Possibilities of Economic Development

Mauritius Times – 60 Years

By Peter Ibbotson

Figures for the external trade of Mauritius show considerable growth over the last 20 years. In the three years from 1936 to 1938, imports were valued at Rs 32,759,000 on average annually; exports averaged Rs 39,464,000 annually—a total of Rs 72,223,000. In 1957, imports were valued at Rs 263,818,000 and exports at Rs 332,798,000—a total of Rs 596,616,000. Even allowing for the fall in the value of money, this represents a strikingly phenomenal increase. Of course, the increase in the population has contributed to the rise in imports; but the value of imports per head rose from Rs 80 (1936-38 average) to Rs 449 in 1957. The value of exports per head also increased, from Rs 95 to Rs 567. Assuming reasonably that a pre-war rupee is worth only 25 cents today, the value of pre-war imports and exports must be multiplied by 4 to estimate their approximate worth today; thus, Rs 80 and Rs 95 become Rs 320 and Rs 380. Even so, there is an increase in the value of trade over the last 20 years.

In the same period, the favorable balance of trade, i.e., the excess in value of exports over imports, has increased ten-fold, from a 1936-38 average of Rs 6,705,000 to a 1957 figure of Rs 68,980,000. Making the same adjustment for the fall in the value of the rupee, there has been a very substantial increase in Mauritius’ favorable balance of trade.

Pic – vintagemauritius.org

This economic expansion is due almost entirely to the growth of the sugar industry, whose production has increased enormously with the introduction of more efficient methods of cultivation. Whereas in 1937 the sugar crop sold for only Rs 32,000,000, the 1957 crop sold for nearly ten times as much—Rs 300,000,000. As Barclays Bank ‘Overseas Review’ notes about the West Indies sugar industry: “This increase must be related to the stability given to the industry by the Commonwealth Sugar Agreement dating from 1950, which provides assured marketing at a remunerative, guaranteed price. Additional quotas for export are often available through redistribution of shortfalls from other Agreement territories and from quotas available under the International Sugar Agreement.”

Since sugar is such an important crop for Mauritius (exports of sugar and molasses formed 99.2% of total exports in value in 1957), the value of the Commonwealth and International Sugar Agreements to Mauritius cannot be overestimated. Another valuable factor in Mauritius’ orderly economic progress over the last 15 years has been a stable political climate. The reforms following the disturbances examined in the Moody Report have helped establish a comparatively stable political climate, although there is still resentment that these reforms were so long overdue and came only after bloodshed among exploited labourers. Nonetheless, the constitutional development of the last 15 years has contributed to the economic progress of the period.

It would be foolish to pretend that everything in Mauritius is perfect. There are many areas where progress still needs to be made. The Government was frank enough to enumerate several in ‘Mauritius Faces The Future’: unemployment and an alarmingly high incidence of anemia were two. However, the Government is committed to making the necessary progress and maintaining the stable political climate in which economic progress can flourish, and in which the sugar industry has confidence.

Although the ideology of the Labour Party is anathema to the sugar producers, known as plantocrats in the West Indies, these same producers know that the continued progress of Mauritius’ economy depends on the Labour Party remaining in power and on the Labour Party being kept out of power. This does not mean that the Labour Party has to prioritize the interests of the sugar producers over those of the people. Far from it; the job of the Labour Party is to do the best for everyone.

This will be no easy task, as we have emphasized in these columns many times before. Opponents of the Labour Party in the Legislative Council suggest in their speeches that everything is easy; Mr. Bisoondoyal or Mr Koenig has only to wave a magic wand and all of Mauritius’ problems will be redressed overnight. The truth is that the Labour Party in office has to clean up the Augean legacy from the recent colonial past, address the immediate needs of the population, and plan for the future to ensure that the standard of living rises rather than declines. The continual criticism of the Labour Party in the Council, as well as in the press and on the platform, is not helpful. What is needed is the cooperation of all parties in the task before Mauritius, not the continual denigration of the Labour Party’s and the Government’s honest attempts to address past, present, and future problems simultaneously.

The bulk of the population relies on agricultural production and must continue to do so. The UK is the principal outlet for Mauritius’ agricultural produce and will remain so; therefore, the UK must bear considerable responsibility for the progress of the economy. On the other hand, the Mauritius Government is determined to develop secondary industries to reduce the country’s almost total dependence on sugar. In the past, West Indian colonies were similarly dependent on agricultural produce such as sugar, bananas, citrus fruit, ginger, and nutmegs. However, thanks to the enterprise of various island governments, many light industries have been established to reduce dependence on primary production. The Labour Government of Mauritius is equally determined to develop the local economy; the success of developing secondary industries will again depend on maintaining a stable political and social climate. The erratic I.F.B. and the splenetic P.M. are not the kind of political parties to inspire confidence in outside investors, should they ever attain power, either singly or in coalition. On the other hand, continued public support for the Labour Party will guarantee the orderly development of the economy.

Trends in the West Indies are outlined in the ‘Overseas Review’ of Barclays Bank for December 1959. Trinidad has a socialistic government headed by Eric Williams; the Industrial Development Corporation there has received over 50 applications (from Canada, the U.S.A., Venezuela, British Guiana, Jamaica, Switzerland, as well as locally) for pioneer status as investors in the colony. Shortly, a paint factory will be established where I.C.I. will manufacture paints. In Jamaica, where there is a Labour Government headed by Mr. Manley, 18 new industrial projects are to be established to employ 2,500 people, financed largely with North American capital. Colgate-Palmolive intends to manufacture dental cream at a new factory to be built on the industrial estate. A factory for manufacturing louvre windows has just started production; new factories soon to start include those producing textiles, printing rollers, brushes, brooms, frozen fresh coconut meat, and woven products.

In Grenada, the Legislative Council recently agreed to allow duty-free imports and a five-year depreciation write-off for new machinery in respect of dry-cleaning laundry equipment, cold storage plants, ice-making plants, and aerated water manufacturing equipment. Similar concessions will be available for equipment essential for livestock and poultry development. In both Jamaica and Trinidad, very rapid development has occurred, with flourishing cement manufacturing industries. Formerly considerable imports of cement into both countries have been reduced to insignificance.

All the territories, both small and large, are developing their tourist industries—Trinidad is spending 4½ million dollars (approximately Rs 1½ million) on a new hotel; eight new hotels, accommodating 900 persons, have just been opened in Jamaica; a hotel opened in Barbados in November; a hotel with air-conditioned rooms and a roof garden opened a few weeks ago in St. Kitts; and St. Lucia plans to invite investors from abroad to develop tourism there.

But in all these territories, as in Mauritius, the path has not been smooth, nor will it be. Economic development requires careful planning and conservation of resources. Foreign investors are not attracted by unsettled internal affairs. The present Government of Mauritius has created conditions conducive to settled internal affairs and a stable social and political climate, which is, however, finely balanced. The opponents of the present Government are busy at their destructive work, undermining confidence in the Government both abroad and at home. If they succeed in their nefarious work, the future prospects for Mauritius are bleak indeed.

However, if the people exercise patience and support their freely elected Government with cooperation, the prospects for the future are indeed bright. Above all, the destroyers must be firmly stamped out.

7th Year – No 281
Friday 8th January, 1960

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