A Labour Party-MMM Alliance: What For?

A substantial majority in Parliament does not make a “strong” government. The Alliance will be anything but a monolithic group and will permanently be criss-crossed by a variety of contradictions coming from various quarters

At the time of writing, the terms of a Labour Party-MMM Alliance seem to have been finalized to the satisfaction of both party leaders. This should put a final stop to the long months of negotiations which frankly were starting to get on the nerves of every citizen of this country. It therefore comes as a great relief to supporters of the alliance as well as, one would imagine, its opponents.

The contours of the political battlefield for the next elections can now be drawn as the future opponents will soon be clearly identified. One can expect speculations about the dates of the next national polling exercise to be rife in the coming days although the odds favour a rather short-lived suspense. The Prime Minister’s decision is likely to be dictated by the urgency to have a new government in charge and the timely presentation of a new budget to boot.

In the most likely scenario that it is the Labour Party-MMM Alliance which wins the next general elections, the litmus test of the new administration will most certainly be two-fold: its new economic policy orientation and determination to bolster the fight against corruption.

Several people coming from the left and far left of the political spectrum have expressed the view that the Labour Party-MMM alliance has all along been concocted by the “private sector” and will therefore inevitably lead to the implementation of right wing or ultraliberal economic policies in favour of the “capitalists” against the interest of the working class. In the worst case, if not most likely scenario, according to this line of thought, such an alliance will win a substantial majority in the coming elections. Such a strong government will then be prone to introduce “repressive” anti-working class legislation to keep the demands of the working class under check.

While this is admittedly a rather sketchy interpretation of this view, it does nevertheless capture its essential message. Actually what has been happening in the aftermath of the financial crisis in countries such as Greece and even France today – purportedly under a “socialist” government – does tend to show that there is a real temptation to creep out of the crisis by the imposition of “austerity programmes.”

In the prevailing circumstances it would indeed be foolish to suggest that there is no such threat. But this is where our agreement with the above analysis stops. There need not be any reason to believe that such an outcome is “inevitable” or somehow inscribed in the very genes of the proposed Alliance. This is so for mainly two reasons.

The first is related to the external environment in which governments are now operating. As has been aptly and forcefully demonstrated by the popular revolts known as the “Arab Spring” even in countries where there is no real freedom of expression to speak of, there is space for organized and determined groups of individuals to influence the course of developments in their countries and even beyond.

Developments in communications technology and the breakdown of the hard and fast socially restrictive rules prevailing in isolated communities have combined to weaken if not put an end to the monopoly of the dominant classes in influencing policy making. In Mauritius, which boasts of a fairly mature democratic tradition and is of a size which facilitates proximity between the government and the governed, it is conceivable that the design of economic policy can be largely influenced by “structured” opinion of people other than the dominant class.

The second reason for which a strong government is not necessarily synonymous with a repressive government has to do with the internal dynamics of the workings of political alliances generally and in Mauritius particularly. As the “leftists” would be the first to agree, and the members of the Alliance should carefully measure this factor, a substantial majority in Parliament does not make a “strong” government. The Alliance will be anything but a monolithic group and will permanently be criss-crossed by a variety of contradictions coming from various quarters. Whether it is in economics or in politics there is nothing which is self-evident. Major decisions are the outcome of permanent negotiations and constant power struggles. While this statement is generally applicable in all situations it unfortunately evokes a peculiarly sombre connotation in Mauritius.

Against the backdrop described above there is an opportunity and assuredly the concomitant risks of failure, for groups and individuals – whether acting in consort or not and who are genuinely interested in promoting a particular set of policies and principles – to create a “voice” with the avowed objective of influencing government policies. Given the past and recent public statements of both party leaders regarding their commitment to creating a fairer and more equal society, it is not disingenuous to suggest that there is an opportunity for a “progressive platform” to formulate a set of core principles and objectives which can contribute to getting the country back to a high and sustainable growth trajectory. As a matter of illustration, some of the following could form part of such a platform.

The new government could take a leaf from the book of Narendra Modi’s first 100 days in government. It might not be necessary or even wise to proceed with big bang reforms without having first reviewed governance structures and the bureaucratic impediments on implementation of government decisions. Incremental progress may be necessary before more ground-breaking measures are effective.

Empowering and liberating State-controlled enterprises from the shackles of day-to-day political interference could go a long way towards improving the performance of the latter. The irony of recent experience is that such interference has caused a loss of credibility in the ability to perform of such institutions which are then “privatized” — thus adding water to the mill of rightist ideologues who maintain that State Owned Enterprises are bound to fail.

The new budget should lay the foundations of the core objective of returning to a high sustainable growth rate. The prevailing wisdom of the benefits derived by a country through the introduction of “low tax regimes” need not be regarded as the “sacred cow” of economic policy. In a time of crisis, conventional wisdom may be the worst enemy of the need for radical, imaginative policies and approaches which break away into a new paradigm. (Remember the US administration’s “nationalization” of private banks at the height of the financial crisis.) The effectiveness of fiscal policy as an instrument of economic policy must be restored and enhanced by giving more flexibility to its applications toward achieving developmental policy objectives.

Global experience and the recent case of Mauritius show that countries with effective safety nets that target the poor are the most resilient in responding to crisis. While there is a need for rationalizing the worst and demonstrable excesses leading to waste of resources, the basic philosophy of the welfare state should prevail.

There is no reason to be apprehensive about the notions of improved competitiveness and enhanced productivity. Indeed our increasing integration in the global economy has made them an imperative condition for better standards of welfare for the population. Rapid reduction in the UNIT cost of labour via structural reforms and adoption of new technology, in consultation with trade unions are acceptable to the extent, however, that the gains obtained from such improvements are shared fairly between capital and labour.

These and other such measures can form the core of a “progressive platform.” To what extent will an eventual Labour Party-MMM alliance commanding a substantial majority in Parliament after the next general elections be sensitive to such propositions? The answer to this question will provide at least a partial answer to the question raised in our title. This will in turn depend on the interplay among the various undercurrents which will animate the future government. Economic governance in the immediate future must consist of a fundamental trade-off between economic growth and capitalist prosperity on the one hand and the emergence of a fairer and more open, equal society on the other. Some would say an irreconcilable proposition…

* Published in print edition on 5 September 2014