No one finances elections for fun

Interview: Kugan Parapen

The MTC-GRA tussle was inevitable

When you pour millions behind a political alliance, you expect your agenda to be fulfilled

* ‘governments since independence have been the ‘sirdars’ of the ruling economic class.
If we dissect the anatomy of victorious electoral alliances down the years, we will find that most, if not all of them, surfed on populist measures’

* ‘Mauritius now boasts the highest income per inhabitant in Africa. Does the population feel rich? Do civil service officers feel rich? Do pensioners feel rich?’

Kugan Parapen needs no introduction as an outspoken activist on several fronts and one of the leading economic voices of Resistans ek Alternativ (REA). The party’s views on economic development priorities, its long challenge of the communal descriptors in our electoral system, are well recognized and he carried a honourable 4% of votes at the November 2017 by-election in Belle-Rose/Quatre-Bornes constituency. We invited him to share his views on the state of the country and government when the atmosphere is loaded with disenchantment, social turmoil and economic uncertainties, and, as expected, he minces not his words

Mauritius Times: There are a lot of hot issues at the moment. There are those relating to energy and the CEB-Terragen conflict, the MTC-GRA tussle about the organisation of horse racing, the rising cost of living and public discontent, the controversy surrounding the deportation of a Slovak national… all of which the government is having to grapple with without a break. We do not know why all this is happening now, but the government seems determined so far not to give way. What is your reading of what’s actually happening, and the government’s response to them?

Kugan Parapen: Of the multiple issues you mention, there is a distinction that can be made. The energy crisis, the rise in the cost of living and the growing public discontent are part and parcel of the ongoing economic crisis. On the other hand, the MTC-GRA tussle about the organisation of horse racing is not related to the rest and has more to do with politics, or rather cronyism. Lastly, the deportation of a Slovak national is another reminder of the erosion of democratic principles in Mauritius. Aggregated together, we have an overall picture of our society in a nutshell. 

On the social front, one has to wonder as to whether magma is about to become lava? Leftist political forces in this country have warned the population of the upcoming economic and social chaos for many years but their repeated warnings have mostly fallen upon deaf ears. The so-called extremists of the left, who have been marginalised by most of the mainstream media and laughed at by the neo-liberal political parties, had long predicted the downfall of the Mauritian economy. And we can now say that things will get worse if the ills of our economy are not treated at source.

Years of palliative pseudo-economic policies have masked the real issues of our economy from the population but the day of reckoning seems to have arrived. With the debt ceiling having been effectively reached, if not breached, one has to wonder whether the game is nearly over for our debt-binging government?

Many seasoned political observers point to the fact that whenever the population feels impoverished, the ruling government becomes very unpopular. For years, the purchasing power of the population has been eroding but that was more on a relative basis than an absolute one. For example, it is statistically proven that the share of the wealth created that accrues to the labour force has been consistently falling over the last 50 years at the expense of the owners of capital. It is also indisputable that the tax burden carried by the population is disproportionate to that borne by the wealthy. Such relativism unfortunately does not resonate much with the working class. Absolutism however does.

The government’s response to the inflation crisis has been mostly muted so far. And it comes as no surprise. In the years leading to the pandemic, the government had already raided the reserves of the State to finance their electoral promises. We warned then that the country was about to face an economic cyclone with very weak foundations. It is true that rising prices is a global phenomenon but few other countries will experience the magnitude of increase in prices as Mauritius will. Our structural trade imbalances have led to a significant depreciation of the local currency over the last few years and combined with the rising commodity prices, it has created a rather toxic economic environment.

With respect to the MTC-GRA tussle, it was inevitable given the political setup. No one finances elections for fun. When you pour millions behind a political alliance, you expect your agenda to be fulfilled. In this instance, the victim seems to be a historical establishment and may be that is why it is getting so much attention. But this has been happening time and again. Some finance political parties so that they can destroy wetlands to erect a hotel. Others set their eyes on public beaches. Cronies exist at all levels of society. Think of all the juicy state contracts that are allotted under a mandate. Cronyland!

* The CEB-Terragen Ltd tussle has again brought to our attention the unresolved issue of energy generation by the Independent Power Producers (IPPs) on terms and conditions that are considered to be both onerous and unusual. Why do you think successive governments have been unable to resolve this issue?

Crony capitalism knows no barriers. What have our local neo-liberals not said about capitalism? They praise the invisible hands of demand and supply in public and resort to corrupting the allocating mechanism in the shadows.

All IPPs form part of conglomerates who contribute millions year in year out to the coffers of political parties, be it the governing party or opposition mainstream parties. Successive governments cannot be thought of as problem solvers for the simple reason that they are part of the problem.

It is not that they have been unable to resolve the energy issue, it is them who have created the issue in the first place. Be it Jugnauth, Ramgoolam or Berenger, they have all contributed to privatise the energy sector of the country. They have all, at some point or other, under their prime ministership, signed off lucrative contracts with the IPPs. Further down the line, they have extended these contracts when they were close to expiring.

There is a reason why the left does not differentiate among these mainstream parties – their modus operandi are exactly the same when it comes to financing. They all eat on the same immoral plate. And we expect them to bite the hand that feeds them? It would seem that crony capitalism abides by an invisible hand after all…

* But the suspension of electricity production by Terragen Ltd apparently due to the rise in prices of coal has brought home the risks to our energy security when 60% of the electricity the CEB distributes to the public comes today from the IPPs. Those are risks worth addressing at the earliest lest we do not want to be held hostage by any business interest, isn’t it?

A key industry like the energy industry should never have been privatised in the first place.

It is widely known that the energy industry is one of the most non-cyclical industries for an economy. Irrespective of the stage of the economic cycle, energy consumption patterns remain more or less intact. Pre-IPPs, the Central Electricity Board was producing all of the energy requirements of the society. It should have remained the same.

I am a staunch advocate of the principle that economic needs should not be privatised at any cost as opposed to economic wants. Access to economic needs is the locus of human dignity and it is the duty of any responsible and caring government to ensure that all members of society can satisfy those needs in the most efficient manner.

Efficiency has often been associated with profit maximisation because it incorrectly assumes efficiency has to do with business interest only. From a societal perspective, efficiency has a whole different meaning. Efficiency pertains to welfare maximisation for society rather than profit maximisation. And what better way to optimise welfare than to ensure that access to basic needs is done in an efficient manner, that is, in a cost-effective way.

From my understanding, Terragen Ltd has evoked a ‘force majeure’ to terminate the contract. How can a rise in the price of raw materials (in this case, charcoal) be a ‘force majeure’? Or are there loopholes in the contract?

In any case, it would seem the era of privatisation of profits and socialisation of losses is still on. It remains to be seen how the government reacts to the situation and my gut feel tells me the answer will lie somewhere in the budget.

* As regards public discontent about the erosion of their purchasing power, Government has not been more forthcoming in terms of concrete measures to mitigate the hardships of less-well-off sections of the population, except for the importation and price subsidies being granted to commodity importers and retailers. Can it do more?

Of course, it can do more. It should do more given the hardships faced by the population, especially those at the bottom of the ladder. It is all a matter of willingness. In so many countries around the world, the government has been very reactive in the face of soaring fuel prices. Some have reduced the tax levied at the petrol pump while others have provided a rebate to consumers.

In Mauritius, no immediate action has been taken. Under the prime ministership of Pravind Jugnauth, more than five additional rupees have been levied per litre of fuel. That was done in a context when oil prices were at historical lows. The tide has now turned and the population is being pinched very hard by the opportunistic tax policies implemented in previous years.

Furthermore, vehicle drivers are still contributing towards the purchase of vaccines. When will this come to an end? Finally, the State levies 15% of Value Added Tax on the different levies slapped on fuel prices. This must be one of the most ridiculous and abusive policies ever. In effect, the State is taxing taxes! One for the textbooks!

* Public debt is going up, yet the government seems unable to get its priorities right: billions will go into what are considered to be white elephants, many more have gone into the MIC for distressed companies; there is also unchecked depreciation of the rupee. What do you anticipate might happen if there is no reorientation in policy in the forthcoming Budget 2022-23?

Young professionals are fleeing the country as they see no future for them and their children here. One could argue that some migration has always taken place over the years but the trend seems to have accelerated over recent months. While I would not go as far as saying that it is akin to rats leaving a sinking ship, I still believe this fact to be an excellent barometer of where we are heading.

The Mauritian economy is flawed and has been for a while now. Without any reorientation, the economy will crash. Many are flaunting the fact that Mauritius now boasts the highest income per inhabitant in Africa as a major achievement. Does the population feel rich? Do the people who took to the street to protest against rising prices feel rich? Do civil service officers feel rich? Do pensioners feel rich? If none of these feel rich, the legitimate question to ask then is where is the wealth? Not in the gentrified camp for sure!

* But it would however be too much to expect a drastic change in policy with general elections approaching and with the focus shifting towards the election campaign likely to start next year itself and whatever goodies will be given out. What do you think?

The political class has been a fervent adept of TINA (There Is No Alternative) as far as economic models are concerned. It would be naive to think that they can reinvent themselves now.

In so many ways, governments since independence have not really crafted a sustainable economic model for the country. Rather, they have been the ‘sirdars’ of the ruling economic class, trying to imitate them along the way. In all honesty, bringing forward real impactful change is maybe beyond most of them.

If we dissect the anatomy of victorious electoral alliances down the years, we will find that most, if not all of them, surfed on populist measures which garnered the adhesion of the population. Think free transport or higher pensions, for example. When was the last time the population voted for a progressive economic programme?

* It is highly unlikely that Xavier Duval’s motion of no confidence would pass in Parliament. But do you think it’s necessary and properly timed?

In any worthy democracy, a motion of confidence is a shrewd move when the socioeconomic situation is tense and uncertain. It forces the bearers of power under a representative democratic system to show their hands and decide whether they want to continue to support the incumbent government or withdraw that support.

Of course, such an exercise will most likely prove futile in our local context as far as change of allegiance is concerned. Nevertheless, I feel it is important to have on record the members of the majority in this conjuncture. Further down the line, none of them will be able to absolve from their collective responsibility.

In any case, the parliament has hardly been a temple of democracy in recent times and the futility of the motion of no confidence can hardly match the futility of the parliament itself.

* If we go along with the survey results of Week-end/Straconsult, published last Sunday, the current ruling alliance should not have cause for worry: it’s still way ahead of the main opposition parties. What’s your own assessment of the ‘rapport de forces’ on the ground?

That is one way to look at it.

Another perspective is that the support for the government and even the Prime Minister are also at very low levels. Typically, if you support the government, you would want to say it out loud when your party is in power. The fact that only a small proportion of the electorate openly supports the government suggests in my opinion that the unpopularity of the regime is deep rooted.

That does not necessarily translate in support for mainstream opposition parties but among those who did not express any support for a particular party (the most popular category by the way), it is very unlikely that they would actually vote for the government should elections be behind the door.

* Again, if you give some credit to the survey, the leaders of the different mainstream leaders have cut a very poor figure. It’s nowhere near the public rating of political leaders of Europe or Asia. At the recent French presidential elections, for example, Macron beat Le Pen with 58.5% of the votes to her 41.5%, even if turnout was 72.0%, the lowest in a presidential election run-off since 1969. The survey results would suggest that there’s some hard thinking that our political parties would do well to undertake in light of the very low confidence they seem to enjoy from the electorate. What do you think?

The political establishment is progressively being ousted from power around the world.

It is worth remembering that both political powerhouses of French politics (Les Republicains/Valerie Pecresse and Le Parti Socialiste/Anne Hidalgo) could not score more than 5% during the first round of the French presidential elections. In the United States, Donald Trump has stormed the Republican camp. In Italy, Spain and many other European countries, traditional parties are no longer relevant. To some extent, recent events in Sri Lanka do suggest that winds of change are strengthening.

The demise of many traditional parties has to do with disillusionment of the electorate who feel they have been hung out to dry. The latest survey in Mauritius does point in that direction. A careful and alternative analysis of electoral results over the least three general elections in Mauritius shows a progressive shift of the electorate away from the traditional parties. This trend should accelerate in the coming years…


Mauritius Times ePaper Friday 13May 2022

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