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Sunday, November 13, 2005

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.


At 11:27 PM, Anonymous Anonymous said...

I couldnt agree more. However it maybe useful to distinguish between primary, professional and higher education. The indian government has certainly done a great job of creating higher education institutions that have led a globally competitive educated workforce. However,the lack of investment in primary education and professional education for the less privelaged as you call them has certainly effected the countries progress in other areas and has made for a bad combination with democracy


At 5:02 AM, Anonymous AA said...

I agree with the statement that large sections of our population are not well equipped to access the jobs that the new industries are throwing up. And to compete globally, and even move up the value chain we need that. Low cost man(person?)-power is not the solution. That sentiment is like throwing money after hard problems. That works... sometimes. But more often than not, it does not.

Also, there have been posts in similar vein in the Indian blogosphere. One was about how the elite have 'conspired' to keep education 'elitist'. Not sure how much I agree with it, but the fact remains the quality of education provided to a child in a village does not compare favourably with the quality of education to a child in a private school, in say, Mumbai.

Finally, there was another report(sorry, I keep forgetting all the links) about how large sections of the Indian graduates are not quite ready for a plunge in real world work place. Kind of goes to shore up your arguments.

At 12:54 PM, Anonymous AG said...

Regarding what it takes for a country to start converging towards a developed economy status, the answer from economics is not very clear. I'd highly recommend William Easterly's "The elusive quest for growth" if you have not alrady read it. Education, in particular, and very non-intuitively, may be an effect rather than a cause of growth (correlation does not necessarily imply causation). He points towards recent research on virtual and vicious circles which can entrap countries in high income or low income equilibria.


At 8:18 PM, Blogger Anand Sridharan said...

ag: As you say, that sounds non-intuitive, but has me thinking. Let me get a hold of the book you mention.
In India's context, sustainable widespread decent-quality employment is as much an objective as growth itself. If growth doesnt yield this, democracy will derail growth itself (what the Left is doing is a perverse form of this, even with minority votes). Without education, employment wont happen. We have to break the vicious cycle, but how?

At 1:34 PM, Anonymous AG said...

>In India's context, sustainable >widespread decent-quality >employment is as much an >objective as growth itself.

Indeed. I'm not suggesting not investing in education and infrastructure. They may be necessary but not sufficient, or at least that is my take on growth economists.

On a more opimistic note, Steve Roach of Morgan Stanley, who has been skeptical about India in the past, recently wrote the following about Indian growth prospects. He notes an interesting difference from China and Tiger countries in India's recent growth spurt: its consumer demand led as opposed to export led. He thinks this makes it more sustainable:


At 6:13 PM, Blogger .m. said...

interesting to note tht Mauritius left a good impression on you. We are faring pretty well here.. despite all.

At 1:13 PM, Blogger areda_athu said...

Interesting post. BTW there is a state in India which has higher literacy rate, better health care facilities and longer life span (I think) than Mauritius; however the per capita income is way behind that of Mauritius. While all the factors mentioned above are important, I think the key is to have the right attitude. You CANNOT depend on the Government to do everything for; neither can you blame them for everything that is wrong.

At 10:58 PM, Anonymous Jai said...


All is not sugary in Mauritius. Once the world's fifth largest exporter of sugar (impressive for a country of < 700 sq. miles) the industry has collapsed due to the vagaries of globalisation.

The same is happening in the Carribean.

Nothing beats a huge domestic consumer population in the long run. Even the best of governance in an export economy :)

At 8:28 PM, Anonymous Nitin MUTKAWOA said...

It is indeed surprising that though the leaders of society know that without inner peace nothing can be achieved, yet nothing really effective is being done. Even if there is any mild outcry for peace anywhere, it is only a lip-service. Education in human values, living values, model UN programs, seminars, commandments, prayers, rituals and celebration of festivals, be they religious, social or cultural, have all failed and will continue to do so. When shall we understand that 95.5% of unconsciousness is not a child’s play to do away with? Psychology and religion will have to join forces so as to help to make the greatest revolution in the psyche of man on an international level - - Dear friends dont we need a global mental transformation??.. Its suprising that we have got so many religious, political institutions, schools of so many different kind, big research are being made yet we are in the dark- our world is going to be dissapear soon. Just reflect a bit on that...

At 8:32 PM, Anonymous Nitin MUTKAWOA said...


No teaching or education system is successful if learning does not take place; therefore there are certain pedagogical conditions which are required. Initially the trained teachers will focus on the proposed pedagogy and eventually many approaches can be transferred to all teaching leaching learning situations, for development of body, mind and heart happens all the time; although the self education classes will focus only the aspects proposed as content of the program,
The teacher is the first experimenter who puts to practice these skills as life skills so that they are capable of discussing with students the progress made, difficulties faced and further action required. Role modeling is very effective.
This is a highly interactive learning because the golden rule is practice for it is fully skills based. Hence learning by doing is the motto.
Participation for exchange of ideas, frank talk, talking about oneself usually more conveniently successful call for peer learning, group activities and individual reflection. Encouragement for sincerity with oneself, acceptance of one’s own reality within a given context and discovery of strengths through “no wrong but area for further development concept” will be a highly effective approach. No sense of guilt but an opportunity for setting higher targets through a lesson learnt will form an integral part of the pedagogy.
Therapeutic skills coupled with theoretical knowledge about their benefits, backed by related literature will be incorporated in the strategy.
Exposure to cognitive aspects will incorporate more audiovisual means, literature and Knowledge Hub concept.
Enquiry, questioning, free discussions and pastoral needs expressed by students will form an integral part of the pedagogy since this subject will cause students to bring to surface their complexes and blockages which when repressed ultimately result in behavioral disfunctioning.
Appropriate overall school approach is required to enable an integral approach in the unfurling of the individual.

Dear friends . . should you not be interested for the so called type of education?

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