- Dr the Honourable Kaviraj Sukon, Minister of Tertiary Education, Science and Research
- Professor Ephrem Redda, Chair of the SSIRC 2026
- Professor Mabutho Sibanda, Executive Dean of the Faculty of Economic and Management Sciences, North West University
- Professor Babs Surujlal, former Dean of the Faculty of Economic and Management Sciences, North West University
- Professor Kavi Kumar Khedo, Vice-Chancellor of the University of Mauritius
- Professor Boopen Seetanah, Dean of the Faculty of Law and Management, University of Mauritius
- Professor Crizelle Els, Director of the WorkWell Research Unit, North West University
- Members of the SSIRC 2026 Organising Committee
- Distinguished guests, esteemed keynote speakers, respected researchers and academics
- Ladies and Gentlemen,
Good morning.
I am delighted to be with you today. I would like to express my sincere thanks for the invitation to deliver a keynote address for the Social Sciences International Research Conference (SSIRC) 2026, jointly organised by North West University and the University of Mauritius.
At the outset, I would like to commend the organising committee for putting together a rich program with an impressive line-up of speakers on a broad spectrum of issues across the social sciences. The value of international research conferences such as the SSIRC cannot be underestimated. Beyond pushing the frontiers of knowledge, these fora provide opportunities for rigorous debates; foster the sharing of experiences across generations of researchers and across countries; and help lay bare the extent of our collective ignorance, a necessary precondition for intellectual humility and better policymaking.
For policymakers, perhaps the most important consequence of recognising the limits of our knowledge is the need for both conviction and humility: conviction in the principles that have stood the test of time, and humility in the face of a future that cannot be perfectly predicted. Today, I would like to reflect on how we strike that balance in a changing world.
We live in a period which is often described as unprecedented, with socio-economic and technological transformations that are as profound as they are fast paced. And uncertainty seems to have become the defining feature of our time. Yet, there is a sense in which economic policymakers confront the same fundamental challenge that their predecessors have always faced: how to promote stability, prosperity, and opportunity in a world which is constantly evolving. The instruments change but the responsibility does not.
Thus, my address today will focus on economic policymaking in a changing world and will be organised around three key questions:
- First, what principles have endured the test of time?
- Second, what emerging trends should policymakers pay particular attention to?
- And third, what do we still not know and how do we design policies in the face of such profound uncertainty?
Let me turn to the economic principles which have endured the test of time. Some are rooted in fundamental economic relationships; others reflect deep and persistent realities of human behaviour and economic organisation.
The first principle I want to submit for your consideration this morning is that the budget constraint is always binding. One of the first equations which students taking introductory graduate-level courses in macroeconomics are introduced to is the intertemporal budget constraint. This equation shows how consumption, income, borrowing, lending, assets, and liabilities are linked over time. It tells us that the present value of lifetime consumption cannot exceed the present value of lifetime resources.
Every household understands that borrowing today creates obligations for tomorrow. A family may borrow to send a child to university or to navigate a difficult period. But that borrowing must ultimately be serviced through future income, and sometimes at a higher interest rate. What is true for a household is also true, in different ways, for firms and governments. Governments can borrow to finance investment or respond to shocks, but over time, debt must be serviced through future income, taxation or the sale of assets.
The broader lesson is that decisions about consumption, borrowing and investment must ultimately be confronted with the tests of solvency and sustainability. This principle is particularly relevant for policymakers because the benefits and costs of decisions are often separated across time. Choices made today can shape the constraints and opportunities for future generations.
Central banks have the benefit of a clear mandate and a policy framework to inform and guide their policies, but these are not always well understood by all stakeholders.
The next principle which I would like to highlight is rooted in human behaviour. It is that people respond to incentives. The success of policies, regulations, and social programmes depend as much on their design as on how individuals and institutions respond to them. The response itself may be based on perceptions rather than facts. Yet, perceptions can still powerfully influence decisions and, in turn, shape economic outcomes.
Central bankers encounter this reality frequently. Consider the case of inflation expectations, for example. Even before prices have actually risen, households and businesses that believe inflation will increase may bring forward purchases, demand higher wages, or raise prices in anticipation. These actions can themselves contribute to inflationary pressures, making the original expectation partly self-fulfilling and underscoring the need for central banks to act early on inflation.[1]
The final enduring principle I would like to focus on is that institutions matter. Douglass North demonstrated how institutions shape incentives and economic outcomes over time. Daron Acemoglu, Simon Johnson and James A. Robinson have shown that differences in countries' growth trajectories often owe less to geography, size or culture than to the quality and inclusiveness of their institutions. Francis Fukuyama, meanwhile, has reminded us that good institutional design is necessary but not sufficient. Institutions must also be able to execute their mandates effectively. This idea underpins efforts to bolster central banks’ independence and improve their policy communications in many countries.
Ladies and gentlemen,
The principles governing incentives, constraints and institutions evolve slowly, but the context in which they operate can change dramatically and sometimes quite suddenly. Many of the policy challenges we confront today arise not because economic fundamentals have ceased to matter, but because powerful structural forces are reshaping the way these fundamentals manifest themselves.
Let me therefore turn to the second question: what developments are likely to shape the economic and policy landscape over the coming decade?
The most predictable of these developments is demographic change. Across much of the world, populations are ageing, labour force growth is slowing, and dependency ratios are rising. In Mauritius, the population has peaked and reached 1.24 million in 2024. On current trends, total population is projected to decline by 30 percent by 2070.[2] In the absence of offsetting factors and policies, these trends may constrain potential growth and increase pressures on public finances. More broadly, demographic shifts influence labour supply, savings behaviour, asset prices, and long-term economic growth.
Adding to these demographic trends is the growing challenge of climate change. Climate-related disruptions are already being felt through more frequent extreme weather events, pressures on agricultural production and increased volatility in food and energy prices. At the same time, the transition to a lower-carbon economy is reshaping investment patterns and creating new opportunities for innovation and growth. The 2026 World Bank’s Country Climate and Development Report for Mauritius notes, for example, that investing in renewable energy and optimising marine resources in a sustainable manner could create up to 32000 jobs by 2030. For policymakers, the challenge is to support the transition while preserving economic and financial stability and avoiding greenwashing.
A third development is the evolving geopolitical landscape. For several decades, globalisation was characterised by expanding trade, deeper market integration and increasingly efficient supply chains. While these forces remain important, strategic competition and concerns over economic security are leading many countries to place greater emphasis on resilience alongside efficiency. For small open economies such as Mauritius, navigating this changing environment will require maintaining openness while adapting to greater fragmentation and uncertainty.
Finally, there is a development whose pace distinguishes it from all the others: artificial intelligence. Demographic shifts unfold over decades, climate transitions over years, and geopolitical realignments over policy cycles. Artificial intelligence, by contrast, is capable of transforming economic activity within remarkably short periods of time. Its ultimate impact remains uncertain, but its potential to reshape productivity, employment, and business models is difficult to ignore.
Taken together, these developments remind us that the future economy will not be shaped by any single trend. Rather, it will be shaped by the interaction of several profound transformations. An ageing world is confronting climate pressures. Climate transitions are unfolding within a more complex geopolitical environment. And all of this is occurring at a time when technological change is accelerating at an unprecedented pace.
Ladies and gentlemen,
There is another reality we must acknowledge. Not all the forces that will shape the future are visible today. Policymakers are often expected to provide certainty in an uncertain world. However, the most consequential developments are frequently those that few anticipated. Financial crises, pandemics, technological breakthroughs and geopolitical ruptures have repeatedly altered economic trajectories in ways that were difficult to foresee.
This observation is neither an argument for pessimism nor an excuse for inaction. It is a reminder that good policymaking is not primarily about predicting the future with precision. It is about preparing for a range of plausible futures while retaining the capacity to respond when circumstances change.
We know that demographic shifts will influence labour markets. We know that climate change will create both costs and opportunities. We know that geopolitical developments will affect trade and investment. And we know that artificial intelligence will transform production and reshape occupations.
Going back to my third question, what we do not know is the precise magnitude, timing or interaction of these forces. Nor can we anticipate every future innovation, disruption or crisis. Beyond the uncertainties we can identify lie the genuine unknowns: developments that are not yet visible and opportunities that have not yet been recognised.
The challenge for policymakers, therefore, is threefold:
- First, they must manage the known realities of today. This requires maintaining sound macroeconomic fundamentals, preserving price stability, safeguarding financial stability and ensuring fiscal sustainability. These foundations remain indispensable, regardless of how the world evolves.
- Second, policymakers must prepare for emerging trends whose direction is broadly understood even if their ultimate consequences remain uncertain. This means investing in human capital, strengthening resilience to climate risks and fostering an environment that supports innovation and adaptation.
- Third, policymakers must cultivate agility. In a world characterised by uncertainty, flexibility becomes essential. Policies should be robust across a range of scenarios rather than narrowly optimised for a single forecast. Importantly, institutions must be capable of learning and adapting as new information emerges. These approaches underpin much of our work at the Bank of Mauritius, including for the assessment of the monetary policy stance, financial stability risks, and the effects of climate shocks on the economy. Through regular dialogue with academia, other central banks, international organisations, and global standard setters, we seek to continuously adapt our policies and frameworks to bring them in line with evolving best practice.
Ultimately, the objective of policy is not to eliminate uncertainty. Rather, it is to build institutions capable of withstanding shocks, adapting to change and continuing to serve society under a wide range of future circumstances.
The future will undoubtedly contain surprises. Some will test our resilience; others will expand our possibilities. Our success will depend not on our ability to predict every disruption or foresee every turning point, but on our ability to remain prepared, adaptable and forward-looking when those developments occur.
In that respect, conviction and humility are not opposing virtues. They are complementary ones. Conviction provides the foundation upon which sound policy is built and meaningful research is pursued. Humility reminds us that no model, institution, researcher or policymaker possesses complete knowledge.
For policymakers, conviction anchors decisions in enduring principles; humility guards against false certainty. For researchers, conviction inspires the search for new knowledge; humility recognises that answers often reveal new questions.
Together, conviction and humility provide the best guide we have for navigating an uncertain world. They encourage us to remain anchored in what we know, while remaining open to what we have yet to discover.
Perhaps this is where the role of social sciences research is most important. It helps us ask better questions, challenge assumptions, understand trade-offs and recognise where our knowledge remains incomplete.
This is why conferences such as SSIRC matter. They bring together different disciplines, perspectives and generations of researchers. They allow ideas to be tested, challenged and refined. And, ultimately, better research contributes to better institutions and policies.
For the young researcher participating in this conference, the graduate beginning her career, and the family building a future for their children on this island, the world they will inherit will be markedly different from the one we know today.
As policymakers, we cannot promise them certainty. What we can do is build strong institutions, invest in knowledge and human capital, preserve the foundations of stability, and remain willing to adapt to changing circumstances. It is for them that conviction and humility must guide policy choices. And it is in their success that our institutions will ultimately be judged.
Thank you for your attention.
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Dr Priscilla Muthoora Thakoor
Governor of the Bank of Mauritius
9 September 2026
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