About the Mauritian Economy
Over the last three decades, Mauritius has grown from a monocrop economy based on sugar into a diversified structure around several economic pillars. This transformation came about through the combination of three main forces, notably the deeply rooted acceptance of the market-orientated economic model, the strong attachment of its people to democracy and the hard work of its resourceful and energetic people. This led to the gradual opening of the economy, leveraging intelligently upon its competitive advantages, and ultimately to a period of sustained solid GDP growth.
Mauritius, having been an important beneficiary of protected trade regimes, has suffered from the setting up of the new world trade order. As a result, growth clearly slowed in 2005 showing a mere 2.3%, with weaker private sector investment (-0.8%) and rising unemployment (9.6%). The challenge which the country now faces has not come as a surprise. Over the past decade, the groundwork has been laid to move the economy toward more knowledge and skill intensive activities and higher value added financial and business
services. Successive governments have been implementing Mauritius’ vision for its future, restructuring and downsizing sugar and textiles, putting in place enabling legislation for offshore financial services, and drawing investmentinto the IT sector. Major investments have been undertaken in education, transport, and environmental infrastructure. Going forward, the country is pursuing a multi-pronged development strategy based on a liberal and open investment policy in order to achieve sustained economic growth in a fast globalising world economy.
The key elements of the strategy are:
- Consolidation of traditional sectors (textile and sugar);
- Development of emerging sectors, namely: ICT, Business Process Outsourcing, the seafood hub, the land-based oceanic industry and real estate;
- Development of the financial services sector in a services hub in the Indian Ocean;
- Consolidation of the hospitality sector with air access liberalisation and dynamic marketing.
Alongside this, appropriate legislations are being set up to facilitate the opening-up of the economy to foreign investors through:
- Permanent residence and occupation permits;
- Increased length of business visas;
- Accelerated process of work permits and visas;
- The establishment of foreign law firms;
- Access to local property by foreigners.
Government is aware that competition is tough to entice international investment and tax rates need to be attractive internationally. Various measures have been taken and are already attracting additional global entrepreneurs and investors, which will consequently move the economy into its new development phase.
On the international front, Mauritius has built up a good reputation and is highly ranked by international agencies such as the Organisation for Economic Cooperation and Development (OECD), the Financial Task Force (FATF), the International Monetary Fund (IMF) and the World Bank. The country has developed its reputation as a well-regulated, serious and credible economic centre. Mauritius has concluded a number of Investment Promotion and Protection Agreements (IPPAs), safeguarding investors’ assets and investments along with fiscal advantages through Double Taxation Avoidance treaties.
On the regional front, Mauritius is a member of the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), the Indian Ocean Commission (IOC) and the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC).
Additionally, Mauritius aspires to be the channel for trade and investment between Africa and Asia in the coming years. Given its geographical location, its extensive Double Taxation Avoidance network and its cultural ties to both continents, Mauritius is ideally positioned to become the new economic hub of the region.
