Mauritius: Resurgent communalism and economic success (1982-1995)

Updated October 2009

The Mouvement Militant Mauricien (MMM), having won all the seats in the June 1982 election in alliance with the Parti Socialite Mauricien (PSM), formed a coalition government with Anerood Jugnauth as Prime Minister and party founder Paul Bérenger as Minister of Finance (Murison 2008, 773). The government resolved to continue with the rigorous economic structural adjustment programme initiated by the ousted coalition government of the Mauritian Labour Party/Parti Mauricien Social Démocrate (MLP/PMSD), but within nine months the government, and then the MMM, split over how this was to be done (Bräutigam 1997, 50, 51; Kadima & Kasenally 2006, 78). Rejection of Bérenger's tough policies, and of his proposal to make Kreol a national language, led him to resign in March 1983 and take up seat in the opposition benches where he was joined by the majority of the MMM members of the Legislative Assembly and two-thirds of the ministers (Kadima & Kasenally 2006, 78; Bräutigam 1997, 51). Jugnauth lost a court case over the MMM name and his faction constituted itself as the Mouvement Socialite Militant that later merged with the PSM to form the Mouvement Socialiste Mauricien (MSM), but lacking a working majority in the legislature he was forced to call fresh elections (Murison 2008, 773; Bräutigam 1997, 51). The MSM formed a broad coalition that included the MLP and the PMSD ("The Alliance"), so leaving the MMM isolated (see General election of August 1983 for details). The distribution of seats belied the closeness of the election, for with 46% of the votes the MMM won only of the 19 (31%) of the 62 elective seats (see Election results for details). With 52% of the vote the Alliance won 41 (62%) of the seats, the two seats Rodrigues seats going once more to the Organisation du Peuple de Rodrigues (OPR). The voter turnout of 82% voter was the lowest recorded hitherto.

The effect of these manoeuvres was that communal identities rather than class formed the basis of Mauritian politics once more. The MSM and MLP members of the governing coalition both drew their support from the Hindu population based in the rural areas, while the PMSD, whose leader Gaëtan Duval became Deputy Prime Minister, represented a minority of the Creole population (Kadima & Kasenally 2006, 79, 80). Shorn of its Hindu wing, the MMM was now an urban party representing the interests of the majority of Creoles and Muslims (Kadima & Kasenally 2006, 79, 80). Ideologically, all the parties espoused social democracy and the exigencies of economic structural adjustment left little room for manoeuvre even on policy details and the new government followed the same austerity programme that had been adopted from the turn of the decade (Kadima & Kasenally 2006, 91, 97, 98; Bräutigam 1997, 50, 51; Murison 2008, 773). A pattern of communal based mobilisation and jockeying for power was established, with coalitions being formed and broken opportunistically, driven by the desire to obtain and maintain power (Kadima & Kasenally 2006, 80). Thus, in February 1984 the MLP left the coalition, but three ministers and eight MPs remained creating a breakaway Rassemblement des Travaillistes Mauriciens, but in 1985 a scandal involving drug smuggling by MPs led to a stream of defections from the MSM to the MMM, forcing Jugnauth to bring the MLP back into government to maintain a parliamentary majority (Kadima & Kasenally 2006, 80; Murison 2008, 773, 774). The government was tardy in dealing with the scandal that followed the arrest of four MPs at Amsterdam's Schiphol Airport on charges of heroin smuggling, for only in June 1986 was a commission of inquiry appointed whose reports implicated a further six MPs (Murison 2008, 774).

Despite the political upheavals, the austerity programme was doggedly followed and in 1983 the economy began to turn as the balance of payments situation improved, with surplices replacing deficits, and the deficit before borrowing fell; by mid 1986 the IMF was proclaiming the structural adjustment process an unqualified success (Bräutigam 1997, 50; Kearney 1990, 197, 206). Inflation, unemployment and foreign debt fell rapidly (Kearney 1990, 196, 197). Apart from cuts in food subsidies and the impact of fiscal discipline on social services spending, successive governments were able to maintain the social democratic state that had been established in the period following independence (Sandbrook 2005, 555). In 1980 the economy had contracted by 7%, but thereafter followed a period of sustained growth, that fluctuated with episodic droughts and cyclones between a low of 1% in 1984 and a high of 11% in 1987, posting an annual average GDP growth rate of 6.6% between 1982 and 1995 (IMF 2008; Sandbrook 2005, 556). Thus real GDP grew by 133% in that period. Inflation, which peaked at 33% in 1980, fell to 13% by 1982 and despite large fluctuations (0.7% in 1987, 15% in 1993) averaged 8% annually between 1982 and 1995 (IMF 2008). The high population growth rates that had clouded the future of Mauritius in the 1950s and 1960s declined dramatically in the 1970s and a moderate annual average growth of 1% was recorded between 1982 and 1995 (IMF 2008). From 27/1000 in 1980 the crude birth rate fell to 19/1000 in at the end of the decade (Kearney 1990, 197; World Bank 1983, 55). High economic growth combined with moderate population growth to create a rising real per capita income growth of 5.6% on average per year between 1982 and 1995 (IMF 2008). This meant that real per capita income doubled in this period.

The rise in national income did not result in growing inequality and increased poverty as was often the case in developing countries. The Gini coefficient of inequality declined from 0.5 in 1962 to 0.37 in the mid-1980s where, with small fluctuations, it remained (Sandbrook 2005, 557; see also Sandbrook 2005, 577 endnote 2). The decline in inequality was due to the State's redistributive spending through the provision of high quality free education, healthcare, housing and subsidies of staple foods, as well as the provision of social security through pensions, poverty relief grants and employment and training schemes during periods of high unemployment (Sandbrook 2005, 557-559). So despite the concentration of wealth in the hands of a small proportion of the population (1% of the people owned more than half of the land under sugar and 65% of productive assets) inequality was reduced and living standards for the poor rose as life expectancy increased and infant mortality and illiteracy declined (Sandbrook 2005, 557). In addition to providing the revenues for state driven wealth redistribution economic growth also translated into large scale job creation and declining unemployment (Sandbrook 2005, 565). Unemployment, which had stood at around 21% in the early 1980s declined steadily to under 4% by 1990 before rising again to over 5% by 1995 (IMF 2003, 4, 5).

The engine that drove job creation in the 1980s was the growth in Export Processing Zone (EPZ) manufacturing sector, especially textiles, which posted an annual average growth rate of 30% between 1983 and 1990 and employment in this sector of the economy increased four-fold (Kearney 1990, 196, 207; Sandbrook 2005, 565). The growth in the EPZ was in turn fuelled by massive foreign invest inflows and by 1985 manufacturing had displaced sugar as the major export earner (Kearney 1990, 196). In the early 1980s the Mauritian Development Bank offered loans to educated unemployed Mauritians to establish EPZ businesses and at the end of the decade a fifth of capital investment and ownership in the EPZ was Mauritian (Kearney 1990, 207; Bräutigam 1997, 57). The sugar industry's contribution to the economy continued to be crucial, earning 35% of export earnings in 1989, but the industry's production gains were capital rather than labour intensive (Kearney 1990, 207). The government's investments in developing the tourism industry bore fruit and earning from tourism grew 30-fold between 1972 and 1987 (Kearney 1990, 196, 208; (UNCTAD 2008, 127). Other areas of government investment included the expansion of transport and communications infrastructure, the upgrading of harbour facilities at Port Louis and the production of energy from sugar cane refuse (Kearney 1990, 206).

The government's mishandling of the Schiphol Airport scandal, and the steady stream of defections of members from the ruling coalition, resulted in it losing its working majority in the Legislative Assembly, forcing an early election that was held on the 30 August 1987 (Murison 2008, 774. See General election of August 1987 for details). Notwithstanding the scandal and further allegations of corruption the ruling coalition (termed the Alliance), consisting of the MSM, the MLP and the PMSD, obtained 49.9% of the vote (losing only 2.4% on its 1983 showing) and won 39 of the elective seats (losing two seats; see Election results for details). The thriving state of the economy, and promises of massive wage increases to civil servants just prior to the election, presumably contributed to the government's electoral success (Kearney 1990, 207; Bräutigam 1997, 51). The Union, a coalition of the MMM and two smaller parties (Mouvement Travaillistes Démocrates (MTD, yet another breakaway from the MLP), yet another MLP breakaway group and Front des Travailleurs Socialiste) won 21 elective seats, while the OPR again took the two seats for Rodrigues. Once more Jugnauth became Prime Minister and constituted a government from the members of the victorious coalition, but matters went awry as differences over labour policy led to the withdrawal of the PMSD under Duval from the coalition before the end of August (Murison 2008, 774; Kadima & Kasenally 2006,80).

In 1989 the MLP began to explore new electoral alliance options for the next Legislative Assembly election, aimed at increasing the number of seats allocated to it, and it attempted to play the MSM off against the MMM by entering into negotiations with both (Kadima & Kasenally 2006, 80, 81; Murison 2008, 774). This backfired when the MSM and the MMM engaged in talks with one another that culminated in an electoral agreement between the two parties in July 1990 (Kadima & Kasenally 2006, 80, 81; Murison 2008, 774). The MSM and MMM agreement included constitutional reforms to make Mauritius a republic within the Commonwealth, but the MLP and the PMSD opposed the amendments in the Legislative Assembly and the necessary three-quarters majority could not be mustered to pass them (Murison 2008, 774). The MLP was forced out of government and was replaced by the MMM who joined the ruling coalition in September 1990 (Murison 2008, 774; Kadima & Kasenally 2006, 80, 81).

Considering conditions favourable to them, the MSM/MMM coalition decided to call an early election, which was held on 15 September 1991 (Murison 2008, 774; Kadima & Kasenally 2006, 81. See General election of September 1991 for details). The MSM/MMM alliance (which included the tiny MTD) was ranged against an alliance of the MLP, the PMSD and the OPR. The MSM/MMM alliance won 56% of the vote and 57 of the elected seats, while the MLP/PMSD/OPR won 40% of the vote and five elected seats; all four best loser seats allocated went to the latter (see Election results). The MLP and the PMSD alleged electoral malpractice, called for electoral reform and boycotted the municipal elections held in the following month (Murison 2008, 774). With 86% of the seats in the Legislative Assembly, the MSM/MMM alliance could easily muster the majority required to amend the relevant sections of the Constitution in December 1991 and in March 1992 Mauritius became a republic within the Commonwealth, the Legislative Assembly became the National Assembly which then elected Cassam Uteem as President in June (Murison 2008, 774; Houbert 1992, 475).

Through the years of austerity, and even following them, the government had used its considerable power in the labour market to keep wages rises below the inflation rate, but in the 1988, on the recommendations of the government's Pay Research Bureau, massive civil service wage increases were passed (Kearney 1990, 207; Bräutigam 1997, 51). This, combined with low unemployment and labour shortages and rising oil prices, triggered three years of high inflation that averaged 12% between 1989 to 1991 (IMF 2008; Bräutigam 1997, 51). Through price controls and tighter monetary policy inflation was brought under control by 1992, but the EPZ became a less attractive area of investment as wages spiralled upwards and higher costs eroded Mauritius' competitiveness (Sandbrook 2005, 566). The measures of 1988 were accompanied or followed by others aimed at making markets more open and competitive and to develop the country as an off-shore banking centre (Kearney 1990, 209; Bräutigam 1997, 52). In 1988 trade quotas were replaced with tariffs and interest rates were liberalised, export taxes on sugar were gradually phased out and abolished in 1994, a stock exchange was launched in 1989 and exchange controls abolished in 1992 (Sandbrook 2005, 564, 566; Bräutigam 1997, 52). In 1992 the Offshore Business Activities Act and the Offshore Trust Act were passed to facilitate international financial operations, establish a free port in Port Louis and the Offshore Business Activities Authority was created to facilitate financial activities, but measures to curb criminal money laundering that might follow from these were also adopted (Sandbrook 2005, 566).

In conformance with the now established tradition, no sooner did the coalition establish itself in power and accomplish whatever common project bound the members together, than they began to quarrel amongst each other. Bérenger was dismissed from the cabinet by Jugnauth in late 1993 for criticising government policy and, led by Prem Nababsingh and supported by the Politbureau, a faction of the MMM refused to follow him into exile in the opposition benches when he withdrew from the coalition, but the faction remaining in government was eventually forced to reconstitute itself as the Renouveau Militant Maricien (RMM. Murison 2008, 774; Kadima & Kasenally 2006, 78). As the next National Assembly elections loomed, the MMM and the MLP formed an electoral alliance in April 1994 (Murison 2008, 774; Kadima & Kasenally 2006, 81). In November 1995 Jugnauth's government was defeated in an attempt to amend the Constitution to enable the status of Indian languages in the education system to be upgraded and, treating the defeat as motion of no confidence, he called an early election (his fourth) for 20 December 1995 (see General election of December 1995 for details). Aligned with the RMM, Prime Minister Jugnauth's MSM suffered a crushing defeat at the hands of the MLP/MMM coalition (see Election results). The MLP/MMM alliance capture all 60 elective seats on the island of Mauritius with 64% of the vote, while the other two seats went (once again) to the OPR. Four best loser seats were allocated. Two to the Mouvement Rodriguais (the opposition that had developed to the OPR on Rodrigues), one to a faction of the PMSD, the Parti Gaëtan Duval, and one to a Muslim religious party, Hizbullah; none went to the MSM/RMM alliance.

References

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