V. Bhardwaj

Who sets the agenda?

— V. BHARDWAJ

Ever since the last general elections in Mauritius, pressures have been exerted on Labour to form a specific political alliance. It was about joining the MMM and Labour together for the elections.  This scheme did not work out finally. Relations have however remained strained since then between the government, formed by a Labour-MSM alliance, and the Sentinelle group of the media in particular. Accusations have been volleyed across which appear to indicate that an enduring struggle for power has set in even after the elections. The Prime Minister has spoken on various occasions about his wish to see more of responsible journalism rather than the media engaging in the broadcasting of negativities about the government. On the other hand, the Sentinelle group has filed a case in court accusing the government of depriving it of government publicity. It is for the courts to decide on the issue. But there may be more than meets the eye in this public tug of war.

On the one hand, we have a government duly elected by popular vote to run the affairs of the country. It has set out a program of work for the next five years. It has a legitimate right and a public duty to fulfil the objectives it has set out in its governmental program. No government has allowed itself to be swayed away from its set objectives by outside forces. We should expect the present government therefore to act in the same manner and take its decisions regarding the governance of the economy and society to their logical conclusions in line with the government philosophy.

On the other hand, the conservative forces which usually thrive on the status quo rather than have to put up with new developments, such as laws to enforce competition on markets, fair trading practices and equal employment opportunities, want to have governments that will do their bidding. The best way they can influence government decisions in their favour is by having a government elected which is fully sympathetic to their interests or, where compromise is called for, by having one or more parties forming part of the government which will serve to deter the government from taking actions perceived by the conservative forces as being contrary to their interests. This may amount to governing the country by proxy. No self-respecting government will abdicate its wider responsibility vis-a-vis the population by playing into the hands of a commercial lobby which sees its own interests alone.

It is frequently made out that the two sides have irreconcilable positions because governments are mandated by the electorate to work in the interest of the public and not that of private enterprise exclusively. This view is not true. Governments cannot advance the best interests of the population without getting the private sector to work together with them. The job of governments is to keep private economic activity alive but not at the cost of the public interest. This context calls for the different protagonists to identify common grounds for cooperation for mutual benefit. The relationship starts hurting only if the equation becomes too one-sided. Normally, governments which do not manage to reconcile differences to keep the economy growing and social distribution balanced find themselves rejected at the polls. Given the prospects of being rejected, governments would do well not to relinquish their role and responsibilities to third parties. A strong political leadership is a guarantee against the usurpation of political power by parties which try to block the actions of governments unless these actions are committed to serve particular interests represented by the lobbyists. It is the government and the government alone which should set its agenda at the risk of losing its credibility in public.

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Looking East

President Obama has just completed a 10-day tour of four countries of the East, including India and Indonesia. His visit to the East was preceded several months ago by a visit of Angela Merkel, the German Chancellor, to the Republic of China. The week before, China’s President was received by the French President in Paris. The French President is himself scheduled to go on official visit to India shortly. UK’s Prime Minister, David Cameroon, was in China during the last week. He was in India some weeks earlier. While it is true that there are political connotations to these high level calls on the governments of the upcoming East, it is the economic agenda which is the real driving force. For example, contracts for up to $30 billion dollars, including purchase of aircrafts, were signed up between China and France. Chinese interests have been busy buying up or bidding for everything including American gas, Brazilian electricity grids and European car companies. Such capital investments across borders make commercial frontiers among countries more porous and pervasive to international exchange. This kind of movement towards new venues for trade and investment is the best remedy against failing domestic demand.

There have been calls made recently by the Prime Minister that Mauritius should, like those major world economic powers, turn its attention to doing business with the East. Efforts have been made to draw the attention of tourists from the East to come over to Mauritius. The national airline has established direct links with the advancing economic giants of the East since a long number of years. We have however not made significant inroads into those markets as suppliers of goods and services. By overtaking Japan, China has become the second largest economy in the world and it is chalked out to overcome the US in some years to come. In just a matter of years, its internal market will consolidate itself further, enlarging opportunities for global suppliers to employ it  as an alternative global force of demand, in much the same manner as the West has been occupying this position so far but is unlikely to continue at the same pace.

Mauritian enterprises have to gear themselves up to penetrate such mature markets in competition with the high and mighty of the world. It is not going to be an easy task. Political support is necessary to make the breakthrough. Even if that is forthcoming, Mauritian enterprise should re-invent itself. It may not be able to compete with established global suppliers on an even footing. But a start can be made by working as a competitive sub-supplier with some of them. One has only to bear in mind in this context that there are today many high brand electronic goods parts of which are sourced in Taiwan, Malaysia, Singapore and South Korea. The more our companies engage themselves in this role, the closer we will come to crystallising a much needed economic partnership with the emerging Eastern economic powers. But that does not exclude getting into a loop with others like South Africa to go out on a common adventure towards the shifting centres of economic power. 

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A bottom-up look at the Budget

Today’s budget will be perceived by different groups according to the importance it will give to their interests. It is usually the case in Mauritius to seek and publicize the reactions of the major economic interest groups to the enunciated budget policies. It is not considered too important to expose the extent to which the aspirations of those at the bottom of the ladder are satisfied. Yet, it is they, the consumers and wage earners, who form the majority of the population and generally do not have a major say in budget policies except at election time.

Consumers have seen their purchasing power eroded in a series of price rises of basic commodities in a relatively short span of time. The one kilogramme of milk powder which was priced at Rs 98 when Minister Jeetah went on a rampage against the milk importers for excessive pricing in the previous mandate of the government, is available on a promotion sale today at Rs 188. The non-promotional price is higher. There are several examples of the sort over the past years. This gives an idea of the scale of loss occasioned to the public either by international price rises or by local currency depreciation or both combined. Consumers will therefore seek protection from the authorities to ward off such erosion of their purchasing power through appropriate policies. If that is not achieved, they will face a relative decline of welfare.  

The catching up is usually achieved by wage compensations. However, as the current year’s compensation adjustments show, it is not quite certain that employers are always in a position to make good the loss of purchasing power of workers. Workers will therefore expect the government to maintain subsidies on basic commodities to enable them to face up to their deteriorating circumstances.

However, like everybody else, they will want the government to make policy decisions which will open up their prospects for getting on to a more remunerative employment than the one they are engaged in. This can be translated into the need to make them more highly skilled through a continuous re-training program of the government and through raising their platform of production to increasingly more sophisticated levels. They will expect the government to take steps to embark on a continuous re-skilling program covering all sectors of activity. Those who have failed to get on the jobs market will look forward to obtain reliefs but more so, suitable placements on the jobs markets. The Minister will no doubt keep these legitimate aspirations in view when spelling out the budget measures. 

V. BHARDWAJ

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