The new labour laws
At the Round Table organized by the Confederation of workers of the private sector (CSTP) on the new Labour laws, the representatives of the Mauritius Employers Federation and the Minister of Labour were conspicuously absent.
In their own closed circles and the one-sided public debates, they had been highlighting the advantages of these innovative legislations which will revolutionize the labor market rendering it more flexible with more employment opportunities and allow a shift from the concept of job security to the concept of employment security. Now that they have the opportunity of driving forward these points to a wider audience, they abscond. Boosted by the massive support of employees mowed down by the slowing economy and job losses and a crippling sentiment of helplessness, the Trade Unions had come well prepared not only to defy the odds but to knock their opponents’ socks off. Their mood was decidedly upbeat. They kept tensions bubbling just under the surface while they hammered at the Labour laws –“préavis de licenciement réduit de trios mois a un mois, licenciement sans compensation pour raison économique , heures suplementaires payé qu’après 90 heures de travail normal “. “Patron finn gagne fouette pou batte travayer” Ms Jane Ragoo was fuming “le lendemain de la journée de l’esclavage, L’esclavage moderne fin intoduire à Maurice .“ Even our dear new advocate was swamped by this wave of trenchant argumentations, acknowledging that the abolition of the Termination of the Contract Services Board and the increasing powers conferred to the Ministry of Labor were against the interest of workers. Feeding them with such fodder as “C’est quoi 1% de Rs 5000” besides reflecting some insensibility to the sufferings of workers , only succeeds in plowing the ground for more virulent seeds of attacks and fanning the discontents that will inevitably slip out of their natural habitat.
Reinventing MK
Stories of airlines in trouble or brought crashing down to earth in a financial fireball have become commonplace. And at MK the situation is no better and it has already taken a nosedive. There has been a noticeable downturn in bookings from the Australian, European and other global markets and some routes have been cut and flight schedules reduced drastically. There seems to be a problem of visibility all around because of the economic crisis. But it is not a good enough excuse for concocting all types of half-baked rescue plans- One of the latest is “Reinventing MK”. To every passenger embarking on Air Mauritius, this new slogan means that he will be provided with a toolkit and in case of any hitches on board, everyone will be free to fend for himself, tools in hand, trying his best to extricate himself from the dire situation but unsure of landing safely in a whole piece. - in other words it is cacophony on board MK. Even after the sales of the non-core assets, a bridging loan of Rs 1.5 billion from NPF pending the injection of fresh capital from major shareholders and the renegotiation of the hedging contracts— there is no guarantee that MK will be saved . It is the same old wine in new bottles; the discredited management and the board of administration are still at the helm. And least of all to improve the chances of survival of MK is the turn-around specialist, Mr Viljoen, who could not turn around South African Airways (SAA). At the cost of a monthly bill of Rs 850,000 , MK will start registering quick gains but after a while we will have to terminate the contract, pay a hefty lump sum compensation and still end up with MK going bust. SAA is yet to recover from the “steersmanship” of Mr Viljoen.
The Emperors and their fiefs
Most of the political appointees and other protégés of the regime find it difficult to get along with their immediate subordinates. At the BOM, Enterprise Mauritius, Airport of Mauritius ltd, National Transport Corporation and in many other government departments, those who find themselves in position of authority, not necessarily because of their competency but out of their proximity to the levers of power, behave like emperors. And in their fiefdom, the boss is always right and others are idiots –simple, plain morons. Moreover, our emperors believe they have been given the difficult task of presiding over a shambolic and talentless administration. The few talented heads, who have the good sense not to subserviently toe the line and in whose presence their faked acumen become too visible, are unceremoniously chopped off and marginalized and a whole saga of harassment and persecution then follows Often these local emperors make sure that they are backed by a foreign expert or adviser knowing very well the Mauritian’s proclivity to accept anything that has the seal of approval of the foreign expert.( Mr Anwar Subraty, Chairman of the CWA notes “Apres 41 ans d ‘índependance, on constate quíl y a toujours cette tendance a avoir recours aux consultants. Certains on le syndrome de consultants…” like the much in vogue Capacity Building Programmes. ) For most of these emperors, c’est l’habit qui fait le moine; Shorn of their paraphernalia and how hard they may try, they fail to stand tall and they look so plain and even their dreary statements, usually couched in the latest clichés and verbiage, which habitually make the headlines of the local media, because of the institutions they head, appear so ordinary and lusterless. But we have to acknowledge that they and their cheerers, their yes-men, have the political flair of the “how and when” to hitch themselves onto the wagon of the governing party. And once on board, it is just a child’s game; they leave it to their megalomania and the resonant titles and accompanying privileges to ensure compliance and enforce total submission. Maybe this cautionary advice from the Zen master , Thieh Nhat Hanh, nobel prize nominee and peace maker ,all carved-out for our local emperors, –“If you think that anyone who disagrees with you is wrong, you tend to become fanatical and ….if you want to obtain a higher form of knowledge, you have to bend.” could cushion their inevitable fall.
The Gold Option
In the last several months, the price of the yellow metal has touched higher levels even as the global recession deepened. Gold has emerged as one of the most attractive option in the world. At a time when equity and mutual fund investors are licking their wounds, investors in gold are laughing all their way to the banks thanks to the soaring gold prices. Gold prices have been staging an upward movement since the last week of October 2008 as the worries of the global economy deepened . For a time frame of the last four months, the yellow metal has yielded a return of as high as 34% to investors. Back in October when the dollar has strengthened temporarily, observers had noted that people were pulling their money home and going to cash. Gold was just reacting to the dollar. There was a loss in demand for all metals and commodities. But most investors were then quite bullish for gold in the long term, primarily because they were seeing the dollar weakening substantially with all this liquidity being pumped into the system. They expected a strong Gold and Silver price rally to begin soon - accelerating after the New Year. Some were even betting that it will be in the range of $1029-$992 in March 2008; On the futures and options market of the New York Mercantile Exchange, the largest and most significant market for gold futures and trading, it was already selling around $ 845.0 per oz for up to April 20 .
Now the headline is that Gold is the new global currency. The US Federal Reserve’s aggressive interest rate- response to the credit squeeze has created a risk of a sharp rise in American inflation. That in turn creates the risk of a precipitous fall in the dollar and so makes gold more attractive as a hedge. Gold prices have now risen to above $ 1,000 a troy ounce mark as investors shunned the risky assets for the relatively safety of the bullion. If we had invested 50% of our reserves in Gold before the last week of October 2008, the country would not only have benefited in terms of billions of rupees but also ensured that we in a better position to withstand the effects of the global meltdown . Not bad at all, especially in such recessionary times.
The stimulus package : Out of steam
We are in the middle of the worst global downturn for decades and we are riding the current crisis better than many others. Some likely reasons could be that the full impact of the global credit crunch were felt somewhat later in our main export markets and that we were appropriately cushioned by the Rs 7-8 billion of inflows to the IRS and the ample liquidity provided by the banking system. The crisis had not yet hit the economy fully and already we are recording catastrophic data for 2008 . The trade balance has more than doubled since 2005 and reached some Rs 65 billion for 2008, Rs 5 billion higher than the CSO forecasts. This represents a high of 24% of GDP. The current account deficit on the other hand has tripled since 2005 and for 2008, it is abnormally high at 11% of GDP. The growth rate of the economy has been revised down to 2.5% for 2009 and this may be revised further down in the next few months. Exports growth continued to decline in real terms for eight consecutive quarters. In the manufacturing sector, Exports exports of manufactured articles of apparel and clothing decreased by 10.5% and Employment employment in the Exports Oriented Enterprises decreased by 5,038 in 2008.
The data now flowing in is not easing the worry lines in government as the negative trends persist and growth continues to dip. Though we are already months past the first attempt to provide the much needed fiscal vitamins to perk up the flagging economy, government’s hopes that with adequate follow up, particularly in implementing the infrastructure projects, key to the revival recipe, that the economy will shore up seems to grow dimmer. The additional stimulus package is yet to have the desired effects. It is not working its way through the economy. The poor performance on the exports front and the job losses mandate further action on the fiscal and monetary fronts. But with the falling revenue, rising fiscal deficit and public debt debt Government, Government will have to tread carefully, delicately balancing deficit financing and budget management. The stimulus package and the AMB, NTC, STC and Air Mauritius losses are piling another load of debt on the debt-wagon already too heavy for the Mauritian economy to pull. And inflation, still relatively high, raises some concerns. Why the call for a second stimulus package ?
First of all, some observers have noted that the current problems of some sectors are layered on top of deep-rooted economic problems that are not addressed by the stimulus package. The long-term fixes of the package that ignore short-term fixes could actually make things worse. The real art and skill of fiscal stimulus is to boost the economy as much as possible in the long turn without weakening its near term prospects. Second, the massive stimulus package bailing out some big companies have lost sight of the role of small business in creating jobs. They must be the focus of any solutions to turn the economy around. It will take months for the stimulus to produce results while small businesses can create jobs quickly. Investment in infrastructure will do little for the people who have lost jobs; the loosening of credit at more affordable rates should continue.
Third, the SME sector does not believe much in the package offered to them through the SME partnership fund; the quasi-equity fund is not working and it is not adapted to our local realities. Direct relief spending is a more powerful stimulus than equity investment in troubled businesses and is better aimed at the neediest. In addition to the administrative slackness, they have to face the additional burden of preparing burdensome financial statements. The SMEs are badly in nee d of funds to finance their need for professional and consultancy services. They prefer to have access to government-guaranteed bank loans.
Fourth, there is a too big time lag between money allocation and actual work being started. Expenditures on augmenting infrastructure could remove the infrastructure constraints in the medium and longer term, add to productivity increases and can have greater multiplier effects, but their fast implementation is the key to their effectiveness. Unfortunately, our recent experience in infrastructure implementation leaves much to be desired. The most important exercise required is to prioritize the ongoing projects and speed up their implementation by every government department. The critical question, however, is whether the various government departments are willing to shed their inertia. Finally, some parts of the stimulus package seem to be more of the same -- trying to prop up the old, failed economy. That strategy simply won't work -- but we could waste a lot of money and time trying. Instead, we need a new direction for our economy. “You can't jump halfway across a chasm -- you just end up falling into the abyss." And instead of bailing water out of the sinking ship, we should construct a replacement appropriate for navigating the economic seas of the 21st century -- and steer it in the right direction.
The Maurice Ile Durable ( MID) Project
Mr Francois Oudendeal, UNDP Consultant believes that the MID project cannot be only in the minds of scientists and politicians, but must be in the minds of each and every Mauritian. “So all Mauritians need to talk about sustainability “ and all need to know what it means and take the commitment to refuse to put at risk the welfare of future generations because of one’s own lifestyles. Following the MID week event, our environmentalist Nicholas Rainer also cautions us that “to win the heart and minds of the average Mauritian,” we have to do more than preach to the choir. The common Mauritian is still not too concerned about the environment. Environmental concerns have to become a big issue gradually and we have to contribute positively in promoting a holistic approach to sustainable development. It should be equally our concern that “at Pereybere we are sawing down a beautiful Falmboyant and on the road between Chemin Grenier and le Morne , the badamiers, flamboyants and eucalyptus will be pulled down to give way to electric poles with high tension lines” and that we are selling of our best land to foreigners and to the IRS projects. And there could not be better advice than that of Mr Francois Oudendeal -“Strive to use every square meter of your land to its best potential”. Are We ?
