Thursday will be a crucial day for the traditional tripartite negotiations between representatives of government, private sector and trade union federations to fix the rate of salary compensation to cover the increase in cost of living. Both the government and the trade unions said after the first meeting last week that they want a ?satisfactory solution for all.? The proposal of the Mauritius Employers? Federation (MEF) to compensate lower wage earners has however stirred up quite an interesting debate.

The Finance minister, Pravind Jugnauth, who chaired the negotiations, has made it clear that ?the impact of this compensation on the economy and the capacity of various sectors to pay will have to be taken in consideration.? He expects the discussions to guide him to find the right formula since ?that is the aim of those negotiations.? The increase will be based on the inflation rate, which was estimated at 3,9% by the Central Statistics Office, for the financial year 2003-2004.

In his traditional survey of the economic outlook, the Finance minister explained that a number of factors have to be considered before deciding on the exact amount of the compensation. According to him, not only the present world economic outlook ? which is morose with the Middle East conflicts, the rise in oil prices and freight increases amongst others ? has to be taken into account but also the situation over the coming months.

Anticipation seems a fundamental notion in these negotiations since the main issue is, of course, the interest of the whole country and not the immediate gain for one party or another. The minister stressed that the present situation in some sectors like the EPZ or the sugar industry is quite alarming. The dismantling of the multi-fibre agreement is scheduled for next January and the prospective European reform on sugar is another threat. The National Economic and Social Council (NESC) composed of the State, the employers and the unions should thus try to find a ?lasting solution for all?

After proposing that the compensation be frozen last year, the MEF has now proposed to grant a full compensation only to workers at the bottom of the scale. In short, this would mean 4%, if this is the accepted inflation rate. It has also clearly stated that those at the top of the scale should accept the sacrifice. According to its president, Gérard Garrioch, employees with good salaries should ?show some solidarity to allow employees who have a low wage to obtain a decent increase in their salaries.?

Price increases

This first in the history of tripartite negotiations is quite another story for trade unions. Tulsiraj Benydin, the National Trade Union Confederation president maintains that ?all employees must benefit from a wage compensation with no regard for the amount of their wage.? The more so, since ?all workers have suffered from price increases,? adds the United Workers? Federation president, Atma Shanto. Jugdish Lollbeeharry, the Mauritius Labour Congress president has, for his part, congratulated the MEF for its commitment to low wage earners.

The main question is the figure that would define high and low wages. The trade unions have already advocated that all workers earning less than Rs 10 285 should be fully compensated. The MEF has refused to give any hint; Gérard Garrioch explains that it will depend on the negotiations that are not yet finished.

Last year, the inflation rate was 5.1% and the full compensation at the bottom of the scale was Rs 110. All stakeholders look quite confident that a consensus will be reached.