Whatever happened to the democratisation agenda?

Whatever happened to the democratisation of the economy agenda of the Mauritius Labour Party (MLP)? We would like to think that this sensible and necessary agenda has not been dropped, nor has it been sacrificed on the altar of political convenience at this particular juncture when an alliance agreement had to be reached with the MMM.

That question however can only be answered by the MLP leadership, but we fail to understand why not even the least reference has been made to it in the ‘Electoral Alliance Agreement between the MLP and the MMM’, which was released on 20 September 14.

What comes under the “Main Policy Content” of the MLP-MMM Agreement in terms of its economic agenda refers to the proposals of, inter alia, “reigniting the engines of growth, increasing private sector and public sector investment, boosting foreign exchange earnings in the export of goods and services from both existing and emerging sectors, generating employment opportunities, consolidating and diversifying the economic base to improve resilience, enhancing productivity and sharpening competitiveness”, etc (italics are ours). How do these proposals match up with the ‘Framework for a Labour Party Economic Democratisation Policy’ (as worked out by the then Economic Democratisation Commission of the Labour Party) and which constituted its main electoral plank for the 2005 general election?

The authors of the Democratisation Policy Framework had in December 2004 promoted the Labour Party’s resolve to “unequivocally embrace an approach that will bring about a democratisation of the ownership and control of economic assets… achieve international competitiveness whilst at the same time integrate historically disadvantaged groups in the economic mainstream.” Further, they added that “Mauritius is badly in need of an inclusive society with chances of growth in fairness to everybody, and this cannot be achieved through the maintenance of a social structure which is non-racial only in words and without an equitable restructuring of the Mauritian economy.”

The LP’s economic democratisation project, they emphasized, “intends to bring reforms to the national economic structure that will result in democratising the latter and open the doors of economic opportunities to the majority of the population in order to mobilise the overall competitive advantage of the whole population endowed and/or to be endowed with resources, in order to attain optimal international competitiveness. This is not only an ethical consideration – which in itself is a justifiable end – but it also responds to the need to bring rationality and a greater dynamism and efficiency to the national economy.”

The jury is still out as regards the success or otherwise achieved by the Labour Party-led governments since 2005 on this score to date. Some progress has been achieved in certain sectors of the economy. However, the view has been expressed here and within the Party itself that we could have travelled much farther towards broadening the scope of economic opportunities if proper attention had been given to fixing the issues of teamwork and synergy among the stakeholder ministries. Their absence would have arisen during the latter part of the 10-year mandate due to ministers at the helm of certain key ministries like Finance, Tourism, Agriculture, etc., allegedly pursuing opposing agendas and not in line with the official ‘discours’ in relation to the democratisation agenda.

This Agenda might also have suffered from a weakening of the political resolve in anticipation of alliances to be contracted for the next general elections, thus the care taken not to unnecessarily ruffle the feathers of the prospective ally. It is publicly known that the MMM in particular does not drink from the same ideological well as the Labour Party. Its stand as regards CT Power’s bid to sharing part of the space in the energy sector and its constant harping on the supposed imminence of a “blackout”, with a view to bringing the government to give in to the demands of a few of the current power producers for increasing their production capacity, speaks volumes about its own (non-inclusive) agenda. This said, we are in line with the Prime Minister’s query about the financial soundness, both fiscal and ethical, of any potential provider, as well as its compliance with environmental concerns and the preference for renewable energy sources.

A Labour Party government would be expected to ensure that potential players be given a fair chance, that they should be empowered to overcome the obstacles which prevent them from contributing to increase the potential of the economy. Whoever can do this, notwithstanding epidermal, race or communal considerations, should be given the affirmative action chance to make the breakthrough for the sake of growing our economy.

To be fair, however, a government can do so much and no more if serious initiatives from other players are not forthcoming. We have argued in these columns that when we aim at bringing more and newer entrepreneurs to do business, the businesses should be viable and sustainable over time. We have thus argued about the need for serious and disciplined management from would-be entrepreneurs in the light of a large number of relatively small loans given to SMEs by the DBM which had to be written off. Failures were due to mismanagement or not evolving with market demand.

Mauritius being a market economy, in practice there is a dense network of interconnections in the way business is done in different sectors with the result that the same persons who have, historically, captured the heights of the economy do so over and again each time there is an interesting big new opportunity to do profitable business. Others are incapacitated right from the start. The resulting status quo means that none other than the existing capitalists make inroads into business in any meaningful sense to the exclusion of potential “intruders”. Worse this style of economic development has nurtured a business-foreclosing and rent-seeking mentality among the handful of our established business class.

Not only will persistence of this situation not unleash the entrepreneurial dynamism we should have been fostering to make new breakthroughs, it will also widen the already yawning inequality gap, as Thomas Piketty has demonstrated in his book ‘Capital in the 21st century’. The big question remains, therefore, which political philosophy will prevail in the matter of democratisation of the economy. And the indication from the Electoral Alliance Agreement is that such democratisation may well not be realised. Economic democratisation makes much economic sense, and should in no way be sacrificed for reasons of political expediency.

* Published in print edition on 3 October 2014

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