Purchasing Power Under Pressure: What Responses to an Imported Crisis?

In "At the Heart of Information," Jane Lutchmaya brought together political leaders and civil society actors to discuss the decline in purchasing power amidst a tense international context. The program featured lively exchanges, critiques, and proposals, shedding light on the economic challenges and potential solutions for households.

Nita Deerpalsing, Jayen Chellum, Suttyhudeo Tengur, president of the Association for the Protection of the Environment and Consumers (APEC), Junior Minister Kugan Parapen, MP Khushal Lobine, and Ajay Beedassy, president of the SME Chamber, took turns contributing to the discussion. The backdrop is a crisis that extends far beyond Mauritius's borders.

Geopolitical tensions in the Middle East have reignited uncertainties in international markets, leading to a notable increase in energy prices. For Mauritius, an island economy reliant on imports, the impact is immediate. Fuel, in particular, acts as a catalyst. Its price increase triggers a chain reaction: higher transport costs, increased logistics burdens, and mounting pressure on consumer prices. Gradually, the entire cost of living is affected.

"Resilience is not improvised; it is planned."

While some basic products remain relatively stable for now, warning signals are multiplying. "The worst is yet to come," warns Jayen Chellum, Secretary-General of the Consumers' Association of Mauritius (ACIM). According to him, the current crisis is only in its infancy. In this context, a central question arises: how to protect Mauritians' purchasing power against an external shock over which the country has little control?

Action is Needed, and Quickly

The discussions quickly reveal fractures, but also convergences on the need for action. MP Khushal Lobine proposed the establishment of a national solidarity fund, based on voluntary contributions from political leaders and economic actors. "This is everyone's business," he insists, referring to an act that is both symbolic and concrete.

He suggested that government members contribute at least 15% of their salaries to this fund. It could also be expanded to large companies in a spirit of patriotism and solidarity towards the most vulnerable. Additionally, he mentioned the possibility of taxing the wealthy to support the most exposed citizens.

This idea partially aligns with Nita Deerpalsing's stance, who advocates for greater contributions from the affluent during crises. "They continue to profit, so a small contribution would be justified," she notes. However, the political analyst expresses skepticism about the management of a solidarity fund: "I do not trust the management of this fund."

For her, the priority lies elsewhere. She calls for strong structural measures, suggesting the need to "reduce the number of ministers" and "eliminate positions that serve little purpose." She also condemns financial abuses and corruption: "The billions that disappear under the table could have been used differently for the country's advancement." In this light, she emphasizes the urgent need for transparency, particularly regarding tax revenues: "We must demand that the government publish the accounts... What will we do with this money?"

Imbalance

On the consumers' side, Jayen Chellum warns against a reactive approach. "Resilience is not improvised; it is planned," he asserts. He believes that current mechanisms show limitations, especially in a context of continuously rising prices. He criticizes the fuel pricing formula, which "will no longer hold if prices keep rising," and points out an imbalance in taxation: "Rs 7.20 leaves individuals' pockets... it's taking from the left pocket to put in the right one." While acknowledging the efforts of the Ministry of Commerce, he calls for "more transparency" and more sustained action.