Economic Governance and Management
483.
484.
485.
194
Chapter 4
The main economic governance and management challenges have little
in common. Furthermore, the macroeconomic and sector economic
policies are not clearly developed. This means that resources were
not effectively allocated to the different sectors in order to achieve the
political objectives. The development of the MTEF and the PB should
be improved in order to reflect accurately the financial objectives, the
strategic directions of policies and macro-economic trends (instead of
the opposite) in order to guarantee that they are efficient, transparent
and predictable.
Another major economic governance challenge for public finance is
the management of parastatal enterprises. There seem to be too many
of them. The government thinks that these entities continue to play a
regulatory role in the job market and safeguard social cohesion. However,
the CRM believes that their role in development is no longer justified
in an economy that seeks to consolidate the pillars of an increasingly
liberal economy while encouraging the private sector to remain the
key driving force of sustainable development. Public debt (Rs122.9
million) is thought to be a risk factor because of the weight of the debt
of parastatal enterprises (Rs31,500 million), caused mainly by external
debt. Table 4.5 shows that the government has tried to reduce the
foreign debt of public companies – it dropped from Rs17,334 million
in 2003 to Rs8,211 million in 2008.
Although the CRM is delighted by the government’s efforts, it concurs
with the CSAR analysis that the plethora of public companies, and
lack of transparency in the appointment of their directors, does
not improve the performance of their managers. It seems rather to
suppress the spirit of competitiveness. This makes the impact of these
entities on development mediocre.
Chapter 4
Economic Governance and Management
Table 4.5: External debt (in millions of Rs)
End of June Government SOEs with
State-owned
government enterprises
guarantees (SOEs)
without
guarantees
Private sector TOTAL
2003
9,074
10,017
7,317
2,271
28,679
2004
8,445
8,838
6,013
1,953
25,249
2005
9,232
8,032
5,326
2,170
24,760
2006
8,535
8,304
4,635
2,058
23,532
2007
13,452
7,419
3,601
1,562
26,033
2008
12,451
5,649
2,562
1,489
22,151
Note: Public external debt includes external investments in government bonds.
Source: MOFEE.
486.
The CRM feels that it is necessary to initiate structural reforms in
this sector to improve the coordination and control of the
management of all public resources and, thereby, to facilitate the
promotion of predictability and transparency of government policies
in all public spheres.
487.
The government has begun developing sector policies for certain
sectors to meet the demands and challenges of the economic crisis.
It has done so to convert its objective, of transforming the structure
of the economy and reconciling social justice with growth, into
action. The CRM congratulates the government for the efforts it
has made to develop these tools to promote economic governance.
However, analysis of the data collected about these strategies shows
great differences in the product produced. Some sectors designed
strategies, others developed policies and yet others devised action
plans. The absence of uniformity shows that this kind of exercise
is not coordinated. These instruments therefore have limited
effect on the process of programming and of budgeting for
government operations. Finally, including them in the MTEF and the
PB will pose problems.
488.
The government began developing a 2008/2011 strategy for ensuring
food security in 2008 in order to find solutions to the problems of
ongoing price increases in food products and possible food shortages.
195