After the Sobrinho saga, now Agliotti
There has been unease at the Prime Minister’s Office (PMO) since last Tuesday. The opposition put a question to the Prime Minister about a controversial businessman of South African descent, who has been living in Mauritius with his wife since early 2018.
The businessman obtained a residence permit from the Passport and Immigration Office (PIO) while there are allegedly several criminal charges raised against him in his country. “He was convicted of drug trafficking and admitted to bribing a police chief. Is he hiding in Mauritius?” That was the question put by PMSD deputy Adrien Duval to the Prime Minister in the National Assembly last Tuesday.
His wife Lelani Agliotti is registered as an investor; she applied for an occupation permit in October 2017. Following the procedure and the necessary verifications, it was granted in January 2018. Glenn and Lelani Agliotti seem to have disappeared into the wilderness. The South African High Commission does not have an inkling of their whereabouts. At the South African Chamber of Commerce, a source confirms that the Agliottis are not members of the organization, although any South African based in Mauritius can become an individual or corporate member. Officially, Lelani Agliotti’s company is listed under the Style by Bella label and specializes in fashion and design. The address refers to a Mauritian based in the North. But an employee posted there declares that she does not live there.
Blog comments are quite critical of this unacceptable situation which shows the laxity of the authorities in the granting of a ‘resident permit’. “By allowing drug dealers in our country without proper checks, the international reputation of Mauritius is getting tarnished,” comments one blogger.
Another blogger is even more direct: “Shame, Mauritian passports are being sold to billionaires who have escaped justice in their own country. We must get rid of this rotten system in Mauritius.”
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Workers’ Rights Bill: The private sector objects
The anti-worker Employment Rights Act, introduced by the tandem Sithanen-Mansoor, which was abused by employers by firing workers easily on economic grounds is being repealed and replaced by the Workers’ Rights Bill with a view to addressing the shortcomings of the present legislation.
The previous legislation was anti-worker in terms of deregulation and systematic debunking of labour codes. It was the general neo-liberal views of “Hire and Fire” that prevailed and thus generated the Employment Rights Act of 2008. It was claimed that those labour laws would add flexibility to the labour market and facilitate the shift from the concept of job security to that of employment security, whilst also improving the business climate and our ranking in the World Bank’s Doing Business Index.
The “flexibility” argument is quite debatable and has remained controversial with many economists. True labour flexibility must be based on worker versatility: the workers must possess a variety of skills, so that they are qualified to change jobs with changes happening in the economy. Building those skills requires time, and creating the conditions for worker versatility that can provide true labour flexibility must be a continual process.
The workers were losing on several fronts: the three months’ notice in case of dismissal went down to one month; the normal rate of 15 days per year of service to calculate compensation in case of wrongful dismissal was removed, etc. The Termination of Contract Services Board, which presided over the redundancies, was abolished, and more powers conferred on the Ministry of Labour were against the interest of workers.
Dev Ramano, specialist in labour laws, warns us that “the sufferings caused by redundancies had become untenable over the last decade. There has also been a drop in the number of sick days from 21 to 15. Without the necessary reforms, we were heading straight toward a social explosion in the years to come.”
Certain provisions of the Workers’ Rights Bill are a step forward, for example, the Wage Remuneration Fund, the institution of the Redundancy Board, the Portable Retirement Gratuity Fund and the elimination of discrimination in contracts for similar work under different conditions.
But the unions and workers are not fully satisfied; they is still more to be done, as for example, the three months’ notice which prevailed earlier in the case of dismissal, and which has been brought down to one month; the normal rate for calculating allowances in case of dismissal that has not been reinstated, etc. As for the difficult issue of disciplinary committees, it remains unchanged. The bosses are always, at this level, judge and party. There is no independent panel system based on the principle of separation of powers whether it has to do with the dismissal of employees for willful misconduct to the right to impose sanctions. “The employer continues to press charges, to hear the case, to try the employee and to impose the penalty,” notes Dev Ramano.
The Confederation of Private Sector Workers (CTSP) is in favour of the draft bill. Its president, Reaz Chutoo, explains that workers have suffered enough and the Workers’ Rights Bill will be a relief. He also points out that the Bill will allow workers to get their dues when their employers decide to fire them. Business Mauritius, he says, has been lobbying for the new law not to be passed.
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Mauritius Leaks: The mystery and treaty shoppers
After the Panama Papers, the Offshore Leaks, and the Paradise Papers, the International Consortium of Investigative Journalists (ICIJ) published on Tuesday, July 23, the Mauritius Leaks. 200,000 documents, emails, contracts, confidential tapes from Conyers Dill & Pearman, a management company based in Ebène.
A series of events during the past three years is affecting our reputation as a clean jurisdiction that we have strived to portray over the years. It has to be noted however that the reputation of our financial centre has been shown to be more positive than its underlying reality, and this gap was likely to pose a substantial risk sooner or later. We are today seen, as qualified by the journalists consortium as the “the lynchpin of many tax avoidance structures in Africa,” and among “the most aggressive corporate tax havens responsible for large revenue losses” across the African continent.
We kept repeating to potential investors that “Yes, you can’t open a bank account here without giving your full details,” or that “we are happy to exchange tax information with all our partners.” But we allowed foreign companies to fragment themselves and register shell and holding companies, and leasing and management operations, in our jurisdiction where not much tax is paid, and then allow these companies to artificially send profits made elsewhere to the offshore fragment in order to avoid tax. And for years, we have been pretending that we are pushing for more tangible commercial substance in the global business sector and that it was being oriented towards more value addition but till today the relative shortage of highly skilled and specialised legal and financial expertise represents a potential bottleneck to rapid growth of higher value added global financial services.
It is true that we have moved to a new threshold now, and our less tax-centric financial industry is at a crossroads but we are committing yet another blunder by again deluding ourselves about our rapid transformation to a more diversified hub driven by Fintech, Cryptocurrency Exchange and Blockchain. Our priorities should be geared towards improving the business and regulatory environment, the professional skills and talent, the infrastructure and connectivity, and the depth and breadth of financial activities. The sooner we acknowledge our weaknesses and squarely confront them, the faster we can chart a more diversified and sustainable course of development in financial services.
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Terre-Rouge/Verdun finally operational after a delay of 15 months
After having struggled for four and a half years with the Terre Rouge/Verdun Motorway, the authorities have finally declared it operational again. Just to repair the truncated sagging trunk at Valton, it cost some Rs 485 million. If we add the Valentina Road and the Arsenal Bypass and the initial cost of Rs 2.6 billion, the Terre-Rouge/Verdun motorway will have cost taxpayers a huge Rs 6 billion.
The Terre Rouge/Verdun Motorway, which will stick forever to the former Minister of Public Infrastructure and his technical team for their failure to ensure the required geological surveys, has claimed another victim in the present Minister of Public Infrastructure. He has been struggling with this project during the last four and a half years. The works started in May 2017 and were scheduled to be completed by March 2018. They were more than 15 months late, despite the reassurance given by Nando Bodha that the works would be completed as soon as possible. Aggravated cracks, bad weather, the instability of the walls are all reasons given for the considerable delay.
After having been through years of delays, detours and congestion, the taxpayer is finally relieved that the highway is finally operational. But at what cost?
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In Baie duTombeau: “Bétonnage” of the beach in front of SAJ’s bungalow
It’s been a year since the construction began, allegedly without any notice for the reinforced concrete laid down on nearly 500 metres of beach. “We do not know anything about this project. We heard that this was part of the port extension project. Was it really necessary to destroy this little piece of beach very popular with locals,” wonders Atma Shanto.
A distressing sight indeed where gravel has replaced sand. “Before, we could go with our boats early in the morning, but with this concrete dam, we cannot do anything, and we must pile up a little further on a few metres of sand still intact,” says Kong. Unhappy to see their livelihood slip through their fingers, fishermen in the region have decided to alert the authorities. “We are not against development, but we must at least know what is happening in our region. This is also our beach and lagoon! “
Atma Shanto decided to join them in this fight. “Fishermen cannot fish or look for their bait. Where will they go to work? After this first visit to Baie du Tombeau, the protesters will go to Tamarin where similar work has begun, again without consultations with fishermen. “The authorities must listen to the fishermen who are suffering,” said Atma Shanto. “The Ministries of Fisheries, Environment and the Prime Minister must assume their responsibilities. We are calling for an immediate halt to this project, which is not only threatening the livelihood of fishermen, but also the environment,” says Atma Shanto.
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Youth Unemployment: The revisited SME Employment Scheme likely to fail again
The first phase of the SME Employment Scheme as part of the 2018-19 budget measure had as objective the placement of 1000 graduates in small and medium-sized enterprises (SMEs), with a monthly salary of Rs 14,000 paid by the government and transport costs borne by SMEs. The scheme was designed to build the capacity of these companies by using qualified staff to improve their performance and reduce the mismatch in the labour market. This programme was also intended to support SMEs in their quest for better productivity and promote the employability of graduates as well as the entrepreneurial spirit, especially among young people. But over time, the first phase did not reach its objectives.
The SME Employment Scheme 2018-19 has been reviewed and improved, with new allocations for the period 2019-20, through a second phase. From now on, degree and diploma holders can be placed in companies with an annual turnover less than or equal to Rs 100 million. They will be employed under a one-year fixed-term contract, which may be renewed for a second year. Small companies that benefit from the Scheme will also be able to apply for graduates.
We still believe that the revisited SME Employment Scheme is likely to face the same hurdles as the previous one. It is a mere subsidization of the labour cost for SMEs which may be of some benefits in the short-term but will not lead to any long-term impact on youth unemployment. Rather than these graduates, most of these SMEs would have preferred workers with the adequate technical and soft skills and past working experience for the job they offer. To meet the demands and requirements of employers, there should be greater emphasis on better targeted comprehensive programming that combines on-the-job training, short classroom training and life-skills training.
For the long term, as recommended by some recent World Bank studies of our labour market, a comprehensive assessment of current and future needs of firms in terms of skills is needed and can help inform education curricula for the coming generation of workers. Our training systems can help those who are already working adapt to the new demands of the labour market whereas skills acquired through Technical and Vocational Education and Training (TVET) should be made relevant to a rapidly changing labour demand. TVET should also be made more attractive to a larger number of youths as they are often viewed as considerably less prestigious than academic education.
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Paying homage to Johnny Clegg: artist and activist
The South African singer and songwriter Johnny Clegg, one of the few white artists to openly confront the apartheid government in the late 1970s and 1980s, has died aged 66.He had been diagnosed with pancreatic cancer in 2015.
The Grammy-nominated singer, sometimes called the “White Zulu”, died peacefully at home in Johannesburg on Tuesday last with his family, according to Clegg’s manager, Roddy Quin.”Johnny leaves deep footprints in the hearts of every person that considers himself or herself to be an African,” Quinn told AFP. South Africa’s government paid tribute to Clegg’s achievements on Twitter, saying his music could “unite people across the races and bring them together as a community. Clegg made an indelible mark in the music industry and the hearts of the people,” they said.
To the Mauritians who had the privilege to hear it live at the Rose-Hill stadium in 1998, and especially to all those who appreciated him and was touched by his music, especially his classic song Asimbonanga, a condolence book will be open from Monday, July 22 to celebrate the exceptional man, his life and his fight, at the headquarters of the agency Immedia, in Port Louis.
Forbidden to play in his own country, Johnny Clegg and the musicians of all the communities who toured with him in his band, Savuka, were able to give a popular echo to the South African tragedy of apartheid and the injustice suffered by Nelson Mandela and his fellow soldiers.
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Raiding of Bank of Mauritius Special Reserve Fund!
The high-level committee set up by the Reserve Bank of India (RBI) on its economic capital framework (ECF) has recommended that surplus reserves held by the central bank be transferred to the government in tranches over three to five years. You recall that in one of our earlier political caricatures we had highlighted that a six-member committee headed by former RBI governor Bimal Jalan was tasked with examining the central bank’s requirements on provisions, reserves and buffers. That would determine how much of the reserves could be transferred to the government. The Government of India, like here, has been pressing RBI, its central bank, to transfer its reserves to the government. The government has been seeking the transfer of a substantial chunk of RBI’s reserves built up over the years.
The committee had been set up in December following differences over various issues between the government and the central bank that culminated in the departure of former governor Urjit Patel. The committee’s mandate included the setting of an adequate level of risk provisioning for the central bank and the formulation of a suitable policy to determine the distribution of any excess taking into account all likely situations.
Why transfer at a go Rs 18 billion from the BOM’s Special Reserves Fund and risk impacting the central bank’s credibility for the proper conduct of monetary policy? In the light of best practices adopted by the RBI, the Board of the BOM can recommend that the transfer of the Rs 18 billion be spread over a period of time to help reduce our elevated level of public sector debt.
* Published in print edition on 26 July 2019
