Economy of the Mauritius

Mauritius has traditionally been an agriculture-based economy. Recent years have however seen the country undergo diversification in its economic activities, particularly going into various industries such as tourism, textile and apparel, and export processing.

In the early 70s Mauritius embarked on the promotion of tourism and the establishment of export processing zones to create more jobs for its population and jumpstart its economy. While it succeeded in providing employment opportunities to its citizens, it also suffered labor problems since the export processing zones were tolerated in practicing unfair labor practices. This led to a host of other labor-related concerns such as lack of health and social benefits for many of the country’s workers.

The country’s economy suffered a backlash in the late 70s when oil prices increased and the balance of payments deficit steadily skyrocketed, reaching a high of US$111 million. To aid its ailing economy, the country availed of assistance from the International Monetary Fund and World Bank.

The Mauritian economy picked up in the succeeding decade as it benefited from increased domestic savings, lowered inflation, and high employment rate. Also garnering momentum was the export processing zones, which posted the best figures and employed the biggest number of workers in the country. The said sector had then outperformed traditionally proficient sectors such as sugar cane production. The economy also got a boost from the tourism boom, as tourists came in droves, and hotels and related infrastructure were established.
Today, the economy of Mauritius is one of the most dynamic and promising in the African continent. In 2000,

a comprehensive competitiveness report ranked it number 2 out of 24 African countries. Its economy grows at an average annual rate of 5% to 6%. In 2005, the gross domestic product of the country was approximated at $16.28 billion for 2005, which is the next best in Africa behind Equatorial Guinea.

The driving force of the economy is manufacturing, as industrialists from all over the world have come to the country to harness its vast natural resources. As mentioned earlier, export processing zones is the country’s largest employer and the main source of foreign exchange. Some of the more popular products from this sector include goods such as clothes, electronic items, books and magazines, and plastic products.

A traditional source of income for the Mauritian economy is sugar cane production, which totals at least a quarter of the country’s export earnings. Though it undertook a massive hit in sugar cane production in 1999, Mauritius has successfully lured foreign investments to spur more trade in the said sector. The economy has also been boosted by the financial sector, which has contributed at least $1 billion in investments.

Another emerging sector that is contributing substantially to the economy is the Information and Technology field. The Mauritian government is focusing on speeding up the establishment of necessary infrastructure to connect more and more households to Cyberspace, and in effect make the country a “Cyber Island”. As this field continues to emerge stronger and more dynamic, expect the economy of Mauritius to become more vibrant in the coming years.

Mauritius is one of the most famous offshore country, thousands of clients establish a company there for asset protection, tax saving, privacy.

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