allAfrica.com: Mauritius: Paul Romer - "My most negative surprise on arriving here was traffic congestion" (Page 1 of 1)

Mauritius: Paul Romer - "My most negative surprise on arriving here was traffic congestion"

The famous American economist held an enlightening public talk at Octave Wiehé auditorium on Tuesday. He tried to convince his audience that growth must undeniably go through 'creativity, education and new ideas '

The US economist thinks that the Mauritian government should keep subsidised education to show it's one of its top priorities.

Brain drain appears as a major problem in Mauritius. Even though education is subsidised, the authorities have always had much difficulty to attract laureates and students in general back into the country after their studies. "Mobility is certainly a good thing to gather new ideas but people should then bring them back," maintains the world-famous economist, Paul Romer. The most important channel, according to him, to economic growth is creativity and new ideas - achieved through education.

So, it is really important that the Mauritian government finds ways and means of convincing young Mauritians that their country is a nice place to live in. "One of the main things that might make them reluctant may well be traffic congestion, which was my first negative surprise when I arrived here," said the lecturer.

From the start, the American economist expressed his "joy to be here". For him, "Mauritius illustrates to a key-point" that led him to write a paper on the matter a long time ago. For a long time, remote areas and countries could not benefit from the progress achieved elsewhere.

Encouraging research

But then, thanks to technology and the opening of frontiers, such regions have caught up with progress. "Mauritius is a very good example where ideas from all over the world have increased the income and the opportunities that you wouldn't have had if you had no contact and trade with other countries."

For him, there is no doubt that the best way of achieving growth was education and ideas - not products in themselves. The example he took to justify his point - oral dehydration therapy - was indeed vivid. "Imagine your child was ill and could die if nothing was done to save him. You have one bottle of medicine to save him but your neighbour's child has the same problem and has more money to offer for the unique bottle of medicine available And imagine that, instead of having the bottle of medicine, your neighbour had the formula of the medicine - this would enable you and all parents to save their children."

For the economist, this illustrates the value of non-rival goods (the formula) compared to rival goods (the bottle of medicine). In fact, human history has shown that a Bangladeshi doctor could save millions of lives thanks to the formula of oral dehydration therapy that cures diarrhoea with basic inexpensive elements. "Non-rival goods are more valuable because they can be used by so many people." Changing rival (scarce) goods into non-rival goods creates value. "The more people there are to find new ideas, the better it is for a country, as it will benefit from so many types of creativity."

But, how come China has not become the biggest international power? "With so many people, people should have had many ideas that would make them achieve the most successful growth rate worldwide for a long time but why was it so slow to copy?" wondered Paul Romer. In fact, the expert explained that achieving growth depends also on the evolution of states, institutions and rules. "Some rules can just keep a country from engaging into catching up with the system. This was the case for a long time in China because they did not let ideas flow in and out."

As rightly pointed out by a member of the audience, intellectual property rights can be one example of those rules. Although there is nothing bad in introducing such rights, there is nevertheless a need for the right balance. In the United States, for instance, medical discoveries remain under property rights for quite some time before they are extended. "So, on one side, people are encouraged to find new ideas but, on the other, the state makes sure that everyone can benefit from the research in the long-term."

Fostering creativity

What the American researcher actually wanted to show was that "education is profoundly important in the process of growth". The most important thing is to have regulations that foster creativity and education because that's the only way to move towards non-rival valuable goods.

Rival goods are scarce and we are bound to find new ideas to use fewer materials to create more innovations in the future. The lecturer is, nevertheless, very optimistic - humanity has kept progressing for ages - one of his favourite examples is the Ipod "Education should always be the top priority for the government and it is important that, in Mauritius for instance, subsidies be kept for that purpose." He insisted that, beside getting new ideas from abroad, Mauritians should be increasingly capable of generating their own ideas.

A GOLDEN OPPORTUNITY

The visit of the famous economist in Mauritius is an initiative of the Board of Investment (BOI). Members of the BOI met him a few months ago when they were in the United States on an official mission with the minister of Finance, Rama Sithanen. The famous economist is attending the symposium on enhancing value-addition in the export of ICT services organised by the BOI in collaboration with the Commonwealth Secretariat that closes today at the Hilton Resort and Spa. His visit was such a golden opportunity that the University of Mauritius thought it should make more people take advantage of his knowledge of economics and original approach. This is why the UoM organised the public conference last Tuesday. Born in 1995, Paul Michael Romer is a professor at Stanford University. He is considered as an expert on economic growth. Paul Romer was named as one of America's 25 most influential people by Time magazine in 1997. In 2000 he started the online educational company Aplia. He has also received the Horst Claus Recktenwald Prize in Economics in Germany. Paul Romer's major works deal with economic growth.

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