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The Coronavirus Epidemic and Economic Crisis after Lockdown

28.07.2020

On Sunday 26 July in a well-attended internal LALIT seminar, LALIT member Rajni Lallah presented the following paper on the coronavirus epidemic and economic crisis after the lockdown. It was followed by debate and discussion.


 


Economic crises in times past


Living generations here today have known different kinds of economic crises. We learn a lot from our experience of past economic crises. We also learn from analysing these different experiences to help us face the present one.


My mother’s generation lived through the Second World War. She remembers the time when ships did not come, and land was used to plant cassava, yam, rice, maize for staple food. There was food rationing to ensure everyone had enough to eat.


There was the economic crisis of 1979 and the early 1980’s in the time when sugar was the main economic pillar, and the price of sugar plummeted. There was the oil crisis. And there was the time when World Bank and International Monetary Fund in return for “aid” imposed its capitalist Structural Adjustment Program. There was massive unemployment, drastic rupee devaluation.


There was the structural economic crisis of the 1990’s when the protected market for sugar and textiles agreements reached an expiry date. Mecanisation and centralisation destroyed thousands of jobs in the sugar industry. In the Free Zone that had employed 100,000 workers, thousands of workers lost jobs. The privatisation that was part of the neo-liberalist wave started destroying the little public control there was in the economy. Consecutive governments proclaiming themselves “facilitators” of the capitalist economy started retreating from the little existing production and control that the State had over the economy.     


In 2008, there was the financial crisis that wiped out pension funds in the US and Europe, thousands losing their homes while the States there bailed out capitalist financial companies. In 2008, in Mauritius, there was also the food crisis – threatening our supply of rice when countries that supply us announced embargos on rice exportation.


And now, we have a new kind of economic crisis, one that is inextricably linked with a world pandemic. A pandemic that, from what comrade Ram has explained, will be with us for quite a while.


Capitalism Fragile


In order to control the epidemic, the State had to impose a near total lockdown. Only essential goods and services were permitted to operate. So, during the March to May confinement this year, we witnessed the fragility of the capitalist economy here, an economy not based on essentials. Its hotels, its cruises, its luxury real estate including Smart Cities and golf courses, its up-market textile and clothing factories are all reduced until now to stand-still mode.


The national airline Air Mauritius, a symbol of our link to places beyond our borders, and the biggest company in the country, has collapsed altogether. 


Our members who work in the docks tell us that importation and exportation is heavily reduced. For the time being, they are busy only because trans-shipment has increased because the port in Durban has closed, closed because of the coronavirus situation in South Africa, and its trans-shipment operations have been rechanelled to Port Louis.


The government is forecasting 100,000 unemployed due to the coronavirus crisis. Hotel industry workers are receiving wages right now because of the Wage Assistance Scheme while people in occupations allied to tourism are receiving aid from the Self Employed Scheme, but this will only last 6 months. Then what?


In other sectors, working hours and wages are being cut. In some companies, workers are even being made to “voluntarily” agree to illegal wage cuts.


There is a generalized increase in the prices of consumer goods due to Rupee depreciation. Yet the already very limited price control extension on basic foods and sanitary material that the Government had put in place during the lockdown has now been removed. 


Nature of the State changed during the lockdown


All this is happening after a period of confinement when we witnessed society being run in a very different way than usual. The de-regulation we had grown used to was replaced by total regulation by the State:


There were draconian repressive measures put in place to stem the spread of the virus. Some capitalist companies were making profits off tenders and contracts during the lockdown. Others were reduced by law or closed frontiers to paralysis. Workers in essential sectors worked tirelessly: in the public health sector and in the free healthcare sector, in waste collection and disposal, in providing us with electricity, water, telephone and internet. And, except for during the tightest lockdown, workers at supermarkets worked throughout, supplying food and basics. 


The nature of the State changed:  postmen and policemen did door to door distribution of universal old-age pensions in cash. National Empowerment Fund workers distributed food packs for those with no food, accompanied by police officers. The State introduced a system of guaranteed revenue for those without wages. The State ensured that whole capitalist economy be run in a way that protects public health and ensures at least food for people. 


Once the lockdown was over, the economic plan that the government had said it was finalising did not materialise. The promised food security disappeared from the State’s agenda. The repressive and anti-worker COVID 19 and Quarantine Acts were passed without the government releasing its economic plan. And most of the repression remains.


Then came the budget. The government did not come up with a plan to re-orient the economy towards local production of essentials, including food production and import subsitution. All the government did was to use Bank of Mauritius reserves by the billion to bail out capitalist companies in financial straits.  


New currents within the capitalist class


Even though it is no longer viable, the government keeps to its old routine of supporting companies in failing and fragile sectors whatever the cost. 


The capitalist class and its State is once again getting united behind a plan to shift the burden of economic crisis onto the shoulders of the working class. Capitalists of the hotel and real estate industry for instance, are pushing for the re-opening up of borders, without caring for the consequences. Cabinet was supposed to announce the different phases of this process on Friday. But, what with ever increasing COVID 19 cases in France, South Africa, UK and Germany, where most tourists come from, it is not surprising that Cabinet did not release its border re-opening plan. So, the bourgeoisie still does not have the kind of control over the State that it usually has.


Despite the capitalist clamour to re-open the borders, there are signs of some re-thinking within the capitalist class as there is growing awareness that the coronavirus crisis will not be short and that capitalist survival is at stake. 


The Mauritius Chamber of Commerce and Industry (MCCI), for instance, is pushing for food production (1). But they have a problem: capitalists in commerce and industry in general, do not own or control the land. Those that do, persist in planting sugar cane on it. There are the beginnings of a new current in even this section of the bourgeoisie however. The Chief Operations Manager of Alteo, Arnaud d’Unienville in June and Omnicane CEO Jacques d’Unienville this week both have expressed interest in food production (2). 


There is a section of the capitalist class that is getting increasingly worried about continued Rupee depreciation. SWAN, the insurance company, has expressed concern about whether there will be enough foreign currency reserves for importation.


With its survival in question, the capitalist globalisation that was the norm in pre-coronavirus times is no longer feasible. Omnicane CEO Jacques d’Unienville explains it in very practical terms: before, he states in his interview referred to, where one gets supplies, where actual production takes place, where products move to, and where markets are, could each have been anywhere in the world. Now, he says, we need to get them closer together. The new chorus being taken up in the capitalist class is to regionalise. The MCCI is also pushing regionalisation. Orienting Mauritian business towards theAfrican mainland and Madagascar is fast becoming a new panacea for sections of the capitalist class that have the means to expand.


 


Working Class Organisations


As the working class begins to bear the brunt of the economic crisis, trade union federations are having to deal with sackings, the threat of big-scale retrenchment, attacks on gains made in labour and industrial relations laws, threats to universal old-age pension and other retirement benefits. At the same time, trade union federations are having to think about the health dangers of re-opening the borders when Covid 19 cases increase unrelentingly on a world scale. 


There have been attempts by a section of the trade union movement to initiate a demonstration on 11 July. In trying to get a wider and wider platform, the demonstration slogans became too vague and too broad to be of any significance. What might have started out as being a workers’ platform swerved into an anti-government “lev pake ale” platform of “citizens”, not “workers”. It also dangerously managed to incorporate communcal forces, too.


During confinement, leaders of several trade union federations started discussing and adhering to demands that LALIT has developed in response to the challenges of the coronavirus crisis: to consolidate the public health and healthcare sector, for a guaranteed monthly revenue for the wageless, to use the land and sea to build a new economic sector based on food production that, in reality, will create employment on a massive scale as well as assure greater food security (3).


The land and housing question has also become a central one right. During a health lockdown, which may not be the last we live through, when everyone needs a living space inside a house in order to confine themselves in it, the need for housing becomes patent. LALIT’s demands on land and housing are the only demands that address this question. And more and more people can see that.


The Importance of our Program


We have learnt from experience of past economic crises the importance of developing a program that unifies and strengthens the working class. We, as a socialist party, need to develop our program further to address the present crisis. 


We need to think about ways and means to popularise our program, how to mobilise on the basis of this program.


As we do this, we need to keep in mind how our demands form part of the struggle to overthrow the capitalist system that has shown itself to be so fragile that its continuation threatens human life and health as well, and, in the case of the looming environmental crisis, threatens all forms of life on the planet.    


(1) L’Express 23 July 2020: “Assemblée générale de la MCCI: L’autosuffisance alimentaire et le commerce régional mis en avant”


(2) Le Mauricien 7 June: Arnaud d’Unienville (Chief Operations Officer – Agricultural Operations, Alteo) : « Créer une industrie agricole selon les besoins alimentaires du pays… »


 2020 and L'Express 23 July, 2020: Jacques d’Unienville: «Notre nouveau mode opératoire : ‘Less global’ et ‘more regional’»


(3) https://www.lalitmauritius.org/en/newsarticle/2426/towards-a-working-class-program-during-the-lockdown-for-epidemic-control/


https://www.lalitmauritius.org/en/newsarticle/2468/union-federations-ntuc-and-ftu-join-working-class-covid19-platform/