricultural sector is a big sector. He mentioned in his speech that we should – he made this directed to me, I think - look at the Minister in charge of fisheries. I think it is a good suggestion. I will look into it.
(Interruptions)
I took this on board, Mr Speaker, Sir, because we look at the experience. It is a huge Ministry.
Mr Speaker, Sir, many of the measures enunciated in the Budget will of course apply to Rodrigues. These are, in addition, to numerous other measures, announced specifically for the island. These will be in addition. They will benefit from all the measures of the Additional Stimulus Package supported by the National Empowerment Fund. Measures have been announced for small farmers, fishermen, SMES and particularly women entrepreneurs. Mr Speaker, Sir, my Government is fully conscious of the difficulties that Rodrigues is facing in the aftermath of the current economic meltdown, less than us, perhaps, but still they are facing these difficulties.
I have noted what hon. Von Mally has said yesterday. He made some proposals. I can tell him that we will look at this in our November Budget. We will see if we can do anything about this. I want to give him the assurance also and to our brothers and sisters in Rodrigues and all those in outer islands like Agalega and St Brandon and all that that my government will stand by them during these hard times.
They have the right to say, yesterday I saw it, I heard him saying that, very late, after hon.Ganoo, that we should speak of the Republic of Mauritius, because they are all citizens of the Republic of Mauritius and my mission is to make sure that each and every one of our citizens get opportunities to live up to his or her god-given potential.
To ensure that all the benefits from the restructuring of the sugar industry benefits all those who are meant to benefit, we have ensured also that small planters and workers join the shareholding of all ventures under the Sugar Sector Reform Plan with 35% shareholding and the Minister of Finance explained that we have already started this.
As for the share in the Energy sector, I must say to the House, Mr Speaker, Sir, although there was, after the initial difficulties, good dialogue between us, but we could not agree with the MSPA on the percentage of shareholding for the energy sector. We were not far, I must say, it is not that they were saying no percentage, but there was a gap which we thought and we agreed in the spirit of dialogue, let’s not say we are right, we do not impose as Government. We don’t say that they are right, let us have an independent consultant, to look at this issue. We had to agree both on the independent consultant, this took a bit of time, but now we have done it, we have come to an agreement on the independent consultant and it is about to start his work.
Mr Speaker, Sir, for what I have said, this is proof that the word ‘solidarity’ is not just a word for us. It means ensuring human dignity especially in times of crisis. Mr Speaker, Sir, we all know the commitment of the Labour Party to education and opportunity. I always say this: at the end of the day –C’est l’éducation qui est la réponse à l’exclusion.
This year, while maintaining free transport for schoolchildren and those attending university, we are building a new university campus – thus creating an additional 8,000 seats for tertiary education. And at the same time we are giving a real boost to our creative Arts.
Mr Speaker, Sir, let me say a few words on Maurice Ile Durable, although it is my colleague, the Deputy Prime Minister who is now at the head of it, engineering it, should I say. I just want to say Mr Speaker, Sir, we all know that the energy sector has been facing daunting challenges in the recent years as a result of climate change and global warming, coupled with increasing energy demand and rising energy prices, but my Government has responded to these challenges by developing the Maurice Ile Durable vision. The word did not exist before, Mr Speaker, Sir. It is an ambitious programme focussing on the use of renewable energy and the emergence of small power producers.
Now Maurice Ile Durable aims primarily at reducing our dependence on fossil fuels that is the primary aim-facilitating our transition to a clean energy economy. However, Mr Speaker, Sir, even the most developed countries they recognise that this will take time, significant effort and massive investments. We, small Mauritius, cannot do this overnight at the risk of curbing growth – on ne peut pas etre plus royaliste que le roi. But, let me reassure the House, I have been in contact with Professor Joel de Rosnay. He is a busy man- who is an eminent scientist as we know. I have taken his advice on board. He has already mentioned to me what we need to do is to have the latest technology in any of these projects. Of course, it is going to cost much more and when it costs much more we must see how the cost will go to those who have to pay. He has mentioned, for example, special filters for the Coventa project. My understanding is I take this from the Deputy Prime Minister that they are already looking to that, even the World Bank is doing some financing, but they are apparently doing it, Mr Speaker, Sir. I will take on board the advice because after all I made him my Adviser on Maurice Ile Durable. It’s not a question of not taking his advice, but what we cannot do, we cannot be plus royaliste que le roi. We cannot take the risk of putting this country into a difficult situation as far as energy is concerned. What we want to do, Mr Speaker, Sir, and I remind Members, that I took the initiative to save the Vallée de Ferney. It would have been an ecological disaster. Many experts agree with me today. As the hon. Jugnauth said, the Government can make mistakes. But, what we want Mr Speaker, Sir, is to ensure that there is no pollution that is going to affect our own the health and of our future generation, that we must minimise to a maximum. Now, if they can do such plants in the centre of New York and Paris, we must make sure naturally, as I said, Mr Speaker, Sir, these adaptations cost a lot money. And if they don’t, if I feel after the advice an adviser is there to advise, Mr Speaker, Sir, but I will take his advice on board at the end of the day that any project will be too dangerous for Mauritius it will not happen. I can tell you this now and here. More importantly, Mr Speaker, Sir, the Maurice Ile Durable vision means a change in our way of thinking, in our approach and in our behaviour. It is culture change that we asking the people of Mauritius to do. Culture change, as President Obama stated, Mr Speaker, Sir and I want to quote him. He said recently: more than anything, it will take a willingness to look past our differences, to act in good faith, to refuse to continue the failures of the past, and to take on this challenge together - for the benefit not just of this generation, but generations to come.” And that is precisely what we want to do. Mr Speaker, Sir, I am please that Mauritian of all creeds, of different socio economic levels, especially the young are rallying behind the Maurice Ile Durable concept and I must congratulate, it is a small thing maybe, but you have no idea how much effect that has done. The Minister Bunwaree, Minister of Education, Culture and Arts who having thought of the idea for the celebration of the Independence to have a small bookmark with all the good things that everyone of us can do to help us to limit carbon emission and to save energy. I can tell you many many many young people, it must be the same for him, have sent messages, emails to say in fact, they are looking for more of these which maybe we will have to print later on. Mr Speaker, Sir, as I said, I am pleased that they are rallying behind this course, this vision. It has aroused a genuine concern for issues related to sustainable development and there is a gradual change in the frame of mind of the business community and the citizens of Mauritius. This is an achievement in itself.
Mr Speaker, Sir, my Government has already made ground breaking effort in the field of energy efficiency and we will continue to do so as far as we can. Perhaps I should mention this because it happened after I met the Director General of UNESCO in Paris last October will continue to do so as far as we can. The University of Mauritius has been engaged actively in research in renewable energy and has set up a Centre for Sustainable Development. As a result of my meetings with him the creation of a UNESCO chair on Sustainable development at the University will be soon materialise. This is another pioneering development which would promote the knowledge base for policy formulation in the field of sustainable development and open the scope for research and development.
One of the pillars of the Maurice Ile Durable vision, Mr Speaker, Sir, is the development of small power producers in the energy sector. This would not only allow us to diversify our energy sources, but also achieve greater democratisation of the economy, to that effect, a grid code has been prepared, this again, in collaboration with Professor de Rosnay. The grid code sets up the technical parameters to allow domestic, industrial and commercial consumers to generate electricity from renewable sources for their own consumption and then they can sell any excess to the CEB.
The business community has responded to the Maurice Ile Durable project, I think, in a positive manner. I am pleased that they have included environmental and energy efficiency schemes in their Corporate Social Responsibility plans.
Mr Speaker, Sir, let me say a few words on law and order. Allow me, Mr Speaker, Sir, to say that in the Government Programme 2005 - 2010, we announced that my Government will take all necessary steps to consolidate law and order and will ensure that law enforcement agencies are provided with the necessary modern equipment and properly trained human resources to be able to fight crime.
Mr Speaker, Sir, our primary purpose is and always will be the safety and security of our citizens and visitors to our island and the protection of our national interests. There can be no compromise on this issue and I don’t think anybody at the head of a country would compromise on such an issue. That is why we are continuing with the reforms of the Police Force which started during my first mandate. In this regard, we have embarked upon a programme for a comprehensive reorganization of the Police Force to reinforce its institutional and operational effectiveness
 Over the years, Mr Speaker, Sir, the Budget allocation of the Police Department has been on the rise. The Budget provision for financial year 2004/2005 was Rs2.8 billion, it went up to Rs 3.5 billion in the Budget 2008/2009 and this Budget provision for the six months, that is, from July to December 2009, it is already Rs2.4 billion. The increase in the Budget allocation of the Police Department is a clear indication of the importance my Government attaches to the law and order situation in the country.
 I must say also the measures put in place to deal with law and order are starting to yield results. We can never be 100% happy, if there is one crime in the country we are not going to be happy, but it is on the downward trend. In fact, we have noted that the overall crime rate has decreased from 5.4% in 2007 to 5.2% in 2008 and we have noted that there is a decrease of 11.8% in the rate of crime and 7.6% in the rate of misdemeanour for the first four months of 2009 compared to the same period last year, that is, 2008. This decreasing trend in overall crime rate, we expect will continue, Mr Speaker, Sir. The world in which the Police are operating today has changed and changed considerably. Technology has removed not only border, but also barriers changes in society have opened up new opportunities, new threats, new challenges and a growing customer culture has led to rising expectations of a customer service. The core role of police is, and will therefore, remain prevention, detection and reduction of crime, which are the main pillars of keeping crime at bay. We have taken, Mr Speaker, Sir, the following additional measures to combat crime in the country. These include:
· Reinforcement of front line policing – I must say the Commissioner of Police, when he came in, he saw the problem, he has moved 300 Police Officers from administrative duties to Police Stations to increase Police presence and visibility.
· Centralization of command of certain small units under Divisional Commanders has been made.
· Redeployment of Field Intelligence Officers under the responsibility of Divisional Commanders with a view to collecting and then distributing intelligence so that information can be reached at the lower level, at the Divisional level, for the purpose of preventing, especially detecting crime.
· The Police is also working in partnership with 57 Government and Non-Governmental Organizations on the elaboration and implementation of programmes aimed at preventing and tackling crime.
· Specialised units of the Force such as the Police du Tourisme, the Police Family Protection Unit, the Anti-Drug and Smuggling Unit, are adopting a coordinated approach in tackling crime. In the past, there was no real coordination.
· Another key element of the strategy adopted by the Police is the involvement of the public at large through the Police Public Partnership Policing Scheme.
As I said, Mr Speaker, Sir, we want to change the Police Force to a Police Service. It takes time to change the mentality also, but we need to embark on that. Gradually, the Police are also shifting from a confession-led investigation to scientific evidence-led investigation, and we now may say that the Police are embarking on a technologically evidence-led investigation and policing. I am not saying that there will be no confession that will be taken into account, but it’s turning towards evidence-led investigation. New technologies are giving us the modern means by which the Police can discharge its duties in an efficient and effective manner. We are sparing no efforts to invest in new technologies with a view to providing the Police with all the necessary tools and space. Mr Speaker, Sir, as part of the modernization process of the Police Force, we have introduced - I know hon. Duval mentioned it - the CCTV Street Surveillance System at Flic en Flac in April this year. I am happy to announce, Mr Speaker, Sir, - and it is very impressive - not only we have installed the cameras, but we have made sure - I have insisted on this - that we don’t want to hear that when there is a crime that on that day, the camera was not working, the TV was blank, all this people have to pay the consequences. If you have responsibility, you have to take your responsibility.
We have seen this in the past. Something happens and you see that the video camera was not working. This won’t work! You have to take responsibility, that is why we have put professionals who know their work, who have designed the system and I can say that already 2 cases, apart from the one case of the rape that we have identified people at the filling station - there were no witnesses - have been resolved: one was a hit and run, I think, accident and the other one was an attack on a tourist and 3 persons have already been identified and arrested.
 In fact, I am sure we will see a dramatic decrease in crime in this area of Flic en Flac, because anybody who goes to visit that place, where they are doing the monitors, would dare to do anything in Flic en Flac because they won’t be missed, believe me, in that area! It is a warning to all those who go there at night, as well.
(Interruption)
That is so Mr Speaker, Sir! We will! I must say, Mr Speaker, Sir, believe it or not, the cases of larceny against tourists has ped by 40 % compared to the same period last year, and we are comparing last year to this year. That is why we are also - we have already planned, but we are going to introduce CCTV Systems in Grand’ Baie, Port Louis with the support of the Chinese Government, which are expected to be operational early next year. Apart from the CCTV System, a modern Digital Radio Communication System will be installed to link up all Police Units and Division because we have to replace the present police radio communication system which is more than 15 years old and from time to time they have technical problems. The design of the system is being finalized in consultation with the Chinese Authorities. In addition, we are having a Coastal Radar Surveillance System which will be installed with the assistance of the Indian Government. In order to improve search and rescue capacity, we have already procured a new twin-engined helicopter for this because it gives us extra possibilities. We are investing heavily in new equipment and vehicles for the Police. We have a programme for the renewal and maintenance of the fleet of vehicles of the Police Force. Hon. Bhawang always asks the question. We are spending Rs79 m. in this Budget for the acquisition of vehicles, more that we have already done. In the near future, the Police Department will also be equipped with a Crime Occurrence Tracking System. This system will allow the police to monitor, if somebody makes a declaration or an occurrence has happened, from the time these are reported, wherever they are reported, at the various Stations, till cases are disposed of, by the courts we will be able to monitor it. As regards human resources, we have ensured that the Police Force has adequate manpower to deal with emerging challenges. Since 2005 to date, some 500 new police constables have been recruited. Currently, a recruitment exercise is on to recruit some 550 Trainee Police Constables. And I can say, Mr Speaker, Sir, that I will be discussing with the Commissioner of Police about how we can improve the recruitment exercise and also the promotion in the Force in the future. It is the Disciplined Forces - people think that it is the Government, or the Prime Minister, in fact, people who work with me sometimes, are complaining about their promotions, I know, from others as well. But we need to have a clearer picture as to why it is happening that way. I am going to have a discussion with him and have said also that Police Officers must have greater security and confidence about their future careers and we must motivate those who perform I think it goes without saying. There are some difficulties in that, but we are trying to see how we can do this. My Government, Mr Speaker, Sir, remains fully committed also to tackle the drug problem in the country. The fight against drug abuse and drug trafficking is an ongoing process, it requires our determined efforts all along - all of us, Mr Speaker, Sir, - We have to work together to tackle the scourge of drugs.
The fight against drug abuse and drug trafficking is an ongoing process. It requires our determined efforts all along from all of us. We have to work together to tackle the scourge of drugs. There are no “quick fixes”, as you know, to the drug problem. Occasionally hon. Members of Parliament send me lists, he is not here at the moment, I think, of places where they say drugs are being distributed. I immediately pass it on to the Police. They try to send a Brigade, but I do not want to go into the details because this may not be a good thing. We are fully conscious of the fact that we must do more if we are to meet our ambition of a society free of the problems caused by drugs. We cannot allow illegal drugs to destroy lives and wipe out the talent and potential that lies unfulfilled in thousands of our young people.
 I have indicated to the House, on various occasions, of the strict control measures being taken by the Police Department at the Port, Airport and the Customs Department to prevent illicit drugs, including Subutex, as you know, we have added this on, from entering the country. There is now better coordination between these agencies. We have also passed the Dangerous Drugs (Amendment) Act 2008 to toughen penalties for drug dealers.
 Allow me to place on record the excellent work done by the Police Department in the recent large scale seizures of drugs that we have seen. This is a clear indication that the measures put in place by my Government are yielding results.
 Mr Speaker, Sir, no country, is immune from international terrorism. We have set up a Counter Terrorism Unit to enhance security of the country. A special cadre of Marine Commandos is being created within the National Coast Guard, but not necessarily all from there. In this respect, I know that 23 Officers are currently undergoing specialized commando training. We are in the process of acquiring specialized equipment for the Marine Commandos from friendly countries. We have also passed the Prevention of Terrorism (International Obligations) Act 2008 to allow adherence to various international counter-terrorism instruments. We are also continuing our training programme with friendly countries such as India, US, UK , France. Another top level French team has arrived this morning in Mauritius and, in fact, I had a working session with them this very morning because they are only here for two days and we need to accelerate these processes.
The Forensic Science Laboratory will be called upon to play a major role in crime detection and investigation where emphasis will be laid on evidence-based investigation, as I was saying, MSP, instead of confession-based investigation. We have therefore to properly staff and equip the FSL so that it can meet the challenge. I must say also that this is not new, the previous Government also gave whatever they needed. But I must say here that I am grateful for the assistance we are receiving from our compatriot, Dr Ramgopal, Pro-Vice Chancellor of Staffordshire University. I did not know him, he volunteered to come and help because, in fact, there is a very well- known Forensic Department in that University. He is going to help us train people.
 We are upgrading the FSL with the acquisition of modern equipment. Since December 2005, new equipment amounting to Rs16.2 m. has been acquired, including necessary equipment for performing DNA tests. Additional professional staff has also been recruited. Relevant training is being provided to that staff. Last year, as I was saying, we had a team of experts from Staffordshire University which came here and they conducted training in the field of forensic science for the benefit of FSL officers, Scene of Crime Officers and Police Investigators. We are coming shortly, I know that this is overdue, but we had some difficulties. But we are coming shortly with the DNA Identification Bill which will offer the Police significant legal powers to use DNA evidence.
Coming to the Prison Service, I just want to say, Mr Speaker, Sir, that the idea for the construction of a modern prison started as far back as 2001, for various reasons it did not materialised. We are now constructing a modern prison at Melrose on a plot of land that could accommodate about 750 detainees. A plot of land, I think, of an extent of 37 arpents has been acquired. Professional services have already been enlisted. Tenders, I believe, will be shortly launched and hopefully there will be no delay and construction works, in fact, are expected to start by the end of this year.
 I should also add, Mr Speaker, Sir, that the existing prisons infrastructure is being upgraded and the new facilities are being put up to improve the living conditions in the prisons. Over the last three years, over Rs22 m. have been spent in this connection. An amount of Rs9 m. has been provided in the current budget for the improvement of the existing conditions.
 I also want to say, Mr Speaker, Sir, what we are doing about the HIV AIDS. During the financial year 2008-2009 the National AIDS Secretariat finalized its institutional setup and built its capacity as well as that of other stakeholders in various fields. It was also successful in mobilizing significant resources to fight against HIV and AIDS from international and bilateral donors. An Institutional Skills and Capacity Assessment of the national multi-sectoral response to HIV/AIDS was carried out under the World Bank IDF Grant. The objective of this assessment was to review the mechanisms and efficiency of country-level coordination and harmonization efforts at the national level, to clarify the mandate and working links with partners and also stakeholders in the fight against HIV/AIDS, and also to assess the implementation arrangements at the decentralized levels. We need to constantly assess and monitor, Mr Speaker, Sir, because this is a real problem and that we have to make sure that we do not have in Mauritius what is happening in Botswana and in other countries.
 I must say that following this assessment, a National Steering Committee has been set up. As we know, the Committee is chaired by Prime Minister’s Office and consists of the Ministries concerned, the Civil Society and a representative of UNDP. The Committee is also responsible for providing policy advice and guidance to the National AIDS Committee. We had a meeting, in fact, last month which I chaired and we are improving certain areas. We have taken on board also Mrs Gaud I think, she comes from the Reunion Island who is extremely good and extremely capable. I met her at the collogue that was organized and she is extremely good and a very good help to the Secretariat. We have others who are actually extremely good at what they are doing and that is encouraging. We have with the World Bank, organized a training in Programme Management for all stakeholders. Some 25 participants from NGOs have actually attended the training which was held over a period of five days.
We are also looking at that problem in the prisons. We all know that questions had been asked in the past about what is happening the in prisons. An assessment of capacity in managing HIV in the prison setting has been carried out with World Bank funding. Following recommendations of this assessment, a Consultant, again funded under the IDF Grant of the World Bank, conducted a four-day training for Prison Officers and Prison Medical Officers on HIV/AIDS, Drugs and Human Rights.
 In October 2008, two consultants, one of which was international and the other one was national, were recruited under the IDF Grant to conduct an assessment of the existing skills and local capacity for Behaviour Analysis and Behavior Change among them. Based on the assessment an operational plan is being developed with the participation of all stakeholders to ensure the optimization of resources allocated in communication. I should also say, Mr Speaker, Sir, as I was mentioning earlier, that monitoring and evaluation is extremely important.
 Under the IDF Grant of the World Bank, an assessment of the existing Monitoring and Evaluation capacity was undertaken and I must say that is why it is important that we continue to assess because capacity gaps were identified in that area. An Action Plan was developed to address these gaps. Training materials were created and the training of the NAS staff and key stakeholders was carried out. A Monitoring and Evaluation Committee has been set up, chaired by the NAS.
 I should also say, Mr Speaker, Sir, that in the call of proposals for Round 8 of the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFTAM), Mauritius was declared to be eligible for HIV, in spite of being classified as an Upper Middle Income Country and this only after I spoke to the Regional Director of the World Bank. I explained to him that you should not go on this basis because, look at what has happened to Botswana! It is a good example! Botswana was also described as not being eligible for aid and they did not get the aid that they should have got and look what happened in Botswana. This is precisely the argument I used with him, I persuaded him and he agreed with me. Now we have are eligible for this aid. Proposals are developed and sent to the GFTAM by Country Coordinating Mechanisms because this is a requirement of the Global Fund.
I am saying this to explain to the hon. Members that this is not just money given and then use as we want, there is a monitoring. I must say Mr Speaker, Sir, this has led to the development of a proposal for a grant of nearly €7.9 m. which is equivalent to around Rs360 m. The proposal was approved by the Global Fund Board as category 1 and the National AIDS Secretariat is in the process of finalising the details of the grant which will be of a period of 5 years, divided into two phases. Again, the NAS has also mobilised US Government funding for technical assistance for setting up the appropriate structures and mechanisms for grant implementation. Again this process will be completed by June 2009 when a grant signature is expected to take place.
And following my initiative with Former President Bill Clinton, Mauritius is continuing to benefit from the provision of Antiretroviral drugs and diagnostics at the lowest possible prices. There is a monitoring mechanism in place and we have just signed a new agreement for this. Because again they have to monitor what we are doing with the money, there are a lot of follow up on this.
Mr Speaker, Sir, I have mentioned all this to show to hon. Members and to the people of the Republic of Mauritius that while we are living in unprecedented difficult times, we have not forgotten about our priorities. Mr Speaker, Sir, we all know, that life is about making choices. In life, as in economics, you have to make tough choices sometimes.
You have to decide you want to buy this but not this. We must also remind people that nothing is free in life, apart from the air we breathe, I think, nothing else.
(Interruptions)
The sooner some learn this, the better Mr Speaker, Sir! We should realise this. If you have to make choices, what you do? you have to prioritise!
Now, we may be wrong in our choices. I do not say that, maybe the Opposition would have had different priorities. But choices have to be made and tough decisions taken. And let me remind hon. Members, because I get the impression, I must say, Mr Speaker, Sir, that hon. Members want us to be so careful, to the point of taking no decision. Sometimes questions are asked, I do not know whether to create doubt in the mind of the public the hon.
Vice Prime Minister thinks so, to make insinuations that there are something anguille sous roche so that in fact, we back pedal and we do not take any decisions. In all decisions, anybody who takes decisions, of course, some decisions be will be wrong. But it is better to take decisions than to take none at all, Mr Speaker, Sir.
What the population expects at the end of the day, is results, not explanations about how procedures blocked us. They are not interested in that, they want to see results infront of them. That is why they voted for and they want to see results, they want us to tackle the problems wherever they are, that is why we have done, Mr Speaker, Sir as for the Procurement Board is concerned. But I must say hon. Ganoo made a good suggestion I took this on board. We have to look at it, but in the meantime we want things to move, we do not want to lose time.
And let me remind those who don’t seem to realise, Mr Speaker, Sir, that we are a small island again in the middle of the Indian Ocean, far away from our main exporters and we have no natural resources like others, no gold, no diamond, no oil, nothing in fact. Except our only resource is our people, so far. This, I must say to hon. Members - I don’t know why, is this done on purpose, is this just because they do not realise because some give the lead and the others just follow blindly. Mauritius this is no Eldorado. It should be patently obvious to anyone with a modicum of good faith and common sense, that we will never be able to do all we want to do. Whatever Government is in power we can never do everything that you like to do, nobody can, not even the USA Mr Speaker, Sir.
The richest country in the world - go and see how many poor, there are begging on the streets of New York, Washington, California, the richest State in the world I think, and look at the situation! I was really surprised and this is whyI want to come to that- about what my good friend, hon. Cuttaree, said about the economy. He criticised the reforms, he says that he does not believe that these reforms were vital to give the economy its resilience and so on.
But I do not whether he knows – I am sure he knows that the financial crisis started not in 2005, but in 2007. Had we - and remember, it kept worsening and has now grown into a full blown unprecedented economic world recession -had we not taken the measures we have taken, how would we have created the fiscal space which allowed us to resist for so long, Mr Speaker, Sir?
We are an open economy, as I have said, with no natural resources. The world does not depend on us, we depend on the world. We have no control on both the things that are happening. And hon. Cuttaree really surprised me when he was speaking I was listened to him in my office. He spoke, Mr Speaker, Sir, as if economies are not static. Bur they do not operate in a vacuum. You know, we all know, economics may be a dismal science, but not a static science. It changes all the time and with globalisation, things change very rapidly.
We all remember what happen in the Asian financial crisis, it developed like this, Mr Speaker, Sir - very quickly. And just to remind him , the proof of the pudding after all is in the eating. If you look at the macro-economic indicators when they were in Government and now. I just give four - I did not intend to do that but since he spoke, I think, I need to say it, I do not whether the vice Prime Minister would have said it, but I think we need. Growth was 2.3% and falling in 2005, it went up since we came to power to 5.3% in 2008, in spite of the world economy recession starting. Unemployment was 9.6% and rising, we brought it down to 7.2%, never before 19,400 jobs created in one year. More than they created in five years, Mr Speaker, Sir. The Budget deficit was 6%. Just imagine with a Budget deficit of 6% we come in with a budget deficit to continue to rise because we have promised - electoral promises – we allowed it to rise and the recession has hit us. What would we have done? What would the Vice-Prime Minister of Finance done? There would have no fiscal space, no flexible credit line for the IMF, on the contrary we would have already been in a recession. And I say 6% Budget deficit, we should not forget Rs6 billion of skeletons parked somewhere else. Now, we brought it roughly to 3%. The public debt, you know and I know, 70% of GDP, Rs10 billion per year of debt brought down to 56.5%. FDI - they were getting Rs1 billion at the most per year we got Rs30 billion in the last three years. You know, I do not want to quote what he said, you knows what he said, we had negative growth, recession in the EPZ for four years, 35,000 people lost their jobs in one year. And he knows what he said, the people are losing their jobs at “la vertigineuse”. In the tourism sector growth it was harbouring around 2%. When hon. Duval took over – and in one time it went even to 13%, if I am not mistaken.
International reserves had gone down and were continuing to go down. All this in spite of the fact that they increased VAT twice over 12 months. We intend to forget this, a large sum of money was transferred from the Bank of Mauritius, easily transferred to help on the Budget, now we know why!
The fact, Mr Speaker, Sir, is that we have done better in an unprecedented recession than the previous Government did when there was not even a hint of a recession. And to correct three misleading statements, I must say that, maybe he did not realise, the IRS, you take great exception when we said that the idea was started by us. They developed it into IRS, I have no quarrel with this. But in fact, the idea was started by us.
(Interruptions)
Listen! They can go and check! We did not do it like they did!
(Interruptions)
No, no they are mistaken again! We started the Permanent Resident Scheme for foreigners to invest in property. It was the first time! They had to invest. The figure has not changed. $500,000! They did not change the figure! $500,000! They had t put that in a Fund, then they could get a permanent Resident Scheme. This would allow them then to invest in property. These are facts! I know they are laughing because they don’t like it, but these are facts!
(Interruptions)
Of course, I am being serious! Go and check because he has lied to himself so much that he has started to believe his own lies! He was not in Government, we were in Government! Hon. Xavier Luc Duval was with me! I am talking about the Government after they left! They were blocking all decisions, and I said ‘go’! Let us do it! You had to go! We have said it. There is a Cabinet paper you can see. We have said the idea was to attract high net worth individuals to Mauritius. If you don’t know, even a brochure was published at the time. Let me say something else, Mr Speaker, Sir. Hon. Cuttaree has forgotten what were they saying then! They were saying – listen to that hon. Ms Deerpalsing – that we are creating ghettos, Mr Speaker, Sir.
(Interruptions)
He said! We have this! Go and look at the papers, and he will see!
(Interruptions)
I did not say that he said! But, he has forgotten that this was being said. That is what I said. I must tell you in all frankness – now, you agree with it – that we had also planned to have a second phase for retired persons to come to Mauritius. We discussed it with hon. Duval, and I told him that the elections are coming near, let us wait after the elections, and we will try to see whether we can do this. I needed to say this.
 He talked about the seafood hub as if it’s their idea. I’ll him what idea it was! He won’t believe it! Not my idea, not his idea, not our idea! The idea started with SSR in the 1970s. Go and see! But, we have developed it and we have also increased it.
 Now the ICT – I am amazed that you still talk of the ICT as their programme, their development. I signed an MoU with Prime Minister Vajpayee in Clarisse House, it was on television. Ministers were there. But then there was election. Remember, they seem to have forgotten! Let me remind him, Prime Minister Manmohan Singh, came to Mauritius put the record straight. He came here before the election of 2005 and he said that we must give credit to Dr. Ramgoolam because he started the project and he gave me credit.
(Interruptions)
I heard that they had even had to change their posters because they had put this on their posters, they changed their posters and there were some very unbecoming remarks made by some Members of the MMM, but I won’t go into that. But then I must tell you, it would not have been at Ebène - that I must agree. We had planned - Dr. Bunwaree knows - to do it in the North of the island at Riche Terre and also we thought it would have created less traffic congestion. We have already started. I need to say this, Mr Speaker, Sir, to put the record straight. But the Government, Mr Speaker, Sir, has done its best in a very difficult situation in an unprecedented global recession.
The hon. Vice-Prime Minister and Minister of Finance, I must say to this House, has discussed with me on a daily basis for hours. We decided it should not be a transition Budget because of what is happening in the world economy, it should be an Action Plan for a long time. We had to work for long hours for this. And I want to congratulate him, Mr Speaker, Sir, for all his efforts. The Opposition might not agree with everything we have done, granted, that is the Opposition’s right, but I must congratulate him for the hard work, for resilience he has shown and the efforts that he himself has shown. Mr Speaker, Sir, we have taken the decisions we have taken, but there are things that we could have done, we did not look for these options.
Le me remind the House we did not increase VAT. We all know, Mr Speaker, Sir, indirect taxes affect whom? It does not affect the very rich. It does not affect the poor because the poor does not have enough to spend so much. It affects the middle class. We have done this to protect the middle class. Some people don’t seem to put this in their head. They keep forgetting. They think of other things. We have not increased VAT, Mr Speaker, Sir.
(Interruptions)
 Exactly what we have done! For the reforms which created the fiscal space that we have done. They increased VAT twice and there was not a hint of recession. Neither have we broadened the VAT base! This was available to us to broaden the VAT base. We have not done this. It was an easy option as receipts for VAT have fallen. It would have been an easy option, but we have not done this. We have not increased income tax, Mr Speaker, Sir. This could have been tempting to do. And let me say something to hon. Members because life is like this. You know by coincidence the Chancellor of Exchequer in the UK has just presented a budget, the Rt. Hon Alistair Darling and ‘The Economist’ of 02 May – I know that the hon. Leader of the Opposition likes to read ‘The Economist’, I hope that he has this issue of ‘The Economist’. I have brought a copy of the article who ever has not read it, I would give it I would even make photocopies free of charge. But he presented his budget and he did in that some of the things that the Opposition is saying we should have done, for example, increase income tax for the upper bracket to 50%. He started giving relief right, left and centre and the article title is “A nasty Brown mess”. Look at what ‘The Economist’ says. I just want to quote this, Mr Speaker, Sir, I won’t take too long. ‘The Economist’ describes the measures thus –
“Britain’s attempts to fill the fiscal gulf created by recession are a dismal failure and a lesson to cash-strapped Governments everywhere”.
And it goes on to say that -
“The best tax systems combine low rates with minimal exemptions. Businesses and citizens should be making decisions based on their economic opportunities, not the advice of their accountants.”
And this is what we have done here, Mr Speaker, Sir. It looks perhaps the way it looks, but I think we have been successful. Here in Mauritius, everyone - I mean everyone - I suppose it is natural, they tend to look at their own particular case. I suppose it is natural. Do you know how many times - my father was Minister of Finance then - I saw him talk to people, whom he knew very well, who were complaining about tax. And he used to say to them – I told that story to the DPM and Minister of Finance - you make money you don’t want to pay tax. Who is going to pay tax then? How are we going to run the country if we have no money? It is natural, but people tend to look at their own particular case. They never look at the big picture. Who do you think honestly are capable to hire the best accountants to find ways of avoiding tax and giving relief left, right and centre? Who are these people? It is the very rich not the middle class! It is the very rich who have the ways and means of doing this. We have also maintained free transport. It is difficult for us, but we have maintained. We have kept the Welfare State – free health/free education – compare this to other countries what they are doing, next door, Seychelles for what they are doing. We have kept universal pensions as I said, increased it, not frozen it. We have kept subsidies on flour and cooking gas. Nobody is mentioning this, Mr Speaker, Sir! We have kept these subsidies. And, as I said, Mr Speaker, Sir, we looked at the situation. We have made choices that we thought are right. We may have to make choices in life even if they are unpalatable. I have always said, there is no magic wand, there is no magic bullet.
I wish, Mr Speaker, Sir, I could have made this Budget Speech against a better back for the world economy.
Unfortunately I cannot. However, given this back, I know that we could not be putting in front of the people of this country a much better Budget, a thought-out Budget. We all agree in life it is like this. Maybe we need to correct things later on, we will do, we will see. Mr Speaker, Sir, I am getting a comparison again. But as a ship’s captain, I can’t alter the weather. No captain in any ship can alter the weather, but what I can do is to ensure that the ship and crew act in a responsible way to maximize safety and ensure success once the storm has passed. And this is what we are doing, Mr Speaker, Sir! This Budget shows the benefits of our past policies, it shows our focus on employment and the long term prospects for growth. The courage and resilience of our country have stood the test of trying times before on many occasions since independence. We owe it to future generations that we bequeath to them that same sense of confidence and optimism that has shaped the destiny of our country. Nowhere in the world has adversity been defeated by gloom and despondency.
We should not talk ourselves into a recession when there is no recession actually. Nowhere in the world has adversity been defeated by gloom and despondency. This is no time for political posturing. This is the time for bold decisions.
Success, Mr Speaker, Sir, does not depend on quick fixes, does not depend on the easy options. When you are in Government, you have to act responsibly. Success, Mr Speaker, Sir, depends on making the right choices even though they might be difficult and then having the strength and the courage to see it through. That is what we are seeking to do and to achieve with this Budget, Mr Speaker, Sir.
Thank you.
Mr Speaker, Sir, first of all, I want to look at the context of the presentation of this Budget. We should all know, and I put emphasis on all, by now that the world economy is experiencing its worst slowdown for nearly 80 years. Since 2007 the world economy has deteriorated and has continued to deteriorate. Problems that originally started in the United States mortgage market have spread and undermined the global financial system. These deep seated problems in the financial system have in turn produced a major macroeconomic crisis.
What was a major financial crisis has turned into a worldwide economic crisis. The world, Mr Speaker, Sir, is now experiencing its worst global recession - even worse than the Great Depression of the 1930’s. This unprecedented recession in turn has brought about a sharp fall in world trade which has spread the recession even to countries which were not involved in the original financial crisis and that includes Mauritius.
It is clear, Mr Speaker, Sir, that we are experiencing a long lasting change in our external environment and it is inevitable that Mauritius will be affected by this continuing - and I put emphasis on continuing, Mr Speaker, Sir - slowdown in the world economy. All the economies of the world have been affected or are being affected, from rich to emerging, from developing to poor. All the economies in the world are being affected. Even China, India and the countries of the European Union have been affected. Mr Speaker, Sir, if countries of their magnitude suffer from the downturn, it is obvious that we cannot be forever spared as the world economic recession deepens for we live as we all know in a globalised world. Unemployment has been rising worldwide. According to the ILO, 100 million people will lose their jobs this year. Another 100 million will fall below the poverty line, dramatically increasing poverty worldwide.
What is worse, Mr Speaker, Sir, most experts not only they did not predict this unprecedented global economic crisis but none can predict how deep it will be or when it will end. There is continuing uncertainty, there is heightened volatility and there is no clarity - nobody can see ahead. The World Bank, the IMF, the OECD, the African Development Bank, the Ministers of Finance of different countries, are all changing their forecasts regularly.
I said during the debate on the Additional Stimulus Package, even the British Chancellor of Exchequer, Rt Hon Alistair Darling himself admitted recently that he was wrong about the length and severity of the recession and that he has been forced to tear up his economic predictions. For members who perhaps do not know, the British Chancellor of Exchequer, has an array of economists - not one, not two - at his beck and call. Not any economist, this is no ordinary team in the Treasury, Mr Speaker, Sir, yet they all got it wrong. And everybody understood this in the United Kingdom, for everyone is aware that there is lack of clarity ahead.
Even as I have said before, Mr Speaker, Sir, Mr Larry Summers, the economic Tsar of President Obama, a former secretary for the Treasury, who was a great believer in the market, who believed that markets should be left alone and that they can be relied upon to regulate themselves, has now changed his views and is urging for massive Government spending to help the banking institutions and various industries which would otherwise close leading to further massive unemployment.
We do not see that everybody in the United States say that “no, no, we should not do that, we should distribute money all over the place.” This is why I find it difficult to understand the logic of the economic arguments of some Members of the Opposition.
Mr Speaker, Sir, who would have thought that General Motors, the icon of the auto industry in the United States, would file for bankruptcy one day, with debt amounting to nearly $55 billion? Not million, but billion dollars, Mr Speaker, Sir. Who would have thought? That’s exactly what happened yesterday with dramatic consequences for employment not only in the United Stated of America, but also in the UK, Germany and Belgium, because General Motors has plants in these countries. People are going to lose their jobs in these countries because General Motors in the United States have filed for bankruptcy.
This is what happens in a globalised world. We are living in a globalised world. I find it hard to believe that Members of Parliament themselves do not realise this, Mr Speaker, Sir. That is what I find difficult to believe. Maybe we do not say that everything we say is right, but there are certain facts that remain facts, Mr Speaker, Sir. Even in Canada where there is no General Motors plant but they are closing down this plant which manufactures parts in Canada. They are also losing their jobs.
Mr Larry Summers -nobody here I am sure will say that is a fool - is known and has a reputation in the United States and worldwide. When Mr Larry Summers was asked: how could he explain that he who believed in the market, that the market was, can be allowed, can be relied upon to control itself, to regulate itself. How can he come around and say that Government should help to put money in banks so that banks can lend to people? Unheard of! And when they said how he can explain this 180˚ change, he simply said “when circumstances change, I change my opinion”.
That is why, Mr Speaker, Sir, we need to be able to abandon old mindsets, live in the real world and adopt a flexible attitude and not resist change to changing circumstances. And that, I find, I must say not all, but most people are not realising this.
We have all seen Mr Speaker, Sir, how the markets failed to regulate themselves in the midst of this major global downturn.
There are indeed many lessons to be learnt about market failures, but it was President Obama who, in his Inaugural Speech, eloquently zoomed in on the fundamental lesson that we must learn and we must keep in mind. Let me quote from that memorable speech. He said –
“The question before us is not whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control – and that a nation cannot prosper long when it favours only the prosperous. The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity on our ability to extend opportunity to every willing heart – not out of charity, but because it is the surest route to our common good.”
That was in his Inaugural Speech, but then, with circumstances that have developed, he has seen to it that there was an urgency to help failing enterprises in the United States, Mr Speaker, Sir. We have to adapt to the changes that are happening in the world.
 Mr Speaker, Sir, we, in the Labour Party, could not agree more with what President Obama said. In fact, this is exactly what the Labour Party has stood for ever since its inception and this is precisely what we have been saying and have been committed to, all the way back to the days of SSR who was a convinced Fabian.
The idea that we have to keep a watchful eye on the market – I said the other day, I coined this phrase: Replace the invisible hand of Adam Smith by the guiding strong, firm hand of the Government. And that economic policy has to reach out to the many and not be restrained to the few. It is also encapsulated in our campaign theme of the 2005, that is, democratisation of the economy.
Mr Speaker, Sir, although what is happening to the world economy is beyond our control, we must continue to adapt our policies to minimise the impact of the world recession on our economy.
For instance, the policies that we have pursued since we were in Government aimed at improving the state of the economy and public finances have helped us weather the early stages of the crisis well.
Everybody knows, Mr Speaker, Sir, that we inherited an economy in serious decline. We have taken bold steps, started bold reforms which have stood us in good stead. Without these reforms, Mr Speaker, Sir, we would have been in a deep recession already. I noted what hon. Cuttaree was saying, because he does not agree with this, and I will come back to that later. We have been ahead of the curve and we have been congratulated by many institutions for having been not only pro-active but also speedily reactive. Reforms have really, we believe it, saved this country from economic chaos.
Although, because of the continuing global recession and we are the first to admit it, we have had to downgrade our growth forecasts for the economy from over 5% to around 2%, this is a smaller decline that most countries are experiencing. In the United States, in the European Union, in China, growth has fallen by substantially more than 5%. Further, because we achieved a decline in Government debt relative to GDP we have in this Budget and the Additional Stimulus measures previously announced been able to create the fiscal space to offer support to firms in a focused effort to try and minimise any increase in unemployment.
Mr Speaker, Sir, let me here say a few words about the assistance we are giving to firms who are experiencing difficulties. The Government, as was pointed out, I think, by the hon. Vice-Prime Minister and Minister of Finance, by others I think also, is not there to dish out money to anyone who asks for money. I think the Vice-Prime Minister and Minister of Tourism, hon. X. L. Duval, said it clearly, the firms should come to Government as a last resort. And when they do, we do not just dish out money, because they are asking for money, we analyse their case and we put conditions. I can tell you that the hon. Vice-Prime Minister and Minister of Finance has had cases where people have asked for money and their demand was rejected. There is no free money to give. This is tax-payers’ money. There is no free money to give. There are conditions attached to giving money, Mr Speaker, Sir.
Now, we know, some may think that this is a golden opportunity to get money from the Government. We are aware of this. There are those, you know, who always complain - always cry wolf - they are always in trouble. Recession or no recession, they are always in trouble. As hon. Duval says, if you have a hotel which is not paying his way for five years, what kind of hotel it is? What kind of business are you? You cannot run your business properly! There are these people, we know this, we are aware of this. Not everyone will do this, but we are trying to help and, of course, there are risks involved. If you do not take any risk – suppose in America President Obama decided: no, no, I am not going to give money to the banks to lend to others, they have been making huge profits, I am not going to help General Motors not to put so many people out of a job, because these are taxpayers’ money, but this is precisely why we do it, because we need to ensure that people, first of all, are not thrown out and do not lose their jobs. This is the most important factor that is pushing all Governments in that direction, Mr Speaker, Sir,
However, let me say this – those who think they can make a quick gain and then disappear – we take guarantees, as well, assets, of course, there are risks. Of course, at the end of the day the assets might not match what is being given, we do not know what kind of tricks have been done with all this. But those who think they will make a quick gain on the back of the taxpayer and disappear, I will ask them to think again, because they will be put on a black list. And believe me, they will find it very difficult to do business again, whoever they are. I don’t think I should say more at this stage, Mr Speaker, Sir, but we are looking at this as well.
This global downturn reinforces in my mind two key lessons, Mr Speaker, Sir –
The first is that economic policy is about long-term changes and development. Precisely, because the economy can be so volatile it is important that Governments plan for the long-term and not just on the basis of what is happening today. It is because we have tried to do this, in fact, that we can offer support to firms and individuals in these difficult times.
Rather than add to the volatility of the economy we have been able to protect people and firms from the economic storm. It is only by pursuing the long-term interests of the economy that we can help people as much as we can in the short-term. Throughout this slowdown and throughout the next upturn it is my intention to continue to build the long-term health of the economy, together with the very able team that I have with me, Mr Speaker, Sir. This will bring again renewed prosperity, but also, more importantly, maximise our chances of surviving the worst global shock the world has known in the last 80 years or so.
The second lesson that has been reinforced is that economic success in Mauritius comes from cohesion. It is important that not only the fruits of economic success are widely shared but so too are the downturns. It is inevitable in the midst of a global recession that profits will fall - inevitably. We have to help firms through this period and make sure that our long run economic success is not jeopardised. But if we help firms we have to make sure that they help their workforce as well, and that is one of the conditions that we have put. I have been encouraged, Mr Speaker, Sir, that the private sector organisations recognise that workers too need protection from the slowdown and this is why in this Budget we have announced all the measures concerning saving jobs and all of which are intended to preserve as much job stability as we can in these challenging times.
This Budget is an Action Plan to face the very daunting challenges of this world economic recession for the next 18 months. I heard hon. Ganoo saying late yesterday, I must say: what kind of Budget is this? It is an Action Plan. No Budget should be an Action Plan! Of course, a Budget lays down the overall strategy of Government, but also lays down the plan ahead, more specifically an Action Plan to save jobs, protect people and prepare for recovery. For recovery will come! Make no mistake! And I hope we are there when the recovery comes, Mr Speaker, Sir.
It is a balance between these three major objectives, this is what we are trying to do -
(1) contain the adverse impact of the continuing recession on our economy
(2) protect the most vulnerable groups in our society, and
(3) protect our environment through the Maurice Ile Durable programme.
We have put Rs4 billion to save jobs, Mr Speaker, Sir Rs2.4 billion to protect people Rs2.7 billion to prepare for recovery.
Given the back for the world economy, Mr Speaker, Sir, it was not an easy feat for the Vice-Prime Minister and Minister of Finance. Our priority has been to protect jobs as I said, to protect the most vulnerable and to prepare Mauritius to take full advantage when the recovery occurs.
This meant that we had to control the fiscal deficit as far as possible. Had we not done so in the past: putting the deficit on a downward trend from 6% of GDP in 2005 when there was no world recession to around 3%, we would have today had no fiscal space to allow us some, if I may call it, “breathing” space in this crisis, Mr Speaker, Sir!
In spite of all this, the fiscal deficit – because we have moved to that stage - is forecast to be 3.9% of GDP now. It is forecast to rise to around 4.8% in 6 months’ time and 5% in 2010 and to fall to 3.3% in 2011 – well within reasonable parameters in such circumstances, Mr Speaker, Sir. Look at what is happening in other countries! They have deficits of 12%, 15% and they are going on bended knees to the IMF. And I say, Mr Speaker, Sir, this is no mean feat, in the face of such unprecedented global crisis. We could have done otherwise. We could have allowed the deficit to run over 6% and do as the Opposition has been saying – give money away to this, to that R10 m here R200 m. there. We could have done that and spend, spend and spend. We could also have done that, especially we are coming to the fourth year of our mandate, we could have done that, but that would be irresponsible and it would not be in the long term interests of the country.
We have been ahead of the curve Mr Speaker, Sir, and we want to stay ahead of the curve. Global capital markets are increasingly not funding large deficits. That is why, as a precautionary measure, we want to secure access to the Flexible Credit Line of the IMF. Now, the IMF, I should say this for some Members, perhaps they don’t realise, has just introduced this contingent credit line which is available to Governments which have met certain criteria, not to any Government. We are in that position precisely because we have managed the economy well.
The access to the Flexible Credit Line of the IMF if we ever need it, Mr Speaker, Sir, is much better than having to go to the IMF in a crisis. We all know what conditions the IMF imposes in such cases. We just have to look around. Look at our neighbour next door, Seychelles! The IMF has imposed radical solutions on them, cut in subsidies amongst others – all sorts of cuts. They had no choice because they were in that precarious situation. We are not in that position, Mr Speaker, Sir, that is why we want to have access to it, if need be. Not only that, the very fact that we have access to it, reassures others that we would not have had access had we not been in a terrible situation.
Not only, Mr Speaker, Sir, we are acting responsibly not to allow our fiscal deficit to rise sharply, but we should also remember that as Governments abroad have intervened to support their banking systems, they are insisting that banks reduce their overseas lending and focus on domestic firms. We have foreign banks here. This is what is happening.
They are being asked to cut the lending in foreign countries and to focus at home, in the domestic market. The result is a sharp fall in foreign lending and this has led to severe problems in many emerging markets as countries like Dubai, Central & Eastern Europe, but Dubai. Go and see what is happening in Dubai, Mr Speaker, Sir!
In fact, the Managing Director of the IMF, Mr Dominique Strauss-Kahn, had predicted that this would inevitably happen and that FDI would dry up for developing countries.
And we should not forget, Mr Speaker, Sir. We seem to forget this. We should not forget that Mauritius is a small open economy, dependent on world trade, exports and investment in the tourism sector. It is in this difficult context that we have presented this Budget. And while acting responsibly, we have made it our priority, as I have said, to protect jobs, to protect the most vulnerable in our society and to prepare us to take full advantage of the recovery.
Mr Speaker, Sir, the best way to fight poverty is to ensure that people have jobs. It’s the best way. We know the saying, Mr Speaker, Sir: ‘don’t give a hungry man a fish everyday, show him how to fish!’. We won’t even have to give him that fish. The Opposition seems to think that we should have given a full compensation in line with inflation for everybody. That is what they are saying.
I must say, perhaps they know they are not saying it, the employers were advocating a total freeze in the wages. Many economists were advocating the same thing. In Singapore, Mr Speaker, Sir, wages were not frozen they were actually reduced because times are difficult. Here, in spite of the unprecedented world recession, we have agreed to abide by the findings of the National Pay Council and those who get up to Rs12,000 have had a wage increase according to a well-known formula, Mr Speaker, Sir, which takes into account both inflation and productivity.
Now, it is essential that we do not compensate just on the basis of inflation. It is not sound economics whatever anyone would say. Mr Speaker, Sir, it is not just a question of income to individuals. The payment of wages and salaries has an economic role that goes beyond the provisions of income to individuals. The Opposition seems to have forgotten how many experts were invited to Mauritius to look at wage compensation. I remember hon. Soodhun who was Minister of Labour then, he was kind enough to invite me as Leader of the Opposition and listened to the experts from Singapore - we all know, there are reports and reports, I don’t know how many in all there are – what they had to say about this ludicrous way we were doing things and they recommended that we should change, we should mend our ways. Surely the Opposition knows of the vicious circle of wages chasing prices – chasing wages – chasing prices. It is a vicious circle and if you just look at inflation on its own, you are just stoking inflation, in fact that is basic economics.
If wage increase is based solely on inflation, it prices people out of jobs and we lose our competitiveness, Mr Speaker, Sir.
That is the naked truth of this. Nobody is going to invest in a country where you compensate workers on the basis of inflation alone without taking into consideration productivity. Don’t forget, as I say, we are a small open economy.
We are far away from the main countries where we export to. Investors do not come to Mauritius because they like the sand, the sea and whatever else. They will go elsewhere if they find their profit is going to be diminished. And firms will close and people will be out of jobs. If we do this compensation just based on inflation, we will achieve two things, Mr Speaker, Sir. They will lose jobs and inflation is going to go up. We must break that circle, and that is what we are doing and in a reasonable formula. We should not be even doing this in normal times, but even more so in such precarious and uncertain times, Mr Speaker, Sir. What we need to do in such times is to ensure that jobs are saved and that enterprises, as far as possible, do not close down. There are some enterprises which do not manage properly, which have a very low productivity, which are now trying to see if they can get help from the Government. They will not, because we are not going to save firms just for a short while. What we want is to help firms which can actually recover and continue to operate. That is why, Mr Speaker, Sir, we must continue with our policy to democratise the economy because I believe very strongly that we have to have more players in the economy and allow more competition. We have named the members of the Competition Commission just a few days ago. We must extend the economic base because that is the way to increase prosperity. Everybody must be a stakeholder in the economy. That is the way forward. That is why we have set up a new Fund, The Saving Jobs & Recovery Fund. As I said, Mr Speaker, Sir, we have put Rs4 billion just to save jobs and Rs2.7 billion to prepare for the recovery.
The Vice-Prime Minister & Minister of Finance has mentioned in his speech all the measures we have taken to assist the Small & Medium Enterprises and our main export industries. I don’t want to go through that list again. At the same time, once again, we have catered for those who are most vulnerable. And, Mr Speaker, Sir, when we speak of those who are most vulnerable, people don’t realise that many women fall in the vulnerable groups. That is why we have made a special effort on our gender-based policies, not only to help those who are vulnerable, but also to empower them.
(1) The allowance, for example, for single mothers has been increased by 40% from Rs700 to Rs1000, that is, 40% increase, Mr Speaker, Sir. And they will continue to benefit from social aid as before with a cut off naturally at Rs7,500 which is exclusive, I must say, of this allowance, and again also we have raised the age limit for the child, which was 5 years to 7 years
(2) The allowances payable under the social aid to abandoned women and their children has been increased by 10%
(3) We have increased income support by 15% and I can tell you, we have worked out the figures, around 100,000 people are going to benefit from this
(4) We are accelerating the training and re-skilling of women through the National Empowerment Foundation. I can say that since 2005, when we started this, more than 7,000 people have actually benefitted from this
(5) I am amazed to say that everybody - on both sides I must say - is saying that we have not increased universal pensions for the old, for the widows, orphans and disabled. Even my good friend, hon. Jhugroo, was saying that I had said that I would double it. He was reading the wrong newspaper, that was in 2005. But we have actually increased the pension. That is what I said. We have increased it, perhaps not as much as some would like, but we have actually increased it, Mr Speaker, Sir.
(6) We have also helped the CHA occupiers to become owners. Mr Speaker, Sir, very nearly 20,000 people have benefitted from this measure and this includes people in Agalega. We have also given money to improve the infrastructure of the NHDC housing, also the one, I should say, in Rose Hill.
(Interruptions)
I am saying that even though it is in the hon. Leader of the Opposition’s constituency, we have done it, because we are not going to treat people because of constituency, as hon. Lesjongard, sometimes believes. We look at people - when they are poor, they are poor – wherever they are. We cannot treat people differently by constituencies because they voted for the Opposition or whatever. Poor people are poor people! We have to help them wherever they are! This is to name, but a few of the measures we have taken, Mr Speaker, Sir.
Similarly, Mr Speaker, Sir, for those who are in the Agro-Industry. I will not go through the items, but I want to say because very often I hear about these 60 tonnes that we have taken away from tax relief and the 4 x 4. There is a constant – even my colleague tells me this - reminder that this is wrong. I will come to that later. But we have done other things. It is a balance, as I say.
(1) We have put Rs700 million for small planters – for irrigation, derocking and land preparation
(2) We have reduced by 20% the contribution of small planters to cess because we think it was unfair. This is equivalent to about Rs60 m. over two years
(3) The Food Security Fund will contribute Rs350 m. to fund various projects for small farmers, breeders and fishermen
(4) Government is introducing a Food Crop Insurance Scheme for small crop planters – Rs15 m. are being provided under this scheme which will benefit some 2,000 small food planters
(5) Rs45 m. have been provided for the setting up of three dairy farms and we expect that they will produce about 700,000 litres of milk by 2010
(6) We have provided nearly Rs300 m. for pig breeders. After the swine fever epidemic, lots of things have been done for the small breeders
(7) The Fishermen Investment Trust will finance new activities for artisanal fishermen. Furthermore, Rs28 m. will be provided to finance fibreglass boats for off-lagoon fishing
Rs45 m. have been earmarked to finance various medium-sized projects such as fish processing, aquaculture and purchase of fishing boats, and
(8) The Maritime Training Academy will be extended to Rodriguan fishermen. While Rodriguans will also share the benefits that we have in Mauritius. Eleven measures have been mentioned by the Vice-Prime Minister and Minister of Finance for them.
One thing that I noted when the hon. Leader of the Opposition said it, I think it is a good – I am not going to give any indication – suggestion because we did it at the time in essence of modernizing things. But the agricultural sector is a big sector. He mentioned in his speech that we should – he made this directed to me, I think - look at the Minister in charge of fisheries. I think it is a good suggestion. I will look into it.
(Interruptions)
I took this on board, Mr Speaker, Sir, because we look at the experience. It is a huge Ministry.
Mr Speaker, Sir, many of the measures enunciated in the Budget will of course apply to Rodrigues. These are, in addition, to numerous other measures, announced specifically for the island. These will be in addition. They will benefit from all the measures of the Additional Stimulus Package supported by the National Empowerment Fund. Measures have been announced for small farmers, fishermen, SMES and particularly women entrepreneurs. Mr Speaker, Sir, my Government is fully conscious of the difficulties that Rodrigues is facing in the aftermath of the current economic meltdown, less than us, perhaps, but still they are facing these difficulties.
I have noted what hon. Von Mally has said yesterday. He made some proposals. I can tell him that we will look at this in our November Budget. We will see if we can do anything about this. I want to give him the assurance also and to our brothers and sisters in Rodrigues and all those in outer islands like Agalega and St Brandon and all that that my government will stand by them during these hard times.
They have the right to say, yesterday I saw it, I heard him saying that, very late, after hon.Ganoo, that we should speak of the Republic of Mauritius, because they are all citizens of the Republic of Mauritius and my mission is to make sure that each and every one of our citizens get opportunities to live up to his or her god-given potential.
To ensure that all the benefits from the restructuring of the sugar industry benefits all those who are meant to benefit, we have ensured also that small planters and workers join the shareholding of all ventures under the Sugar Sector Reform Plan with 35% shareholding and the Minister of Finance explained that we have already started this.
As for the share in the Energy sector, I must say to the House, Mr Speaker, Sir, although there was, after the initial difficulties, good dialogue between us, but we could not agree with the MSPA on the percentage of shareholding for the energy sector. We were not far, I must say, it is not that they were saying no percentage, but there was a gap which we thought and we agreed in the spirit of dialogue, let’s not say we are right, we do not impose as Government. We don’t say that they are right, let us have an independent consultant, to look at this issue. We had to agree both on the independent consultant, this took a bit of time, but now we have done it, we have come to an agreement on the independent consultant and it is about to start his work.
Mr Speaker, Sir, for what I have said, this is proof that the word ‘solidarity’ is not just a word for us. It means ensuring human dignity especially in times of crisis. Mr Speaker, Sir, we all know the commitment of the Labour Party to education and opportunity. I always say this: at the end of the day –C’est l’éducation qui est la réponse à l’exclusion.
This year, while maintaining free transport for schoolchildren and those attending university, we are building a new university campus – thus creating an additional 8,000 seats for tertiary education. And at the same time we are giving a real boost to our creative Arts.
Mr Speaker, Sir, let me say a few words on Maurice Ile Durable, although it is my colleague, the Deputy Prime Minister who is now at the head of it, engineering it, should I say. I just want to say Mr Speaker, Sir, we all know that the energy sector has been facing daunting challenges in the recent years as a result of climate change and global warming, coupled with increasing energy demand and rising energy prices, but my Government has responded to these challenges by developing the Maurice Ile Durable vision. The word did not exist before, Mr Speaker, Sir. It is an ambitious programme focussing on the use of renewable energy and the emergence of small power producers.
Now Maurice Ile Durable aims primarily at reducing our dependence on fossil fuels that is the primary aim-facilitating our transition to a clean energy economy. However, Mr Speaker, Sir, even the most developed countries they recognise that this will take time, significant effort and massive investments. We, small Mauritius, cannot do this overnight at the risk of curbing growth – on ne peut pas etre plus royaliste que le roi. But, let me reassure the House, I have been in contact with Professor Joel de Rosnay. He is a busy man- who is an eminent scientist as we know. I have taken his advice on board. He has already mentioned to me what we need to do is to have the latest technology in any of these projects. Of course, it is going to cost much more and when it costs much more we must see how the cost will go to those who have to pay. He has mentioned, for example, special filters for the Coventa project. My understanding is I take this from the Deputy Prime Minister that they are already looking to that, even the World Bank is doing some financing, but they are apparently doing it, Mr Speaker, Sir. I will take on board the advice because after all I made him my Adviser on Maurice Ile Durable. It’s not a question of not taking his advice, but what we cannot do, we cannot be plus royaliste que le roi. We cannot take the risk of putting this country into a difficult situation as far as energy is concerned. What we want to do, Mr Speaker, Sir, and I remind Members, that I took the initiative to save the Vallée de Ferney. It would have been an ecological disaster. Many experts agree with me today. As the hon. Jugnauth said, the Government can make mistakes. But, what we want Mr Speaker, Sir, is to ensure that there is no pollution that is going to affect our own the health and of our future generation, that we must minimise to a maximum. Now, if they can do such plants in the centre of New York and Paris, we must make sure naturally, as I said, Mr Speaker, Sir, these adaptations cost a lot money. And if they don’t, if I feel after the advice an adviser is there to advise, Mr Speaker, Sir, but I will take his advice on board at the end of the day that any project will be too dangerous for Mauritius it will not happen. I can tell you this now and here. More importantly, Mr Speaker, Sir, the Maurice Ile Durable vision means a change in our way of thinking, in our approach and in our behaviour. It is culture change that we asking the people of Mauritius to do. Culture change, as President Obama stated, Mr Speaker, Sir and I want to quote him. He said recently: more than anything, it will take a willingness to look past our differences, to act in good faith, to refuse to continue the failures of the past, and to take on this challenge together - for the benefit not just of this generation, but generations to come.” And that is precisely what we want to do. Mr Speaker, Sir, I am please that Mauritian of all creeds, of different socio economic levels, especially the young are rallying behind the Maurice Ile Durable concept and I must congratulate, it is a small thing maybe, but you have no idea how much effect that has done. The Minister Bunwaree, Minister of Education, Culture and Arts who having thought of the idea for the celebration of the Independence to have a small bookmark with all the good things that everyone of us can do to help us to limit carbon emission and to save energy. I can tell you many many many young people, it must be the same for him, have sent messages, emails to say in fact, they are looking for more of these which maybe we will have to print later on. Mr Speaker, Sir, as I said, I am pleased that they are rallying behind this course, this vision. It has aroused a genuine concern for issues related to sustainable development and there is a gradual change in the frame of mind of the business community and the citizens of Mauritius. This is an achievement in itself.
Mr Speaker, Sir, my Government has already made ground breaking effort in the field of energy efficiency and we will continue to do so as far as we can. Perhaps I should mention this because it happened after I met the Director General of UNESCO in Paris last October will continue to do so as far as we can. The University of Mauritius has been engaged actively in research in renewable energy and has set up a Centre for Sustainable Development. As a result of my meetings with him the creation of a UNESCO chair on Sustainable development at the University will be soon materialise. This is another pioneering development which would promote the knowledge base for policy formulation in the field of sustainable development and open the scope for research and development.
One of the pillars of the Maurice Ile Durable vision, Mr Speaker, Sir, is the development of small power producers in the energy sector. This would not only allow us to diversify our energy sources, but also achieve greater democratisation of the economy, to that effect, a grid code has been prepared, this again, in collaboration with Professor de Rosnay. The grid code sets up the technical parameters to allow domestic, industrial and commercial consumers to generate electricity from renewable sources for their own consumption and then they can sell any excess to the CEB.
The business community has responded to the Maurice Ile Durable project, I think, in a positive manner. I am pleased that they have included environmental and energy efficiency schemes in their Corporate Social Responsibility plans.
Mr Speaker, Sir, let me say a few words on law and order. Allow me, Mr Speaker, Sir, to say that in the Government Programme 2005 - 2010, we announced that my Government will take all necessary steps to consolidate law and order and will ensure that law enforcement agencies are provided with the necessary modern equipment and properly trained human resources to be able to fight crime.
Mr Speaker, Sir, our primary purpose is and always will be the safety and security of our citizens and visitors to our island and the protection of our national interests. There can be no compromise on this issue and I don’t think anybody at the head of a country would compromise on such an issue. That is why we are continuing with the reforms of the Police Force which started during my first mandate. In this regard, we have embarked upon a programme for a comprehensive reorganization of the Police Force to reinforce its institutional and operational effectiveness
 Over the years, Mr Speaker, Sir, the Budget allocation of the Police Department has been on the rise. The Budget provision for financial year 2004/2005 was Rs2.8 billion, it went up to Rs 3.5 billion in the Budget 2008/2009 and this Budget provision for the six months, that is, from July to December 2009, it is already Rs2.4 billion. The increase in the Budget allocation of the Police Department is a clear indication of the importance my Government attaches to the law and order situation in the country.
 I must say also the measures put in place to deal with law and order are starting to yield results. We can never be 100% happy, if there is one crime in the country we are not going to be happy, but it is on the downward trend. In fact, we have noted that the overall crime rate has decreased from 5.4% in 2007 to 5.2% in 2008 and we have noted that there is a decrease of 11.8% in the rate of crime and 7.6% in the rate of misdemeanour for the first four months of 2009 compared to the same period last year, that is, 2008. This decreasing trend in overall crime rate, we expect will continue, Mr Speaker, Sir. The world in which the Police are operating today has changed and changed considerably. Technology has removed not only border, but also barriers changes in society have opened up new opportunities, new threats, new challenges and a growing customer culture has led to rising expectations of a customer service. The core role of police is, and will therefore, remain prevention, detection and reduction of crime, which are the main pillars of keeping crime at bay. We have taken, Mr Speaker, Sir, the following additional measures to combat crime in the country. These include:
· Reinforcement of front line policing – I must say the Commissioner of Police, when he came in, he saw the problem, he has moved 300 Police Officers from administrative duties to Police Stations to increase Police presence and visibility.
· Centralization of command of certain small units under Divisional Commanders has been made.
· Redeployment of Field Intelligence Officers under the responsibility of Divisional Commanders with a view to collecting and then distributing intelligence so that information can be reached at the lower level, at the Divisional level, for the purpose of preventing, especially detecting crime.
· The Police is also working in partnership with 57 Government and Non-Governmental Organizations on the elaboration and implementation of programmes aimed at preventing and tackling crime.
· Specialised units of the Force such as the Police du Tourisme, the Police Family Protection Unit, the Anti-Drug and Smuggling Unit, are adopting a coordinated approach in tackling crime. In the past, there was no real coordination.
· Another key element of the strategy adopted by the Police is the involvement of the public at large through the Police Public Partnership Policing Scheme.
As I said, Mr Speaker, Sir, we want to change the Police Force to a Police Service. It takes time to change the mentality also, but we need to embark on that. Gradually, the Police are also shifting from a confession-led investigation to scientific evidence-led investigation, and we now may say that the Police are embarking on a technologically evidence-led investigation and policing. I am not saying that there will be no confession that will be taken into account, but it’s turning towards evidence-led investigation. New technologies are giving us the modern means by which the Police can discharge its duties in an efficient and effective manner. We are sparing no efforts to invest in new technologies with a view to providing the Police with all the necessary tools and space. Mr Speaker, Sir, as part of the modernization process of the Police Force, we have introduced - I know hon. Duval mentioned it - the CCTV Street Surveillance System at Flic en Flac in April this year. I am happy to announce, Mr Speaker, Sir, - and it is very impressive - not only we have installed the cameras, but we have made sure - I have insisted on this - that we don’t want to hear that when there is a crime that on that day, the camera was not working, the TV was blank, all this people have to pay the consequences. If you have responsibility, you have to take your responsibility.
We have seen this in the past. Something happens and you see that the video camera was not working. This won’t work! You have to take responsibility, that is why we have put professionals who know their work, who have designed the system and I can say that already 2 cases, apart from the one case of the rape that we have identified people at the filling station - there were no witnesses - have been resolved: one was a hit and run, I think, accident and the other one was an attack on a tourist and 3 persons have already been identified and arrested.
 In fact, I am sure we will see a dramatic decrease in crime in this area of Flic en Flac, because anybody who goes to visit that place, where they are doing the monitors, would dare to do anything in Flic en Flac because they won’t be missed, believe me, in that area! It is a warning to all those who go there at night, as well.
(Interruption)
That is so Mr Speaker, Sir! We will! I must say, Mr Speaker, Sir, believe it or not, the cases of larceny against tourists has ped by 40 % compared to the same period last year, and we are comparing last year to this year. That is why we are also - we have already planned, but we are going to introduce CCTV Systems in Grand’ Baie, Port Louis with the support of the Chinese Government, which are expected to be operational early next year. Apart from the CCTV System, a modern Digital Radio Communication System will be installed to link up all Police Units and Division because we have to replace the present police radio communication system which is more than 15 years old and from time to time they have technical problems. The design of the system is being finalized in consultation with the Chinese Authorities. In addition, we are having a Coastal Radar Surveillance System which will be installed with the assistance of the Indian Government. In order to improve search and rescue capacity, we have already procured a new twin-engined helicopter for this because it gives us extra possibilities. We are investing heavily in new equipment and vehicles for the Police. We have a programme for the renewal and maintenance of the fleet of vehicles of the Police Force. Hon. Bhawang always asks the question. We are spending Rs79 m. in this Budget for the acquisition of vehicles, more that we have already done. In the near future, the Police Department will also be equipped with a Crime Occurrence Tracking System. This system will allow the police to monitor, if somebody makes a declaration or an occurrence has happened, from the time these are reported, wherever they are reported, at the various Stations, till cases are disposed of, by the courts we will be able to monitor it. As regards human resources, we have ensured that the Police Force has adequate manpower to deal with emerging challenges. Since 2005 to date, some 500 new police constables have been recruited. Currently, a recruitment exercise is on to recruit some 550 Trainee Police Constables. And I can say, Mr Speaker, Sir, that I will be discussing with the Commissioner of Police about how we can improve the recruitment exercise and also the promotion in the Force in the future. It is the Disciplined Forces - people think that it is the Government, or the Prime Minister, in fact, people who work with me sometimes, are complaining about their promotions, I know, from others as well. But we need to have a clearer picture as to why it is happening that way. I am going to have a discussion with him and have said also that Police Officers must have greater security and confidence about their future careers and we must motivate those who perform I think it goes without saying. There are some difficulties in that, but we are trying to see how we can do this. My Government, Mr Speaker, Sir, remains fully committed also to tackle the drug problem in the country. The fight against drug abuse and drug trafficking is an ongoing process, it requires our determined efforts all along - all of us, Mr Speaker, Sir, - We have to work together to tackle the scourge of drugs.
The fight against drug abuse and drug trafficking is an ongoing process. It requires our determined efforts all along from all of us. We have to work together to tackle the scourge of drugs. There are no “quick fixes”, as you know, to the drug problem. Occasionally hon. Members of Parliament send me lists, he is not here at the moment, I think, of places where they say drugs are being distributed. I immediately pass it on to the Police. They try to send a Brigade, but I do not want to go into the details because this may not be a good thing. We are fully conscious of the fact that we must do more if we are to meet our ambition of a society free of the problems caused by drugs. We cannot allow illegal drugs to destroy lives and wipe out the talent and potential that lies unfulfilled in thousands of our young people.
 I have indicated to the House, on various occasions, of the strict control measures being taken by the Police Department at the Port, Airport and the Customs Department to prevent illicit drugs, including Subutex, as you know, we have added this on, from entering the country. There is now better coordination between these agencies. We have also passed the Dangerous Drugs (Amendment) Act 2008 to toughen penalties for drug dealers.
 Allow me to place on record the excellent work done by the Police Department in the recent large scale seizures of drugs that we have seen. This is a clear indication that the measures put in place by my Government are yielding results.
 Mr Speaker, Sir, no country, is immune from international terrorism. We have set up a Counter Terrorism Unit to enhance security of the country. A special cadre of Marine Commandos is being created within the National Coast Guard, but not necessarily all from there. In this respect, I know that 23 Officers are currently undergoing specialized commando training. We are in the process of acquiring specialized equipment for the Marine Commandos from friendly countries. We have also passed the Prevention of Terrorism (International Obligations) Act 2008 to allow adherence to various international counter-terrorism instruments. We are also continuing our training programme with friendly countries such as India, US, UK , France. Another top level French team has arrived this morning in Mauritius and, in fact, I had a working session with them this very morning because they are only here for two days and we need to accelerate these processes.
The Forensic Science Laboratory will be called upon to play a major role in crime detection and investigation where emphasis will be laid on evidence-based investigation, as I was saying, MSP, instead of confession-based investigation. We have therefore to properly staff and equip the FSL so that it can meet the challenge. I must say also that this is not new, the previous Government also gave whatever they needed. But I must say here that I am grateful for the assistance we are receiving from our compatriot, Dr Ramgopal, Pro-Vice Chancellor of Staffordshire University. I did not know him, he volunteered to come and help because, in fact, there is a very well- known Forensic Department in that University. He is going to help us train people.
 We are upgrading the FSL with the acquisition of modern equipment. Since December 2005, new equipment amounting to Rs16.2 m. has been acquired, including necessary equipment for performing DNA tests. Additional professional staff has also been recruited. Relevant training is being provided to that staff. Last year, as I was saying, we had a team of experts from Staffordshire University which came here and they conducted training in the field of forensic science for the benefit of FSL officers, Scene of Crime Officers and Police Investigators. We are coming shortly, I know that this is overdue, but we had some difficulties. But we are coming shortly with the DNA Identification Bill which will offer the Police significant legal powers to use DNA evidence.
Coming to the Prison Service, I just want to say, Mr Speaker, Sir, that the idea for the construction of a modern prison started as far back as 2001, for various reasons it did not materialised. We are now constructing a modern prison at Melrose on a plot of land that could accommodate about 750 detainees. A plot of land, I think, of an extent of 37 arpents has been acquired. Professional services have already been enlisted. Tenders, I believe, will be shortly launched and hopefully there will be no delay and construction works, in fact, are expected to start by the end of this year.
 I should also add, Mr Speaker, Sir, that the existing prisons infrastructure is being upgraded and the new facilities are being put up to improve the living conditions in the prisons. Over the last three years, over Rs22 m. have been spent in this connection. An amount of Rs9 m. has been provided in the current budget for the improvement of the existing conditions.
 I also want to say, Mr Speaker, Sir, what we are doing about the HIV AIDS. During the financial year 2008-2009 the National AIDS Secretariat finalized its institutional setup and built its capacity as well as that of other stakeholders in various fields. It was also successful in mobilizing significant resources to fight against HIV and AIDS from international and bilateral donors. An Institutional Skills and Capacity Assessment of the national multi-sectoral response to HIV/AIDS was carried out under the World Bank IDF Grant. The objective of this assessment was to review the mechanisms and efficiency of country-level coordination and harmonization efforts at the national level, to clarify the mandate and working links with partners and also stakeholders in the fight against HIV/AIDS, and also to assess the implementation arrangements at the decentralized levels. We need to constantly assess and monitor, Mr Speaker, Sir, because this is a real problem and that we have to make sure that we do not have in Mauritius what is happening in Botswana and in other countries.
 I must say that following this assessment, a National Steering Committee has been set up. As we know, the Committee is chaired by Prime Minister’s Office and consists of the Ministries concerned, the Civil Society and a representative of UNDP. The Committee is also responsible for providing policy advice and guidance to the National AIDS Committee. We had a meeting, in fact, last month which I chaired and we are improving certain areas. We have taken on board also Mrs Gaud I think, she comes from the Reunion Island who is extremely good and extremely capable. I met her at the collogue that was organized and she is extremely good and a very good help to the Secretariat. We have others who are actually extremely good at what they are doing and that is encouraging. We have with the World Bank, organized a training in Programme Management for all stakeholders. Some 25 participants from NGOs have actually attended the training which was held over a period of five days.
We are also looking at that problem in the prisons. We all know that questions had been asked in the past about what is happening the in prisons. An assessment of capacity in managing HIV in the prison setting has been carried out with World Bank funding. Following recommendations of this assessment, a Consultant, again funded under the IDF Grant of the World Bank, conducted a four-day training for Prison Officers and Prison Medical Officers on HIV/AIDS, Drugs and Human Rights.
 In October 2008, two consultants, one of which was international and the other one was national, were recruited under the IDF Grant to conduct an assessment of the existing skills and local capacity for Behaviour Analysis and Behavior Change among them. Based on the assessment an operational plan is being developed with the participation of all stakeholders to ensure the optimization of resources allocated in communication. I should also say, Mr Speaker, Sir, as I was mentioning earlier, that monitoring and evaluation is extremely important.
 Under the IDF Grant of the World Bank, an assessment of the existing Monitoring and Evaluation capacity was undertaken and I must say that is why it is important that we continue to assess because capacity gaps were identified in that area. An Action Plan was developed to address these gaps. Training materials were created and the training of the NAS staff and key stakeholders was carried out. A Monitoring and Evaluation Committee has been set up, chaired by the NAS.
 I should also say, Mr Speaker, Sir, that in the call of proposals for Round 8 of the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFTAM), Mauritius was declared to be eligible for HIV, in spite of being classified as an Upper Middle Income Country and this only after I spoke to the Regional Director of the World Bank. I explained to him that you should not go on this basis because, look at what has happened to Botswana! It is a good example! Botswana was also described as not being eligible for aid and they did not get the aid that they should have got and look what happened in Botswana. This is precisely the argument I used with him, I persuaded him and he agreed with me. Now we have are eligible for this aid. Proposals are developed and sent to the GFTAM by Country Coordinating Mechanisms because this is a requirement of the Global Fund.
I am saying this to explain to the hon. Members that this is not just money given and then use as we want, there is a monitoring. I must say Mr Speaker, Sir, this has led to the development of a proposal for a grant of nearly €7.9 m. which is equivalent to around Rs360 m. The proposal was approved by the Global Fund Board as category 1 and the National AIDS Secretariat is in the process of finalising the details of the grant which will be of a period of 5 years, divided into two phases. Again, the NAS has also mobilised US Government funding for technical assistance for setting up the appropriate structures and mechanisms for grant implementation. Again this process will be completed by June 2009 when a grant signature is expected to take place.
And following my initiative with Former President Bill Clinton, Mauritius is continuing to benefit from the provision of Antiretroviral drugs and diagnostics at the lowest possible prices. There is a monitoring mechanism in place and we have just signed a new agreement for this. Because again they have to monitor what we are doing with the money, there are a lot of follow up on this.
Mr Speaker, Sir, I have mentioned all this to show to hon. Members and to the people of the Republic of Mauritius that while we are living in unprecedented difficult times, we have not forgotten about our priorities. Mr Speaker, Sir, we all know, that life is about making choices. In life, as in economics, you have to make tough choices sometimes.
You have to decide you want to buy this but not this. We must also remind people that nothing is free in life, apart from the air we breathe, I think, nothing else.
(Interruptions)
The sooner some learn this, the better Mr Speaker, Sir! We should realise this. If you have to make choices, what you do? you have to prioritise!
Now, we may be wrong in our choices. I do not say that, maybe the Opposition would have had different priorities. But choices have to be made and tough decisions taken. And let me remind hon. Members, because I get the impression, I must say, Mr Speaker, Sir, that hon. Members want us to be so careful, to the point of taking no decision. Sometimes questions are asked, I do not know whether to create doubt in the mind of the public the hon.
Vice Prime Minister thinks so, to make insinuations that there are something anguille sous roche so that in fact, we back pedal and we do not take any decisions. In all decisions, anybody who takes decisions, of course, some decisions be will be wrong. But it is better to take decisions than to take none at all, Mr Speaker, Sir.
What the population expects at the end of the day, is results, not explanations about how procedures blocked us. They are not interested in that, they want to see results infront of them. That is why they voted for and they want to see results, they want us to tackle the problems wherever they are, that is why we have done, Mr Speaker, Sir as for the Procurement Board is concerned. But I must say hon. Ganoo made a good suggestion I took this on board. We have to look at it, but in the meantime we want things to move, we do not want to lose time.
And let me remind those who don’t seem to realise, Mr Speaker, Sir, that we are a small island again in the middle of the Indian Ocean, far away from our main exporters and we have no natural resources like others, no gold, no diamond, no oil, nothing in fact. Except our only resource is our people, so far. This, I must say to hon. Members - I don’t know why, is this done on purpose, is this just because they do not realise because some give the lead and the others just follow blindly. Mauritius this is no Eldorado. It should be patently obvious to anyone with a modicum of good faith and common sense, that we will never be able to do all we want to do. Whatever Government is in power we can never do everything that you like to do, nobody can, not even the USA Mr Speaker, Sir.
The richest country in the world - go and see how many poor, there are begging on the streets of New York, Washington, California, the richest State in the world I think, and look at the situation! I was really surprised and this is whyI want to come to that- about what my good friend, hon. Cuttaree, said about the economy. He criticised the reforms, he says that he does not believe that these reforms were vital to give the economy its resilience and so on.
But I do not whether he knows – I am sure he knows that the financial crisis started not in 2005, but in 2007. Had we - and remember, it kept worsening and has now grown into a full blown unprecedented economic world recession -had we not taken the measures we have taken, how would we have created the fiscal space which allowed us to resist for so long, Mr Speaker, Sir?
We are an open economy, as I have said, with no natural resources. The world does not depend on us, we depend on the world. We have no control on both the things that are happening. And hon. Cuttaree really surprised me when he was speaking I was listened to him in my office. He spoke, Mr Speaker, Sir, as if economies are not static. Bur they do not operate in a vacuum. You know, we all know, economics may be a dismal science, but not a static science. It changes all the time and with globalisation, things change very rapidly.
We all remember what happen in the Asian financial crisis, it developed like this, Mr Speaker, Sir - very quickly. And just to remind him , the proof of the pudding after all is in the eating. If you look at the macro-economic indicators when they were in Government and now. I just give four - I did not intend to do that but since he spoke, I think, I need to say it, I do not whether the vice Prime Minister would have said it, but I think we need. Growth was 2.3% and falling in 2005, it went up since we came to power to 5.3% in 2008, in spite of the world economy recession starting. Unemployment was 9.6% and rising, we brought it down to 7.2%, never before 19,400 jobs created in one year. More than they created in five years, Mr Speaker, Sir. The Budget deficit was 6%. Just imagine with a Budget deficit of 6% we come in with a budget deficit to continue to rise because we have promised - electoral promises – we allowed it to rise and the recession has hit us. What would we have done? What would the Vice-Prime Minister of Finance done? There would have no fiscal space, no flexible credit line for the IMF, on the contrary we would have already been in a recession. And I say 6% Budget deficit, we should not forget Rs6 billion of skeletons parked somewhere else. Now, we brought it roughly to 3%. The public debt, you know and I know, 70% of GDP, Rs10 billion per year of debt brought down to 56.5%. FDI - they were getting Rs1 billion at the most per year we got Rs30 billion in the last three years. You know, I do not want to quote what he said, you knows what he said, we had negative growth, recession in the EPZ for four years, 35,000 people lost their jobs in one year. And he knows what he said, the people are losing their jobs at “la vertigineuse”. In the tourism sector growth it was harbouring around 2%. When hon. Duval took over – and in one time it went even to 13%, if I am not mistaken.
International reserves had gone down and were continuing to go down. All this in spite of the fact that they increased VAT twice over 12 months. We intend to forget this, a large sum of money was transferred from the Bank of Mauritius, easily transferred to help on the Budget, now we know why!
The fact, Mr Speaker, Sir, is that we have done better in an unprecedented recession than the previous Government did when there was not even a hint of a recession. And to correct three misleading statements, I must say that, maybe he did not realise, the IRS, you take great exception when we said that the idea was started by us. They developed it into IRS, I have no quarrel with this. But in fact, the idea was started by us.
(Interruptions)
Listen! They can go and check! We did not do it like they did!
(Interruptions)
No, no they are mistaken again! We started the Permanent Resident Scheme for foreigners to invest in property. It was the first time! They had to invest. The figure has not changed. $500,000! They did not change the figure! $500,000! They had t put that in a Fund, then they could get a permanent Resident Scheme. This would allow them then to invest in property. These are facts! I know they are laughing because they don’t like it, but these are facts!
(Interruptions)
Of course, I am being serious! Go and check because he has lied to himself so much that he has started to believe his own lies! He was not in Government, we were in Government! Hon. Xavier Luc Duval was with me! I am talking about the Government after they left! They were blocking all decisions, and I said ‘go’! Let us do it! You had to go! We have said it. There is a Cabinet paper you can see. We have said the idea was to attract high net worth individuals to Mauritius. If you don’t know, even a brochure was published at the time. Let me say something else, Mr Speaker, Sir. Hon. Cuttaree has forgotten what were they saying then! They were saying – listen to that hon. Ms Deerpalsing – that we are creating ghettos, Mr Speaker, Sir.
(Interruptions)
He said! We have this! Go and look at the papers, and he will see!
(Interruptions)
I did not say that he said! But, he has forgotten that this was being said. That is what I said. I must tell you in all frankness – now, you agree with it – that we had also planned to have a second phase for retired persons to come to Mauritius. We discussed it with hon. Duval, and I told him that the elections are coming near, let us wait after the elections, and we will try to see whether we can do this. I needed to say this.
 He talked about the seafood hub as if it’s their idea. I’ll him what idea it was! He won’t believe it! Not my idea, not his idea, not our idea! The idea started with SSR in the 1970s. Go and see! But, we have developed it and we have also increased it.
 Now the ICT – I am amazed that you still talk of the ICT as their programme, their development. I signed an MoU with Prime Minister Vajpayee in Clarisse House, it was on television. Ministers were there. But then there was election. Remember, they seem to have forgotten! Let me remind him, Prime Minister Manmohan Singh, came to Mauritius put the record straight. He came here before the election of 2005 and he said that we must give credit to Dr. Ramgoolam because he started the project and he gave me credit.
(Interruptions)
I heard that they had even had to change their posters because they had put this on their posters, they changed their posters and there were some very unbecoming remarks made by some Members of the MMM, but I won’t go into that. But then I must tell you, it would not have been at Ebène - that I must agree. We had planned - Dr. Bunwaree knows - to do it in the North of the island at Riche Terre and also we thought it would have created less traffic congestion. We have already started. I need to say this, Mr Speaker, Sir, to put the record straight. But the Government, Mr Speaker, Sir, has done its best in a very difficult situation in an unprecedented global recession.
The hon. Vice-Prime Minister and Minister of Finance, I must say to this House, has discussed with me on a daily basis for hours. We decided it should not be a transition Budget because of what is happening in the world economy, it should be an Action Plan for a long time. We had to work for long hours for this. And I want to congratulate him, Mr Speaker, Sir, for all his efforts. The Opposition might not agree with everything we have done, granted, that is the Opposition’s right, but I must congratulate him for the hard work, for resilience he has shown and the efforts that he himself has shown. Mr Speaker, Sir, we have taken the decisions we have taken, but there are things that we could have done, we did not look for these options.
Le me remind the House we did not increase VAT. We all know, Mr Speaker, Sir, indirect taxes affect whom? It does not affect the very rich. It does not affect the poor because the poor does not have enough to spend so much. It affects the middle class. We have done this to protect the middle class. Some people don’t seem to put this in their head. They keep forgetting. They think of other things. We have not increased VAT, Mr Speaker, Sir.
(Interruptions)
 Exactly what we have done! For the reforms which created the fiscal space that we have done. They increased VAT twice and there was not a hint of recession. Neither have we broadened the VAT base! This was available to us to broaden the VAT base. We have not done this. It was an easy option as receipts for VAT have fallen. It would have been an easy option, but we have not done this. We have not increased income tax, Mr Speaker, Sir. This could have been tempting to do. And let me say something to hon. Members because life is like this. You know by coincidence the Chancellor of Exchequer in the UK has just presented a budget, the Rt. Hon Alistair Darling and ‘The Economist’ of 02 May – I know that the hon. Leader of the Opposition likes to read ‘The Economist’, I hope that he has this issue of ‘The Economist’. I have brought a copy of the article who ever has not read it, I would give it I would even make photocopies free of charge. But he presented his budget and he did in that some of the things that the Opposition is saying we should have done, for example, increase income tax for the upper bracket to 50%. He started giving relief right, left and centre and the article title is “A nasty Brown mess”. Look at what ‘The Economist’ says. I just want to quote this, Mr Speaker, Sir, I won’t take too long. ‘The Economist’ describes the measures thus –
“Britain’s attempts to fill the fiscal gulf created by recession are a dismal failure and a lesson to cash-strapped Governments everywhere”.
And it goes on to say that -
“The best tax systems combine low rates with minimal exemptions. Businesses and citizens should be making decisions based on their economic opportunities, not the advice of their accountants.”
And this is what we have done here, Mr Speaker, Sir. It looks perhaps the way it looks, but I think we have been successful. Here in Mauritius, everyone - I mean everyone - I suppose it is natural, they tend to look at their own particular case. I suppose it is natural. Do you know how many times - my father was Minister of Finance then - I saw him talk to people, whom he knew very well, who were complaining about tax. And he used to say to them – I told that story to the DPM and Minister of Finance - you make money you don’t want to pay tax. Who is going to pay tax then? How are we going to run the country if we have no money? It is natural, but people tend to look at their own particular case. They never look at the big picture. Who do you think honestly are capable to hire the best accountants to find ways of avoiding tax and giving relief left, right and centre? Who are these people? It is the very rich not the middle class! It is the very rich who have the ways and means of doing this. We have also maintained free transport. It is difficult for us, but we have maintained. We have kept the Welfare State – free health/free education – compare this to other countries what they are doing, next door, Seychelles for what they are doing. We have kept universal pensions as I said, increased it, not frozen it. We have kept subsidies on flour and cooking gas. Nobody is mentioning this, Mr Speaker, Sir! We have kept these subsidies. And, as I said, Mr Speaker, Sir, we looked at the situation. We have made choices that we thought are right. We may have to make choices in life even if they are unpalatable. I have always said, there is no magic wand, there is no magic bullet.
I wish, Mr Speaker, Sir, I could have made this Budget Speech against a better back for the world economy.
Unfortunately I cannot. However, given this back, I know that we could not be putting in front of the people of this country a much better Budget, a thought-out Budget. We all agree in life it is like this. Maybe we need to correct things later on, we will do, we will see. Mr Speaker, Sir, I am getting a comparison again. But as a ship’s captain, I can’t alter the weather. No captain in any ship can alter the weather, but what I can do is to ensure that the ship and crew act in a responsible way to maximize safety and ensure success once the storm has passed. And this is what we are doing, Mr Speaker, Sir! This Budget shows the benefits of our past policies, it shows our focus on employment and the long term prospects for growth. The courage and resilience of our country have stood the test of trying times before on many occasions since independence. We owe it to future generations that we bequeath to them that same sense of confidence and optimism that has shaped the destiny of our country. Nowhere in the world has adversity been defeated by gloom and despondency.
We should not talk ourselves into a recession when there is no recession actually. Nowhere in the world has adversity been defeated by gloom and despondency. This is no time for political posturing. This is the time for bold decisions.
Success, Mr Speaker, Sir, does not depend on quick fixes, does not depend on the easy options. When you are in Government, you have to act responsibly. Success, Mr Speaker, Sir, depends on making the right choices even though they might be difficult and then having the strength and the courage to see it through. That is what we are seeking to do and to achieve with this Budget, Mr Speaker, Sir.
Thank you.