Sithanen?s budget has been called a number of fancy names. The dressing has given the impression that the salad is somehow revolutionary, thought up by the economic genius who is our Finance minister. However, it has never been pointed out that what is on the menu for the majority of the population is rotten. It is no wonder that the only group which welcomed the measures, was the private sector, those with real power in Mauritius, and who are about to get even more powerful.

But, in fact, Sithanen?s budget was not so radically different in direction from the previous MMM/MSM government. It is hard to imagine how nobody laughed at the opposition when they called Sithanen a man of the private sector. Pravind Jugnauth epitomised the hypocrisy of the opposition by both claiming that the budget was ultraliberal and patting himself on the back for his ?duty-free island? vision. A classic example of intellectual cretinism.

Underneath the hot air, there is a real agenda of divestment from the state, a process that has been taking place in Western countries. However, the shrinking role of the state must be qualified. While it is increasingly shunning its responsibility towards the people (in providing accessible housing, healthcare and education), it has been taking a more active role as a regulator of private enterprise. Its role is to facilitate business. Thus, the finance ministry needs to ?create a favourable climate for investment?, usually by passing anti-union laws and putting pressure on workers to accept increasingly less of the national cake. It should be concerned only with inflation, keeping it low at all times, to encourage consumption. Social concerns are for fantasists.

Ireland has seen just that. Inflation is controlled from Europe but the rest is in the hands of the government. While the country has offered all types of tax incentives to the rich, social policies come only at the time of an election or when the government needs a make-over of its image. Whatever the second richest country in the world allocates is purely cosmetic. Meanwhile, the state is being gradually stripped of its assets.

It has already privatised its telephone company, Eircom, a complete disaster. The current consensus among power brokers (politicians, business leaders and the media) argue that privatisation always increases efficiency. But the handing over of Eircom to investors has left Ireland lagging behind most Western countries in Broadband penetration. Worse still, it has even been overtaken by some of the new member states of the European Union. An OECD (Organisation for Economic Co-operation and Development) survey of 22 countries found Ireland languishing in the 19th place in 2005.

The health system is equally in tatters, while public transport is nearly non-existent in the country that Ramgoolam likes to cite as example. But, since the Social Alliance is hell-bent on adopting neo-liberal policies, at least it can claim there is logic in its madness. The madness in question is that the state should hand over everything to investors, taking a less active role in running the country. For example, this has allowed Ireland to pave the way to privatisation of one of its most profitable companies, the national airline Aer Lingus. The state carrier has been one of the few profitable national companies since the terrorist attacks on New York. In 2004, it raked in a ?200 million surplus. However, the government now wants to privatise it. Mauritius, it must be remembered, followed the same recipe with its telecom company under the previous regime.

Democratic barrier

The central issue for proponents of privatisation is to minimise the democratic rights of the people. Hence, a company which is in the hands of the state, is still to some extent under the control of the people, though that is also fairly minimal. Shifting it to the private sector removes this nuisance straightaway. Effectively, it is a transition towards a private tyranny. Trade unions are already marginalised in the private sector, another democratic barrier less.

Accordingly, state intervention is always ?heavy-handed? and it should divest itself of running the country. Instead, it should provide law and order, a riot police that can coerce people into toeing the line even when economic policies are putting severe constraints on their livelihood. As Eric Ng Ping Cheung confidently asserted, in this newspaper, last week: ?History testifies that the most efficient allocator of resources is the market which knows best where to create wealth.?

He was probably referring to Haiti, where the market was given free reign and duly allocated the resources to a rich elite, creating sky high profits for them and multinationals, while the rest were impoverished. Or maybe he meant Russia, another laboratory test of free market policies, which accomplished the truly amazing fate of reducing life expectancy by 10 years, in the decade after the collapse of the Soviet Union. What a psychopath like Stalin started, the market finished off.

However, the prophets of neo-liberalism often ignore the contributions of the state towards the private sector. Their tunnel-vision ideology fails to acknowledge the creation of an educated and healthy workforce, all at the cost of taxpayers. Take the University of Mauritius. The state is the major R&D (Research and Development) contributor, outstripping private assistance by a factor of two. The latter benefits largely, since the faculties of the university are mainly geared towards industry. The same applies to other research centres, all financed through taxation. This is a classic example of state intervention.

But when the state subsidises the private sector, we don?t hear them whinge about the ?heavy-handedness of the state?. What they propose is a form of ?social darwinism?, where the state is subservient to big private interests. As many commentators have pointed out, the collaboration of the state and big business already possesses a name: fascism. Since this word is taboo in polite society, it is wrapped in niceties such as market efficiency.

Diren VALAYDEN Outlook Correspondent in Dublin