Usury

Mauritius Times – 60 Years

The worker is born into debt; he lives a life of debt; he dies in debt; his funeral expenses bequeath an after-life debt to his heirs

By Peter Ibbotson

Once again, with the publication of the Report of the Commission appointed to enquire into the Purchasing Power of the Rupee in Mauritius, we find that the Mauritius Times has advocated a policy years before the Government, or a government commission of enquiry has advocated that same policy as being desirable. On this occasion it is legislation affecting moneylenders in the colony which is recommended; yet two years or more ago, the Mauritius Times was asking for just that.

The Commission has done, for laymen, a good job of work as far as the report goes. They have unearthed a lot of hard facts which substantiate what people have been saying for a long time but have lacked proof to support it. For a long period, I had been getting letters from businessmen and men in-the-street complaining of profiteering in pharmaceuticals, and of abuse of the sole agency system. But nobody could give hard facts. Now we have it from the Commission, with the margins between import and retail prices for a number of drugs. It is worth quoting the Commission in full: “We still think that margins as high as 164 per cent. for Metatone, 127 per cent. for Benadryl cream, of 306 per cent and 44l per cent. for certain vitamins, 132 per cent. on Streptomycin, of 161 per cent on Penicillin Procaine, let alone the 563 per cent we have already mentioned on 5 grams tablets of Acetyl Salicylic Acid (aspirin) and 549 per cent on Ephedrine HCL 1/2 gr., to quote certain striking instances, are proof that, somewhere in the chain, excessive profits are being made at least on these drugs.”

One agrees with the Commission that a full-scale enquiry is justified in the specialised field of pharmaceuticals. More than once, however, the Commission refers to the fact that its members — Messrs Nairac, Ah-Chuen, Dupré, Piat, Ringadoo, Roy and Herchenroder — were all laymen in the field of economics. One wonders why no competent professional economist was included in the Commission; the fact that the enquiry was entrusted (or had to be entrusted) to laymen underlines that lack of economists in Mauritius, a lack which will not be redressed in the near future if we are to judge by the data supplied by the Students’ Unit regarding courses being pursued by students in the UK, France and Ireland at present. Mr Beejadhur has made an excellent beginning at the Ministry of Education; it is hoped that he will be able to persuade students to follow economics courses when they come to the UK. In this modern world, economists are no less valuable than agricultural experts in a country such as Mauritius.

Indebtedness is rife all over Mauritius; so, the report tells us. The worker is born into debt; he lives a life of debt; he dies in debt; his funeral expenses bequeath an after-life debt to his heirs. The social customs of many labourers impose heavy expenditure (extravagant, perhaps, when seen through Western spectacles, but unavoidable in the social milieu of Mauritius) on such occasions as weddings and funerals. When all other sources of cash fail, recourse has to be made to the village or departmental money lender; and the Commission has revealed the debts to which these parasites, these leeches on the body politic, will go.

The borrower signs a promissory note agreeing to pay interests at 12 per cent per year; in fact he pays interest (and makes a verbal agreement to pay this) at a much higher rate, often as much as 20 per cent per month (240 per cent per year !) The classic case is retold by the Commission of the man who borrowed Rs 300; by the time he had repaid the moneylender Rs 1,105.50, he still owed Rs 371! This is, says the Commission, “no doubt that professional money lending at usurious rates of interest is very widespread indeed throughout Mauritius.”

The Commission tells of Civil Servants who augment their salaries by lending money to their colleagues. The Commission recommends money lending legislation based on the English Act of 1927 — moneylenders must be licensed, interest rates must not exceed 48 per cent per annum for unsecured loans, the capital borrowed should be repayable by installments. if you want to keep abreast and ahead of the times, then read the Mauritius Times.

All of this is what the Mauritius Times asked for two years ago. The English act was then described; the activities of the moneylender were revealed; we referred to Civil Servants who were spare time moneylenders. All this part of the Commission’s report will command the unequivocal support of the Mauritius Times when the time comes (and we hope it will be soon) for legislation to implement these particular recommendations.

We should add one suggestion which the Commission has not made — that where it is known that a Civil Servant is acting as a moneylender, either to his colleagues or to the general public, he should be dismissed from the service immediately, with complete forfeiture of any pension, rights which he may have accrued. And I would go further and say that any Civil Service pensioner who is acting as a moneylender should be liable to suspension or forfeiture of his pension. Ruthless, perhaps, but I believe that usurers deserve the harshest possible treatment, and no steps are too harsh if they are to be stamped out.

The Commission does not appear, on this subject, to have studied two different remedies which have been applied, with success, in other colonies. One, which has in the past been applied in Cyprus and Zanzibar, was the drastic remedy of debt conciliation — debts were scaled down to sums which the peasants could afford to repay. The remedy, which has been practised in Uganda and Bechuanaland (which became the Republic of Botswana), is to make it as difficult as possible for people to borrow from moneylenders by refusing legal enforcement to liens on crops and other instruments of debt.

It is good to see the desirability of credit unionism being canvassed; one hopes that positive steps will be taken to set up credit unions. Meanwhile, are steps being taken to educate the public in ways of avoiding recourse to borrowing to meet funeral or marriage expenses? I mean, of course, are people being sufficiently made aware that it is possible to effect insurance policies to provide funeral expenses, etc.? The operative word is, of course, ‘sufficiently’ — that so many people run off to the usurer for help suggests that the insurance companies have begun ‘sufficiently’ to educate their potential clients.

I have dealt this week almost entirely with that part of the Commission’s report which deals with private indebtedness to moneylenders. The rest of the report deserves an article to itself; and it will get it next week. For the present I will content myself by saying that capitalism and private enterprise stand condemned by the facts which the Commission have unearthed and published. The people have been for years at the mercy of the exploiting capitalists who have clearly waxed fat at the expense of the general public.

The clear-cut remedy here, since private enterprise and capitalism have failed, is for public enterprise and Socialism to replace them.

Yet we have the unedifying spectacle of one of the members of the Commission, a Socialist of long standing, flirting with the opponents of the only organisation in Mauritius (the Labour Party) which is determined to see Socialism in action!

Mauritius Times ePaper Friday 31 May 2024