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Lalit develops program for impending systemic crisis in Mauritius

by Ram Seegobin

[Ram Seegobin is a member of the Central Committee of Lalit and active in the working-class struggle. As medical practitioner, he was part of a village health cooperative for twenty-five years.]

At the most recent general election, in July 2005, Lalit presented candidates in all twenty constituencies.1 In the ten days leading up to polling day, the national radio and TV station carried party political broadcasts in short slots recorded by members of parties participating in the election.

On the opening day of the broadcasts, Lalit’s presentation on TV included the following:

If voters are finding it difficult to choose between the two main alliance blocs, it’s mainly because neither of them is addressing the real problems worrying people today: rising unemployment, casualisation of jobs and the threat hanging over the livelihood of all sugar cane field labourers, sugar factory workers, small cane-planters and workers in the textile factories of the export processing zone. The very existence of these two industries [sugar and textiles] is at stake. Even if there are external factors that have precipitated this crisis, the threat has been present for more than ten years. The parties in the two main alliance blocs have been in power over these years, and they have done nothing about it.

So it’s not surprising that people are moving away from those two alliance blocs. And fortunately in these elections, there are not only these two blocs.

The Lalit party is in these elections precisely to put the economic and social crisis on the agenda: not just to criticise and expose the bankruptcy of the two alliances, but to propose a debate on a program for an alternative economic policy that does not depend on sugar and textiles, and which can generate employment rapidly.

When the capitalist system enters the sort of systemic crisis that it is now doing, there are only two possibilities: either the capitalist class will try to impose its solution of austerity based on retrenchments, unemployment and devaluation, and imposed through repression by a coalition government. This happened in the seventies. Or the working class, students, youth and women will mobilise together to defend acquired rights, to claim more democratic rights and liberty, to propose real change. This also happened in the seventies.

This choice is in our hands. This is what is at stake in these coming elections.

Your support for Lalit in the elections will accelerate the development of the kind of movement which is essential if we are to avoid the situation where the workers and poorer sections of the population have to shoulder all the burden for the economic crisis in a system over which we have had no control. [translated from the Mauritian Kreol transcript]

This quotation gives an idea of how we put our emerging program for an alternative political economy on the agenda during the campaign. Then, on the last day of radio and TV broadcasts, on the eve of voting, the following was what Lalit said:

Whichever of the two alliance blocs forms the next government, all of us together will have to start thinking of the necessity of a new movement that has the necessary muscle to face up to the coming economic and social crisis; to face up to the dangers of a devaluation, austerity measures and possible repression by a coalition government that may take shape after the elections.

If we look at the recent history of our country, we find that every thirty years a new movement is born, after the previous wave has lost all historical pertinence: we had the Labour Party, then the Mouvement Militant Mauricien. Both of them have become the opposite of what they were originally, after thirty years of compromise and selling-out.

Today, it’s Lalit which is involved in all struggles where workers, the poor masses, women, unemployed and youth are standing up for their rights, are fighting against capitalist exploitation, struggling to defend acquired rights against the kind of globalisation that is in the interest of multinationals and financial speculators.

The result of the elections was predictable: the six parties in the Labour Party-dominated Social Alliance bloc won a comfortable majority. Their slogan, curiously, was “Democratising the economy”. But the recent trend in elections has, in any case, been a “negative” vote against the incumbent party or alliance, on the basis of frustration with ultra-liberal policies following a “socialist” sounding electoral campaign. The previous mmm-msm2 Alliance government had proved to be as ultra-liberal as any in its economic policies and anti-worker measures. So although the “Social Alliance” finally produced its electoral manifesto only days before voting, a majority of the electorate had already decided to vote for it as being the most likely to dislodge the previous government. In this electoralist logic, there is very little space for parties like Lalit, although a significant number of people would fully agree with our analysis and our program.

For Lalit, participation in elections and presenting candidates is a tactical decision: for each election, we have fresh debates about the form of our participation, depending on the main debates that will dominate the campaign and our capacity to influence the issues. In the last general election, there was no doubt that economic issues were going to be central. Given the looming systemic crisis, the logic of the capitalist mode of production itself could be challenged. Economic alternatives could be proposed that would be widely accepted, while at the same time raising the central issue of the ownership and control of the means of production.

Standing candidates also provided the party with the opportunity to make our program better known and understood at a national level, through the party broadcasts on radio and tv. But at the same time, within the party, there is never the political illusion that elections as such can bring about mass support for a revolutionary socialist program.

After the election, after 100-day “honeymoon” with the electorate and a few popular measures,3 the new Social Alliance government got down to applying the measures it deemed appropriate for the developing economic crisis.

Genesis of a systemic crisis

Three main economic sectors provide the bulk of the country’s employment and produce the quasi-totality of export earnings necessary for importing food, equipment, fuel and raw materials. Mauritius imports practically all its food and has no local source of energy fuel or raw material and no heavy industry producing equipment and transport vehicles. So it is the sugar industry, textile factories, and tourist industry that constitute the bulk of the economy, and two of them are threatened with impending collapse.

Of course this situation has been predictable ever since the wto4 was set up, because both the sugar and textile industries had developed and survived under heavy protectionist regimes within the framework of the post-colonial arrangements of successive African-Caribbean-Pacific (acp) conventions with the European Union. It was totally predictable that these protectionist regimes would not survive the ruthless “free-market” philosophy of the wto or the dictates of capitalist globalisation.

The sugar sector

Last year the European Union unilaterally announced a thirty-six per cent reduction in the price of the beet sugar produced in Europe and cane sugar imported from acp countries: the reduction would be phased in over a four-year period. The price reduction has three roots: the wto, the recent expansion of the eu from fifteen to twenty-five members, and Pascal Lamy’s “Everything But Arms” policy of importing sugar (and other products) from least developed countries duty free.

The beet sugar produced in European countries, added to the cane sugar imported from the ex-colonies of the acp, was in excess of the sugar requirements of Europe. So part of it was exported to the world market, competing with Australian, Brazilian and Thai sugar exports. But the European sugar was heavily subsidised through the Common Agricultural Policy, and imported sugar through the preferential price given to acp producers. So when the Cairns Group5 challenged the eu at the wto, it was pretty obvious what the result would be. The eu then had to devise means to deal with its excess sugar, and it decided to reduce the guaranteed price to a level that would drive a percentage of producers out of the industry, the capitalist logic being that the more “competitive” producers would survive.

Secondly, the ten new members of the eu have mainly agricultural economies, so a redistribution of farming subsidies would necessitate a reduction in the subsidies provided to beet sugar producers.

Thirdly, the cane sugar from the least developed countries comes from very low-cost producers, and the eu could gradually be provided with the same cheap sugar as in the olden days of colonies and slaves.

From 2009, there will no longer be a guaranteed price for sugar producers. There will instead be a “reference price” linked to the price on the world sugar market: a clear indication that the thirty-six per cent price reduction by 2009 will be followed by other reductions until all eu and acp sugar producers will simply get the world market price set by the highly mechanised and very big producers.

So Mauritius is faced with a thirty-six per cent reduction in sugar revenue over the next four years, and probably further reductions after 2009. With its very restricted agricultural land, and frequent cyclones, for how long will the sugar sector be viable? Meanwhile, the sugar bosses have been laying off thousands of field workers and hundreds of mill workers.

The textile factories of the export processing zone

The textile industry of the export processing zone developed over the past thirty years, mainly as a result of unemployment and the resulting cheap labour of the 1970s and 1980s, and because of entry into the European garment market. As in the case of sugar, here too the acp countries were offered duty-free entry into the European market, while other producers had to face duty and quota barriers. In the late 1980s, the anxiety felt by Hong Kong industrialists about the approaching return to China caused a significant number of Hong Kong companies to delocalise their production units, while at the same time benefiting from the duty-free and quota-free access into Europe. Many ended up in Mauritius.

By the mid-1990s, the textile factories provided employment for nearly a quarter of the Mauritian labour force. Although wages were unbelievably low and the labour legislation more restrictive than in other sectors, the fact that several young members of the same family could bring home pay packets made it appear worthwhile.

As the Hong Kong industrialists became more reassured with the general framework surrounding the retrocession, and as the Multi Fibre Agreement (which allowed quotas on imports of garments) was approaching its termination, the factories of the Hong Kong companies in Mauritius started closing down and moving back to Asia. The quota restrictions on textile products from China were being lifted, as well as the restrictions on other countries like India, Pakistan, Vietnam. Mauritian textile workers were being retrenched by the thousands, with no alternative employment possibility.

Towards the end of the 1990s, the United States developed a new interest in the African continent. In 2000, Congress passed the African Growth and Opportunity Act (agoa), which aimed to facilitate trade between African countries and the United States. The us market was opened to manufactured goods from forty-eight African countries free of customs duties, and as far as Mauritius was concerned, this opening was mainly for textile products. But this “free trade” was subject to a certain number of conditions, one of them being that the raw material had to be produced either in Africa itself or in the us. The only derogation to this condition was for countries whose per capita income was less than $1000 a year, which definitely excluded Mauritius. One of the immediate effects of this legislation was that a number of the bigger Mauritian companies using relatively cheap Asian fabrics relocated some of their production units to countries like Madagascar. More factory closures, more workers retrenched: Mauritian textile exports to the us actually decreased after the agoa came into operation.

Amongst the conditionalities that make African countries eligible or not eligible to the so-called benefits of the agoa, there is one that reads: “whether or not such country engages in activities that undermine us national security or foreign policy interest”. It is perhaps not surprising that the previous Mauritian government was among the first in the world to vote a “Prevention of Terrorism Act” after Bush launched his crusade after September 2001. The Prevention of Terrorism Act, like equivalent legislation in other countries, is a very serious attack on fundamental democratic rights, and was bitterly resisted by the trade union movement and political movements like Lalit. After the repressive legislation was passed by the National Assembly, the president of the republic, and after him the vice president, chose to resign from office rather than give the necessary assent before the law is proclaimed. Finally it was the chief justice who assented to legislation that may contain clauses in contradiction with fundamental constitutional rights, and could conceivably be challenged in the Supreme Court of the same chief justice. So much for the famous “separation of powers”!

The unfolding crisis in the sugar and textile export sectors has precipitated another predictable crisis, one related to exchange rates, accelerated depreciation of the Mauritian rupee, and imported inflation affecting the standard of living of the population. Apart from the protection that these two main export sectors enjoyed under acp-eu conventions, the monetary policies of various governments made sure that the rupee depreciated steadily against the dollar, euro, and pound sterling. The export earnings from sugar and textiles kept increasing in terms of rupees, and the profit levels of sugar and textile companies could thus be assured, albeit at the expense of the workers, pensioners and even unemployed, whose imported basic needs were costing more and more in the rupees of their pay packets and pensions. The masses were being made to subsidise the profits of sugar and textile companies, as well as the tourist hotel owners. The previous mmm-msm government, in its monetary policies aimed at supporting the big companies, amended the foreign exchange regulations to allow the sugar, textile and tourism companies to hang on to all their export earnings in foreign currency-denominated accounts. From that situation to those companies deliberately manipulating the currency market to accelerate depreciation was a step they would inevitably take as the going got tough. So much so that importers and students studying abroad have been finding it hard to get foreign currency from the commercial banks, and the minister of finance has had to make a pathetic plea in public to the foreign currency hoarders to be patriotic and release some of their foreign exchange.

If the crisis in the sugar and textile sectors was predictable enough, there are other important elements of the systemic crisis that were not. The higher imported fuel oil bill is building up astronomical commercial deficits, and there is no serious plan for developing alternative energy sources. The tourism sector, on which successive governments have over-relied, is at the same time not really expanding. This is due to higher air fares with fuel surcharges. In addition, the expected rise in tourist arrivals has not materialised due to epidemics of a mosquito-borne viral infection, chikungunya, that has affected the whole region.

The response of the ruling class

Over the period that the crisis has been unfolding, the bourgeoisie, with the backing of various World Bank delegations, and with the open support of a section of the press, had been preparing the ground for the kind of solutions they were proposing. They mounted a massive campaign against government spending, in particular social welfare benefits, against existing labour laws that they described as too rigid and in favour of massive privatisation of services.

Finally, when the new government came up with its first budget in June 2006, the measures it contained reflected very precisely the economic agenda put forward by the bosses and the World Bank. The very title of the budget speech was a give-away: “Securing the transition: from trade preferences to global competition”. It made it clear on whose shoulders the government intended to place the burden of the economic crisis: the wages and work conditions of workers that corresponded to a “trade preference situation” would have to be trimmed down to face global competition. Perhaps more importantly, the budget proposed measures that corresponded to one of the cyclical crises that is characteristic of the capitalist system, not to the situation of systemic crisis that the Mauritian economy is facing. The term “trade preferences” described two of the main three economic and employment sectors, sugar and textiles, whose very survival was in question. The “transition” proposed was towards “global competition”, which usually refers to production costs, and in particular labour costs, without any reference to any actual new sectors of production, nor to any future employment possibilities.

The main proposals in the budget were: lowering corporate tax levels, widespread deregulation to facilitate “doing business”, the setting up of an Empowerment Fund to support small and medium enterprises, measures to encourage real estate speculation by opening the market to international bidders, decreasing welfare spending by targeting benefits and perhaps the real hard core that exposes the ultra-liberal philosophy of the budget: the modification of labour laws to enable bosses to lower real wages and deregulate work conditions, to make retrenchments easier by what the budget speech describes as “reduc[ing] the cost to employers of releasing labour” and as reducing “the notice period for separation, the cost of separation”. The clear aim of all these measures is to make Mauritius once again a low-cost producer and business-friendly enough to attract foreign direct investment. The rate of local investment is already extremely low at around fifteen per cent of gdp, mainly because the local capitalists are really rent-seekers by tradition and are wary of non-protected sectors without guaranteed profits.

Semi-feudal bourgeoisie

The historical bourgeoisie in Mauritius, dating back to the period of French colonisation, is still organised mainly into family groups and their conglomerates. Historically they were mainly in imports and in sugar planting and milling. After independence in 1968, that same bourgeoisie moved into the tourism and textiles, but they still have their ideological roots in sugar cane fields. It is often said here that the main mental activity of directors of large sugar companies is to sit in the board room and gaze out the window to watch the sugar cane grow. But they have managed to compose very well with the more recently formed layers of capitalists, and with successive political regimes. At heart the bourgeoisie is very conservative, and its main reaction to an economic crisis is to go backward into history to search for easier days.

The more recently formed sectors of the bourgeoisie are very dependent on state patronage and differential protection, as well as being economically subordinate to the traditional bourgeoisie, and even ideologically servile to the old bourgeoisie.

Selling the ultra-liberal budget

The national radio and TV organised a series of programs to allow the minister of finance, the prime minister and “economic experts” in various private and public institutions to address the nation and try to explain or defend the aims of the budget. Business-friendly journalists were brought into live programs to ask obliging questions. At various social, cultural, and even religious functions, ministers would give speeches rejecting the criticisms that by now were flying thick and fast. Ingenious opinion polls were devised to show how a new “feel good factor” was spreading through various sections of the population. But the depth and breadth of the attack on living standards and security of employment, and the general anguish about the bleakness of future prospects, could not be plastered over, however cunning and persistent the spin-doctoring. So finally the government called for outside help, and it came in the form of a World Bank-sponsored team of ex-ministers of finance from Mexico, Chile and New Zealand and an ex-prime minister of Ireland.

Ruth Richardson, former minister of finance of New Zealand, famous for her Fiscal Responsibility Act of 1994, was brought in to explain the necessity of reforms in the public sector and the need to curtail the public debt. What in fact impressed her most during her short stay here was a visit to a large textile factory where workers had been trained to move about the factory on roller-blades to minimise the time wasted through ordinary walking! Santiago Levy Algazy from Mexico presented his case against universal welfare benefits: he described how poverty in Mexico had been alleviated through a policy of targeting the needy poor, without evidently saying much about the Poor Law of the distant past. From Chile, Nicholas Guzman was a great defender of an economy more open to the world market. The ex-prime minister of Ireland, Garret Fitzgerald, was here mainly to explain how employment can be created by having legislation that makes it easier for bosses to sack workers. But, unlike the other three, he did express some concern about the effectiveness of the proposed reforms, given that the education system here was providing tertiary education for only around ten per cent of school children.

So each of the four visitors was given a specific brief to defend one aspect of the economic reforms being imposed by the government. The press conferences, television programs, meetings with bosses, ministers and members of the National Assembly and public conferences were all carefully planned with the director of the International Trade Department of the World Bank as principal “tour manager”.

Threat of repression

As we predicted in our electoral campaign last year, the austerity measures taken by the government would bring about widespread protest movements, and the government would be tempted to use repression to put them down. Ironically, the same press that supported the measures in the budget was the first victim of threats of repression. As the government parties became more and more unpopular, to the extent that most ministers and government members of the National Assembly were finding it hard to set foot in their constituencies without heavy bodyguards, any critical article in the press was considered as very dangerous, and accusations of “unpatriotism” and “publication of false news” started to be levelled at specific newspapers and journalists. There is even a Media Commission Bill being proposed to keep journalists and newspapers in line. In general, this threat against the press is always a sign that more generalised repression against all protest movements is quite likely to follow.

The trade union movement has launched a protest campaign against the ultra-liberal aspects of the last budget. So far the regime has not used any repressive measures against the union leaders, having concentrated in the first instance on producing divisions in the ranks of the movement and pacifying some of the leaders by nominations to boards and committees.

Lalit’s program

About two years ago, it was becoming obvious that the reduction in eu sugar price was going to coincide with an accelerated shrinking in the textile sector, and unemployment would rise rapidly. It must be pointed out that the previous government had already, together with the sugar bosses, initiated a plan for sugar factory closures with retrenchments of sugar factory workers, together with phased reduction in employment in the cane plantation work force through a retirement scheme.

In Lalit, we started working out proposals for an alternative political economy with a potential of new employment creation in productive sectors. This special emphasis on employment and alternative production sectors was in addition to the ongoing political program that we have developed over the years. The particular subjects on which we had done most work in terms of documents, publications, meetings, public debates and mobilisation were:

The fight against communalism in politics. The political system is characterised by a form of institutionalised ethno-religious communalism called “the Best Loser System”. This allows additional members of the National Assembly to be nominated after the election results, in order to establish some sort of ethno-religious balance in the body. This particular perversion of the democratic system requires that the whole population be classified into four different “communities”, and each candidate in general elections has to classify himself or herself on the nomination paper. In Lalit, we have consistently rejected classifying ourselves in ethno-religious categories. So, to be able to participate in elections, we proceed by drawing lots, during a press conference, to determine which one of the four communities each of our candidates will inscribe on the nomination paper, at the same time as we address an official letter to the electoral commissioner, to ask him to exclude all our candidates from the Best Loser allocation. At every general election, this Lalit action against the concept of “apartheid-like” classification causes quite widespread debate, and there is now a fairly broad consensus that this aberration should be done away with.

Military base and decolonisation. The struggles around the us military base on Diego Garcia, the return of the Chagos Archipelago, which includes Diego Garcia, to Mauritian sovereignty, and reparations and the right to return of the Chagossians, have also been very high on our agenda. This has constituted, over the years, the mainstream of our regional and international work. We have published a thoroughly documented book on the subject, and Lalit militants have brought up the subject in various international meetings like the Open World Conference in San Francisco, the Mumbai World Social Forum and the Asia Pacific International Solidarity Conference in Sydney. Lalit is now a member of the international organising committee planning a world conference against military bases, which is scheduled to take place in Ecuador in 2007.

Other issues. We have also published program booklets and campaigned on: land reform; the promotion of the mother-tongue Kreol language and its widespread utilisation in informal and formal education; necessary reforms in the education system which is at present very much based on the concept of an “elite”; protection of the environment; the struggle for women’s rights and against domestic violence in a patriarchal society; for human rights and against police brutality; reforms in the electoral system and the judiciary.

Our present campaign on an alternative economy has included the publication of a bilingual (Kreol/English) booklet that proposes massive agricultural diversification, agro-industries for export as well as local consumption, extensive and intensive fish and livestock farming and milk production, development of an ecologically sustainable fishing industry and—faced with the present oil price crisis, together with environment protection issues—the development of alternative energy sources.

There is no doubt that proposals like these are immediately recognised by working people to be the only sensible economic alternative being proposed. Our program shows clearly how to bring about the rapid employment creation that is necessary if Mauritius is to avoid the kind of major social crisis that could turn the country into another “failed state”. It also immediately poses the question of ownership and control of the economy.

Our campaign has taken the form of public debates, poster campaigns and leaflet distributions. On June 25, 2006, we organised an all-day seminar with an international dimension with the contribution of Oupa Lehulere, the director of Khanya College in Johannesburg. The object of the seminar was to analyse and discuss the philosophy of the last budget, especially as to the indications it provided on the economic and political strategy of the present government, to discuss the relevance of the Lalit mobilisation campaign to the present systemic crisis and to analyse the nature of the crisis itself. Lalit members, supporters and a number of trade union activists attended the seminar, and the debates after the three papers were very useful for the further development of our program.

Difficulties

In our present campaign, we have to face a number of political difficulties.

At present the leadership of the trade union movement is very divided on strategic and bureaucratic issues, so much so that it has fairly limited credibility, even within the union membership, let alone at national level. The mobilisation campaign that the movement is carrying out is based very much on fighting to preserve acquired rights and resisting changes. Although this is certainly central to the role of any trade union in times of a systemic crisis, it can very easily be dismissed as “conservatism” by the propagandists of the bourgeoisie. The leadership of the union movement definitely needs to address broader economic and social issues that will allow it to move out of the “corporatism” in which it often stagnates. Lalit has initiated a number of meetings with trade union delegates to discuss these needs.

The crass opportunism of the parliamentary opposition parties also occasionally constitutes a difficulty: when they were in government, they had very much the same ultra-liberal economic and social policies as the present government. But now in opposition, they are very quick to try to control any mass mobilisation that the trade union movement or Lalit manages to initiate. The bourgeois press in general contributes to this, when it’s not actually defending the bosses’ agenda.

As the economic crisis has started affecting people’s everyday lives, a number of social problems have taken on a more serious dimension: a drugs problem is becoming more widespread, as are the concomitant burglaries and petty thefts, violence against women and a high rate of suicide even amongst the very young.

These social problems tend to occupy headlines constantly, and actually constitute a genuine preoccupation for ordinary people, and this adds to the difficulties of carrying out political mobilisation and organising based on the broad basic issue of the economy.

Conclusion

Although we are at present concentrating on the need to mobilise workers and the broad masses on the issues of employment and the need for an economic alternative independent of sugar and textiles, we are at the same time very much aware that our whole program on other issues has to be kept alive, and that our strategy is to put the socialist transformation of the economy and society firmly on the agenda at one and the same time as proposing alternative production sectors. The present systemic crisis makes it only too evident to everyone that class society and capitalism, whether ultra-liberal or social democratic, cannot provide the equality and social justice that a vast majority of people here, and all over the world, aspire to. This, in turn, leads to a simultaneous putting into question of the existing forms of ownership and control of the economy, and of the political and social mechanisms that maintain them. In Lalit, we see our aim, in the broadest terms, as the developing of a common understanding of the tasks before us, if we are to move from where we are today to where we want to be tomorrow.6

We are also constantly aware that our struggle needs to articulate with political struggles that other movements are involved in, regionally and internationally. We are certainly committed to taking initiatives that would aid this articulation.

Notes
1. There were 32 Lalit candidates in all; Mauritius has a system of each elector in each constituency having three votes for three candidates.
2. Movement Militant Mauricien-Movement Socialiste Mauricien.
3. Free bus transport was introduced on all routes at all times for pensioners and handicapped people, and free transport to school and university. The government returned to universal, not targeted, old age pensions.
4. In fact, more than twenty years ago, Lalit was involved in a campaign against over-reliance on sugar; the campaign was called “What future is there in sugar?”
5. Mainly Australia, Brazil and Thailand.
6. For more about Lalit’s program and political work, visit www.lalitmauritius.org.

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