Economy of Mauritius

From Wikipedia, the free encyclopedia

This article may require cleanup to meet Wikipedia's quality standards. No
cleanup reason has been specified. Please help improve this article if you can.
(November 2007)
Economy of Mauritius

The Capital Port Louis
Rank 10
Currency Mauritian rupee (MUR)
Fiscal year 1 July - 30 June
Trade organisations WTO, COMESA, SADC, AU, IOC, IORA
Statistics
GDP $19.30 billion (PPP)(2012)
GDP growth 3.3% (2012)
GDP per capita $15,595 (PPP)(2012)
GDP by sector agriculture (4.4%), industry (23.8%), services (71.8%)(2011 estimate)
Inflation (CPI) 6.7% (2011 estimate)
Population below
poverty line
8% (2006 estimate)
Labour force 607,400 (2011 estimate)
Labour force by
occupation
agriculture and fishing (9%), construction and industry (30%),
transportation and communication (7%), trade, restaurants, hotels
(26%), finance (6%), other services (25%) (2007)
Unemployment 7.9% (2012 estimate)
Main industries
food processing (largely sugar milling), textiles, clothing, chemicals,
metal products, transport equipment, nonelectrical machinery, tourism
Ease-of-doing-
business rank
19th
[1]

External
Exports $2.707 billion f.o.b. (2011 estimate)
Export goods clothing and textiles, sugar, cut flowers, molasses
Main export United Kingdom 18.7%
partners France 16.4%
United States 10.4%
South Africa 9.7%
Spain 7.6%
Italy 7.1%
Madagascar 6.7% (2012 est.)
[2]

Imports $5.111 billion (2012 estimate)
Import goods
manufactured goods, capital equipment, foodstuffs, petroleum
products, chemicals
Main import
partners
India 23.7%
China 15.3%
France 8.9%
South Africa 6.3% (2012 est.)
[3]

Public finances
Public debt $6.002 billion (60.2% of GDP) (2011 estimate)
Revenues $2.421 billion (2012 estimate)
Expenses $2.919 billion (2012 estimate)
Economic aid $42 million (1997)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.
The economy of Mauritius refers to the economic activity of the island nation of Mauritius.
Contents
1 Overview
2 Policies for Success
o 2.1 Heterodox Liberalisation and Diversification
o 2.2 Concerted strategy of nation building
o 2.3 Strong and inclusive institutions
2.3.1 Corruption Law
o 2.4 High levels of equitable public investment
3 Financial services
4 Macroeconomic statistics
5 See also
6 Notes and references
7 External links
Overview
Since independence in 1968, Mauritius has developed from a low-income, agriculturally
based economy to a middle-income diversified economy with growing industrial, financial,
and tourist sectors. For most of the period, annual growth has been in the order of 5% to 6%.
This compares very favourably with other sub-Saharan African countries and is largely due to
sustained progress in economic conditions; between 1977 and 2008, growth averaged 4.6%
compared with a 2.9% average in sub-Saharan Africa.
[4]
Also important is that it has achieved
what few fast growing economies achieve, a more equitable income distribution and
inequality (as measured by the Gini coefficient) fell from 45.7 to 38.9 between 1980 and
2006.
[4]
This remarkable achievement has been reflected in increased life expectancy,
lowered infant mortality, and a much-improved infrastructure. Sugarcane is grown on about
90% of the cultivated land area and accounts for 25% of export earnings. The government's
development strategy centers on expanding local financial institutions and building a
domestic information telecommunications industry. Mauritius has attracted more than 9,000
offshore entities, many aimed at commerce in India and South Africa, and investment in the
banking sector alone has reached over $1 billion. Mauritius, with its strong textile sector, has
been well poised to take advantage of the Africa Growth and Opportunity Act (AGOA).
Mauritius has attracted US$10.98 billion in Foreign direct investment inflows. Top sectors
attracting FDI inflows from Mauritius (from January 2000 to December, 2005) are electrical
equipment, telecommunications, fuels, cement & gypsum products and services sector
(financial & non-financial).
[citation needed]

With a well-developed legal and commercial infrastructure and a tradition of
entrepreneurship and representative government, Mauritius is one of the developing worlds
most successful democracies. The economy has shown a considerable degree of resilience,
and an environment already conducive to dynamic entrepreneurial activity has moved further
toward economic freedom. The islands institutional advantages are noticeable. A transparent
and well-defined investment code and legal system have made the foreign investment climate
in Mauritius one of the best in the region. Taxation is competitive and efficient. The economy
is increasingly diversified, with significant private-sector activity in sugar, tourism, economic
processing zones, and financial services, particularly in offshore enterprises. The government
is trying to modernize the sugar and textile industries, which in the past were overly
dependent on trade preferences, while promoting diversification into such areas as
information and communications technology, financial and business services, seafood
processing and exports, and free trade zones. Agriculture and industry have become less
important to the economy, and services, especially tourism, accounted for over 72 percent of
GDP. The government still owns utilities and controls imports of rice, flour, petroleum
products, and cement.
Policies for Success
Recent reports on progress on the Millennium Development Goals by the Overseas
Development Institute indicated four key reasons for economic success.
[4]

1. Heterodox Liberalisation and Diversification
2. Concerted strategy of nation building
3. Strong and inclusive institutions
4. High levels of equitable public investment
Heterodox Liberalisation and Diversification


Graphical depiction of Mauritius's product exports in 28 color-coded categories.
Mauritius has followed a pragmatic development strategy in which liberalisation process was
sequenced and tailored to its competitive advantages and weaknesses.
[4]
The export-
orientated approach has encouraged liberalisation supported by strong state involvement as a
facilitator (of the enabling environment for the private sector); as operator (to encourage
competition); and as regulator (to protect the economy as well as vulnerable groups and
sectors from shocks).
[4]
Strategies were evidence-based and adapted according to results.
[4]

There has been consistency and stability, regardless of which political party is in power.
[4]

Liberalisation occurred in phases that were initiated to build on advantages the economy
enjoyed on the international market.
[4]

1970s: Mauritius profited from sugar rents, established an export processing zone
EPZ and successfully attracted capital and foreign investment in manufacturing.
1980s-1990s: EPZ expanded and led to a significant increase in foreign direct
investment (FDI) and tourism. Preferential access to sugar and clothing markets
amounted to 7% of GDP in the 1980s and 4.5% in the 1990s, capital and current
accounts were liberalised, contributing to an investment and employment boom and
the high inflow of FDI brought with it managerial skills.
1990s-2010: Further diversification, liberalisation and investment.
Concerted strategy of nation building
A concerted strategy of nation building since Independence created the foundations for
sustained growth.
[4]
Partnerships across ethnic groups allowed economic redistribution to be
negotiated and the resulting better balance of economic and political power allowed strong
and independent institutions.
[4]
The emerging political system encouraged a consultative
approach to policy formation that allowed strategies for growth to be continued regardless of
changes in the parties in power.
[4]

Strong and inclusive institutions
Strong institutions are critical in ensuring countrys competitiveness, economic resilience and
stability.
[4]
They have supported development strategies and ensured that export earnings are
reinvested in strategic and productive sectors. In the financial sector they have built a
regulated and well-capitalised banking and financial system that protected it from toxic assets
prior to the 2008 global financial crisis.
[4]

Corruption Law
Mauritius ranks 46th out of 182 countries in Transparency Internationals Corruption
Perceptions Index for 2011, third in Africa. Mauritius is one of Africas least corrupt
countries. In 2002, the government adopted the Prevention of Corruption Act, which led to
the setting up of an Independent Commission Against Corruption (ICAC) a few months later.
The ICAC has the power to detect and investigate corruption and money-laundering offenses
and can also confiscate the proceeds of corruption and money laundering. Corruption is not
seen as an obstacle to foreign direct investment.
High levels of equitable public investment
Mauritius has a strong human capital foundation developed through consistent and equitable
investment in human development.
[4]
This enabled Mauritius to exploit advantages, learn
from expertise brought in through FDI and maintain competitiveness in a fast evolving
international market.
[4]
Education and health services are free and have been expanded in
recent years, in order to create further employment opportunities and ensuring inclusive
growth. The educated and adaptable workforce were essential elements of 1980s export-
orientated growth.
[4]
Around 90% of entrepreneurs in the export processing zone (EPZ) and
in the manufacturing sector were Mauritian nationals, businesspeople had the human capital,
education and knowledge needed to exploit market opportunities.
[4]

Financial services
Mauritius provides an environment for banks, insurance and reinsurance companies, captive
insurance managers, trading companies, ship owners or managers, fund managers and
professionals to conduct their international business. The economic success achieved in the
1980s engendered the rapid growth of the financial services sector in Mauritius. The
following types of offshore activities can be conducted in Mauritius:
Offshore Banking
Offshore Insurance
Offshore Funds Management
International Financial Services
Operational Headquarters
International Consultancy Services
Shipping and Ship Management
Aircraft Financing and Leasing
International Licensing and Franchising
International Data Processing and Information Technology Services
Offshore Pension Funds
International Trading
International Assets Management
International Employment Services
Macroeconomic statistics
Name Source Year Notes Ref
GDP (PPP)
International
Monetary Fund
2012 GDP (PPP) is $20.200 billion [1]
World Bank 2012 GDP (PPP) is $19,245,631,329
[2]
[3]
The World Factbook 2012 GDP (PPP) is $20,950,000,000 [4]
GDP (PPP) per capita
International
Monetary Fund
2012 GDP (PPP) per capita is $15,591.974 [5]
World Bank 2012 GDP (PPP) per capita is $14,902 [6]
The World Factbook 2013 GDP (PPP) per capita is $16,100 [7]
GDP (PPP) per person
employed
World Bank
1990-
2010

[8]
The World Factbook 2012

[9]
GDP (nominal)
United Nations 2012 GDP (nominal) is $10,086,649,093 [10]
International
Monetary Fund
2013 GDP (nominal) is US$11.930 billion [11]
World Bank 2012 GDP (nominal) is $10,486,037,634
[12]
[13]
The World Factbook 2013 GDP (nominal) is $11.9 billion [14]
GDP (nominal) per capita
United Nations 2012

[15]
International
Monetary Fund
2013 GDP (nominal) per capita is US$9,159.681 [16]
World Bank 2012

[17]
The World Factbook 2013

[18]
Gross national income
(Atlas method)
World Bank 2012
Gross national income is US$11,070
million
[19]
GNI per capita (Atlas
method and PPP)
World Bank 2012
Average national income (PPP) of
US$8,570 per person/Year
[20]
Household income or consumption by percentage share:
lowest 10%: NA
highest 10%: NA
Distribution of family income - Gini index: 39 (2006 estimate)
Agriculture - products: sugarcane, tea, corn, potatoes, bananas, pulses; cattle, goats; fish
Industrial production growth rate: 8% (2000 estimate)
Electricity - production: 1,836 GWh (2002)
Electricity - consumption: 1,707 GWh (2002)
Oil - consumption: 21,000 bbl/d (3,300 m
3
/d) (2003 estimate)
21,000 bbl/d (3,300 m
3
/d) (2001 estimate)
Current account balance: $1,339 million (2011 estimate)
$799.4 million (2010 estimate)
Reserves of foreign exchange and gold: $2,797 billion (2012 estimate)
$2,601 billion (2010 estimate)
2013 Index of Economic Freedom rank = 8th