The European Union (EU) seems to be turning a deaf ear to the Mauritian requests for an increase in the quantum of accompanying measures that should follow the revision of the sugar protocol. After the lobby led by the ministers of Finance, Rama Sithanen, and Agro-industry, Arvin Boolell, in Europe, the government seized the opportunity of the EU-Eastern Southern Africa (ESA) discussions for an economic partnership to discuss the issue with EU trade commissioner, Peter Mandelson.

The government made it clear that the country has been facing a number of threats lately. The 36% drop in sugar export prices added to the problems in textile and the rise in oil prices at international level are already big hurdles. The EU financial compensation should soften their impact and help boost the economy by developing new sectors.

This is what the government has been trying to explain to the Europeans but it seems its lobbying has been fruitless. The commission plans to give some 5.85 million euros out of the total 40 million to Mauritius this year. Mauritius finds it unfair since the country?s exports represent 38% of the ACP total exports.

But the EU has decided to allocate compensation funds according to the weight in the Growth Domestic Product (GDP) and to the people employed in the sector. Mauritius does not agree; its case shows that sugar represents more than its contribution to the GDP. In fact, sugar exports represent one-third of our foreign currency income.

<B>Far below expectations</B>

The production of sugar should be seen as a ?multi-purpose? activity and ethanol should form part of it. Moreover, the restructuring of the sector requires some Rs 25 billion. The compensation is far from such expectations. Even if it restructures its sugar sector, Mauritius can?t afford to rely only on this field. It has to invest in other fields like the seafood hub or the land-based oceanic industry to create jobs and boost the economy. And Mauritius had hoped the EU compensation would serve to that aim.

Compensation appears like a must for the survival of the economy. The PM made it clear that the government was doing its utmost to convince the EU to increase that compensation. But the EU reaction has not left much room for hope?

Peter Mandelson explained that the criteria for allocating compensation have been extremely difficult to define and that the EU has finally managed to find a balance. Hence, Mauritius doesn?t have much hope that its amount of compensation be increased unless the global amount for the ACP rises. But, as the EU commissioner said, ?Mauritius has an intrinsic strength thanks to its population, physical geography and its democracy.?