Economy of Mauritius

Economy of Mauritius

The Capital Port Louis
Currency Mauritian rupee (MUR)
1 July - 30 June
Trade organisations
 WTO, COMESA, SADC, AU, IOC, IORA
Statistics
GDP $23.36 billion (PPP)(2014) $13.24 billion (nominal)(2014)
GDP rank 97th (nominal) / 138th (PPP)
GDP growth
 3.2% (2014)
GDP per capita
 $18,600 (PPP)(2014)
GDP by sector
 agriculture (4.5%), industry (22.4%), services (73.2%)(2014 estimate)
3% (2014 estimate)
Population below poverty line
 8% (2006 estimate)
Labour force
 600,200 (2014 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 7.8% (2014 estimate)
Main industries
 food processing (largely sugar milling), textiles, clothing, chemicals, metal products, transport equipment, nonelectrical machinery, tourism
19th[1]
External
Exports $3.135 billion f.o.b. (2014 estimate)
Export goods
 clothing and textiles, sugar, cut flowers, molasses
Main export partners
  United Kingdom 16.9%
 France 15%
 United States 10.1%
 Italy 8.9%
 South Africa 8.4%
 Madagascar 6.2%
 Spain 5.8% (2013 est.)[2]
Imports $5.441 billion (2014 estimate)
Import goods
 manufactured goods, capital equipment, foodstuffs, petroleum products, chemicals
Main import partners
  India 24.3%
 China 14.7%
 France 8.2%
 South Africa 6.2% (2013 est.)[3]
Public finances
$5.7 billion (61.4% of GDP) (2014 estimate)
Revenues $2.797 billion (2014 estimate)
Expenses $3.263 billion (2014 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.

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 and gypsum products and services sector (financial and non-financial).

With a well-developed legal and commercial infrastructure and a tradition of entrepreneurship and representative government, Mauritius is one of the developing world’s 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 island’s 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 WEINERS
  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]

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 country’s 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 International’s Corruption Perceptions Index for 2011, third in Africa. Mauritius is one of Africa’s 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:

Macroeconomic statistics

Name Source Year Notes Ref
GDP (PPP)
International Monetary Fund 2012 GDP (PPP) is $20.200 billion
World Bank 2012 GDP (PPP) is $19,245,631,329
The World Factbook 2012 GDP (PPP) is $20,950,000,000
GDP (PPP) per capita
International Monetary Fund 2012 GDP (PPP) per capita is $15,591.974
World Bank 2012 GDP (PPP) per capita is $14,902
The World Factbook 2013 GDP (PPP) per capita is $16,100
GDP (PPP) per person employed
World Bank 1990-2010
The World Factbook 2012
GDP (nominal)
United Nations 2012 GDP (nominal) is $10,086,649,093
International Monetary Fund 2013 GDP (nominal) is US$11.930 billion
World Bank 2012 GDP (nominal) is $10,486,037,634
The World Factbook 2013 GDP (nominal) is $11.9 billion
GDP (nominal) per capita
United Nations 2012
International Monetary Fund 2013 GDP (nominal) per capita is US$9,159.681
World Bank 2012
The World Factbook 2013
Gross national income (Atlas method) World Bank 2012 Gross national income is US$11,070 million
GNI per capita (Atlas method and PPP) World Bank 2012 Average national income (PPP) of US$8,570 per person/Year

Household income or consumption by percentage share:

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 m3/d) (2003 estimate)
21,000 bbl/d (3,300 m3/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

Exchange rates: Mauritian rupees per US dollar - 30.12 (26 March 2014), 30.99 (1 February 2010), 32.86 (2006), 29.14 (2005), 27.499 (2004), 27.902 (2003), 29.962 (2002), 29.129 (2001)

See also

Notes and references

  1. ↑ "Doing Business in Mauritius 201". World Bank. Retrieved 2012-10-22.
  2. ↑ "Export Partners of Mauritius". CIA World Factbook. 2013. Retrieved 2015-05-11.
  3. ↑ "Import Partners of Mauritius". CIA World Factbook. 2013. Retrieved 2015-05-11.
  4. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Milo Vandemoortele and Kate Bird 2010. Progress in economic conditions in Mauritius: Success against the odds. London: Overseas Development Institute

 This article incorporates public domain material from websites or documents of the CIA World Factbook.

External links


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