PRB report: Merit reward or public revenue bash?

The Pay Research Bureau was set up in 1977 as a permanent and independent institution to continuously review pay and grading structures and conditions of service in the public sector. As from this year, the Bureau will issue its report every three years. On the other hand, it is the role of the National Remuneration Board (NRB) to determine the wage rate for workers in the private sector.  The central theme of the report this year is “Transformation of the Public Sector to meet citizens’ needs, non-citizens’ needs as well as other stakeholders needs”. This 8th report since 1977 has been produced in the context of the new Government’s programme that put emphasis on job creation, poverty alleviation, new technological development, advanced education and health systems, the right to information, improved water distribution and food security, among others, leading to a modern public sector meeting the needs of citizens and improving the delivery mechanisms for providing more professional and better services to the common man. In short, this Report is “putting the base to achieve the Second Economic Miracle”. [[{"type":"media","view_mode":"media_large","fid":"14631","attributes":{"class":"media-image wp-image-24446 size-full alignleft","typeof":"foaf:Image","style":"","width":"259","height":"265","alt":""}}]] The Report reminds us that, since the last 2013 PRB Report, the international economic environment has hardly improved and continues to be uncertain and challenging. Our average annual growth rate during the three year period 2013-2015 was moderate at 3.3%. Major sectors such as agriculture, financial services, ICT, retail trade and food processing registered slower growth due to weak demand. Total investment as a ratio to GDP declined sharply from 23% in 2012 to 17.8% in 2015 – a drop of 5.2 percentage points – and private investment from 17.7% to 13%. Unemployment remains at 8%. Domestic labour cost has been rising thrice as much as productivity growth during 2013-2015, undermining our international competitiveness. However, inflationary pressures remained subdued during the period 2013-2015, with prices increasing by only 2.7% annually on average. The inflation rate in 2015 was 1.3% - the second lowest rate in five decades. On the fiscal side, public sector debt has been on the rise again since 2013 and reached a high level of 56% of GDP in December 2015 (Rs 259 billion).

Key Challenges Ahead

Mauritius main challenges include: increasing competitiveness through greater regional integration, creating a stronger environment for innovation, making growth more inclusive by addressing scarcity of skilled human resources and bolstering resilience to natural disaster and climate change. As an open economy, developments on the international front will inevitably have an impact on the Mauritian economy. In addition, the stated objectives of the government are to achieve higher growth of at least 5.5% annually, boost employment creation and reduce poverty. These will require the pursuit of structural reforms in order to transform our economy and broaden our economic base and space; develop growth-enhancing infrastructure; raise productivity to global competitiveness levels through ICT, Science, Technology, Engineering and Mathematics (STEM) and innovation; improve the business climate to put Mauritius among the top 15 countries in the World Bank Ease of Doing Business; address the impact of an ageing population and promote inclusive growth.

[[{"type":"media","view_mode":"media_large","fid":"14632","attributes":{"class":"media-image wp-image-24447 alignleft","typeof":"foaf:Image","style":"","width":"255","height":"283","alt":"ARVIND NILMADHUB"}}]]Arvind Nilmadhub, economist: “Time for a single agency for public and private sectors”

Economist Arvind Nilmadhub says he cannot reconcile the pay review with the current economic context. He further advocates for a new single national mechanism to address pay review and working conditions in both the public and private sectors, eliminating all disparities. Public servants will earn a pay rise between 6.5 % and 10.4 %. Is it really insufficient, as claimed by some trade unions? It is more than sufficient. I would even add to the controversy by saying that such a rise is not warranted at all. Let me explain. Every year, wages and salaries are adjusted for inflation. We all receive a compensation. During the past few years, our economic growth has been more or less stagnant. Why should we therefore offer pay increase? Can the economy afford it? Remember, we are already indebted to the tune of nearly Rs 260 billion. Well, if we had discovered an oil reserve or a gold mine, I would be the first to advocate for pay review. The PRB is like a reward for civil servants, but reward for what? What about private sector workers? Furthermore, there is often no penalty in the public sector for mismanagement of funds, taking of wrong decisions, cost overruns, etc. The annual Audit report regularly shows cases of mismanagement and inefficiencies in the delivery of public services, but we rarely see any officer being held accountable. It is said the PRB report will cost the government Rs 3 billion per year. What is its impact on public finance? I think this is already taken care of in government budget. However, I feel such a sum could have been put to better use. For example, investing Rs 3 billion annually in modernising our public transport. Imagine if civil servants (and private sector workers as well) could leave home and reach office in less than half an hour, without any road congestion. Definitely, this would boost productivity, reduce stress and improve the personal life of each worker. I would rather have this change in my life than a 10% pay rise that only makes me spend further, with no improvement in my standard of living! It is time to think differently, for the common good. Some observers claim the report has helped to reduce the gap between the top brass and low end workers… Indeed, in some cases, the gap is closing, but I would advocate more positive discrimination. Even within the civil service, not everybody benefits. Many people at the lower end of the hierarchy see no real improvement in their working conditions, but they are reluctant to voice out their concerns for fear of reprisals. To really close the gap, I think it is time to introduce a progressive taxation system. Should we have a PRB report every three years or five years? I am for a new mechanism that absorbs both the PRB and the NRB and that determines a single pay scale as per job title or description, irrespective of the public or private sector. I believe we should have a report every five years and the final determination of the pay rise should take into account the economic growth achieved. A new mechanism should reward not only public sector workers but private sector workers as well. Don’t the 300,000 private workers deserve a reward? And yes, in times of economic crisis, the burden should be shared by the public sector also. After the publication of every PRB report, public sector workers are expected to become more performing and more efficient. How to ensure this happens? Very often we blame public servants for inefficiencies, and we tend to forget that most often, these officers operate in a given situation, under a given mindset. It may be that the legislation or the regulations have never evolved with time. Systems need to change, procedures need to be streamlined. I am sure if we visit each ministry, each department, each parastatal body, etc, and make a complete audit of the current system and update and upgrade, we will easily eliminate at least 50 percent of the duties being carried out. This will make the institution lighter, better performing, more efficient and will also result in better delivery of services. But it takes a bold government to embark on such a programme. Currently, we simply recruit new staff to fill vacancies without ascertaining whether we really need more people. Other measures we should introduce include set time frame to process applications, Adopt the Silent Agreement Principle in case of no reply, the preparation of guidelines, flow charts on procedures to better inform the public. This will also eliminate risks of corruption and will protect both members of the public and public officers. Will the introduction of a minimum wage reduce wage differentials between public and private sector? No, it is not that easy, but it would be a good start. Setting a minimum wage is not that easy. Raising the level of wages will severely impact cost of production, and many enterprises will simply lay off workers. Their products will no more be competitive. The issue is not only about minimum wage. Today, we no longer live in a society where a person holds the same job for life. A person can change job at least 10 times in the span of his career. The job market should be further stimulated, with the availability of full time jobs, part time jobs, job share, job exchange, etc. There should be a particular type of job for everyone. A person could be doing two types of jobs and earn a total exceeding his expectations. A mother could be working part time. A retired person could find a part time job to supplement his pension income. We need better job flexibility. Other means to stimulate the job market is to introduce hourly rate, and also introduce weekly and fortnightly wage or salary payment. This has the benefit to spread economic activity evenly over a month, rather than having everybody do the shopping on pay day at the end of the month. This will positively impact cash flow, road traffic and also savings.

[[{"type":"media","view_mode":"media_large","fid":"14633","attributes":{"class":"media-image wp-image-24448 alignleft","typeof":"foaf:Image","style":"","width":"246","height":"248","alt":"Radhakrishna Sadien,"}}]]Radhakrishna Sadien, trade unionist: “The NRB should produce more regular reports”

In a statement to Radio Plus in the ‘Duel’ program, Radhakrishna Sadien, president of the State Employees Federation, said he does not agree that there should be a single agency to determine wages and working conditions. “Public and private sector in Mauritius each has its own specificity, and it is not possible to have a single unit. I believe we need two separate units to look into salary and working conditions for each respective sector.” Radhakrishna Sadien added that there is no collective bargaining in the public sector, unlike the private sector. He however agrees that employers do not always play the game as it should be. “The public sector is more service-oriented, contrary to the private sector where we have more producing sectors. In addition, the private sector is motivated by profits. For the private sector, it is the National Remuneration Board that makes recommendations.”  The trade unionist said he agrees tnat the PRB is more regular, and unfortunately the NRB is not so regular in producing reports. He feels that it is imperative that the NRB be given the necessary tools and be empowered to come up with regular reports. “It is not normal that when we are talking about minimal salary we still have workers in this country who earn a basic salary of Rs 3,000 a month,” he concluded.