Category Archives: Political & Economic

Update on Salary Compensation

At its weekly meeting today, the Cabinet approved the recommendations made by the NPC. The Finance Minister stated it’ll cost more than Rs 3.5 billions to implement the recommendations. He’s is particularly concerned about the payment capacity of small enterprises who are facing fierce competitions and evolving challenges. Although he believes that some sectors can pay more than the recommended amount, he’s been all the time in favour of a compensation based on productivity and capacity to pay rather than on the only inflationary rate index.

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Not on the same wavelength

Something is wrong somewhere. We’ve always been used to seeing the government and the private sector in good terms, with common stand even in difficult economic contexts. Everybody is surprised with the statement of the Joint Economic Council (JEC), on the one hand, and the Government on the other.

Few days ago the JEC declared in a press conference that it’s the Government’s “irrational and incoherent” approach that has led to the “rise in cost of living, closure of factories and loss of jobs”. They say there’s too much Government intervention in their affairs. Their business freedom is upset.

Government has decided to favour foreign direct investment (FDI). This is the apparent cause for frustration in the private sector. Big businesses like Ireland Blight Limited (IBL) are not as happy as they seemed to be. One example is the absence of decision on the part of Government with regard to allowing Catovair to be the alternate carrier in between the islands of Mauritius and Reunion. Catovair was introduced recently as the new air services by IBL to serve as inter-islands link.

Another issue of concern is the closure of Desbro International (manufacturer of iron and steel). Claims for increase in prices of iron have been subject to debates from various quarters. Some 500 people lost their jobs.

The main hypermarkets were in the process of merging together. The news has spread; and Government has decided to introduce a Competition Bill in Parliament to counteract this move in order to protect the consumers. The price of basic commodities, rice, milk, flour, bread, has been rising constantly. In two years the prices of bread and rice have risen by more than 50%, oil 40%; and these are only a few. Some brands of milk have simply disappeared form the stalls.

Government says it won’t tolerate the private sector’s criticisms. If they maintain their stand, it will have no other option than to take drastic measures. The Prime Minister has been very harsh on this issue in a statement to the press. He also said he won’t miss the big opportunity of Tianli’s (a Chinese enterprise) implantation at Terre Rouge, which will bring no less than Rs 17 billions in terms of investments, and quite a number of job prospects.

There’s definite distortion of the wavelength between Government and the JEC. We have now to see what happens next with the forthcoming tripartite meetings to decide on the compensation for cost of living.

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Election invalidation

A Supreme Court judgment has last week recommended the invalidation of the election of Mr. Ashock Jugnauth, the first returned candidate at the June 2005 elections in constituency number 8 (Moka- Q.Militaire). Then Minister of Health, Mr. A. Jugnauth is alleged to have been elected by bribery.

Several people from his constituency were said to have been offered employment in the Ministry of Health on the eve of the elections. Another ground held by the Court is the promise of a plot of land to one community for use as cemetery. These were considered in violation of the Representation of People’s Act by Mr. Raj Ringadoo, one of the defeated candidates who had filed a petition to that effect. Mr. Ashock Jugnauth has signified his intention to appeal to the Privy Council.

The court has also recommended to the Electoral Supervisory Commission to set up a code of conduct or guidelines for politicians during election campaigns.

This judgment will make history being the first of its kind, although a previous invalidation was held in 1956 on ground of the elected candidate’s name being wrongly written in the election paper.

A partial election may have to be organized soon if the ruling is maintained. Politicians will have to be wary now, more than ever before.

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