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.