November 1, 2017

Mauritius: An Agenda for Development & Growth

India and Mauritius have nurtured a very special relationship for decades – a relationship that keeps growing from strength to strength.

Mauritius as you may know has come a long way as a small island nation. We have diversified our economy significantly from a sugar based mono-crop economy since independence on the 12th of March 1968 to a modern service economy only two decades later. Today, as we stand at the dawn of the 50th anniversary of our independence we also stand proud of our achievements.The helping hand of India has been significant in achieving this progress. We could not have reached to where we are now without the help of friendly nations and India has always been by our side.

Since Independence, our country has had to weather many storms and even black swan events. But we have against all the odds raised the standard of living of our people through free education to one and all. All along we have seen our relationship with India grow and evolve – from one which was centered on cultural cooperation in the early days of independence to one that became more and more focused on economic cooperation in the eighties and late nineties.

And now with Prime Minister Modi I can say that the relationship between our two nations is extending to areas like technology, innovation, digitalisation and also to coming together to reach out to Africa. In fact, Indo-Mauritian relations have never been so deep and so strong. India, as has been the case all the time, still strikes a very emotional chord in the hearts of Mauritians.

On the other hand, we are very happy to see that India is now one of the most prominent players on the world economic and political front. The world around us keeps changing very fast. Just a few years ago we were talking about globalisation and free trade and all the good that it meant to the whole world. Many countries like Mauritius were condemned to adapt. We have changed our development paradigm to become more open to trade, to investment and to foreign expertise when under pressure to join the free trade we totally liberalised our trade and economy. In fact, Mauritius is almost a duty-free island now. And we are among the most liberalised economies in the world. When Reaganomics and Thatcherism swept the world, we deregulated extensively. Today, we fear that the world may go back to the policies of the sixties and seventies where protectionism was the order of the day.

One cannot help but think that it was the protectionist policies of the then developed countries, in particular their hostile attitude to manufacturing products from developing countries – that had stifled the industrialisation efforts of countries in Africa, Latin America, and also Asia.  And this includes countries like India, Brazil and Mauritius amongst many others.

Today we must seriously ask ourselves whether these days will be back. And if they are back – how will the world order unfold in the next few years? Looking at the world today, retrospectively to the start of the great recession, with the benefit of hindsight, we can seriously put into question the ability of traditional fiscal and monetary policies to take economies out of recessions and put them on a recovery path.

Is the fear of deflation behind us? There are so many questions that need to be answered so that we can as policy makers make the right choices and implement the right policies.  But there are also so many events at the geopolitical level, the rise of terrorism and even normal political events that are resulting in surprises that development considerations are fast moving to backstage.

Mauritius is nevertheless doing its very best to adapt.  We are a small nation – what we would call a price taker and not a price setter. I have decided that the next lap of our development will have to be innovation driven. We are fast losing our competitiveness against the low wage export platforms and our global competitiveness will therefore be determined by our ability to innovate.

We also realise that we are experiencing a demographic shift in our country that will constrain our development. The fertility rate is falling and our population is ageing fast. This means that our population will start decreasing in the coming decades. With an already exiguous domestic market we are condemned to be an export dependent nation, unlike countries like India that can also leverage its domestic market to fuel growth.

That is why we are pursuing policies to broaden our economic space through a New Africa Strategy and the Ocean Economy. The new Africa Strategy opens a market of some 1 billion people and with good prospects for growth in the future. This is an endeavour that we know we will not be able to do alone. We are expecting the collaboration of India and Indian investors for mutual benefits.

And as regards the Ocean Economy, it opens up some 2.3 million square kilometers of maritime economic space. In fact, Mauritius has one of the largest exclusive economic zones in the world. This offers immense opportunity for long term and even very long-term development. In fact, our ocean economy, including our seafood hub, fisheries, port activities and tourism already contributes around 10 percent to our GDP.

We are also investing massively in infrastructure because we believe that such investments will bring in hefty dividends in the medium and long-term. Thanks to support from India we will have a sophisticated light railway system to modernise our public transport system. And we are also investing to transform our port into a maritime hub for the region, expanding our airport capacity, and extending our road networks.

There will thus be vast opportunities for further strengthening ties between our two governments, our entrepreneurs and investors and indeed our nation. The rapid conclusion of CECPA negotiations is of high priority to our two nations.

I hope that India will continue its march to greatness and to continue in its endeavour to shape a better world for all of us. Mauritius has made its choice under my Prime-ministership – India is our strategic partner. Thank you India.

*This article is a summary of the speech delivered by Shri Pravind Kumar Jugnauth,
Prime Minister of Mauritius at the civic réception hosted in his honour by
India Foundation at New Delhi on 27th May, 2017.

(This article is carried in the print edition of November-December 2017 issue of India Foundation Journal.)


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