MAURITIUS: RAMGOOLAM VISITS UNITED STATES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000102310002-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 22, 2016
• Document Release Date: September 7, 2010
• Sequence Number: 2
• Publication Date: October 3, 1980
• Content Type: MEMO

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CENTRAL INTELLIGENCE AGENCY
NATIONAL FOREIGN ASSESSMENT CENTER
Mauritius: Ramgoolam Visits United States
Prime Minister Sir Seewoosagur Ramgoolarn is meeting in
Washington with high-level US officials from 11 to 15 October
after addressing the UN General Assembly. Since leading
Mauritius to independence in 1968, the crafty "Uncle Ram,"
as he is known affectionately on the island, has played the
role of political godfather, periodically forging political
marriages of convenience to remain in power. Ramgoolam, now
80, views himself as a democratic socialist along the lines of
British Laborites, and he is a prominent voice for moderation
and pro-Western policies in the Indian Ocean region. His
style in domestic and international dealings is one of
flexibility and compromise, sometimes leading his rivals to
, 25X1
to grips with the island's severe economic difficulties.
Ramgoolam will probably ask for additional US assistance in
propping up the troubled economy. Mauritius is currently
receiving PL-480 grants totalling $700,000. Stepped-up
Western economic aid could increase his chances of winning 25X1
next year's parliamentary election, although his majority
would probably remain wafer-thin
This memorandum was written byl of the Africa
Division, Office of Political Analysis. It was requested by the
Director of Central Intelligence and has been coordinated with the
Director for Operations, Office of Strategic Research, and Office of
Economic Research. Questions and queries are welcome and should be
NY1N K.1~
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Economic Woes
Mauritius' economic troubles are a classic example of
the problems inherent in a one-crop economy. More than 90
percent of the arable land is devoted to sugar cultivation.
Sugar production accounts for 70 to 90 percent of total
export earnings and half of the gross national product, and
it employs 40 percent of the labor force. 25X1
When world sugar prices were high, Mauritian sugar
earnings rose dramatically--from $63 million in 1970 to a
peak of $279 million in 1974. The government used these
funds to finance a hefty increase in wages and costly social
programs aimed at bolstering the ruling coalition's popularity.
As a result, productivity declined and 4" 1ation rose to 15
25X1
F_ I
percent annually.
Earnings plummeted in the mid-1970s when world sugar
prices fell to 16 percent of their former levels. The
government, seeking to curb inflation, imposed tight monetary
policies which in turn hurt investment and employment and
aggravated discontent among members of 25X1 island's in-
fluential labor unions.
With no prospect for a quick rebound in sugar prices,
Ramgoolam's'government sought foreign help to get the economy
back on its feet. Last year, in return for a $95 million
loan from the International Monetary Fund, the government
agreed to a 30-percent devaluation of the rupee, promised to
cut the budget deficit by 20 percent, and imposed an in-
crease in the bank rate and a credit ceiling on bank lending.
The World Bank has contributed $117 million to help ex and 25X1
port facilities at Port Louis, the capital.
The volatility of the sugar market has led Mauritius to
try to lessen its dependence on sugar by moving into the
manufacture of export goods and increasing tourism. The
government has established an Export Processing Zone in
which foreign investors are given customs and tax incentives
to set up exporting concerns. Through the Lome Convention,
Mauritius has 25X1
which buys 80 percent of the island's exports.
The economy has been further hurt by three cyclones
that damaged the sugar crop this year and, more generally,
by the recession in world trade and the soaring costs of
energy. Inflation earlier this year was running at an
annual rate of 34 percent. Unemployment--especially among
the young--is at least 10 percent and rising.
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The population growth rate has declined from 3.1 per-
cent to 1.4 percent, but government family-planning programs
have created uneasiness among several of the country's 25X1
diverse religious and ethnic communities about possible
changes in the communal balance.* Overcrowding--roughly
926,000 people are jammed into 780 square miles--is chronic.
Some12025X1)0 have applied for emigration permits.
The Political Arena
Ramgoolam presides over a shifting coalition
His pro-Western Labor Party captured only 27 o
the 70 parliamentary seats and 36 percent of the popular
vote in the 1976 election, far behind the 34 seats (and
39 percent of the vote) won by the more radical Mauritian
Militant Movement (MMM). Ramgoolam's years of experience in
back-room communal politics, however, enabled him to forge a
shaky coalition with the conservative Social Democrats, who
had polled 17 percent of the vote. Since then, both Labor
and the MMM have lost a few seats due to defections or
expulsions from the two parties. The current legislative
lineup is:
The Government (36 seats)
--Labor Party (27 seats). Ramgoolam's party has
been in power even since independence. The party
is strongly supported by the Hindu community. It
stands for moderate democratic socialism, social
welfare, and private enterprise. Party leaders
are strongly anti-Communist, although Mauritius
maintains diplomatic relations with the major
Communist powers. The sole parliamentary member
of the Moslem Action Committee consistently votes
with the Labor Party.
--Mauritian Social Democratic Party (8 seats). The
PMSD compaigned against independence, reflecting
its conservative Creole and Franco-Mauritian
*Two-thirds of the population are ethnic Indians, 29 percent are
Creoles, and the rest are of Chinese, English, or French extraction.
Half the people are Hindus, a third are Christian (mostly Catholic), and
the rest are Muslim. The literacy rate is 60 percent.
cFrRFm
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supporters' fears of being ruled by Hindus.
Gaetan Duval, 41, the PMSD's flamboyant and con-
troversial leader, has been criticized by party
members for joining the government.
The Opposition (30 seats)
--The Mauritian Militant Movement (30 seats). The
leftist MMM has been hurt in the last few years
by internal disputes and by tactical mistakes on
the part of its leader, 35-year-old Paul Berenger,
but it is still backed by many educated younger
Mauritians and by the island's main labor organiz-
tion. The party was won several municipal elections
in recent years and is still hopeful of winning
power in the 1981 election.
Others (4 seats)
--Mauritian Socialist Party (3 seats). This party
was formed last year by Harish Boodhoo, a dissident
Laborite who led a compaign against government
corruption and nepotism that resulted in the forced
resignations of two Cabinet minsters. The party
is anti-Communist.
--The lone independent in the legislature wields
influence out of proportion to his voting strength
due to the narrowness of the government's majority.
25X1
Political Prospects
The octogenarian Ramgoolam is in ill health and is
rumored to be considering retiring. But he has yet to
designate his protege, left-leaning but pro-US
Minister Veerasamy Ringadoo, as his successor.
Ringadoo is a capable administrator who would probably
continue Ramgoolam's moderate policies. His strongest
rival, Agriculture Minister Satcam Boolell, leads the reform-
minded "Group of 13"--an informal grouping of ministers and
other officials who, along with influential Hindu business-
men, demand a purging of the party's old guard.
Ramgoolam's political career has been pockmarked by a 25X1
series of career-threatening crises, but he has always
confounded his political enemies with last-minute escapes.
He has, for example, maneuvered adroitly to defuse a potent-
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ially disruptive dispute over the government budget and also
to prevent the MMM from instigating disruptive nationwide
strikes. Ramgoolam will probably stand for reelection next
year, and even if his party fails to win a majority he will
have a good chance of successfully negotiating a new govern-
ing coalition with himself at its head. He will probably
try to stay in office until he can give the impression of
having stabilized the political scene, then use his age and
health as reasons for leaving office in a dignified manner.
An MMM Administration?
The MMM remains the sole alternative to a Ramgoolam-led
coalition after the 1981 elections. At present, the party's
sole hope of coming to power legitimately is to win the
election outright; Labor's coalition partner, as well as the
other parties, are wary of the MMM and would be unlikely to
join a Berenger-led coalition. We have no evidence that the
MMM is planning to seize power by force, and if it did make
such an attempt, its chances for success would be slim.
Ramgoolam tightened up security following the coup in the
Seychelles three years ago and closely monitors the major
opposition groups. He would probabl clam down on the MMM
if he perceived a serious threat. 25X1
Libya, the USSR, and the French Communist Party
Ocean islands. It allegedly has received funding from
Berenger espouses Marxist rhetoric, and the MMM has
extensive contacts with other radical parties in the Indian
MMM officials have said that if they come to power they
will gradually nationalize large sectors of the economy, 25X1
including sugar, insurance, transportation, and the docks,
while leaving untouched export-oriented enterprises such as
textiles, electronics, and diamond-cutting. Berenger also
would probably try to loosen the country's economic ties
with South Africa, Mauritius' second largest source of
imports and purchaser of 70 percent of the Mauritian tea
crop. An MMM administration might begin by banning South
African Airways flights to the island, paralleling a recent
move by left-leaning President Rene of neighboring Seychelles.
Relations with Communist, Arab, and radical Third World
governments would be strengthened, and the MMM would press
in earnest for the return of Diego Garcia.0 25X1
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Ramgoolam's Foreign Policy
Despite its tiny size and lack of economic leverage,
Mauritius has been active in foreign affairs because of its
strategic position in the Indian Ocean. Ramgoolam, who
identifies strongly with Africa, has served as president of
the OAU, and Mauritius was on the UN Security Council in
1977-78. The small but effective diplomatic service has
concentrated on strengthening economic ties to the West.
Mauritius has remained among the moderate nonaligned 25X1
countries on North-South issues.
The foreign policy issue with greatest domestic impact
in Mauritius is the status of Diego Garcia, with its joint
US-UK military facilities. Diego Garcia was ceded by the
then self-governing colony of Mauritius in 1965 to the
British, who provided $7.2 million in development aid.
Ramgoolam claims that he agreed to cede the island in return
for a shorter timetable for Mauritian independence, and that
he was misled as to its future uses. He has demanded the
return of the island to Mauritius, thus outflanking the MMM
on the issue and earning unaccustomed support from his more
left-lea i hbors, with 2whnTn 5X1 he has little else in
common.
Ramgoolam has expressed interest in the Indian Ocean
Zone of Peace concept. While he is uneasy about increasing
big-power military activity in the area, he primarily dis-
trusts the Soviets and is privately comfo25Xile with a US
presence nearby.
The diverse ethnic backgrounds of Mauritians have led
to domestic pressures for closer ties with the French,
British, Indians, and Chinese. Relations with the USSR are
cool, partly because Moscow assists the MMM. The government
has resisted Soviet requests for naval and air facilities
and is reviewing its existi25X12isheries agreement with
Moscow.
Relations with the US are good. Mauritius has supported
the US position on the Tehran hostages, the invasion of
Afghanistan, and the Olympics boycott. Although Ramgoolam
chides the US publicly for activities on Diego Garcia, he is
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quietly attempting to increase Mauritian employment in the
facility there. Mauritius was under great pressure from
both the Arabs and the US over the question of granting the
Palestine Liberation organization observer status in the IMF
and the World Bank. The Mauritians eventually took the line
of least resistance by not voting.
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SUBJECT: Mauritius: Ramgoolam Visits United States
DISTRIBUTION:
Orig - DCI
1 - NIO/AF
1 - D/OPA
1 - DDO/AF=:
1 - OCO/FLS
3 - OPA/PROD
4 - OCO/IDCD/CB
2 - OPA/AFI--- -
NFAC/OPA/AFJ r3OCT80
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