An economics lesson from Mauritius
I am back in Mumbai after a delightful vacation in Mauritius. This Sunday evening is more depressing than usual, as I need to return to work after a 2-week break. While Mauritius invokes beautiful images of sea, sand and coral reefs, I’d like to write about man-made economics rather than natural scenery.
Based on what I saw and heard (from the locals), Mauritius has excellent infrastructure (notably roads), free school education and healthcare for all and low levels of poverty, crime and unemployment. Overall, the impression was one of a prosperous country, with a fairly content populace. I realize that as a tourist, one’s views on a new country are fairly skewed. Further, there is the usual trap of drawing macro conclusions based on micro data. So, I did a quick check on some development indicators, to make sure I wasn’t way off. See for yourself – per capita GDP of $4600, life expectancy of 72.5 years, 85% adult literacy, tele-density of 55%, 100% primary school enrolment among the relevant age-group. Not bad at all.
I am no economist (nor an expert on Mauritius policies based on one short jaunt), but cant help drawing two clear lessons for India – on the role of the government and need for broad-based job creation. First, the Mauritius government’s primary focus has been on education, health and infrastructure. Second, the nature of growth has created jobs for a broad section of the population. The three main drivers of growth – sugar, textiles and tourism – not only cover agriculture (and agro-processing), manufacturing and services, but also create ample employment opportunities for the average high-school or college graduate. By ensuring near-universal education, the government made sure that people could realistically access these job opportunities.
The idea is not to draw simplistic parallels between a nation with 1.2 million people and another with (almost) 1.2 billion people. I am encouraged by the secular growth that India is seeing, across sectors such as auto components, textiles, retail, travel and construction. While IT and ITES would rightfully create jobs for the young urban middle-class with access to English-medium college education, these other sectors are badly needed to do the same for far larger numbers of less privileged people. The challenge remains that large segments of the population are simply not equipped to benefit from these opportunities. If there are 3 areas I’d like the government to spend time & money on, these would be education, health and infrastructure. In all other areas, the government simply has to set the basic (and hopefully fair) rules of the game, and then get out of the way.