Good intentions have been caught up with by harsh reality. Despite the government?s announcements that the budget was aimed at helping the most vulnerable, the price increases that have occurred since last week seem to have put a spoke in its wheel. The minister of Finance, Rama Sithanen, made it clear that the decisions he made in the budget had absolutely nothing to do with the rise in the price of commodities. But the public does not seem to care much about the reasons behind the change in their individual budgets and the government may have a hard time winning its popularity back.

Rama Sithanen is actually right to point out that he has absolutely no power over the price increases that have hit consumers over the past few days ? no matter what they earn at the end of the month. The international situation is such that the government had no other choice than to pass the burden on to consumers. The State Trading Corporation (STC) is indebted enough and can no longer afford to cover for the latest increases.

Rajiv Servansingh confirms that, ?With globalisation, the consequences of price increases are felt more rapidly on the local market?. So, at the moment, with the rises in the prices of petrol, gas, cement and freight on the international market, the public should not be surprised by the stream of increases here in Mauritius. The equation is simple, ?higher costs generally lead to higher prices for the public,? explains Sunil Bundhoo.

Of course, it can happen that importers ask their suppliers to give exaggerated prices so that they can make more profits on the goods they will be selling. However, competition between the different importers generally prevents this from happening, if and only if there is healthy competition.

Since the increases have occurred, the consumer protection associations have kept on criticising the government saying it has not respected its electoral promises. But these associations can?t do much more than to castigate the measures and try to put pressure on the government by raising popular anger. They do not have he financial or human resources to try and effectively bring about change.

But, even if they had the means to make their voices heard, these price increases really seem to be inevitable. The only measure contained in the budget that has led directly to price increases is the removal of subsidies on flour and ?ration rice?. The government found it unfair that everyone ? irrespective of his/her monthly earnings ? should benefit from subsidies.

<I>When minister Sithanen introduced the budget in Parliament, he made it clear that there was a need to ?rethink our priorities regarding social protection?. </I>

As a result it chose the targeting method, making sure that the most vulnerable will not suffer from this decision since they will obtain Rs 225 compensation to cover the increased outlay. However, the system of allocation ? called Income Support ? is still under study to better fit the needs of the most vulnerable groups. The objective of such compensation is to allow poor people to face the increase in the cost of living.

When he introduced the budget in Parliament, the minister of Finance made it clear that there was a need to ?rethink our priorities regarding social protection?, implying that the most vulnerable groups would obtain more money and facilities from the government. The Empowerment Programme was among the major ways of achieving such a goal and the setting up of its steering committee after the cabinet meeting last Friday is a major step forward.

The director of La Sentinelle, Jean-Claude de l?Estrac, who will chair the committee, concedes that it has a huge task facing it but ?when I saw the names of the members from both the public and private sectors that the government was about to appoint, I was brought to believe it could be a success even though I find the programme extremely ambitious?.

This programme is aimed at facilitating the transition between the sugar and textile sectors to other fields with added value. Rs five billion will be allocated to the whole programme with a budget of Rs 750 million for this year only. Employment and training should be at the centre of the members? preoccupations. The Empowerment Programme is indeed aimed at examining opportunities for the unemployed but also providing training and recycling for people who have lost their jobs in some sectors. Special programmes should also be set up for unemployed people. Five tourist villages as well as the development of new SMEs are also among the top priorities of this ambitious programme.

Minister Sithanen is convinced that the population will finally see the positive impact of the budget on their daily lives. ?I believe that the worst will be behind us if we implement the measures contained in the budget. We have to create jobs to create wealth and this can only be achieved with training. But for now people are far too emotional.?