Industrialization in the Sixties – Years of Endurance or Years of Creativity?

Despite promises, hopes and dreams for alternative routes to development and for a self-reliant economy, none has been put in practice to date

Jay Narain Roy published his book ‘Mauritius in Transition’ in 1957 when Mauritius was undergoing changes in every walk of life, but the decade which followed – the 1960s – were years of tribulations for the overwhelming majority of Mauritians. This was also the time when Mauritians had to rack their brains to come up with solutions to solve the problems which confronted them, which they successfully did, thus laying down the foundation for the economic development of Mauritius

In the 1950s there was a general improvement in the island after the end of the Second World War. The economy improved, benefiting from a world shortage of primary commodities. A reconstruction programme was under way, particularly after the cyclone of 1945. Political life was being liberalized under the Constitution of 1947, though not yet democratized. Malaria had been brought under control after the introduction of DDT during the War. The standard of living improved considerably as shown by the health statistics. By 1955, malaria had been almost eliminated. Death rate had fallen from 29.5 per thousand to 12.9. Infant mortality rate had fallen from 145.2 per thousand of live births in 1946 to 67.2 in 1955, and finally maternal mortality rate had dropped from 10.39 per thousand births in 1946 to 1.47 in 1955.

However, by the end of the 1950s and as we entered the 1960s, the years of hope had turned to gloom. The modest progress achieved in the 1950s was being wiped out. The baby boom brought about a population explosion and already in the 1950s unemployment had reared its ugly head. The government was aware of the problem and had commissioned the Luce Report on Unemployment and Underemployment. It was published in 1958 and revealed that in a population of 600,724, there were 336,618 of working age and of that number, 205,281, or 61% were economically active. The number of unemployed persons was 31,001, that is 15.1% of the economically active population. There were also another 20,000 who were underemployed.

Poor living conditions were evident everywhere in the island. Most pupils walked barefooted to schools and the incidence of malnutrition was so high that milk and vitamins had to be provided to pupils. A majority of primary school pupils dropped out of school at Standard Four, which served as a screening examination. Most of those who completed successfully their primary education could not attend secondary schools, which hardly existed except in a few big villages and towns. Fees were prohibitive, ranging from Rs 8.00 to Rs 12.00 for Form 1, in the few secondary schools that existed. Even if a parent could afford it for one boy, it was unlikely that younger siblings would benefit from secondary education. As for girls, prejudices of the time as well as financial costs debarred them from secondary education.

The situation worsened with cyclones Alix and more particularly Carol hit Mauritius very hard and destroyed 80,000 thousand houses. Port Louis suffered the most because in the 1950s most of its inhabitants lived in hovels and hamlets which were rented. According the 1952 Census Report, the town of Port Louis had a population of 69,693, and there was approximately one landlord for every seven tenants. Government responded to the refugee crisis with a Housing Reconstruction Programme. Meanwhile thousands of people who could not find shelter from relatives lived in makeshift shelters for two or three years before they could move in the new housing estates if they could afford to pay the rent.

The problems facing the population and the government were multiple and complex. Experts were brought in to propose possible solutions. Professor Richard Titmuss made a comprehensive analysis of the colony’s problems and came up with recommendations including family allowance to combat poverty and family planning to limit population growth. A determined government with a resolute Minister of Health, Guy Forget, forged ahead with a family planning programme despite resistance and finally reached consensus on a family planning programme. The results were positive and went beyond expectations. Birth rate declined from 50 per thousand in 1950 to 30 per thousand in 1968.

Professor Meade looked into the economy’s problems and, after consulting various stakeholders in the island, made 129 recommendations which would enable Mauritius to better confront the future. Among his recommendations was the setting up of import substitution industries as well as an Industrial Development Board to attract local and foreign investors with tax holidays. The then government as well as the people generally had practically no experience in how to develop an export sector — their experience was then limited to producing sugar — and opted for an import substitution industry in 1963. Meanwhile, the average earning of workers continued to fall and unemployment was on the rise.

In several parts of Mauritius, there were a few protest marches of the unemployed to seek work from the authorities and the police dispersed most of them after assuring them that their problems would be communicated to the authorities. To mitigate poverty among the unemployed, relief work was provided to workers with weekly wages of Rs 5.00 and supplemented by food rations. However, a number of new industries were set up. Mauritius Breweries Ltd was established in 1963, Micro Jewels Ltd in 1964, Soap and Allied Ltd and Food and Allied Industries in 1966, Margarine Industries Ltd in 1967, and Mauritius Oil Refineries in 1968. By 1970 there were only 110 industries with development certificates employing 5,500 workers of which 80% were men. The import substitution policy had made a good start but was grossly inadequate to deal with unemployment.

Government made a fresh attempt at industrialization by opting for an export processing zone. It was first announced in the post- Independence budget of 1968 and the EPZ Act was passed in 1970, followed by a number of national plans and the extension of the activities of the Development Bank, created in 1961, to export processing industries.

Even with the EPZ Act in place, Mauritius did not have the knowhow or even the capital to start the export manufacturing industries. Local capitalists had diversified only in import substitution industries such as tourism, insurance and commerce. Luckily Mauritian Chinese entrepreneurs with business networks in Asia, particularly in Hong Kong, were able to attract foreign industrialists to Mauritius to set up their factories on their own or in partnership with Mauritians. In the 1970s, Afrasia, Crystal Group, Sinotex and others as well as well as a few European and South African firms with Mauritian partners put up their factories in the export processing zone.

The sugar boom of 1974 enabled Mauritian companies to invest more in the export sector and the names of a few of them were the Rogers Group, Ireland Blyth, De Grivel Group in 1974 and the Currimjee Group. Between 1970 and 1977, the number of EPZ enterprises had increased from 4 in 1970 to 85 in 1977. In that year the number of employed was 18,169 of which there were 3808 males and 14,361 females. By the end of the 1970s, the export-processing zone had laid down the foundation of industrialization in Mauritius.

This first phase of industrialization would not have been possible without the important role of the State and the political and social changes taking place in the island. While the government was putting in place measures to industrialize the country, it was at the same time pursuing a number of constitutional changes which would give greater leeway to Mauritians to pursue the new economic orientation as well as new social policies in education, labour relations and social amenities which helped to sustain industrialization. The construction of primary schools throughout the island, completed in 1965, provided the basic education and skills necessary for the early phase of economic development. Though EPZ workers were not to benefit from the protection and security of employment provided by the progressive labour legislation of the 1960s, they had to shoulder the burden of early industrialization and it was mostly women workers who did so.

In brief, the long road to industrialization was also the road to independence and to the welfare state. These three major changes in the economy, politics and society were indissolubly linked in the 1960s. These were the years of endurance and tribulations for the many: those who took the initiatives to industrialise the country and to sustain these early years of industrialization deserve credit for their achievements, the more so that despite promises, hopes and dreams for alternative routes to development and for a self-reliant economy, none has been put in practice to date.