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The parliamentary opposition and the 2021-22 Government Budget

04.07.2021

The same evening Finance Minister Padayachy presented the 2021-22 budget, LALIT analysed how the government budget did not address the magnitude of the economic and social crisis in the context of the COVID 19 pandemic. The budget was presented in the middle of the Coronavirus world crisis impacting on the world economy and the national economy. It was presented in a time when working people are bearing the brunt of the Coronavirus crisis: soaring prices on basic necessities what with Rupee depreciation and world price increases attacking food security, real unemployment threatening survival of working people by the hundred thousand. The so-called “pillars” of the economy have collapsed: tourism, sugar and cane, the offshore sector; Air Mauritius is in shambles. 


All the budget has done is to pander to the dominant sectors of the capitalist class: sugar industry bosses, tourism, real estate, textile and financial sector bosses. This, even though all these sectors were already floundering before the onset of the Coronavirus pandemic. The budget also reinforces measures to promote private clinics and private universities. The only positive thing about the government budget is that it did not cede to International Monetary Fund (IMF) – World Bank (WB) pressure to increase universal old age pension age from 60 to 65 years and make universal pensions means-tested.


Now that the Jugnauth-Obeegadoo-Ganoo-Collendavelloo government 2021-22 budget has been voted, looking back at the content of the debate of the budget in the National Assembly, we find the nature of the parliamentary opposition revealed. The Opposition in Parliament today consists of the PMSD-MMM-Bodha alliance and the Labour Party. What did the parliamentary opposition have to say on the budget? 


Opposition: political voice of the IMF/WB? 


What characterised all the speeches of MP's of the parliamentary opposition parties was the constant unashamed call for the Government to heed the guidelines of the neo-liberalist IMF and World Bank. They could almost have said “Sel solisyon, FMI/Labank Mondyal”. And they were pressing for the Government to listen to the IMF/World Bank at a time when the IMF/WB are demanding that the government increases universal old age pension to 65 years and for this pension to be means tested? 


Historical Unopularity of IMF-WB politics


In Mauritius, from the 1970’s onwards, the IMF/WB were known for their dictates to devalue the Rupee, to close down or privatise existing social services, to cut government spending on health, education, housing, pensions. They have historically attacked the all the too minimal social services that working people have fought for and depend on in our day-to-day lives. 


The “economic miracle” that people attribute to feu Aneerood Jugnauth was only possible because working people resisted the privatisation, liberalisation and cuts on expenditure on social services in the 1980's despite IMF-WB dictates. Bérenger’s MMM at the time became the political voice of the IMF-WB. Feu Aneerood Jugnauth, MSM leader, in his electoral campaigns was careful to politically oppose the MMM’s bowing down to IMF/WB “dictates” throughout the 1980’s knowing just how unpopular IMF/WB politics were.


Then later in the 1990’s, the Jugnauth government backtracked introducing IMF-WB-inspired means-testing on rice and flour subsidies and closing down the Central Housing Authority (CHA) that built rented social housing for the working class. Working people, often led by LALIT, opposed this by making these issues become major electoral themes that finally brought the downfall of the MSM in the 1995 elections.


The Jugnauth government also tried introducing means-testing for universal old age pensions in the 1990’s in line with the IMF-WB dictates. This was again resisted by working people. All it did was help in bringing on an MSM defeat and Labour Party victory when it became a major electoral theme in 1995 general elections. The Labour Party government attempted to privatise water, another IMF/WB measure by privatising the CWA in 2000. This was also resisted by working people and became a major electoral theme in the 2000 general elections bringing on an MSM-MMM victory. Again, we mention that it was often LALIT that put these issues on the political agenda.


All this to say that the IMF-WB is historically unpopular in Mauritius and has been resisted by working people.   


Today


Yet today, most of the parliamentary opposition parties are becoming a political voice of the IMF/WB. The Opposition parties not only lean on the IMF/WB to attack the government budget, they also make a vociferous call for the World Bank report on sugar to be released. As if it really mattered what the World Bank had to say.


This common parliamentary opposition stand to be the IMF/WB’s political mouth-piece, together with the stand of most of the opposition to defend the changes in the law that have made it possible for the Betamax dispute to be “resolved” outside democratic control in a Singapore arbitration tribunal instead of the Supreme Court of Mauritius, thus putting into question judicial sovereignty, taken together really reveals the nature of this parliamentary opposition today.  


Coronavirus crisis and understaffed public health services


In the middle of the Coronavirus crisis of which health workers, already overworked because of understaffing from before the crisis, are bearing the brunt, all public health and healthcare workers' trade-unions have been calling for more staff to be recruited. LALIT, too, has consistently called for this. Yet not even one of Opposition MP has used their budget speech to call for more health workers to be recruited. They did not support the frontline workers who were so vital in protecting us all from the coronavirus crisis. 


The only employment the government came up with in the budget was for 4,000 police officers to be recruited. You would have thought parliamentary opposition parties would have had no trouble attacking the government for its emphasis on reinforcing recruitment in the repressive arm of the State rather than reinforcing recruitment in public health that cares for peoples’ health, particularly during a pandemic. But, no. They do not seem to care one whit.  


How the Opposition uses popular discontent to strengthen a neo-liberal agenda


While all the opposition party MP's were leaning on the IMF-WB to attack the government budget, they at the same time, exposed the extent of the real crisis in the lives of working people. Listening to them, anyone unfamiliar with the infamous history of the IMF/WB worldwide and in Mauritius, would have thought the IMF-WB to be some kind of world representative of working peoples' interests or of some form of economic democracy institution.


Labour Party member Shakeel Mohamed for instance, exposed the grossly understated government figures for unemployment – as if he is in favour of job creation. Labour Party member Sik Yuen read out what Arvin Boolell referred to as a “shopping list” showing the dramatic increase in the price of food items and basic necessities – as if he would be in favour of price control or a fixed mark-up or subsidies. But they certainly did not call for a change in economic strategy so that the massive funds Finance Minister Padayachy has pulled together to face the COVID 19 crisis are used to create productive sectors in land and sea-based food production, preservation and transformation thus creating employment. LALIT and many union federations in the trade-union movement have been calling for this. The opposition refuses to support this demand. This kind of industry would cater both for job creation, food sovereignty, and foreign exchange needs through exporting part of the production. 


Opposition MP’s speeches rarely referred to the need to develop the ocean economy. The few references were plainly vague. The Opposition did, as they often do and rightly so, denounce the secretive Special Funds and MIC operations not accountable to Parliament. But they certainly did not challenge what much of Padayachy’s Rs 145 billion COVID 19 “war chest” is being used for up to now: to prop up capitalist lame ducks in tourism, in real estate, in sugar/cane. Nor did they challenge Padayachy’s budget for continuing this support of capitalist lame ducks responsible for the crisis. 


Opposition applauds budget measures for sugar industry


The sugar industry was already in crisis before the Coronavirus crisis. It had already destroyed thousands of jobs. It had already become unviable. Yet it monopolizes all the good agricultural land. The government was, even before the budget, continuing its subsidies on sugar production. The Green Energy Industry presented by Finance Minister Padayachy as a “new economic growth pole” was in reality an excuse to increase subsidies for the sugar/cane sector. Did the Opposition challenge this? No, they applauded it. Let’s take a close look at what they said in Parliament when debating the budget.


MMM


MMM leader Bérenger went out of his way to support the sugar industry to the extent of approving government measures to bolster it:


“L’industrie sucrière est toujours dans une situation très difficile, et de mon point de vue, l’industrie sucrière avec ses planteurs, ses artisans, ses laboureurs et tout ce qui a autour, allaient vers un désastre à moyen terme. C’est pourquoi nous approuvons la nouvelle méthode de rémunération de la bagasse, entre autres choses. C’est pourquoi nous approuvons la nouvelle méthode de rémunération de la bagasse entre autre chose et il est bon que dans le budget, on ait prévu Rs 1.4 milliards en 2021-22 for, I quote – ‘Support to sugar cane planters and biomass framework’.”


He does not see that this is merely throwing good money after bad. He just pretends he is speaking in favour of planters, artisans and labourers, when he is supporting a doomed industry.  


PMSD leader Xavier Duval, Opposition leader showed his support for this industry, too: 


“What about sugar? I welcome the price of Rs3,300 per ton of sugar to be paid to bagasse producers; I welcome that.”


Labour Party


Even though Labour Party member Assirvaden in budget debates revealed to what extent the sugar/cane industry is “ungreen” using coal to produce electricity, his Labour Party MP colleague,  


Ramful called for even more subsidies for sugar cane planters:


“And what about the sugarcane growers, the small planters? What about them? They are also facing difficulty; they are also affected by COVID. (…) Rs 25,000 pour une tonne de sucre! But the planters are asking, is the price of Rs3,300 per tonne of sugar for bagasse going to be included in that Rs25,000? The price for molasses, is that also going to be included in that Rs25,000? The price for other by-products, is that also going to be included? If they are going to be included, then, it’s but peanuts! If the Rs 25,000 include tout ça, mais ce n’est pas la peine.” 


Opposition calls for support for capitalists in tourism


All the Opposition parties in Parliament in the 2021-22 in budget debates took stock of the crisis of the tourism sector. Did they even question its viability? Did they even pose the question of whether tourism is a viable sector, in the long run, and in the context of the Coronavirus crisis? No. They all pleaded for continued support to a capitalist sector that was already fragile even before the Coronavirus crisis. Let us look at what they actually said in the National Assembly:


PMSD


PMSD leader and Leader of the Opposition X.Duval: X.Duval: “(…) tourism, Mr Speaker, Sir, depends on the vaccination. Let us hope we get the doses and we actually vaccinate people.” Even vaccination, important as it is, is argued for on the grounds that it is a benefit to the tourism industry.


MMM


MMM leader Berenger: “(…) c’est-à-dire, qu’on ne peut pas espérer une vraie relance, et même-là c’est difficile, une vraie relance dans le secteur du tourisme avant 2023. Il faut tous qu’on s’y mette, mais il ne faut pas qu’on se leurre non plus, M. le président.” 


No talk of encouraging bosses in tourism to invest in other sectors – at least partially.  


MMM MP Foo Kune-Bacha: “M. le président, le tourisme est sans nul doute, le secteur le plus durement éprouvé par la crise. À genoux, mais qui résiste encore, mais pour combien de temps? Le tourisme constitue non seulement une source cruciale de devises étrangères mais crée directement et indirectement environ un emploi sur 5 et l’effondrement du tourisme a mis en péril les moyens d’existences de plus d’une centaine de milliers de nos citoyens, employés d’hôtels, d’agences de voyage, de restaurants, plaisanciers, chauffeurs de taxi, artistes, artisans. Le sésame reste l’ouverture des frontières, une ouverture que tout le monde souhaite qui se fasse dans les meilleures conditions, dont sanitaires. Le pari est difficile, mais il faut le prendre.” 


Again, no vision outside this unreliable and unproductive industry.


Bodha


Bodha: “Now, let me just say a few words about the opening of frontiers. Everybody has talked about it. Opening of frontiers sadly has been an antagonistic debate between Government and the captains of industry in the hotel industry for too long. The opening of frontiers is a national issue. We should open the frontiers for the country, for the nation, for the survival of the tourism industry.”


Labour Party


Labour Party MP Sik Yeung: “Le monde des affaires à Maurice est dans un coma économique et le secteur du tourisme est complétement à l’arrêt. Pour atteindre ce but, il faut promouvoir la destination mais malheureusement, je note que le budget alloué au secteur du tourisme est seulement à R 250 millions; ce n’est pas assez pour sortir de cette crise.” Investment, he says, must be increased in this fragile sector.


Again, we see the Opposition bent on staying in tourism at whatever cost.


 


Opposition supports tax haven for capitalists


The parliamentary opposition parties even showed concern for the survival of disreputable capitalist tax haven sectors like offshore that employs professionals to deprive States of taxes on companies: 


PMSD MP Armance“Quelle est la considération que ce gouvernement donne aujourd’hui à notre offshore, à notre secteur financier pour réellement avoir ce vouloir de retirer Maurice sur la liste noire de la GAFI?” 


 


Even to the point about calling the introduction of a minimum tax on the offshore finance sector a “threat”. And this is happening here, from the Opposition benches, even as President Biden and Prime Minister Boris Johnson are seeking to impose a 15% tax on all capital, thus undermining, at long last, the very idea of tax havens.


 


MMM MP Ameer Meea“Now, Mr Speaker, Sir, I would like to say a few words on the offshore sector before I conclude. (…) It is the first time since its advent that the offshore sector witnessed a decelerated growth rate greatly due to COVID-19. With the global minimum tax lurking in the background, as a palpable threat, it is crucial that we, as a jurisdiction, we are prepared to face such a challenge.”


 Government's reaction


So what was the Jugnauth-Obeegadoo-Ganoo-Collendavelloo reaction to this line of opposition? Quite a few of them like Minister Jeewa-Daureeawoo or Minister Seeruttun responded by quoting how Business Mauritius, the association of tourism bosses AHRIM, the Mauritius Bankers Association, the Mauritian Chamber of Agriculture, the Alteo CEO were satifisfied with the Padayachy budget, reassuring the bosses political representatives that their interests were being protected. 


Quite a few like Vice-Prime Minister Obeegadoo went to the trouble of quoting IMF-WB reports commending them for their handling of the Coronavirus crisis.


So the political effect of such a neo-liberal parliamentary Opposition is that we end up with a neo-liberalist government. 


We appeal to working people to reject the neo-liberalist platform of the parliamentary opposition – both the L'Alliance L'Espoir and the Labour Party, and support the LALIT platform against the Government Budget.