Q. What effect will the ongoing economic crisis in the eurozone have on the Mauritian economy in 2012?
A. We are facing a double-barrel shotgun as far as the eurozone is concerned. [In terms of our exports] 40% go to Europe, and 65% of our tourists are from there. Consumer and investor confidence will be affected by a crisis: [fewer] holidays, and [fewer] purchases by Europeans will affect Mauritius. The second threat comes from the strengthening of the US dollar against the euro. In Mauritius, we import mostly in dollars and export in euros. This could be potentially disastrous for Mauritius.
Yet we have improved our fiscal regime to make Mauritius an even more attractive investment destination. [The fundamentals of] our budget remain excellent. The budget deficit will not be more than 3.8% this year, and public sector debt will not exceed 54%. Moreover, we have a resilience fund of about $250m. This fund is designed to buttress our industries, to promote goods and services overseas, to support employment, and provide training opportunities if things get worse [in 2012].
Q. Which types of FDI are you seeking for the country and how does the government plan to reinforce investor confidence in Mauritian institutions?
A. We are not resting on our laurels. We are continuously trying to improve the business environment and further [eliminate] red tape when processing applications. We have created a level playing field [by] providing a low tax rate. We also have the rule of law [implemented] through an independent judiciary, and our last court of appeal is the UK Privy Council.
We want diversified FDI so we are actively promoting investments in our new sectors. We are keen to attract marinas, high-tech hospitals in the medical sector, secondary and tertiary education campuses and other projects in emerging sectors. We are also promoting new products such as limited partnerships in our financial services sector. Yet we cannot forget the traditional sectors, such as seafood, tourism and manufacturing, which have a lot of untapped potential.
Q. How would you assess Mauritius’ economic performance, and what role will emerging economies play in the country’s development?
A. We have performed very well. [In 2011] we achieved a growth rate of 4.1% – reasonable by our standards but excellent by many other countries’ standards. We were able to do that because some of our sectors have been resilient despite difficult economic conditions. For instance, our textiles sector grew by 8%, mainly by maintaining its market share and by diversifying into new markets. Tourism registered 4% growth, and information and communication technologies and business process outsourcing activities grew by 10%.
While giving every attention to our offering in Europe, we obviously need to follow [emerging] trends, and we are now very active in China, India and the Middle East. We are looking at [improving] air access and [attracting] tourism in these markets, as these regions will play an important role [in terms of] FDI into Mauritius.
As far as Africa is concerned, Mauritius has a very dynamic African policy and we see ourselves as adding value to any [investment] propositions in Africa. Some people may see Africa as high risk, but investing from Mauritius brings added value because we have a stable fiscal situation, a rule of law and we are bilingual – not everyone speaks French and English. All of these factors make Mauritius an ideal gateway into Africa, thus domiciling your company and having a regional office in Mauritius considerably reduces risk and facilitates investment into Africa.