BAI Saga Vindicates LALIT long-term Class Analysis
23.05.2015
The BAI saga, as it unfolds, shows up clearly, for everyone to see, how the Labour Party helped a medium-sized enterprise, BAI Insurance, catapult itself into the short-list of top conglomerates of the bourgeoisie by means of using the leverage of political power and political patronage. It also shows up even more clearly how, once this political protection is removed, say, after a general election thrashing, the precariously balanced conglomerate cannot continue, and actually collapses.
Let us deal first with those few commentators, especially those who work in BAI-influenced companies, who maintain that the BAI could have survived because it always had survived in the past. “People with BAI insurance policies had always got their claims respected before,” they say. “Workers at Courts, Iframac, Bramer Bank, BAI insurance, etc, had all got their pay-cheques, without fail, for all those years,” they add, in an attempt to blame the new Government for the fall of the BAI. But one look at the figures for the BAI’s Super Cash Back Gold (SCBG) scam shows that these commentators’ voices on BAI are a bit like the voice overheard of a man who was falling from the 100th floor of a building, as he went past the 93rd floor, saying “So far, so good!” When the Government has in fact, to continue the metaphor, been rushing around trying to put a matress under the falling man, and sometimes making a mess of its attempts.
So, let’s take a look at the BAI’s Super Cash Back Gold. In fact, the SCBG had collected lump sums from some 20,000 people at the rate of, on average, one million rupees. This makes 20 billion. Since its interest rates, which were designed to attract this capital, were over 7%, much more than elsewhere, it meant that every year BAI was having to pay out some Rs1.4 billion per year, just on interest. Add to this the yearly pay-back on matured capital of about Rs2 billion, and we have an annual debt of 3.4 billion Rupees. But the entire conglomerate was not making nearly that amount of revenue-over-expenses, to pay this money back. It is child’s play to understand this. You don’t need to be an actuary. So, the only way the BAI could hope to continue paying out insurance claims, bank withdrawals and monthly pay cheques, was to bring in new capital really fast by offering more of the same high interest rates via SCBG. Thus we have heard the well-founded accusation that the conglomerate was luring people into a Ponzi scheme, through the SCBG. Meanwhile, over years as the situation worsened, all the regulatory authorities, for political reasons, either turned a blind eye, or acted so timidly that nothing was ever done ... until General Elections overturned Navin Ramgoolam and his Labour clique, so unexpectedly and so thoroughly, and despite the Labour allying itself with the MMM, “the biggest party in the country” that the whole fragile conglomerate was exposed.
All this to say that, at long last, everyone in Mauritius can see what we in LALIT mean when we talk about the “state bourgeoisie”. Dawood Rawat is a classic case. When the BAI sees financial difficulty ahead, it gets a license to open a new bank. Its insurance company gets the green light for a fixed deposit scheme. Or, as things got really bad, someone close to Ramgoolam gets a loan from SICOM to buy a floor of a BAI building for Rs100 million, another someone close to Ramgoolam gets a loan from a Bramer Bank in order to buy another floor for Rs 100 million. Other similar deals are being exposed every day. We are only just beginning to see the mechanisms used to hide the “hole” in the centre of the finance capital empire. So far, if we consider BAI one pillar, there have been three other pillars: Gooljaury-Soornack, going from rags to vast riches through state intervention and now fallen out; the Betamax and other immense deals saw the Bhunjun-Jeetah clan’s rise to the level of vast conglomerate with shipping, real estate and tertiary education; the Ah-Teck and Gamma Civic got the lottery, with their lottery permits.
LALIT defines the state bourgeoisie as a section of the bourgeoisie, itself, that rises to the highest of heights simply by being aided and abetted by judicious use of state power – at the expense of both the historic bourgeoisie (sugar oligarchs, big importers, old banks) and also at the expense of the working class and intermediate classes.
We would like to say it again: The State bourgeoisie has nothing to do with community, but only with money-and-politics. Nor is it ordinary nomination-and-promotion in the civil service or state enterprises, either; this is another level of corruption altogether. It is perfectly represented by the relationship between Ramgoolam and the four pillars: BAI, Gooljaury-Soornack, Bhunjun-Jeetah and Ah-Tech.
State power to promote a state bourgeoisie like this is not available to all “Governments” world-wide. In ex-colonizer countries, for example, the bourgeoisie “runs” its own bourgeois state. It dictates what the State does, and will not be dictated to by it. This is true except in dire cases, like war or post-war, like when the very fascism the bourgeoisie engenders slips out of control. This kind of state power to create new elements in the bourgeoisie exists in ex-colonized States. It is left over from the excessive powers that the colonizer state had, by definition, over the entire country during colonization i.e. powers that involved dictating over all classes, including the ruling class, i.e. including the historic bourgeoisie.
Even traditional MMM supporter Dr. Jocelyn Chan Low, when asked in a recent interview about the BAI, admitted: “... si les faits reprochés s’avères vrais, l’analyse marxiste de la politique mauricienne telle qu’énoncée par Ram Seegobin et Lalit se trouve renforcée, c’est-a-dire qu’il a effectivement une bourgeoisie d’Etat prédatrice qui utilise les leviers de l’Etat pour s’enrichir et se consolider face à la bourgeoisie historique.” (Le Defi quotidien, 18 Me 2015).
The Labour Party has a name for its crony capitalism. It does not admit that it is a jobber for a section of the bourgeoisie. It calls its strategy “democratization of the economy”, and some of the Labour Party hacks use quite overtly racial codes for this politics, which is nothing more than favours for friends in a very tight circle i.e. corruption. So, anyone who worked closely with Labour, under the pretext of an alliance against the oligarchs, is now thoroughly exposed.
All this explains why, in LALIT, we oppose the entire bourgeisie, both historic and state Bourgeoisie sections. The working class needs to mobilize and build its political strength separately from and independently of all parts of the bourgeoisie. One part cannot be “used” against the other, without mortally corrupting one. Rezistans often buckles under this problem, after having worked so closely with the the Labour Party and its state bourgeoisie’s strategy for supposedly “democratizing the economy”. This is clear, once again, from a recent statement by Labour Party leader, Nita Deerpalsing. She says, in a surprising answer to a question as to why so much money public was spent on the “Democratization of the Economy Commission” she presided over. She says she should have got more, given that, “Vous pouvez demander à Ashok Subron le nombre de fois que je l’ai rencontré a mon bureau pour que les travailleurs obtiennent leur du.” (L’Express, 4 Avril, 2015). This kind of revelation is damaging, and even more so coming at the very time when Labour is so discredited. Labour is literally drowning in the cascade of its unexplained suitcases of money ($100 bills hot off the US federal reserves’ presses, all in numeric order, and Rs2,000 bills hot off the Mauritian presses, again in order). And now, the exposure of the connivance between Labour leaders and the BAI shows even more clearly the dangers of allying with sections of the bourgeoisie and their political representatives.
The MMM has paid heavily for its inability to understand the reality of the historic and the state bourgeoisies, and how the state bourgeoisie, together with the Labour Party, has grappled for 60 years to create a stable enough “historic bloc”, around the sugar and cane sector, to maintain capitalist rule. The MMM, for example, saw the “big bourgeoisie” (to use its terminology) as its “main enemy”, seeking an alliance with the small and medium-sized bourgeoisies (again its terminology); and yet its main political adversary was always Labour, which represents something that looks like the “small and medium-sized bourgeoisie”, as opposed to the PMSD which used to be the mouthpiece of the historic bourgeoisie, before the PMSD had so much choice. And it is this strategic confusion in the MMM that has caused Paul Bérenger, again and again, to vacillate between seeking and avoiding political alliances with the Labour Party in so unprincipled a way that finally in 2014, (with the “on” and “off” saga), it was quite literally his undoing.
Theory is not just something one dabbles in part-time, for lack of anything better to do. It is the very stuff of political strategy. It is the very link with reality, itself. And it is only strategic integrity, in terms of what class one represents, that allows a party to persist over time. In the case of a party like LALIT, whose aim is to change the class which is in power, it is vital that our analyses based on reality and on theory, turn out correct. If Jocelyn Chan Low concedes this, so much the better.
