?Fully satisfied?. Those were the words used by Finance minister Pravind Jugnauth to sum up the two weeks he has spent meeting various economic, social and religious groups as well as non-governmental organisations in the context of the preparation of the budget for the coming financial year. But the main part of this preparation has not started yet: this week, he chairs the traditional tripartite negotiations on the cost-of-living salary compensation(see inset).

On the whole, some 20 organisations involved in the various economic sectors have submitted proposals. Pravind Jugnauth has guaranteed that he will take into account valid and feasible proposals in the coming budget or at least that he will consider them for next year. He has already announced his main budget themes: fighting low growth and investment as well as rising unemployment and reducing the budget deficit.

The Joint Economic Council (JEC) can only agree with these ideas. The JEC has based its proposals on the economic difficulties of the country. The private sector has highlighted the importance of medium-size companies since they are the ones that create the greatest number of jobs. One proposal has particularly attracted the government: the creation of a Start Up Zone for medium companies supported by a new institution, Enterprise Mauritius.

However, restructuring the economy will not be that easy considering the fact that financial resources are not readily available. There is a lack of non-bank funding to support the restructuring of new projects.

To help solve this problem, the JEC has proposed the development of a debt and capital market. In other countries, such a market plays a major role since companies have financing opportunities other than the usual banking system. It recommends the setting up of a short-term corporate debt market and the creation of a Credit Rating Agency. This should help companies to assess the risks when credit documents are issued.

Besides, the JEC issued a series of measures aimed at boosting investment. It is in favour of the complete abolition of price control. It also recommends a single rate (15%) of Corporate Tax for all companies, the revision of the Landlord and Tenant Act and the creation of a freight control mechanism.

There is one measure on which both the JEC and the Association of hotels and restaurants owners of Mauritius (AHRIM) agree: the air access policy review. The AHRIM has also submitted its proposals to the minister. Apart from the recommendation on air access, it has also asked for more financial means for tourist promotion. The association intends to sell the island as an international conference venue with the coming conference centre in Pailles. It has also asked for a special package for small and medium tourist companies.

The Mauritius Vegetable Planters? Association has made it clear that small farmers have difficulty in servicing their debts. The association has thus asked for the implementation of an immediate support fund to help them. Cooperatives have also grabbed the chance to air their problems. The major one, the Mauritius Co-operative Union (MCU), has made its case on the problems the sector has to face. According to MCU secretary general Dharamjeet Bucktowar, ?cooperatives are a means to reduce poverty and unemployment in Mauritius. They should thus benefit from help from the government.?

The Small Scale Entrepreneur Association of Mauritius has asked that bureaucracy be reduced for minor operators and for lower credit cost from the Development Bank.

Tripartites

If pre-budget consultations are not systematic, the tripartite meetings are, however, considered as an ?institution? by the MEF. They aim at helping the Finance minister prepare his budget. The first of these meetings between the representatives of the government, trade unions and employers will be held next Thursday. The second one is scheduled for 13th May.

According to the Mauritius Employers' Federation (MEF), these negotiations aim at fixing a wage guideline: compensation based on 50% of the annual inflation rate. In a memorandum submitted to the government, MEF explains that the present mechanism of salary compensation is inappropriate considering the present state of the economy. The federation has suggested the implementation of a national committee on salaries.