Mauritius - Economy

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The influence on the economy of Sir Robert Farquhar, the first British governor, only waned 168 years after his departure from Mauritius. Farquhar realised the value of an export-oriented economy but encouraged a reliance on one export only: sugar. It was not until 1985 that sugar was displaced as the country’s main foreign-exchange earner by the manufacturing sector.

The reliance on a one-crop economy meant that the prosperity of Mauritius depended on the world demand for sugar and on home climatic conditions. When both were favourable, Mauritius benefited.

This is what happened in the early 1970s when economic growth averaged 9% per year. The standard of living improved visibly; new houses were built of concrete blocks and electricity served 90% of the island’s dwellings. However, the pace of economic advance slowed as the sugar boom fizzled out.

The salvation was the Export Processing Zone (EPZ) set up in 1970 to attract foreign, as well as to encourage local, investment. According to the 1995 report of the Chamber of Commerce, ‘The EPZ which has been the main engine of growth for a decade is giving way to an economic growth supported more and more by local demand.’ The report noted that, from a macro-economic point of view, there was an urgent need to reduce consumption and increase savings and investment. This was based on the observation that ‘new shopping centres with modern concepts have been well received by the population. Their immediate success is evidence of the aspirations of the population for better services and greater choice.’

Inflation, which was 14.5% in 1981, dropped to 6.7% in 1985 and was running at 3.5% in March 2012. Unemployment, which reached 19% of the registered workforce in 1983, was at 7.5% in 2011. Unemployment hardship relief of just Rs220 per month is available to the registered unemployed, who are actively seeking work. Since the 1990s Mauritius has had to import labour from abroad, mainly from Taiwan and Sri Lanka, for the construction and textile industries.

The challenge for the Mauritian economy is to look for new areas which can drive economic growth. Although sugar, textiles and tourism are likely to remain important, new avenues are opening up which take advantage of Mauritius’s greatest natural asset: its skilled and multi-lingual workforce.

Offshore banking , pharmaceuticals, communications and information technology have already started to gain a foothold and it is perhaps these new industries that will direct Mauritius’s economic development over the coming decades. It is already in a strong position: Mauritius is considered a relatively stable, peaceful democracy, has attracted considerable foreign income and has one of the highest per capita incomes in the African region.

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Mauritius - Economy

Mauritius - Economy

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Mauritius - Economy