By IPS Correspondents
PORT LOUIS, Mar 12 2008 (IPS)

‘‘The days of trade preferences and of cheap food are over. We are living in an era of competition and we have no choice but to reduce our costs of production.’’

These are the words of agro-industry minister Arvin Boolell from an interview with IPS. For about 40 years, Mauritius has benefited from non-reciprocal trade preferences under successive conventions signed with European states.

But in the current era of liberalised trade these agreements are falling away, leaving the small island state no choice but to consolidate its economic pillars – sugar, textiles and clothing, tourism and services – while developing new ones, such as seafood, to survive in this globalized world.

‘‘Nobody owes us a living,’’ Prime Minister Navin Ramgoolam has said on occasion. ‘‘The only way to face our difficulties arising from the end of trade preferences and the high cost of oil and of imports, is to work, work and work.’’

Ramgoolam reminds Mauritians regularly in his public addresses that trade liberalisation and fierce competition in the country’s traditional export markets of the EU and the U.S. are affecting the economy, making it hard to cope.

Boolell believes in the currently popular neo-liberal adage that ‘‘the rising tide is lifting all boats’’ but warns that ‘‘we should watch the waves and not let them hit our vulnerable island too hard.’’

The European Union’s decision to cut sugar prices by 36 percent and the end of the multi-fibre arrangement in January 2005 forced both these sectors to lay off thousands of workers. Some 40,000 were lost during the past three years in the textile and clothing industry and more than 10,000 in the sugar sector.

This year, several thousands more will be lost in the sugar sector.

These blows were aggravated by Mauritius’ status as a net importer of food that is geographically removed from the main world markets. The rising costs of oil and of imported foodstuffs have rendered the situation more difficult. Prices of food commodities and services are increasing fast while wages remain the same.

Mauritians woke up to this reality a few years ago. Things had to change and fast. They took up the challenge by, first, reforming the sugar industry.

Boolell has pointed out that producing only sugar is not enough anymore, which is why the government is shifting the industry towards becoming a sugar cane industry with a multifunctional role.

Sugar cane production is being centralized at the level of four flexi-factories capable of producing raw sugar, refined white sugar, special sugars, ethanol from molasses or cane juice and electricity from bagasse and industrial rum.

A vast reform campaign of the sugar industry is on. Land belonging to small farmers is being de-rocked and regrouped in larger portions to boost productivity and achieve economy of scale. This is partly done with financial aid from the European Union (EU).

The Sugar Protocol, which provided Mauritius with preferential access to the EU market, ensured the island state of a predictable and stable source of earnings over many years.

It was instrumental in developing the local sugar industry and fostering the economic diversification of the island, according to the Mauritius Chamber of Commerce and Industry.

Revenue from sugar has continually been re-invested in the sugar industry and other economic sectors, with tangible results, Jairaj Ramkissoon, director-general of the Food and Agricultural Research Council, told IPS.

Mauritians have always taken the trade preferences for granted. It was also easy for them to keep on importing food products (excluding vegetables) over the past four decades.

Today, foreign exchange earnings are dropping while the prices of imported foodstuffs are rising. ‘‘We should reduce our dependency on imported food and become self-sufficient as much as possible. An agricultural island like Mauritius should not import so many food products,’’ observes Salil Roy, a sugar farmer, in an interview with IPS.

‘‘We can live without trade preferences by changing our mentality because many opportunities exist in the world, even for a small island like ours,’’ he maintains.

*The first article in a two-part series

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