In good days and even in less good ones, the sugar industry (SI) of large plantation estates and factories diverted its substantial sugar profits into new areas of activity: hotels, retail business, manufacturing and services. Small planters, on the other hand, and still more, workers in the sugar industry neither had the necessary collective finances nor easy access to financing to follow in the footsteps of the SI. Those new activities were considered by the SI investors as separate and distinct from their sugar activity. Accordingly, no financial support was obtained back from those investments into the sugar industry to enable the latter to undertake reforms, modernize and re-equip itself.
When it came to the voluntary Retirement Scheme under the previous MMM-MSM government, the SI borrowed large funds at concessional rates from the Bank of Mauritius as it was then being said that the SI could not afford to borrow the money needed at going commercial interest rates, given the precarious state of its finances. In 1983, when the late Dragoslav Avramovic chaired a Commission of Inquiry on the sugar industry, the plea was made that the government should cease to levy the sugar export duty, given the absence of investment in the sector due to the parlous state of its finances. Now that the EU has, in the context of its rehabilitation program following a decision to reduce the EU price paid for sugar by 36% cumulatively over three years, decided to finance projects as accompanying measures, the SI is to benefit from part of the funds made available for carrying out a more extensive VRS program in the sector.
The proposals for that voluntary Retirement Scheme (VRS) program are contained in the Sugar Industry Efficiency (Amendments) Bill (SIE Bill). Presenting the SIE Bill, the Minister of Agro-Industry stated that there will, in fact, be two schemes, notably the VRS applicable to the older workers of the SI and an Early Retirement Scheme (ERS) for even younger currently permanently employed workers, for them to go on voluntary retirement based on a proposed package at an even earlier age. The Minister stated that the new schemes (VRS and ERS) would be more advantageous to the retirees in terms of pensions and other benefits attached. The present extended retirement version is expected to enable the SI to cut costs and modernize itself. The expected EU funding of this « project » will therefore be the third at least of a series of lifeline supports sought and obtained by the Sugar Industry since 1983. It will be one of the several « projects » forming part of the EU accompanying measures. It will also stand to the EU as a convincing free market model adjustment so common in western economies based on the laying off of large number of workers.
Looked at from another angle, that of the workers themselves, this move will represent a considerable shift of policy in so far as job security in concerned, and a signal perhaps not only for the Sugar Industry. Once accepted, the concept may become generalised to all other sectors. After the workers have been «disposed of» under the retirement schemes and cease to be permanent employees, pensions and other rights normally found in the workers’ contracts, will cease to accrue. The workers’ status will be changed from permanent to temporary and their services will cease therefore to be continuously required. Moreover, the focus of this «project» on the need to dispose of workers seems to emphasize that it is the workers, and none other, that have become the major uneconomic cost element of the Sugar Industry. We do not know which study has established that this is actually and in reality the case. The absence of information in this regard may give rise to the perception that it has not been fully established that the SI would become internationally competitive and globally viable, minus the retired workers. Remarkably it is Labour, a party that has historically fought for workers’ emancipation, which is supporting this policy shift.
That leads to other questions on the SI. Do the other proposals contained in the country strategy Paper presented to the EU take into consideration the interests of all other stakeholders in the SI? Or, will further funds obtained for other EU accompanying projects be equally one-sided? Further, if they really embrace the entire sugar community, on projects such as energy production, ethanol, the production of all types of sugars, will the funding received from the EU be fairly shared among all concerned, including the workers? who is informing all the stakeholders as to how equitably the «projects» are to be evolved with EU funding so that all affected by the EU price decision, stand to emerge as common shareholders in the emerging profile of the «sugarcane sector» as distinct from the «sugar sector» under the reform package?
Those who are concerned by what is happening in the sugar sector at present, are sure to take it very badly if, later, they form the opinion that they would have been taken for a ride. The negative reactions of the population to reforms under implementation, e.g., tightening of budget, removal of subsidies, high currency depreciation, inflation, etc., can amplify and stand in the way of necessary economic reforms if there is a continuing feeling of injustice among the population. That could jeopardize the future implementation of further reforms such as a generalisation of the «hire and fire» approach on the labour market, the establishment of sectoral wages councils, elimination of «acquired rights» and benefits, etc. The question will then be whether anything worth the while will be achieved by going only part of the way. People need to know clearly as to what exactly they stand to gain out of the funding to be obtained from the EU. Short of this, the type of action being pursued presently may derail the train.
Source: Mauritius Times
2 March 2007
Mauritius: Who will look into the interests of workers and small planters?
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