Adapt or Perish

Looking back at the events in Mauritius and some of the misguided government decisions of the past year, we invariably think of an amoeba moving hither and thither by trial and error, perpetually changing course at every obstacle in its way

The events of the past year have profoundly changed and re-shaped the world. A similar set of events are also re-modeling Mauritius. The established world order and its systemic failings are being more and more challenged by the people’s protest vote.

This is evidenced by the series of setbacks registered by ruling parties at the polls in the world. A spate of game changing events have basically turned the established order upside down. Similarly, a chequered series of events have also impacted the political and socio-economic landscape of Mauritius.

Thus, Europe, the United Kingdom and the United States, the main markets for our goods and services, will no longer be the same with the Brexit vote, the various political upheavals in France, Austria or Italy and the election of Donald Trump as the President-elect of the United States. However, despite the pervasive ire of the people against those in power, these as well as those roundly defeated at the polls continue to remain blind to the growing clamour of the people against the ruling political establishment and a model of socio-economic development based on economic liberalism, globalization, wanton financial speculation and free trade which have systematically failed the people and caused deepening inequalities.

In November last, the German Chancellor Angela Merkel announced that she will once again run for elections next year even though her popularity has plummeted because of her policies and her open-door migrant policy which saw more than one million migrants entering Germany and a surge of communal tensions. A series of terrorist attacks in Germany in the summer and the heavy toll taken by a lorry driven by a migrant ploughing through people in a Christmas market in Berlin have heightened the xenophobic rhetoric by right wing parties. Despite the signs that people want a different socio-economic and a people centric order, the Christian Democratic Union, the party which Angela Merkel leads, stated that she is absolutely determined to stand as a bulwark against populism and ‘strengthen the international liberal order’. Is this what vox populi and their dissenting vote spreading across the western democracies really want?

In contrast, Francois Hollande’s decision not to run for a second term stems from his reading of the mood of the people and the desire for new blood and talent to enhance the electoral chances of the Socialist party at the presidential elections to be held in April and May 2017. Not all political leaders put their own personal interests above those of the party or the country.

The loud message from the people to the ruling governments and the political parties is unequivocal: Adapt to the ground realities or perish.

A bull in a china shop

In the United States, the election of Donald Trump as President-elect opens a new era. His heavy-handed style has already raised controversy. Donald Trump’s first 100-day plan, released in October, which he called ‘Donald Trump’s contract with the American voter’ has already antagonized senior members of Congress. The list contains six measures to clean up the corruption and special interest collusion in Washington, DC; 7 actions to protect American workers and 10 legislative measures. The first 100-day plan includes proposals for a Constitutional Amendment to impose term limits on all members of Congress, or to work with Congress to introduce the required legislation that would repeal Obamacare. Donald Trump also proposes to fund the construction of a wall at the Southern border (with a provision that Mexico would reimburse the U.S.), encourage infrastructure investment, rebuild military bases and promote school choice.

Donald Trump’s more controversial actions include international trade so vital to our exports under AGOA. In a bid to protect American workers, he inter alia intends to upset the applecart by re-negotiating the North American Free Trade Agreement (NAFTA), withdraw from the Trans-Pacific Partnership, label China a currency manipulator and direct the Secretary of Commerce and the U.S. Trade Representative to list out all foreign trading abuses that unfairly impact American workers and take every legal step possible to end these abuses forthwith.

Similarly Donald Trump plans to undo the measures taken by Barack Obama in the context of US commitments under COP 21 in recognition of the serious threats of climate change and global warming on Earth. Alive to the mounting evidence on the adverse effects of climate change, Barack Obama proposed an aggressive energy policy reform aimed at reducing CO2 emissions. He therefore called for a moratorium on all coal use for energy production as coal is the largest potential source of CO2 emissions. In contrast, Donald Trump has proposed to unlock energy production from highly polluting coal and lift the restrictions on the production of the energy from coal. It all conjures the disquieting hunch of immense collateral damage akin to a bull in a china shop.

Some of the proposals have already met with direct opposition from Congress. Senate Majority Leader Mitch McConnell shot down Donald Trump’s infrastructure plans, calling it not a top priority and added that Trump’s proposal to impose term limits on Congress ‘will not be on the agenda in the Senate.’ To put it simply, it is evident that the style and policy approach of Donald Trump will entail a roller coaster ride for Americans and the world at large.

In such a context, it would be foolhardy for Mauritius not to smartly put its act together to intelligently ride over the many challenges ahead. It is therefore vital that the Ministry of Foreign Affairs, Regional Integration and International Trade and its top cadres seasoned in safeguarding in association with the private sector our export trade and diplomatic interests are again given the prime role of protecting these vital interests in the choppy times ahead.

In the past year this key role has too often been assumed by Ministers and cadres not particularly savvy about the important technicalities of international trade negotiations and diplomatic powwowing. The many challenges faced by Mauritius in our main markets in post Brexit UK, Europe and the US under Trump require that we field our best team instead of the dilettante.

Looking back at the events in Mauritius and some of the misguided government decisions of the past year, we invariably think of an amoeba moving hither and thither by trial and error, perpetually changing course at every obstacle in its way, its level of ambition repeatedly contained.

The GDP real growth rate of 4.1% forecasted for 2016-17 in the July Budget Speech already set the tone. A sustained growth rate of at least 5% is required if Mauritius is to meet its ambition to become a high income economy. It would appear that this government objective has been shelved for the time being. Last week, Statistics Mauritius cut the growth rate for 2017 to 3.8%.

Lifeline, props and pipedreams

In the midst of the tumult caused by the exit of the PMSD from government, the Sugar Industry Efficiency (Amendment) Bill was surreptitiously passed in the National Assembly last week despite the fact that the sugar industry, according to the findings of a July 2016 EU study, ‘is not competitive at world market prices.’

The ‘Study on Current and Forecast Market Developments for ACP Sugar Suppliers to the EU Market’ was commissioned by the European Commission and prepared by LMC, the same firm which carried out the study on the Mauritian sugar industry in June 2015.The Commission’s report also contends that limited regional market access means that despite efforts to diversify markets and products, the EU market still appears to be the most interesting market for Mauritius. The stark reality is that sales to the EU market generates losses.

It should be recalled that the lack of competiveness of locally produced white sugar in the more difficult liberalized market conditions had been flagged last year. The June 2015 report’s flawed proposals endorsed by the Minister of Agriculture had also been forcefully contested by the sugar planting community, to little avail.

Last week’s Cabinet decision to pay compensation to planters from the Sugarcane Sustainability Fund to shore their revenue yet again confirms that the revenue derived from the sale of sugar cannot cover rising costs, thus engendering losses. The policy of providing a lifeline to prop an uncompetitive sugar industry through payments from the Sugarcane Sustainability Fund is untenable nor sustainable. It is tantamount to throwing good money after bad. Under such circumstances, the Minister’s leitmotiv about maintaining an annual production of 400,000 tonnes of sugar seems surrealistic. Pipedreams cannot mask reality.

It is equally flabbergasting to note that whilst the SIEA (Amendment) Bill aims at developing an ethanol and molasses framework to allow the mandatory blending of ethanol and mogas (at the expense of vehicle owners) and a framework to promote a sugar based agro-industry to generate value added, it does not address any of the many outstanding concerns of the sugar planters.

At a time when byproduct-generated new revenue options from ethanol and blended car fuel are being provided to the corporate sector, there is no proposal to translate the long outstanding 2007 government commitment to provide 35% shareholding to planters and workers in the sugar cane industry. This to ensure that the planters and workers can also benefit as the corporate sector from revenue streams from the diverse plants in the sugar cane cluster using their byproducts as feedstock, to shore up their falling sugar revenue.

Is that another sign that despite the rhetoric, government has yet again let down the sugar planting community at a time when falling sugar revenue is causing abandonment of sugar cane farming on an increasingly large scale? Why such flagrant double standards?

In contrast, last week’s adoption of the Non-Citizens (Property Restriction) Bill whereby non-citizens can henceforth buy property in Mauritius essentially enlarges the market base of potential buyers for real estate developers and smart city promoters. In parallel, it will significantly hike real estate values in the country and generally make them even more inaccessible to the young, people from diverse walks of life and mainstream Mauritius.

Except for ending the hawkers’ invasive forays in urban areas, 2016 was a bad year in terms of policy framework, government decisions and initiatives to resolve the diverse problems of the people and the small man. There is a mounting exasperation at the glaring inequity of government policies which spawn inequalities and their patent ineptitude to address and solve the real concerns of people in a comprehensive and inclusive manner. This will certainly not do.

Mrinal Roy

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