The millennium started with the focus firmly on the sugar industry. We could only watch in horror while the European Union (EU) dismantled that part of its agricultural policy and our quotas went up in smoke. However, the great unravelling of our economy started in the nineties, when the textile industry started to falter. Factories were closing down and more and more people were losing their jobs, a phenomenon that continues relentlessly in that sector.

At the moment we seem to be watching a plane crash. Full of bold statements and catchphrases during the electoral campaign, the finance minister is now keeping a low profile. The economic bulldog is crouching in his kennel, a castrated animal. Contrary to the then opposition?s propaganda, there are no quick-fix solutions for our economic problems. Last week, Ireland was cited in Parliament as the example to follow.

The Celtic Tiger phenomenon was primarily built on a highly-educated workforce. Creating a low corporate tax regime, the lowest in Europe at the time, it attracted many American multinationals. Ireland?s geographic position, coupled with an English-speaking workforce was ideal for them. Foreign companies re-routed their profits through their Irish bases, guaranteeing that they escaped taxation, a method known as ?transfer pricing?. Ireland became very convenient and companies followed each other to establish an Irish subsidiary. Thus some of the biggest pharmaceutical and software manufacturers implanted themselves in the Emerald Isle from the 70s on.

Mauritius seems to possess almost all the ingredients to follow the Irish recipe for an economic boom. However, we are lacking in some departments. Our workforce, at present, lacks the education required for hi-tech companies. Despite our proximity to Africa, the continent?s poverty means that it is not viewed as an attractive market. Thirdly, there is the case of India, where a cheap and educated labour market means that companies can maximise their profits with a minimum capital outlay. The rising cost of living in Mauritius, which has pushed wages up, and a refusal to work as slave labour in industry (mainly textile) are two reasons why the country is not attractive.

Ferries on a sea of discontent

This is why we now hear terms like labour-market flexibility. This terminology simply means that all labour must be de-unionised and accept long working hours for meagre salaries. For those who think such scenarios emanate from neo-Marxist fantasists, there is no better country than Ireland to look at for concrete proofs. Two weeks ago, nearly 100 000 people took to the streets over industrial dispute. Their demands were simple: no more exploitation of migrant workers and no displacement of Irish jobs. The company involved in the dispute, Irish Ferries, was previously a state company, which had been sold for a pittance to private entrepreneurs. While they turned the fortunes of the firm around, they grew greedier as time went by.

Last year, Irish Ferries announced that it would start employing agency workers, from the new EU countries, on its ships. The existing workers were presented with two options. Either they accept a redundancy package or work longer for reduced wages. The latter was so outrageous that the workers opted for the former. But then it was learned that the new workers were to earn under half the minimum wage.

Furthermore, they would have to work for nearly 84 hours a week and with no union representation. This seems to be the trend in Ireland. Indeed, it is also common in the Mauritian textile industry, where foreign workers are exploited at will. But, in Ireland, this is taking on an alarming proportion throughout the economy. In construction, some workers from Eastern Europe are being paid at one-third the minimum wage. Forestry workers were earning as little as one-sixth of that amount. As the labour inspectorate is overworked, these cases are rarely highlighted.

Cheap labour

But back to Irish Ferries, and the company has been profitable year after year. In 2004, its profits were ?26.5 million. All the directors have received salary increases to reflect the good financial health of the company. Some have even doubled their earnings over the last year. What emerged was an ugly picture of rapacious greed. When the unions threatened to go on strike, the company announced the re-flagging of its vessels, thus excusing it from the constraints of Irish laws. The issue was brought to a head when officers on one ship

barricaded themselves in the control room. Other workers at Irish ports, in solidarity with their colleagues, refused to handle the Irish Ferries vessels, thus preventing them from docking at their destination ports.

Subsequently, the management of the company threatened to substantially reduce the redundancy package and a deal had to be concluded with the unions. They accepted to pay the outsourced workers the minimum wage and keep the ships under Irish flag for the moment. However, nothing prevents the company from going back on its word. The Irish Ferries issue marked a watershed in labour relations. People witnessed the power of capital in the modern economy. Its ability to relocate, pursuing the cheapest labour and the laxest laws, has made everyone vulnerable. In Ireland, while wages grew by 2.7%, this was below the nationally agreed upon 4% rise. This meant that there was a class of labour that was being paid less.

Mauritian workers face tough times ahead. The economy, if it follows the WTO blueprint, will be increasingly controlled by the private sector. This means a steady decline of both wages and protection for workers. But, on the other hand, without this restructuring, growth will be stalled. Unless we start embracing a value-added hi-tech economy, we could face a reverse of the economic and social progress made in the last decade or so. But then someone has to have the courage to start it.

Diren VALAYDEN Outlook Correspondent in Dublin