From monocrop to innovation driven industries

Mauritius has achieved spectacular economic transformation over the last five decades. Dominated by the sugar cane industry, Mauritius was, however, able to diversity its economy with the conception of other sectors post independence.

Ramen Mootooganagen, Senior Lecturer in Finance and Accounting at the University of Mauritius provides a detailed description of how the country rose from its knees to turn into a developing country, but there are also a couple of downsides.

“The Mauritian economy has witnessed drastic changes since its Independence in 1968. At that time, the progress of the economy was very poor, as it depended largely on the cultivation of sugarcane. Most of our people were employed as labourers in the sugar cane fields.

But over time, it was found that there were few job opportunities outside the sugar sector. This is where lots of difficulties cropped up, leading to a high level of unemployment. There was a need to find ways and means to develop the economy and to bring more jobs for the population.

That was the main challenge of the successive governments:  To reduce the level of unemployment and at the same time to eradicate poverty. The industrialisation of our economy in the 1980s has been a blessing to the problem of unemployment and also for the emancipation of women in our society.

Since then, the Mauritian economy has kept on improving and it is an undeniable fact that even the remarkable success of Mauritius is recognised worldwide. One of the great developments, which is at the base of our success, is also free education.

Indeed, we should be thankful to all governments for this opportunity given to all children in Mauritius. The educated population that we are today has enabled the country to make enormous progress in different sectors such as manufacturing, banking, offshore, financial services, ICT, and so on.

However, there is still room for improvement and progress in different sectors of our economy,” explains Ramen Mootooganagen, Senior Lecturer in Finance and Accounting at the University of Mauritius.

New scopes emerge in the 1970s

Indeed, the attempt to bring new scopes in the economy emerges in the 1970s. The then Prime Minister Sir Seewoosagur Ramgoolam launched the “Import Substitution Industries” plan, which was a program to encourage local entrepreneurs to manufacture in Mauritius, namely products such as soap, toothpaste, soft drinks, paint, gloves and boots, even though these same products were being imported at that time.

The goal of reducing our imports and saving foreign exchange while creating jobs was largely achieved. Mauritius was thus one of the first developing economies to embark on the creation of a free zone in 1970.

Industrialisation in the 1980s

The 1980s, on the other hand, saw the development of the industrialized sector. Large influx of Hong Kong, Singaporean, Indian and Pakistani investors consolidated this sector, especially textiles.

Under the prime ministership of Sir Anerood Juganuth, industries mushroomed rapidly thanks to the many incentives this sector offered. During these years, the Mauritian women also became important actors in the economic development.

No longer confined to their traditional roles, women played a major part by working in the Export Processing Zone. In addition, tourism started to flourish, as newly constructed hotels absorbed unemployment and further diversified the economy.

Financial Services in the 1990s

In the 1990s, the Financial Services sector helped in boosting the country’s economy, following the launch of the Mauritius Stock Exchange in 1988. Global Business took off and the banking and insurance sectors flourished alongside.

Major transformations in 2000s

The 2000s saw other major transformations, namely with the coming of the Financial Services Commission and the emergence of niche sectors such as the Sea Food Hub. In November 2003, as part of its policy of economic diversification and its strategy to strengthen the fishing sector, the government, led by Paul Bérenger as prime minister, was committed to make Mauritius a world renowned Seafood Hub.

With an exclusive Economic Zone (EEZ) of more than two million square kilometers, sophisticated infrastructure, modern port facilities and a favourable and friendly environment for business, this sector quickly became a growth engine and one of the mainstays of the Mauritian economy.

During the same decade, the authorities came up with the real estate sector as a source of massive foreign investment. The development of the cyber city in Ebène and the emergence of the ICT/BPO sector in the landscape helped in employing tens of thousands of people.

In 2002, the program “Integrated Resources Scheme” (IRS) was launched. The real estate sector would be further consolidated by Dr. Navin Ramgoolam, the new Prime Minister who took over in 2005, with the launch in 2007 of the “Real Estate Scheme,” which wants to be a mini-IRS.

Other real estate projects such as Shopping Malls or Business Parks were being encouraged, as well as the expansion of the airport, the extension of the sewage system and the development of the special economic zones, although delayed. There were also the “Medical Hub” and the “'Knowledge Hub.”

Smart Cities in mid 2015

In the last eight years, new promising sectors also emerged, such as the renewable energy and further consolidation of the real estate sector with the advent of Smart Cities in 2015. On the infrastructure side, there is also the Road Decongestion Program (in force since 2008) and state investments in public buildings.

We also talk about biotechnology, Fintech, the Shipping Hub, the State Ocean, the film industry, among others. There is now the 2030 vision. The current Prime Minister Pravind Jugnauth has launched the Metro Express, a 30-year-old project.

He has also transformed the country into a vast business enterprise, with several projects for roads, interchanges, public infrastructures, improved water supply, hospitals and port facilities.

But what are the current, major challenges in the economic sector? “The world is witnessing many changes which are creating lots of challenges. Mauritius being an open economy has no alternative than to move in the same direction and needs to be prepared. One of the most important challenges is to ensure sustainable employment not only for people holding high academic qualifications but most importantly for unskilled people.

This is a major issue, as it is a fact that unemployment obviously leads to social crises such as poverty and insecurity. Another major aspect of our economy that requires consideration is the environmental problems and climate change. The government will have to address this issue by taking proactive initiatives such as strict rules and regulations to protect the environment and education campaigns,” declares Ramen Mootooganagen.

According to the Senior Lecturer, the tourism sector, one of the major pillars of our economy, depends largely on environment factors. “There should be a change in the mindset of people, too. Consolidating our economy should not be a concern for the government only.

All stakeholders have a moral responsibility to ensure its success. Developments will not occur without efforts and the economy demands more initiatives from Mauritians as individuals. One way to consolidate our economy is to exploit the entrepreneurial sector,” he explains.

Ramen Mootooganagen states that as challenges await us in the future, we need to focus on further developing some other sectors in order for our the economy to keep flourishing.

“We need more research and innovation such as financial technology. In addition, new sectors need to be developed, such as the blue economy and marine resources. We also need to develop new competitive advantages such as renewable energy and the sea hub.”

Female Participation in the Economy

According to the latest report published by the National Productivity and Competitiveness Council (NPCC), which highlights salient features about the current situation, best practices used globally and presents strategies as well as an action plan to improve the participation of women in the economy, currently of both national and global interest.

Entitled “Promoting Female Participation in the Economy”, the report indicates that in most countries, including Mauritius, female unemployment is rampant leading to an under-utilisation of human resources, thereby impacting productivity and growth.

For instance, women outnumbered men in the unemployment population during the first quarter of 2017. The 44,300 unemployed people in Mauritius counted more females (26,600) against males (17,700) during that period.

Challenges ahead

“The Government is committed to transform the economy into a high income country by 2023, with an income per capita of around USD 13,600 against the current level of USD 9,740. Nonetheless, a number of factors weigh on longer-term growth prospects and competitiveness, including, amongst others, structural headwinds to global trade, slowing productivity growth, governance and institutional challenges and the feeble participation of women in the economy,” highlighted the chairman of the NPCC, Mr. Sanjiv Mulloo, in his observations in the report.

Female stereotypes

The study for the report was the first to be carried out on the ‘Engaging Citizens Online’ (ECO) platform launched by the NPCC in May 2017. Besides the ECO platform, various activities were organized such as focus group discussions and meetings with ministry representatives, Non Governmental Organisations (NGOs) and civil society in an effort to gather data relevant to the study.

The information gathered was used to develop the action plan to promote a healthier participation of Mauritian women in the economy. The report examines different elements that impede female participation in the Mauritian economy, for instance, cultural barriers and provides an overview of the presence of women in different areas including education, politics and society.

For example, the ECO Platform recorded that 51% of respondents believe that Government does not provide enough programmes to respond to the needs of women. The report found that Mauritius remains a deeply patriarchal society. Cultural norms and stereotypical beliefs about women’s and men’s place in society remain the biggest hurdle for women’s entry in the economy.

No motivation

Indeed, it was found that 43% of women in Mauritius prefer not to work if the workplace is far from their residences and 59% of women would not want to form part of the labour force if they have a husband who is earning enough for the family.

The report further indicates that the conventional business career path poses particular difficulties for women with family responsibilities, who nevertheless wish to advance professionally and that there is a remarkable difference between the wages of men and women in Mauritius.

The survey in fact reveals that 50% of respondents are of the view that women lack skills and competencies to be marketable in the labour force. It was also found that in the education arena, the cultural and stereotypical gender roles still have a great impact on young women’s choices for their study areas.

They tend to go for the type of education that fits the accepted norms. In tertiary enrolments, females are higher than their male counterparts but they enroll in stereotypical ‘female’ fields that represent an extension of their traditional roles. The report states that the pathway for women in leadership roles is highly questionable in Mauritius.