square one in the pre - crisis mode of operation. the world will be different whether in terms of regulating the banking sector, market access or whatever. there are some lessons to be drawn from this crisis which should lead us to make some changes. the government, private sector operators and employees cannot do as if the crisis did not happen. the crisis has happened, it has highlighted some structural weaknesses in some parts of the economic apparatus, and we have to draw the lessons that are required because everybody else in the world is doing precisely that. you have to adjust to the brave new post - crisis world. * is all the talk about regulating more firmly the financial sector and taking action against “ tax havens ” merely a screen to deal with a situation that even the west and its economists may not have fully understood? there is an element of scapegoating in picking on the tax havens. it is not an essential part of what brought the world to the crisis we are living through presently. it may be quite important for some countries that lose tax revenues in these havens ; it is quite normal that people should pay their taxes and the way you pay your taxes must be linked to the place where you have your normal operations or where you derive your revenue from. we should by all means discourage harmful tax competition or regulatory arbitrage. but this is nothing new. if you go back historically the whole talk about transfer pricing, especially by multinationals as they were then called, started from this. if we go even further back, we had the likes of luxembourg, liechtenstein and others of this world, that were harbouring these very opaque and murky entities. it was there, as far as i remember before the second world war. what is new now is that you have many other jurisdictions that have joined in this exercise so that you have many more of these offshore financial centres some of which are tax havens. i must here dispute any allegation about mauritius being a tax haven. we are not one, we have never been one and we have always rejected this kind of charge. we have never rolled out the welcome mat for money launderers and tax dodgers. we have a transparent and cooperating jurisdiction, and we are proud of it. * are you saying that our level of financial regulation and international commitment have been beyond reproach for years? so, why was it an issue at all to go and persuade oecd about the obvious? we never had any difficulty with

the people who come to supervise our compliance with international rules and regulations. the imf and the financial action task force and, subsequently the fsap, have jointly with the imf have been monitoring our jurisdictions for more than 15 years now. we also always pass through with flying colours with respect to the report on standards and codes, which deals with compliance with all international norms, specially with regard to tax compliance. we are a clean, reliable and trustworthy jurisdiction. and since the list of tax havens has been produced by the oecd the day after the g20 meeting, i think it was worthwhile for us to make our case known just in case there was a danger that somebody somewhere might include us in the wrong list. for me personally this risk was very remote in the sense that we have always been aboveboard in this matter. the financial services commission, our sister regulator, is doing a great job since we set it up a long time ago as mobaa. we have no reason at all to reproach ourselves. the fsc and all the management companies and others involved in this business have a shared responsibility for keeping this good image for mauritius. to come back to your question, i think the attempt to pin the blame for part of the crisis on tax havens was very much a case of scapegoating. the real issue was a critical failure of supervision and regulation in some key markets. there was also a real failure in global surveillance, in the lack of an early warning system, in ensuring that the right incentives systems were in place in crucial areas of the banking, especially the shadow - banking and finance sector. a system which allowed people to get bonuses based on bad risks that they were accumulating for their enterprises, or which closed its eyes to rating agencies getting paid by the very people they were rating or which provided for walk - in loans at loan - to - value ratios which would make a prudent banker shudder, just could not last. so there was a total failure all along the line and if you add in that picture things like hedge funds, hot money flows, securitisation, credit - default swaps etc., you have the perfect recipe for disaster. why pick on tax havens? * you were speaking earlier about the wrong policies that we should not adopt in the wake of the financial crisis. what is your view of the stimulus package proposed here? are we not simply aping countries in the west that have