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Rajni Lallah on how Bosses and Government show signs of panic, subsidize failing sugar industry

30.09.2017

The Sugar Estate bosses and the Government getting into a state of panic, as the extent of the crisis in the sugar cane industry belatedly dawns on them right now.


 Since as long ago as 1984, LALIT has been campaigning all over the country to warn everyone of the lack of a long-term future for this colonial vestige of an industry, originally viable with slave and indentured labour, and then kept alive for political reasons by a complicated system of economic protection from first Britain, then Europe in the post colonial era.


 The Jugnauth Government at the time of the 1984 LALIT campaign of “slide shows” that were catching on in all the villages of Mauritius, reacted in a way so typical of the Mauritian post-colonial state: it simply banned the slide shows outright. (Young readers might need to know that slide shows were the previous generation of power-point projections). LALIT’s campaign has continued in different phases ever since then. But the crisis has, of course, only deepened, and as usual LALIT is proven correct. Our so often being right is not due to any supernatural powers but simply because we have a material analysis based on the movement of historical forces, also called a “Marxist” analysis.


 Today the price of sugar is going to fall to around Rs 13,000 a ton. And the amount of sugar due to be produced this year will be lower than usual. So the sugar bosses are moaning away about impending losses. They predict a production of only 380,000 tons. Weird but true, the VRAC (or sugar pumping system at the docks that Government invested in in 1980 to support the sugar industry) has been put into reverse gear, quite literally, and now instead of pumping the sugar into the hold of ships for export, is pumping unrefined sugar from the holds of ships from Brazil into huge trucks to take to the Mauritian sugar refineries. 115,000 tons of brown sugar is imported from Brazil to be refined this way this year. This means nearly a third of the 495,000 tons due to be refined by the Estates is not even produced in Mauritius. And then Mauritius, if you can believe such a thing, sells 35,000 tons on the local market, thus effectively having to import raw sugar for local consumption!


 So faced with the new crisis as the end has finally come right now – 30 September, 2017 – of 250 years of colonial logic in sugar cane, as WTO rules kick in, the Jugnauth Government has decided to continue to subsidize this lame duck industry, an industry that hogs all the good arable land.


 The subsidy is to the tune of Rs1,250 the ton. This is 10% of the price.


 So, in Mauritius, the cane industry continues to bleed the working people of the country. The money for the subsidy is being taken from the collective funds of the Sugar Insurance Fund Board (SIFB), leaving the Fund dangerously depleted. Even the CESS tax has now been suspended, thus making for yet another hidden subsidy of Rs200 million to the industry. And instead of giving subsidies to a useful industry – one that creates jobs – it goes to the very industry that has destroyed, and continues to destroy, jobs by the thousand. The cane industry no longer pays the export tax on sugar. Its contribution to foreign exchange is also not much. And worse still, the Government is encouraging, even subsidizing, the cane industry, to sell off its land to millionaires from abroad in real estate schemes, in exchange for permanent residence and even citizenship.


 At the same time, the cane bosses just remove their capital from the country, and invest where workers are even more deeply exploited than here e.g. in Mozambique, Cote d’Ivoire, Kenya.


 Depreciation of the Mauritian Rupee


Now the sugar bosses and other capitalists in export industries (textiles and tourism, in particular) are calling for, and putting economic pressure towards, depreciating the Mauritian Rupee, so as to increase their income in Rupees. The State has bizarrely announced that it will intervene so that exporters continue to get Rs34.50 for each dollar, or what expected to be a subsidy of around Rs2.50 per dollar, but who knows how much it may be.


 Interest rates cut: How the capitalists benefit


That is not all. The Bank of Mauritius has decided to lower the Repo Rate by 50 points which means a fall in interest rates of some 0.5%. Pensioners and others with savings will thus get less than before. Meanwhile, capitalists who owe the banks astronomic amounts will have less interest to pay back. To give an idea of this. The capitalists in construction owe the banks Rs90 billion. The hotel bosses owe around Rs40 billion. The capitalist debt in general is as much as Rs300 billion. What this means is the change in the Repo Rate puts Rs1.5 billion straight into the bosses pockets. Just like that!


 Pravind Jugnauth and the Cane Bosses


In a mere two-week period, the Prime Minister Pravind Jugnauth has taken a number of oaths in public to the effect that he will eternally be at the services of the sugar cane estates, just as his father before him swore to be in his Vision for 2030.


 Pravind Jugnauth cut a ribbon to launch the motorway the State constructed for the Omnicane (ex-Savannah) sugar bosses. The State spent Rs600 million to very quickly put up this motorway to thus subsidize the billionaires who buy villas under Integrated Resort Schemes. Meanwhile the road infrastructure of the rest of the country, in particular where working people live, becomes more and more delapidated.


 Then Jugnauth proceeded to cut another ribbon. This was to launch the Mon Choisy Smart City where more luxury villas and their swimming pools will be sold to billionaries from abroad.


 That was not enough oath-taking.


 He then cut yet another ribbon for the launch of the Medine Unicity, another supposed Smart City, that will specialize in selling all manner of education to the highest bidder. There, Jugnauth made a fool of himself by thanking the Medine bosses for their “donation” of land for the Metro Express. How obsequious can you get: This land was no gift. The Government paid big-time money for this gift. Rs83 million!


 So, we still, in the Third Millenium, have a Government that, like a feudal lord, swears allegeance to the sugar cane bosses, as if they were so many Kings.


 LALIT has been contacted by a number of people who wanted to put on record their agreement with the LALIT article, signed by Lindsey Collen in Le Mauricien about the Government’s role in forever bailing out the ailing sugar cane industry.


 Crisis in Tuna sector, too


Now, the Government is finally exposed for its criminal negligence in not ensuring that Mauritius has a proper fishing industry. Being the 18th biggest country in the world, when territorial waters are included, Mauritius is in the ridiculous position of having no ships to fish them, of instead just selling off cheap permits to ships from big powers to fish the waters. No investment has been directed towards a fishing industry, while all investment has been herded towards real estate speculation. It is truly dangerous.


 LALIT has systematically, since 2003, campaigned for the State to develop a fishing industry. But, successive Governments have preferred to push all investment into sectors that hog the arable land, that do not create much work, that decrease food security (which is already alarming), and which bring only a mirage of FDI. Over 76% of FDI is nothing but real estate, one-off, speculation, that only harms the economy. Even the compensation money from Europe (for the end of the protected regime for sugar) has been ploughed back into the lame duck of the cane industry.


 Instead of a fishing industry, the Government has set up a Free Zone in the port (Free Port) where fish is bought from the big fishing vessels from France, Spain and South Korea to be processed and preserved. 8,000 workers work in this sector, now dependent upon Europe for produce and for markets! And now the quota of fish they can fish in the Indian Ocean is up, and the suppliers blythely announce that there isn’t enough fish to supply the Mauritian factories. For the fish to get preferential treatment when imported into Europe, it must come from the Indian Ocean. But the suppliers have used all their Indian Ocean fish up otherwise. So, the Mauritian Government is once again reduced to begging for derogation from European union rules. This shows the fragility of the colonial-tyle economic model.


 What is to be Done?


The capitalists, when they go into crisis, have no interest whatsoever in creating stable jobs for the working class. They don’t even have an interest in stimulating production.


 The only class, when these capitalist crises bite, that has an interest in creating work, in production, in bringing proper social progress and harmony, is the working class. That is why it is so important to rally around the demands that LALIT has been developing for Mauritius and Rodrigues, and for bringing into question the capitalist system iself. It really needs to be overthrown. Its cruelty knows no boundaries.


 This is the difference between LALIT and all the other parties. We want production to be controlled democratically. You will notice that others who pretend to be on the left want distribution alone to be more equitable, as they put it. But why should the capitalists want that? And why should they concede it?


 The struggle depends on us.


Rajni Lallah


for LALIT