Political Financing Bill spurned

Political Caricatures

By L.E. Pep

The Bill on the financing of political parties debated in the National Assembly on Tuesday 9 July was meant to be rejected. Conscious of the need for a three-quarters majority to amend the law, the government knew very well that the Bill, which excludes any form of State financing of political parties, was doomed to be spurned. Is it only meant to be a mere show that will be used to swing voters to the government’s side by shifting the blame on the opposition parties for its rejection?

Lalit believes that the Bill opens the way for a regime to control the opposition parties. By its repressive nature, it actually discourages participation of ordinary citizens in any political party. It reduces the very idea of a political party to some kind of money-making private company. The draconian fines of up to Rs 1,000,000 for losing a receipt or missing a deadline all prove that the entire exercise of bringing up this Bill is an eye-wash.

Lalit adds that the Bill is not even intended to be a serious means of limiting electoral bribery during campaigns, but is being used an element of State control over political parties. The problem in Mauritius is over-expenditure on electoral campaigns. This is what haunts our democracy… instead of addressing the issue of electoral expenses, the MSM-ML alliance is instead condoning continued over-expenditure by political parties. The State is also imposing a form of bureaucratic control over political parties — the very institutions that need to be free from its control. This proposed form of state control, together with the hideously high, repressive fines, are the new barriers being erected against free expression in Mauritius.

Ashok Subron of Resistans ek Alternativ is categorical: the proposed changes will allow private companies to invest heavily in political parties, drastically curtailing the power, opinion and choice of voters. He adds that the strengthening of the powers vested in the EIectoraI Supervisory Commission will allow it to exercise a KGB-like control by government, now and in the future, that will undermine the fundamental right of citizens to political expression and organization.

He goes on to say that with this new bill, anyone can make donations of up to Rs 40 million to political parties, in all legality and without any restraint. He also warns against a clause in the Bill that will allow any political party sitting in parliament as a member of the government or the opposition to receive money outside the electoral framework. Ashok Subron is outraged by this measure, which will curtail the power of the voter/citizen for the benefit of a handful of people who will have the right to finance who they want and when they want.

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Petroleum Hub: Issues of competitivity

“Mauritius’ bunkering services will be facing tough competition,” says Robin Meech, managing director of Marine and Energy Consulting Limited (MECL). For an isolated country like Mauritius, it is expensive to import fuel to supply ships in the region, he says. Being competitive in this market, where price is the determining factor, will therefore be “very difficult” for Mauritius. The services of MECL have been selected for the development of the bunkering sector in Mauritius. Robin Meech was speaking to the press on Monday, July 8, after a workshop with stakeholders in Ebene.

Mauritius will have to rely increasingly on the quality of its services to stand out from the competition, says the expert. But the success of this sector will have to come from the private sector and not from government, which can only act as a facilitator, Meech added.

What about the Albion Petroleum Hub? Raj Dhaliah, managing director of the State Trading Corporation, declined to comment on the port project in Albion. The feasibility study is still underway, he said.

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Pomponette: ‘Aret Kokin Nu Laplaz’ Aret Kokin Nu Laplaz

(AKNL) is awaiting minister Jhugroo’s response on Pomponette. Since the fateful date of June 30 (the deadline date for starting construction), we have not heard from the Minister. On the other hand, it is alleged that the promoter would have directly challenged the authority of Minister Jhugroo, by refusing to apply for a new EIA license as suggested by the authorities, and instead would to go by the EIA permit obtained for the Midas Acropolis project, given that the two projects are, according to him, related. Who is going to have the last word in this matter? Hotel promoters or the Government?We call for the end of the Pomponette saga and that light be shed on the “deal” that has been going on since the days of Midas Acropolis Co Ltd and Clear Ocean Hotel and Resort Ltd business connections.

In South Africa, the director of Clear Ocean Hotel & Resorts Limited has been accused of fraud and even went bankrupt in 2017. In Mauritius, according to several documents in the possession of AKNL, Clear Ocean Hotel & Resorts Limited allegedly owes some Rs 20 million to the State for the lease of State land over the period 2017 to date. Moreover, there are two cases in the Supreme Court against this company. It is being prosecuted for not paying the rent for its offices.

 Yan Hookoomsing says that AKNL will stand firm despite obstacles.« Li klerki promoter Ocean Resort pa pe respekte lalwa kan li dir ki li pa pou demann enn permis EIA pou so proze. Gouvernma pou bizin asim so responsabilite divan bann instans internasional kinn trouve ki ena problem lor manier pe fer ek bann laplaz dan Moris.» 

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Diego Garcia-Chagos: Paying homage to role of women

Lalit invites the public to an exhibition to be followed by speeches, poetry and music at the Jardin de la Compagnie from 10.00 to Noon on Saturday 13 July. The commemoration of this important date (23 March 1981), a special moment in our history, will put into perspective the immense role played by women, in particular Chagossian women in the Diego García struggle.

It was the day that the Public Order Act trial began against 8 women – Chagossians, Lalit and Muvman Liberasyon Fam members. The arrest and trial of the eight women was followed by three days of street demonstrations by women in the main arteries of Port Louis in support to a hunger strike by another eight women in the Jardin de la Compagnie, which culminated in a sit-in in front of the British High Commission. Charlesia Alexis (46), Marie Louise, Armoogum (42), Lindsey Collen (33), Philine Frivole (40), Lilette Goyaram (Tatayah) (40), Ragini Kistnasamy (23), Merline (Lanzie) Lamb (34), Roselee Pakium (37) were arrested on that day . In November of that year, after a number of court hearings, the women were all found not guilty.

It is a commemoration of the first day of the trial of the eight women, of whom only four are still alive. The arrests and the hunger strike marked the beginning of the struggle led by women, followed by “les années de braise” from 1977 to 1981.

The Saturday 13 July commemoration is being coordinated by Lalit, with the collaboration of the MLF. The opening address will be given by former President of the Republic, Cassam Uteem. Olivier Bancoult and the Chagos Refugees Group will be present and will deliver a message.

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Speed to Market Scheme: Taxpayers subsidising the big firms

The Speed to Market Scheme was introduced in order to give a new impetus to the textile and apparel sector with respect to its exports to the European market, especially in the wake of the challenges of Brexit. This scheme entails a 40% rebate on basic airfreight costs to Europe with Government underwriting it over a period of two years. The scheme became effective as from April 2017. Subsequently, the Scheme was extended to other products manufactured in Mauritius such as jewellery, medical devices, fruits, flowers, vegetables, chilled fish, articles of leather, footwear, watches and fabric plush toys. For agricultural produce, the 40% rebate is shared equally between the planter and the exporter. The Economic Development Board (EDB), which manages the scheme refunds to eligible parties concerned the quantum of the applicable rebate. Since its introduction to 20 June 2019, the EDB has disbursed a total amount of Rs189.6 million under the Speed to Market Scheme to 69 companies and 172 planters.

The Compagnie Mauricienne de Textile Limitée (CMT), one of the leading apparel manufacturers in Mauritius, has exported by air to Europe goods for an export value of around Rs 2.7 billion and has been refunded the largest amount under the scheme, to the tune of Rs 52 million. Readers will recall that the CMT had expressed its intention to relocate to Madagascar and Bangladesh, thereby threatening some 5000 jobs in the textile sector. Should this be construed to be a bribe at taxpayers’ expense to the CMT? Is that not a waste of taxpayers’ money?

Wouldn’t it have been better for those funds to be used instead for restructuring the industry or for investment in innovation? Government had been bragging about the introduction of the minimum wage which was not accompanied by any increase in productivity. And now taxpayers are having to pay the consequences of the rising unit labour costs which are being met by depreciating the rupee and the generous rebate on basic airfreight. These concessions to the exporters are mainly benefiting the big firms with a marginal impact on the SMEs, as reflected by the export growth that shows no improvement.

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Graduating to the High-Income Economy?

Mauritius has this year made a great leap forward to achieving its goal to be a high-income country by 2023. According to the latest World Development Indicators published by the World Bank on Monday 01 July 2019, Mauritius per capita Gross National Income (GNI) in 2018 has made an unprecedented jump of 18.8% over the previous year’s level to reach USD 12,050. This brings Mauritius to 97.4% of the high-income threshold of USD 12,375 as set out by the World Bank in contrast to 84% in 2017. At this pace, it can be expected that Mauritius would join the league of high-income countries earlier than forecast.

The World Bank uses, for the purpose of classifying countries in low-, middle- and high-income categories the Gross National Income measure. The GNI measures income generated by the country’s citizens, regardless of the geographic location of the income; in other words it is defined as GDP, plus net receipts from abroad for compensation of employees, property income and net taxes less subsidies on production. This year, the World Bank has redefined its measure of Gross National Income to include income from Global Business Activities.

It is to be noted that our GNI per capita inclusive of net primary income & transfer from Global Business Companies from abroad is some Rs 33 billion or 8% higher than the GNI per capita exclusive of these items. In countries where this difference artificially inflates the size of the economy and creates considerable distortions in GNI figures, a new metric, a modified GNI, in Ireland and Luxembourg for example, is used because the Global Business sector includes a lot of money that residents of a country never actually get a chance to appropriate. Similarly, in Mauritius where distortions are particularly acute, given the large Global Business footprint, policy-makers face additional challenges in interpreting the real-time information embedded in standard, internationally recognised metrics such as Gross Domestic Product and Gross National Income. Movements in these aggregates may become increasingly disconnected from actual trends in living standards in countries that have large Global Business Activities.

This obsession to boost growth at any cost could lead to unsustainable policies that eventually create trap-like patterns of dismal growth that middle-income countries are trying to avoid in the first place. Future sustainably of the growth spurt is as important, if not more, than increases in GNI per capita. The target of high-income status is not a destiny but an obstacle to be overcome.

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Silver Economy: The development of retirement-based communities

The EDB is relying on the silver economy to develop a new growth pole. In the long run, more than 70,000 financially well-off retirees are targeted. This ‘economy of seniors’ with the presence of 70,000 foreign pensioners is expected to inject Rs 84 billion into economy over a ten-year period and generate economic development opportunities, namely by boosting job growth and increasing income levels.Faced with the faltering of the main economic pillars, the EDB is seeking new growth poles to support the economy and attract foreign investment. In the short- to medium-term, some 5000 rich retirees have been identified to spend their last days in 5-star residences and the transfer of more than Rs 3 billion into the economic circuit of the country.For the moment, the government is very far from this goal. There are only 630 foreign pensioners physically active now compared to the 1,975 residence permits issued from October 2016 to February 2018, hence the budget announcement proposing a package including both tax and non-tax measures to attract seniors on a larger scale to come live in Mauritius

But we doubt whether the country will be able to benefit much from this new growth strategy. Given that we are still far behind in terms of comprehensive health care and services for an aging community and that our geriatrics programs still lack the bare essentials to cater to the specific needs of the older population and to help them lead healthier and more satisfying lives, this strategy may turn out to be not much different from the one-off investment in the Property Development Scheme.

And given that at the core of the welfare benefits system of the retirees is their comprehensive social insurance system which includes healthcare provision, pension insurance and an entitlement to a whole range of benefits, they are more likely to take advantage of the more advanced social and health care systems in their countries. We still have a long way to go before the development of retirement-based communities can aim at becoming another important pillar of growth. But that should not prevent the EDB from adding another hub to our list of hubs – Seafood Hub, Cyber Hub, Petroleum Hub, Medical Hub and now the Geriatrics Hub!

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Fitch Solutions forecast a slowing GDP growth in 2019

Fitch Solutions Macro Research (FSMG) of Fitch Solutions Group, an affiliate of Fitch Ratings Inc, seems to be not convinced by Budget 2019-20 and its measures that are expected to propel growth to 3.9 percent in 2019 and 4.1 percent in 2020.

On the basis of the growth rate for the first quarter of 2019 estimated at 3.2% by Statistics Mauritius in its June 2019 issue and its own workings, FSMG expects real GDP growth to decelerate in 2019, driven by headwinds to the sugar production and financial services. FSMG notes that “between May 2018 and April 2019, we have seen foreign liabilities held in the Mauritian banking sector falling by an average of 24.6% y-o-y, while commercial loan growth declined by an average of 7.8% over the same period. Meanwhile the sugar sector continues to face headwinds from weak global sugar prices and increasing competition in the key European export market.”

FSMG thus expects that the Bank of Mauritius to cut its Key Repo rate to 3.25% from 3.50% in 2019, in an attempt to boost growth. It also notes that the Mauritian rupee has depreciated by some 4.4% since June 2018 and that lower fuel prices and freight costs will contain the extent to which import prices rise. “This environment of low inflation would open the door to moderate monetary easing to support the economy.”

There were many of us that saw it coming except the few that still believed that they could delay the slump in growth by investing in such prestige projects as the Metro, the Safe City, the Multisport Complex… the so-called “chantiers”!

* Published in print edition on 12 July 2019

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