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The logical conclusion

1 mars 2019, 13:25

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It sounds like a bad movie: five minutes in, you already know how it’s going to end. Palmar closing down, and 1,300 workers losing their jobs, is greeted with shock. But should it really? After all, what is it about the handling of textiles, or manufacturing in general, by successive governments that did not lead to this logical conclusion?

Starting in the 1980s, Hong Kong industrialists, jittery about being absorbed by communist China, start setting up shop in Mauritius and start textile factories. And it was a great run: the economy galloped ahead, fortunes were made, women were brought into the workforce en-masse and slowly but surely, Mauritian capitalists started taking over the textile industry. They changed the signs but kept the business the same: get the raw materials from Asia, process them in Mauritius and then export them to Europe under trade pacts.

Then the Sinotex strike happened and foreign, deportable workers started replacing Mauritian ones. Initially, they were brought in from China, but then they started complaining and clambering over the walls of their embassy causing diplomatic headaches, so the Chinese embassy put up higher walls and the factories started bringing workers in from Bangladesh and Madagascar instead. They were poorer and less likely to cause trouble.

Then the trade agreements with Europe that the industry relied upon were out. Other, bigger, countries paying their workers much less outcompeted Mauritian textile exports. Now the local textile industry found itself competing with Bangladesh but with the added proviso of having to bring over Bangladeshi workers and paying them Mauritian wages. Between 2002 and 2006, textile factories shut down and 15,000 jobs were lost in the industry. Then the AGOA was clung to as a lifeline. The AGOA was a US law to encourage African cotton farmers by giving textiles manufactured using their cotton and other raw materials tariff-free access to the US. But since Mauritian textiles still source their raw materials from Asia, they got an exemption that could be closed off any day now and live with the hope that the Chagos dispute does not cause a mercurial US president to pull the plug on all this and kill off the sector. 

All the while, an import-dependent island just next to an ageing continent does not want to grow food. Does not want to build ships. And does not want to produce pharmaceuticals and medicines. Instead, successive governments have given the textile sector little freebies like cutting their taxes down to 3 percent, subsidised freight costs by 40 percent and given another subsidy on the exchange rate. Call it socialism for a sunset industry. The idea seems to be to keep kicking the can down the road by putting the industry on life support just long enough for it to finally kick the bucket on someone else’s watch. And then cue the faux-shock when a major textile factory shuts down.

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