As I write the death of one of our fellow-countrymen makes the local news headlines. He is one of the victims of the cold-blooded killings at Taj Hotel in Mumbai on Thursday last. As bank chief executive he was on official mission in India.

His wife who had accompanied him was luckier. She had left her room for the business centre when terrorists perpetrated attacks in the hotel. She was immediately brought to safer locations while her husband was still in his room. They exchanged a last phone conversation at around 11.30 am Indian time. No news since then until she was called to identify his corpse.

We also learned that the anti-terrorist chief in India was shot dead in an encounter. Several innocent people are reported dead following gun fires and bomb blasts. The target seems to be clear. Hotels like Taj and Oberoi are known to lodge high profile international travelers.

Attacks like this one reminds us of the September 11, 2001 episode of the twin towers in New York. The world is becoming ever more insecure. Terrorists seem to be everywhere and they can strike any time. No country can be said to be safe.

Is there any means we can identify and annihilate such moves? Can anybody find out why terrorism strikes? Is there a terrorism profile? How is it that the security services are not privy until the terror has occurred? We always have to indulge in fire fighting. Can the world come up with effective prevention strategies?

These and many other questions still haunt the minds of all people around the world. As silly as it might appear I am tempted to ask whether terrorists are human beings. Any human being worthy of his name cannot commit such cold-blooded killings without any particular motives. If there are motives, what they?

May be if we can go down to the source of these motives we might come up with some sort of explanation. And only then can we find possible means to bring terrorist attacks to a halt once for all. It’s not a one-person concern. Every body should be in as an anti-terrorist ambassador. Remember terrorists do not discriminate. Their hands are always on the trigger. They hit; and they hit hard. They kill. They act like robots.

Alfa King Memories

At 2.00 am on Sunday 26 October this year the clocks in Mauritius read 3.00 am. The country stepped into the summer time concept practiced in many countries. Government aims primarily to save on energy costs as it expects a reduction in the demand of electricity supply at peak hour in the evening. This measure will last until 2.00 am on 29 March 2009 and it is said to be on a pilot basis.

The introduction of this measure however didn’t go without controversial voices from various quarters. Will the electricity charges go down in real terms? What will happen to those religious beliefs that attach special importance on birth dates and specific prayer times? Will it not impact negatively on the health of people with a disturbance in the circadian rhythm? These and many other questions are still not clear in the minds of the common people for whom it means no more that getting up earlier in the morning.

Mauritius has its own specificity with a diversity of cultural heritage. In the absence of prior study on the real impacts of this new system we will have to wait for the answers at the end of summer time. Let’s hope the government comes up with a comprehensive feedback on the practical implications of this innovation to find out whether these are in consonance with the main objective. Only then can it come up with a definite stand on the implementation of such measure in the future.

It’s worth mentioning that such measure was implemented for the first time in the history of Mauritius in 1982 when the MMM-PSM alliance won all the seats at the national elections. A spokesman who was Minister of Energy at that time said in a radio broadcast last week that it did indeed bring about a decrease in the electricity demand by 5% which was quite conclusive in his opinion.

Alfa King Memories

You might by now be thinking this guy’s pocket’s full, now that the PRB report 2008 has been released and its recommendations are about to be implemented as from July. Alfa King has surely quit blogging. He’s busy counting the extra rupees and cents he’ll earn as from next month. Why should he bother writing on the net when he’s got a better package? Well, if that’s what’s in your mind, think again.

The couple of thousands of rupees more will not make the average public sector employee any richer. Blogging is a passionate hobby for me. It’s not always easy to keep to a fixed schedule, especially when you have a full time job. If I’ve been absent for a while it’s because I had a lot to do with official commitments and hosting visitors. I’ll talk a little more about these in my next post.

The PRB report 2008 has only granted a graduated increase in salary to all civil servants and employees of the para-tatal bodies. Except for chief executives and very senior government officials, who are a selected few and whose salary packages have been literally doubled in a gesture to prevent drain as they say, middle and lower income groups have had an increase based mostly on loss of purchasing power since the last report in 2003. With an average increase of 25 to 30% and taking into account this year’s CPI increase of no less than 8%, the increase in real terms is in dilute amount.

There’s no denial. Some conditions have been slightly improved - the increase in the number of cumulative sick leaves and vacation leaves, and the appreciation of certain allowances. But new conditions have been attached as well. The public sector employee will have to contribute for their pension; they’ll have to work up to 65; they’ll have to put up to 38 1/3 years of service in order to qualify for a full pension. However, those already in service as at June 2008 will continue enjoying the conditions hitherto governing their employment.

The grant of annual increase is no longer automatic. The report emphasises the need to relate pay with performance. All increments should be earned. All government departments are required to implement a performance appraisal system to be fully operational in 2010. Emphasis has been laid on staff development and training as an integral part in the performance management system and the report recommends between 40 to 60 hours of training per employee per year. This will enable a better allocation and management of human resources.

This is only a highlight of the major recommendations of the report which aims at “transforming public sector organisations into modern, professional and citizen-friendly entities with competent, committed and performance oriented personnel dedicated to the service of the citizen”. If most public sector employees display a satisfactory mood, there are many who believe that the salary revision exercise was a means to introduce new conditions. It was a give-and-take exercise. Much of the extra earnings will go back to the treasury in the form of taxes. Have you forgotten the NRPT? Well, check whether you fall into it now, if you weren’t previously.

Government has a different stance - it’s a very costly endeavour. The cost of implementation of the report will be twice that of the previous one. Initially scheduled to be implemented in two phases, 75% from July 2008 and the full amount in July 2009, the report will now be implemented in toto this year as “it’s the Prime Minister’s wish” as announced in the national budget speech by the Deputy Prime Minister and Minister of Finance on 6 June last. As if decisions are taken according to the mood of the Premier. But for the average people Government has the capacity to pay although it’ll have to disburse some Rs 4.5 billions.

Private sector employees are now claiming their share. If the national cake has become bigger they have contributed to it too and they should benefit from a similar increase in their salaries and wages, they say. Many people tend to forget that the Pay Research Bureau deals with review of salary and grading structures in the public sector only. Whereas the National Remuneration Board (NRB) caters for the private sector and reports periodically, as does the PRB, not necessarily within the same time frame.

As you can see the situation has become more competitive. A higher standard of commitment, responsibility and performance is expected of the public sector employee. He’s got to be more proactive and live up to the modern exigencies. Incremental credits have been recommended for top performers.

Let’s hope that the conditions are implemented in a just and equitable manner so that those who deserve to be rewarded are indeed recognised and that blue-eyed political pariahs do not find their way in.

Alfa King Memories

As the tax accounting year is approaching, people are getting more and more apprehensive. This year a new system is being introduced. If quite a good number of income tax payers will be waived from the list, those who’d remain may have another sword of Damocles on their head. They’ll be held accountable for what wasn’t previously.

Those who’ve been pooling their savings over the years to ensure better comfort in later days and to acquire and build residential premises for their own and their families’ well being will have to declare these and “give” a percentage to government. As if you have no right to own what you own.

This year will witness the introduction of the NRPT, the National Residential Property Tax – some have nicknamed it Navin Ramgoolam Property Tax after the current Prime Minister’s name, as it’s his government that’s come up with this new concept in the country. The section of the income tax return form relating to NRPT will require taxpayers whose annual revenue exceeds Rs 385 000 to declare the extent of property they own: housing, apartments or bungalows. For personal residential purposes the amount of tax payable is Rs 10 per square meter of land area. For apartments the rate will be Rs 30 per square meter of floor area of the building. Such tax will, however, not be applicable to residential land where there’s no construction.

Political and social factions are organizing resistance in an effort to counteract the implementation of this measure. The trade union organizations have also joined hands to call for civil disobedience. They argue the NRPT is anti-constitutional in the sense that it goes against the constitutional right of private land ownership.

“Government cannot at the stroke of a pen declare a private property a national property,” says one of the spokesmen of the group. “The new measure seems to make of the owner a tenant in that he has to pay for owning and occupying a residential area, which he has acquired at the sweat of several years or even a lifetime of sacrifice after securing endless loans and acquitting themselves of the registration fees. They are already overburdened with repayments.”

Since the announcement of this measure in the last budget presentation, the resistance group entered a case in court and is awaiting judgment. Up to now they say the respondent (the government) hasn’t filed its defense. Until and unless the case is heard and determined the group believes it’s unfair to go ahead with the NRPT. As the forms are already on their way to the taxpayers, the group requests all concerned not to fill in the section relating to NRPT mentioning in the relevant space “awaiting court judgment”.

Bank interest is another headache this year. It will be chargeable. Banks have already sent out or are currently sending interest statements to individual account holders. Tax on interest will be charged at 15% on the amount accrued during the year. For bank deposits exceeding Rs 2 M there’ll be a deduction at source, meaning the banks will automatically deduct the amount payable and credit it to the Mauritius Revenue Authority (MRA), the authority responsible for the collection and management of taxes.

Taxpayers will not be allowed to claim any deductions as before except for their dependents. A dependent is clearly defined as spouse, or child under 18 years of age or child over 18 but receiving university education or undergoing training or unemployed or unemployable due to certain handicaps. Previously you could deduct for any other dependent, for interests payable on loans, for premiums on personal life policies and for expenses in relation to self education. These have been chopped from the list; taxpayers will be classified into four categories of income exemption thresholds, A, B, C and D.

Those with total yearly income of Rs 215 000 and without any dependent will fall in A. Category B will include those with yearly income of Rs 325 000 and having one dependent provided the exempt income of the latter does not exceed Rs 110 000. C will group those earning Rs 385 000 yearly and having two dependents at charge provided the exempt income of the second dependent is less than Rs 60 000. While D will take on board those whose yearly income is Rs 425 000 and have three dependents but the exempt income of the third dependent should not be more than Rs 40 000.

The latest date of filing income tax returns is 30 September.

Note: 1 USD = Rs 31; 1 GBP= Rs 62; 1 EURO= Rs 42. (approx)

Alfa King Memories

Our Prime Minister’s visit to China during the last week has given a new dimension to the cooperation between the two countries. China has agreed to advance a credit of Rs 3.5 billions (around 50 million USD) over the next three years. “This agreement is of major significance to Mauritius,” said the PM, “as it marks China’s commitment towards Mauritius in this period of transition.”

The PM cherished the nearly trebled Chinese assistance compared to Rs 400 million (around 6 million USD) per year obtained previously.

This financial assistance will be vital in realizing a number of projects related to infrastructural development, which will include the construction of a fishing port, a new dam, a new link road from Verdun (village around the centre) to Terre Rouge (northern village near Port Louis) and a new town at Highlands (near the centre).

Other outcomes of the PM’s visit to the People’s Republic of China comprise promises for massive investment. Already one major group of companies, Shanxi Tianli Enterprises Group, has laid its footprints on the island with significant investment potential. The implantation of this group has necessitated the relocation of several small planters who earned their living for decades on the agricultural plot of land identified for allocation to the group.

In this period of difficult economic situation, with rising cost of living, opportunities like those from China and the discovery of potential hydrothermal sources in the territorial waters of Mauritius (which I mentioned yesterday) can only herald better days ahead. Provided they are managed judiciously.

Just been listed in the Carnival of Financial Planning – July 12, 2007 Edition. This carnival as stated in the blog “focuses on efficient and sustainable personal financial planning practices that can lead to lifetime financial security”.

You’ll find posts about a wide range of finance issues from budgeting, debt management, estate planning, financial planning, financing a home, financing education, income, investing, retirement planning to savings and taxes.

Have a look and enjoy.

The Mauritian Finance Minister delivered his budget speech on Friday 15 June. It was his second speech since the “social alliance” (comprising multiple political parties including the Labour party, Parti Mauricien Xavier Duval, Mouvement Republicain, Mouvement Socialiste Democrate and Parti Mauricien Social Democrate) is in power.

He depicted a sound economic management under his ministership, which has resulted in an “early harvest” (meaning early economic recovery) thanks to his so-called bold measures taken last year. He even announced duty remissions on certain electronic devices used mainly by women: hair driers, utensil washing machines, microwave ovens and others.

People were still recuperating when five days later, on 20 June, they ended up in the hypers… only to witness soaring prices of some basic commodities, namely milk – all brands. Some brands which had disappeared from the stalls just before the budget day reappeared out of magic. The price of rice soared too. These rises were explained by “external factors” (appreciation of foreign exchange, drought in Australia, etc), an argument the common people swallowed although somewhat bitter.

Intense parliamentary debates followed the speech during two weeks. They were centered on the foreign direct investments which herald to some extent the “early harvest” as propounded by the minister in spite of contradictory arguments brought by the opposition team. Several questions arose, while members of the government, as could obviously be anticipated, took sides of their colleague minister and defended his policies and strategies with vehemence. “The 2007-2008 budget wouldn’t have been possible without the 2006-2007 (last year’s) budget,” chimed the minister. All to sum up a good budget year ahead, much to the satisfaction of the common people.

The debates ended on Friday last, that is on 29 June. Today it was time for the Automatic Pricing Mechanism panel to deliberate on the price of petroleum products. This panel meets on a quarterly basis to readjust the price of petroleum, no more than 20% change based on current world trend. Guess what? It announced an increase in the price of petrol and fuel oil by about 20%; while diesel increased by about 5%. External factors again (Middle East crisis, strike in Nigeria, high price in the world market), was the explanation given by the Chairman of the State Trading Corporation, the body that imports petroleum products.

Whatever the reason, the public has to pay… or perish. The cascade effects are yet to be anticipated. You can never know how sour a pill is until all the sweet coating is sucked up.

It was “budget day” today; the presentation of the national budget for the year 2007-2008. It’s a tradition now to have it live on TV and radio. So I rushed back home after work. I didn’t want to miss it. Nobody seemed either as the traffic was particularly jammed this afternoon. I managed to make it just in time. It was exactly 4.30 pm when I set my feet at the doorstep. Sarah had already switched on the TV. I could hear the national anthem nearly drawing to its end. The Parliament was just sitting.

The Minister of Finance shot off for a nearly two-hour speech with an excellent use of sweet expressions amidst some announcements that would otherwise appear sour. That’s the usual scenario at each presentation. And you can see his fellow colleagues applauding him interruptedly at every popular announcement, while the members of the opposition stay silent, serious and attentive.

It seemed to be a continuation of last year’s initiatives and it was hard to single out any new (indeed favorable) measure, except the accelerated corporate tax incentive, and some minor benefits to really needy. More and more public private partnership, implying increased capitalism. No mention of any declared price control, special employment incentives or enhanced security measures for the protection of the vulnerable. Those were some of the “on-the-spot” reactions of a couple of trade unionists who chose to boycott the budget speech. The main opposition party mouthpieces chimed in the same line.

I’m tempted to say that year in year out, the budget presentation is a combination of the same set of nice announcements quite apart from what really happens in practice afterwards. Last year everyone was happy with the income tax incentives as the Minister announced exemption of some 40 000 taxpayers from direct taxation. What ensued afterwards is only to make one lament on the decisions. Many would have preferred direct tax payments than the uncontrolled indirect taxation which nearly doubled prices of some basic commodities, like milk, rice, flour, lentils, butter. The prices increased practically every month, which resulted in a two-digit inflation rate.

We cannot doubt the Minister’s word that the measures aim at curbing deficits and favouring economic growth as the country has started to reap the benefits of tight measures taken last year. Let’s hope this year will be better.

Although the extraction rate is expected to be higher as compared to last year, the sugar production will be much lower than usual. The higher extraction would not seem to “fully compensate for the anticipated reduced cane production”, as mentioned in the last monthly bulletin of the Mauritius Sugar Industry Research Institute (MSIRI). The harvest is expected to yield around 465 000 tons of sugar this year. It represents a shortfall of some 50 000 tons with respect to our commitment towards the European market under the Sugar Protocol. And we have still to honor another commitment vis-à-vis the USA.

Last year with a production of some 506 000 tons the shortfall was about 18 000 tons. These figures are much less than what was obtained some years back when the production was over 600 000 tons.

But this decrease in production was forecast by the MSIRI. The cane elongation have been observed to be inferior than normal and also with regard to the previous year as stated in the bulletin: “island-wise the cumulative elongation of 162,1 cms for the 2007 crop was inferior to that of the 2006 crop by 21,8 cm (11,8 %) and to the normal by 26,8 cm (14,2 %).”

As regards the final extraction the MSIRI notes that “sucrose accumulation is higher than that at the same period last year. Despite the fact that further ripening is heavily dependent on forthcoming weather, indications at this stage are for a higher final extraction rate this year compared to 2006 “.

With the end of the sugar protocol reforms in the sugar sector have become imperative and several acres of land have been converted into residential or commercial estates with the result that less land is under sugar cultivation. This trend is expected to continue as we shift further into the reform process already initiated.

“Sugar is the most economic and most efficient source of production of ethanol.” That was a statement made by the Mauritian Minister of Agro-Industry at the opening ceremony of the 31st session of the International Sugar Council (ISC) at the International Conference centre at Grand Bay.

The Minister’s statement is pertinent at a moment when our sugar industry is facing new challenges. The Sugar Protocol, which guaranteed a market and a favourable price, is no longer valid. Alternative uses have become all the more imperative if we want to preserve our sugar-based economy. The poduction of ethanol is one such option in limiting the use of fossil fuel which generate greenhouse gases with detrimental impacts on climate change.

“In that context,” said the Minister, “Mauritius along with many other ACP developing countries is currently implementing Multi Annual Adaptation Strategies to sustain the sugar industry in the light of the EU reforms. These strategies that have been put forward are basically aimed at operating the sugar industry on the model of a cluster producing sugar, energy and ethanol in flexi-factories to reduce costs, increase revenue, and optimize use of by-products “.

Participants from 81 countries will continue to reflect on the theme ” Sugarcane - an Engine for Sustainable Development ” until Thursday 31 May.

At its weekly meeting today, the Cabinet approved the recommendations made by the NPC. The Finance Minister stated it’ll cost more than Rs 3.5 billions to implement the recommendations. He’s is particularly concerned about the payment capacity of small enterprises who are facing fierce competitions and evolving challenges. Although he believes that some sectors can pay more than the recommended amount, he’s been all the time in favour of a compensation based on productivity and capacity to pay rather than on the only inflationary rate index.

Something is wrong somewhere. We’ve always been used to seeing the government and the private sector in good terms, with common stand even in difficult economic contexts. Everybody is surprised with the statement of the Joint Economic Council (JEC), on the one hand, and the Government on the other.

Few days ago the JEC declared in a press conference that it’s the Government’s “irrational and incoherent” approach that has led to the “rise in cost of living, closure of factories and loss of jobs”. They say there’s too much Government intervention in their affairs. Their business freedom is upset.

Government has decided to favour foreign direct investment (FDI). This is the apparent cause for frustration in the private sector. Big businesses like Ireland Blight Limited (IBL) are not as happy as they seemed to be. One example is the absence of decision on the part of Government with regard to allowing Catovair to be the alternate carrier in between the islands of Mauritius and Reunion. Catovair was introduced recently as the new air services by IBL to serve as inter-islands link.

Another issue of concern is the closure of Desbro International (manufacturer of iron and steel). Claims for increase in prices of iron have been subject to debates from various quarters. Some 500 people lost their jobs.

The main hypermarkets were in the process of merging together. The news has spread; and Government has decided to introduce a Competition Bill in Parliament to counteract this move in order to protect the consumers. The price of basic commodities, rice, milk, flour, bread, has been rising constantly. In two years the prices of bread and rice have risen by more than 50%, oil 40%; and these are only a few. Some brands of milk have simply disappeared form the stalls.

Government says it won’t tolerate the private sector’s criticisms. If they maintain their stand, it will have no other option than to take drastic measures. The Prime Minister has been very harsh on this issue in a statement to the press. He also said he won’t miss the big opportunity of Tianli’s (a Chinese enterprise) implantation at Terre Rouge, which will bring no less than Rs 17 billions in terms of investments, and quite a number of job prospects.

There’s definite distortion of the wavelength between Government and the JEC. We have now to see what happens next with the forthcoming tripartite meetings to decide on the compensation for cost of living.

A Supreme Court judgment has last week recommended the invalidation of the election of Mr. Ashock Jugnauth, the first returned candidate at the June 2005 elections in constituency number 8 (Moka- Q.Militaire). Then Minister of Health, Mr. A. Jugnauth is alleged to have been elected by bribery.

Several people from his constituency were said to have been offered employment in the Ministry of Health on the eve of the elections. Another ground held by the Court is the promise of a plot of land to one community for use as cemetery. These were considered in violation of the Representation of People’s Act by Mr. Raj Ringadoo, one of the defeated candidates who had filed a petition to that effect. Mr. Ashock Jugnauth has signified his intention to appeal to the Privy Council.

The court has also recommended to the Electoral Supervisory Commission to set up a code of conduct or guidelines for politicians during election campaigns.

This judgment will make history being the first of its kind, although a previous invalidation was held in 1956 on ground of the elected candidate’s name being wrongly written in the election paper.

A partial election may have to be organized soon if the ruling is maintained. Politicians will have to be wary now, more than ever before.