At the rate that we are going in Mauritius, perhaps only state intervention can help in the redistribution of wealth, though not ‘à la Mugabe’ as in Zimbabwe, because there are powerful structural forces at work — By TP Saran
We will be ‘celebrating’ next Monday the 50th year of our Independence. In the course of the struggle for independence, one of the main problems at issue was the conditions associated with the granting of freedom to the country, and this was tied up with the Americano-British military interest in keeping Diego Garcia for the defence of the West. Presented as a treasonous give-away to the British in exchange of monetary compensation, whereas in fact subsequent findings confirm that the Mauritian negotiators led by SSR were under duress, this matter has travelled a long way and is now to be determined, hopefully once for all, by a UN court of justice.
Notwithstanding the outcome of this process, what cannot be denied are the events that preceded the granting of independence which threatened social peace, and that were politically motivated, using ethnicity to divide the country into two camps: we lived through these frightful years of high tension when the country literally dangled on the edge of a dark precipice. Why? Because with the clamour for independence resonating across the working class led mainly by the Labour Party (LP) and gaining more and more traction, the oligarchy through its mouthpiece the daily Le Cernéen unleashed a malevolent, sustained and false campaign by raising a bogey they called ‘Hindu hegemony’. That campaign consisted of calumny against the leader of the LP Dr Ramgoolam, against the Indian High Commissioner, India and all things Hindu. The editor, NMU, floated the machiavellian idea that all other communities should come together in a movement to prevent LP from coming to power, and thus to avert the imagined “Hindu hegemony”.
That campaign in the newspaper was given practical shape on the ground in the form of the Ralliement Mauricien led by Jules Koenig. It later morphed into Parti Mauricien led by the fiery Gaetan Duval, opposed LP and independence, and generated the frenzy of anti-Hindu propaganda, spreading more lies to scare the people and deepen the ethnic divides. A notorious one was about ‘bateau langoutis’ coming from India for all to wear once independence was gained and Dr Ramgoolam became the Prime Minister.
As it is, the events that followed independence promptly gave the lie to the bogey of Hindu hegemony – which never came to be. Nor did ‘bateau langoutis’ ever reach Mauritian shores. Big power interests (especially France) forced the post-independence alliance of PM and LP. Better sense prevailed as the LP-driven alliance got down to work to consolidate the administrative structure needed to execute government programmes; build the diplomatic cadre that would later play a key role in the negotiations of the Lome Convention that guaranteed us sugar prices for decades; strengthen existing institutions such as the judiciary and set up new ones such as the Public Service Commission; pass legislation that provided a social safety net to all; push an education and health agenda that would widen opportunities for speeding up social mobility, as a majority of the population were still struggling in the protracted aftermath of the two devastating cyclones Alix and Carol in 1960; diversify the economy by encouraging big time the development of tourism and aggressively promoting what came to be known as our first wave of industrialisation.
Mauritians of all hues – from the public and private sectors, from academia –, especially those with ideas and the know-how to make the country develop on the lines being drawn up by the government, participated in this endeavour, the ‘sugar boom’ courtesy Lome helping as the years rolled on. In the 1980s there came the second wave of industrialisation as Mauritius attracted Hong Kong textile magnates shunning the return of the island to mainland China. This was followed in the late 1990s by an expansion of the services industry facilitated by the advent of IT and the more sophisticated financial tools that were becoming available.
All this added up to generate a relative prosperity which benefited all, so that there arose a literate and educated middle class whose needs and aspirations gave further fillip to the country’s development. It was able to increase its standard of living and escape from the harsh realities that it had undergone in the pre-independence years, and kept up hope that the future would be one of continuing improvement in the quality of life of its progeny.
However, as the French economist Thomas Piketty has argued in his now famous book ‘Capital in the Twenty-First Century’, the world today is returning towards ‘patrimonial capitalism’, in which much of the economy is dominated by inherited wealth: the power of this economic class is increasing, threatening to create an oligarchy. There is thus a widening inequality gap within countries at all levels of development, and although it may appear on the surface that things are fine, in reality the middle class is shrinking because less of the national aggregate income is accruing to the middle class, with more going to the wealthy class.
This is only too true of Mauritius as well: we already had the sugar oligarchy. The new oligarchy now also comprises the new rich who do not hesitate to flaunt their wares, and who do not care to look behind to realise where they have come from. They wash themselves off any responsibility towards those whom they have left behind in the milieu from which they themselves come, as they concentrate on hedonistic enjoyment of their newly acquired riches. Property speculation and real estate investment is driving a boom that is making affordable housing a real problem for the middle class, and who doesn’t know young couples who despite education and double salaries are indebting themselves heavily so as to have decent housing.
Experts agree that a shrinking middle class has a vast impact on consumption and ultimately on economic growth, corporate profitability and inflation. For when middle income families can no longer afford to buy the goods and services that businesses are selling, the entire economy is dragged down from top to bottom. Almost everywhere there is disappointment with the state of things and the free market economy which if left unaddressed could prove destabilising.
Piketty has proposed that there should be a redistribution of wealth so as to ‘improve the quality and quantity of economic growth – and reduce the demand for more aggressive state interventions’. But at the rate that we are going in Mauritius, perhaps only state intervention can help in the redistribution of wealth, though not ‘à la Mugabe’ as in Zimbabwe, because there are powerful structural forces at work.
As the adage goes, there is nothing new under the sun. As far back as about 400 years BCE, Greek philosopher Aristotle in his book ‘Politics’ argued about the ‘importance of the middle class and its effect on the stability of a country’. He said that the best nation is one controlled by a numerous middle class that stands between the rich and the poor. For those who possess the goods of fortune in moderation find it “easiest to obey the rule of reason.” They are accordingly less apt than the rich or poor to act unjustly toward their fellow citizens. ‘A constitution based on the middle class is the mean between the extremes of oligarchy (rule by the rich) and democracy (rule by the poor)’.
Shouldn’t we be reviewing our economic model before it is too late?
* Published in print edition on 9 March 2018