Keynote address of Maneesh Gobin at launch of Regulatory Impact Assessment (RIA) framework in Mauritius

The Attorney General made a Keynote address on the 4th Septembre 2019 on the launch of the project of Regulatory Impact Assessment (RIA) framework in Mauritius.

Ladies and Gentlemen

1. It is with great pleasure that I am here with you today on this occasion of the official kick-off of the project to establish a Regulatory Impact Assessment framework in Mauritius; a measure contained in the 2019/2020 National Budget presented by the Honourable Prime Minister and Minister of Finance and Economic Development.

2. On behalf of Government and in my personal name, I would like to thank the European Union for funding this very important project which will mark a milestone in the history of rulemaking in Mauritius. This project is funded to the tune of half-a-million Euros, and the context is of a wider ‘Improving the Business and Investment Climate Project’ which is financed to the tune of 10 million euros by the European Union and which includes the implementation of the National Electronic Licensing System, amongst others.

3. I would also like to thank the Organisation for Economic Co-operation and Development, OECD, for accepting to accompany us in the design and implementation of this very ambitious and important project in Mauritius.

4. We have set the target to graduate to a high-income economy and the Government has a defined roadmap which will lead the country to this objective. This path, ladies and gentlemen, goes through innovation, technology, and the right framework for doing business. This will define our future for at least the next 2 decades.

5. Government has laid strong emphasis on providing the right business environment for investors and the business community at large. The subject of ‘Doing Business’ is championed by the Honourable Prime Minister himself, as you are aware, and with the support of all line ministries and public sector institutions. Government has also established a clear line of communications with the industry in pursuance of its reform agenda. But, more importantly we have established a defined plan for reforms: short term to reap the low hanging fruits, and medium to long term to implement structural reforms in the economy.

6. During the past 2 years, we have come up with Business Facilitation Acts, one in 2017 and one in 2019, and we have amended more than 50 legislations with the sole purpose of improving the business environment. The Business Facilitation Act 2019 amended 29 legislations, and as it was announced in the budget, we are in the process of amending 22 secondary legislations, commonly called Regulations, and we are coming up with 4 new ones to streamline procedures and processes. All these amendments are the result of a Business Process Re-engineering exercise carried out across numerous Ministries and public sector agencies.

7. Furthermore, the Economic Development Board is engaging with the Judiciary to work out an action plan for reforms in the process of settlement of commercial disputes. My office is providing all the required support and I would like to seize this opportunity to thank public and private stakeholders in the legal profession who are participating in this initiative.

8. Whilst we continue to address impediments in licensing processes and streamline procedures to facilitate trade, it is quintessential that we think about the next generation of reforms that will propel our country to the next level. This is where the adoption of good regulatory practice in the rule-making process becomes high priority on our agenda. A Better Regulation Strategy entails easy access to rules and commercial information, legal security and protected rights, as well as predictability and guaranteed inputs into rules before they are adopted.

9. This happens through conducting a Regulatory Impact Assessment before the adoption of legislations which have potential impacts on the business environment.

10. RIA therefore is a systematic process which involves estimation and comparison of costs and benefits of different regulatory alternatives. It helps in adoption of such alternatives which have the potential to result in maximum net benefits to the stakeholders. It necessitates justification of regulation and consequently aids in avoiding adoption of unnecessary regulations.

11. Let me share with you, Ladies and Gentlemen, some information reported by reputed international institutions.

12. Regulations are estimated to command 10 to 20 percent of the world’s GDP and, if not well thought, they may slow growth of GDP by distorting efficiency, and reducing trade, competition and innovation.

13. According to the World Bank, reducing direct and indirect regulatory compliance costs across a broad front, while achieving or enhancing the benefits of regulation, can significantly boost performance at microeconomic and, depending on scale, macroeconomic levels.

14. As per the World Bank again, licensing reform in some countries led to aggregate productivity improvement of around 22% of firms affected by the reform.

15. The Heritage Foundation and the Wall Street Journal yearly index of economic freedom demonstrate that there exists a very strong relationship between economic freedom and GDP. Countries that improved their index of economic freedom improved their economic growth.

16. Last, but not least, as per the OECD Database on Product Market Regulation, regulatory reforms that increase market freedom have positive effects not only in product markets, where they tend to increase investment, innovation, and productivity, but also for employment rates.

17. I wish to also share with you that, during the Commonwealth Heads of Government Meeting last year, adoption of good regulatory practice among member states was one of the various actions identified to boost intra-Commonwealth trade and investments, further to which a technical working group has been set up to define the practices to be adopted by the member states.

18. Ladies and Gentlemen, RIA is not something new. It was first introduced in the United States in 1978 under the Carter administration, and it was used as a tool to assess the impact of inflation. I am informed that RIA is a practice in almost all OECD countries. But the global spread of RIA is expanding. Today, there are more than 90 countries which have an impact assessment policy. Amongst them, and in addition to the United States, OECD countries and EU, there are other countries like Canada, Australia, New Zealand, and Malaysia, and closer to us South Africa, Uganda and Zambia.

19. It is therefore apposite to us that we strengthen the practice for better regulations in our country.

20. However, the adoption and implementation of a RIA Framework also needs to factor in the realities of our own jurisdiction. It is not and cannot be a one size fits all. For instance, Singapore does not have a formal structure for Regulatory Impact Analysis framework as it is a small territory with a well-connected government, making it easy to quickly evaluate policy impacts and connect with relevant stakeholders to gather feedback. However, the government is extremely receptive to any feedback and rely on stakeholders to act as its eyes and ears in identifying areas of regulation which may require further review and reform. Also, for major projects, a careful cost-benefit analysis, an evaluation of stakeholder impact and public consultation are carried out.

21. It is therefore important that, for us here in Mauritius, whichever framework is found best suited, rulemaking for business purposes is not hindered and is not be delayed. The scope of proposed legislations going through a RIA should therefore be properly defined.

22. Finally, we need to have the required institutional set up to ensure better regulation policies. For instance, in UK, the Better Regulations Executive watches over the conduct of RIA, whilst in Malaysia the responsibility is entrusted to the Malaysia Productivity Corporation.

Ladies and Gentlemen,
23. The Government is taking all necessary measures to stimulate an industrial revival, to identify and develop high-value added export-oriented niches. We are sparing no effort in terms of infrastructure development, professional training, connectivity to markets and improvement of the business climate to create an ecosystem that is conducive to entrepreneurship and the attraction of high-tech companies. It is this Government which introduced the Regulatory Sandbox License, with the aim of providing a test environment and accommodating projects where a regulatory vacuum exists, especially in this era of disruptive innovation. Our objective is the creation of innovating jobs and business services in high value-added sectors.

24. With the implementation of such a project in Mauritius, this Government therefore reinforces its commitment of a new public management ideology, which is geared towards being a client-oriented Government with high efficiency, performance measurement, transparency, more business entry and start-ups, more jobs, more innovation, and a more stable long-term growth.

25. With these words, I wish to reiterate the full support of my office for this project and I also, and on behalf of the Honourable Prime Minister, request your active participation with a view to making this project a resounding success.

26. I wish you all fruitful deliberations and to our foreign participants, I also wish you an enjoyable stay on our islands.
Thank You.