Last week, it was reported that Naiade Resorts made a profit of Rs 154 million in the first semester of 2005, a rise of 63% on the previous year. This is quite surprising from a sector which never stops whinging about the declining tourist industry, the same sector which moaned when a tourist arrival tax was introduced by the previous government last year. One could rightly ask to some extent, where has all the gloom and doom gone? Wasn?t the levy compared to administering the kiss of death to an industry supposedly in its last throes?

Now this type of overblown and hysterical prediction is not confined to Mauritius. Each time a tax rise is mooted in capitalist economies, the private sector, and, by extension the rich with their friends in the pro-business media, suffer all kinds of convulsions and contortions, huffing about possible recessions, stalled growth and basically the collapse of the economy. As examples, we just have to look at previous elections in both the UK and the US, when the opponents of the Labour Party and the Democrats, ran scare-mongering campaigns of tax rises if these parties came to power. The media generally nod in docile approval and wheel in their ?experts? to tell the electorate about the forthcoming demise of the country if taxes are increased.

But the point is that, however morose and static the economy looks, some continue to make a fat sum of money. This is not better reflected than in the levels of executive pay. According to the American Federation of Labour and Congress of Industrial Organisations (AFL-CIO), America?s largest union, in 2004, the average CEO of a major company received on average $9.84 million in total compensation, a 12% increase on the previous year. In contrast, the average pay of a non-supervisory worker increased by 2.2% to a little over $24 000. At the bottom of the pile, lie those who are putting in long hours, commuting long distances, and heavily in debt, while the top guys just cream off the rewards year after year.

Corporate greed inherent in society

In the UK, the situation is rather similar, though not quite as grotesque. The median salary of FTSE-100 top executives grew by 92% in the last decade to £579 000. In 2001, according to The Guardian, as the value of companies plummeted by 16%, the executives gave themselves a 12% rise in pay and a further 34% hike in bonuses. Furthermore, directors have more than doubled their salaries since 1998; for every £100 they earned then, they now pocket £213. The average manager or professional, by contrast, saw only a £27 net gain on their previous £100. We have taken all this in the economic context of the late 90s and early 21st century. There was the dot.com crash, the terrorist attacks in America, the steady rise of oil prices, events which all conspired to bring the world into a mini recession.

There are also concrete examples to show the corporate greed that is now inherent in the modern capitalist society. Last year, as Marks and Spencer recorded a downturn in sales, three of its directors bagged £8 million in bonuses. One of them had even launched a failed project, which had cost the company £30 million. Another company which witnessed similar behaviour was Shell. The company which has become something of a hate figure here in Ireland over court actions, which led five innocent men to spend time in jail, has been embroiled in a fiasco over its reserves (some directors had been overestimating its reserves). However, it still found nearly £1 million to hand over to its CEO. While the golden handshake was usually reserved for directors who had put in an extraordinary performance or those who leave after a period of success, now in a kind of tasteless farce, even abject failures get paid healthily. Even directors who are sacked get a bonus.

Mavericks and visionaries

Another Guardian survey found that there were 230 managers in Britain earning a million a year. At the bottom, the median salary is still lingering around the £20,000 to £25,000 mark, 40 times less than these 230 privileged ones. It is legitimate to ask if they are really worth 40 times more than say the administrative clerk or the janitor. While some people are mavericks and visionaries, who deserve every cent that they make, most are middle managers, mere bureaucrats who often have nothing out of the ordinary to show for themselves. Also, that year, the top 500 directors shared the cosy sum of £650 million between them. One CEO banked in £52 million alone. Among the directors, only five women managed to make the grade to the magic million. Not only are corporate directors greedy, but they are also macho.

This is not to begrudge some directors their wealth. There are many self-made people whose vision, talent and hard work have got them to where they are. However, directors who sit on underperforming boards but still collect a fat cheque at the end pose a problem. It is the very reason for the gulf in wealth in society, an issue that threatens to get out of control if governments do not step in.

While we are well aware of our incompetent ministers who earn large salaries, corporate secrecy prevents us from witnessing real performance levels. The schism between those who at the bottom have to work long hours every day but get little in return and those who sit in the boardrooms is slowly becoming unbridgeable. If the new Mauritian government is more than just guff about democratisation of the economy, it is something that they should be looking into. Then, next time they invite Chevron down, they can alert its directors of a new 50% tax on fat salaries and bonuses.

Diren VALAYDEN Outlook Correspondent in Dublin