Low wages cannot be the cornerstone of wealth and prosperity. Every employee has equal rights to the rewards and benefits of prosperity
The recent choreographed government-private sector tango before the announcement that Rs 250 will be granted as salary compensation to those earning up to Rs10, 000 seemed to have occulted its most important element. That, economic miracle notwithstanding, this measure will, as confirmed by the Minister of Finance, benefit no less than 56.7% of the employees of the private sector who earn up to Rs10,000 per month.
This eye-opening statistic epitomizes the growing and yawning inequality between the have-nots and the haves in the country. It also masks the stark fact that it represents more than 200,000 employees in the private sector and that a significant number of employees within this income bracket, earn significantly less than Rs 10,000 per month. This in itself should have jolted the nation to attention instead of the general nonchalance and indifference. These employees who work in a diverse range of jobs are bread earners for their families.
In comparison, a small 3% of the employees of the public sector fall in this category. This shameful reality of Mauritius 47 years after independence is a damning indictment of our model of socio-economic development and of Mauritius Inc. itself.
We pride ourselves to be a middle-income country and are now aiming to become a high-income country with significantly improved indicators. How can the growing wealth and prosperity of the country be built on the untenable model whereby a significant proportion of its workforce and of society diligently contributing to this improved prosperity is maintained in tenuous conditions of livelihood with monthly incomes of up to Rs10,000? How can this go on against a backdrop when the unequal sharing of the improved prosperity is also affecting the purchasing power of the middle-class whilst the rich have become substantially richer?
This abject situation also underscores fundamental questions of principle. In the Mauritius of 2015 and soon 2016, staying competitive cannot mean squeezing and giving low wages and income to a significant proportion of employees. Conversely, if we are no longer competitive in a sector, the rational thing to do is to exit from the sector or focus on upmarket niches. This is in the natural order of socio-economic development of a country from primary to manufacturing and higher value added services sector. All developed countries that now enjoy high standards of living have gone through this development cycle. To put it simply, low wages cannot be the cornerstone of wealth and prosperity. Every employee has equal rights to the rewards and benefits of prosperity.
The mantra of making the cake become bigger first before it is shared is no longer tenable. The approach should be for new ventures to couch their business plans to be competitive whilst paying fair salaries to their employees.
Mauritius therefore needs to change gear to move into more value added goods and services sectors and up the value chain, which are higher skilled based and can support much higher remuneration for its employees trained accordingly. We must remember that those who did not invest in the state of the art highly productive automated equipment in the local textile industry in a timely manner prior to the end of the Multi Fibre Agreement at the end of 2004 went under.
The widening inequality, unemployment and the urgency of boosting growth remain the crying priorities of the country, the more so as growth forecasts despite the array of projects and ‘smart cities’ announced to come on stream, are under par.
In a context when the priorities of the country are so obviously socio-economic, it is flabbergasting that the government should now decide to embark on the wild goose chase of electoral reform. This is the more so as it is abundantly clear to all and sundry that it is the proposed tinkering with our Constitution and the contested proportional representation (PR) proposals which were unequivocally rejected by the people and caused the debacle of its proponents just a year ago at last years’ general election.
All this bunkum about PR and constitutional reform must end as such an important and sensitive issue has not only not obtained a public mandate, a requirement stipulated in the government programme, but is also widely disputed both here and in Rodrigues.
New ethos of solidarity and sharing
The world we live in today is not that of 1983. The most game-changing development has been the growing role of a new breed of altruistic business leaders comprising the wealthiest in the world who for more than a decade now are using their tremendous wealth to address and help resolve some of the major challenges facing the world and mankind.
Moved by the deep inequalities in the world, the richest in the world such as Bill and Melinda Gates, Warren Buffett, George Soros, Carlos Slim, Azim Premji or Li Ka Shing are giving back billions of US dollars of their enormous wealth generated through their tremendous business acumen to improve the livelihoods of people across the world through their foundations. Aware that it is pointless to accumulate massive wealth beyond a certain comfortable threshold, Bill and Melinda Gates have donated $ 27 billion to their Foundation, which supports medical research, emergency relief, education and poverty.
Warren Buffett has so far already donated $21 billion which includes generous endowments to the Bill and Belinda Gates Foundation. Bill Gates has also teamed up with Warren Buffet to set up the ‘Giving Pledge’, a promise by a growing number of the world’s wealthiest to donate a substantial portion of their wealth. Warren Buffett has thus committed to give away 99% of his wealth and Bill Gates half of his during their lifetime. The prime intent of their actions is to empower people through better education, healthcare and opportunities to improve their quality of life and livelihoods.
In order to help fight the threats posed by climate change and global warming to mankind and the conditions of life in the world, some of the richest billionaires across the world such as Bill Gates, Mukesh Ambani (Reliance Industries), Jeff Bezos (Amazon), Ratan Tata (Tata Group), Mark Zuckerburg (Facebook) or Jack Ma (Alibaba) have teamed up with other top investors to form the Breakthrough Energy Coalition. Its object is to invest in clean energy technologies in a bid to move towards zero emissions energy in the future. As we know, the financial crisis has dried up aid funds available from the developed countries to address the many challenges facing the world with dire consequences in particular for the poor and the underprivileged.
Is this new inspiring ethos of solidarity and sharing with everyone on board of the very rich to address the core ills afflicting the world through the use of a large proportion of their immense wealth and the competent delivery mechanisms of their foundations the game changing response for a better and more inclusive order in the world?
Is this new mindset among the richest and most successful business leaders in the world a harbinger of hope for the deprived teeming multitude in the world for the setting up of a more equal society in the context of the pervasive ineptitude of the political class to do so? In Mauritius, the situation is cryingly distanced from this altruistic ethos.
In the local context, the manner the Corporate Social Responsibility (CSR) is being implemented needs to be reviewed. In order to avoid inefficient use of the substantial CSR funds, government should use appropriate key performance indicators to monitor the effectiveness of these projects.
In addition, whilst addressing poverty, the core object cannot be to merely endow the poor with essential necessities such as a house. What is much more important is to train them to enable them to get out of poverty and become a contributing factor in the prosperity of the country. Instead of having mostly a poverty focus, the funds could also be used in a broader range of projects which help iron out bottlenecks such as the training gap between say high school or university graduates and the market place, which would have a positive impact on key economic indicators.
Cannot afford things to go amiss
We are now through the second act of the quarterly government-private sector meetings. In spite of the reassuring rhetoric from both sides after each meeting, the singular fact remains that the private sector projects are essentially ‘smart cities’ based.
The private sector of 1983 is materially different from that operating presently. Some of the new entrepreneurs that have emerged from modest beginnings have been among the most innovative and successful, carrying mainstream Mauritius with them in their prosperity. Is it not high time for the government engagement with the private sector to encompass its broader spectrum of actors than the usual institutional entities that have ring fenced this process? It is equally important that this vital process which will determine the future prospects of the country be transparent.
From the latest statistics available, there are 42,600 unemployed in the country. Of these, a significant 20% i.e. 8,520 diplomates and graduates have a tertiary education. An additional 15.7% are holders of an HSC whereas a further 13.4% are holders of an SC. In addition, some 4,000 university graduates trained abroad or locally enter the job market every year. How can high-end real estate developments and golf courses or business parks match and provide a sustainable employment response to the legitimate aspirations of these unemployed bearing in mind their diverse qualifications and skills spectrum? Is there a necessary matching of the projects with the employment and growth imperatives of the country or is it irrespective of these?
Mauritius cannot take the risk of not making sure through a rigorous appraisal of projects submitted that the objectives of employment both quantitatively and qualitatively and of growth are squarely on track and an essential element of the deliverables. We cannot have a second shot at this. It is equally vital that as the elected representatives of the people, government remains in the face of the shopping lists of demands to continuously seek as improved business facilitating conditions as possible, a fair arbiter of public interest at all times.
Time is of the essence. A new ethos anchored on a common national purpose must drive the vital transformation of the country towards higher levels of inclusive prosperity. Mauritius cannot afford not to do so.