In the face of the world's most severe crisis, Mauritius has managed to come out relatively unscathed with a reasonable growth rate estimated at 2.8% for 2009 and approx 4.3% in 2010.
MAURITIUS HAS announced its fifth annual budget for the year 2010. The major highlights were as follows:
* Shaping recovery to accelerate job creation
* Consolidating social progress to embed inclusive growth
* Sustaining Green Mauritius to mitigate the impact of climate change
In the face of the world’s most severe crisis, Mauritius has managed to come out relatively unscathed with a reasonable growth rate estimated at 2.8% for 2009 and approx 4.3% in 2010. The Mauritius financial service sector has performed relatively well despite the global economic downturn and is expected to grow at nearly 6% this year. ICT and IT-enabled services have grown significantly becoming a larger GDP contributor than sugar. The textile industry regained its buoyancy after four years of despair when it slashed its output by some 35% and shed some 40,000 jobs. The sugar industry metamorphosed into a successful cane industry to reclaim its role as a significant pillar of the economy. Employment creation has been expedited and the unemployment rate is descending. The number of tourist arrivals is expected to pick up in 2010.
Mauritius has successfully been able to attract more than Rs 6 billion in FDI in just 9 months. The total FDI for 2009 is projected to reach approximately Rs. 9 billion by the year end. In addition, planned investments of Rs. 30 billion in a national infrastructure programme that includes significant new funding for roads, airports, ports and freight infrastructure, telecommunications, higher education and public health, would provide important business opportunities for the construction industry as well as private equity firms and other professional service providers.
To further attract FDI and strengthen the traditional and new sectors, a number of measures have been announced. The Government has announced the introduction of a Law of Foundation to give the necessary boost to the Mauritius International Financial Centre. In addition, relevant Mauritian authorities have been mandated to seek equivalent jurisdiction with leading financial centres to expand the scope of the Mauritian financial platform and to market its products globally.
To allow the ICT-BPO industry to surf the next wave of value-addition and sustain its organic growth, the Government has announced a ‘Work from Home BPO Scheme’, an increase in bandwidth and reduction in the price of telecom as well as a ‘Technopreneurship Programme’ which aims at providing support to young graduates and entrepreneur in the technology sector to develop technology products for the global market.
Emphasis has also been placed on the development of the Creative Industry, not only to promote artistic talent but also the development of appropriate infrastructures.
The innovative and homogenized tax reforms adopted since 2006 tax policies removed 36,000 individual income earners out of the tax net with only 7 per cent of the working population paying tax. The same reforms have lowered the tax burden of some 25,000 persons when the maximum personal income tax rate was cut from 30%to a flat 15%. Also, two special bands of income tax have been created for the elderly with an additional deduction of Rs. 45,000. Having one of the lowest tax rates in the world has been a powerful competitive edge to attract businesses, investments and talents to Mauritius. To ensure fairness, tax administration has been firmed up as a result of which tax evasion has been reduced.
Global issues such as climate change and sustainable development are also an integral feature of Mauritius’ development model. Significant sums have also been earmarked for renewable energy and energy efficiency projects, including green buildings and sustainable eco-villages. Furthermore an important public investment feature relates to upgrading of water supply systems.
Another attribute of the development paradigm is the emphasis on empowering women. Strong measures are also directed at setting out bold social policies targeting increased women participation in employment. The actions of the Empowerment Programme, initiation of gender budgeting, doubling the pace of job creation for women, creating new facilities to support them and the number of women who have received training for jobs and support for entrepreneurship are a few examples to enhance the role of women in the country.
The 2010 National Budget intends to better the lives of each and everyone participating in the progress of Mauritius. For salary-earners and small business owners, measures such as the ability to work from home, the training opportunities and the National Empowerment Fund incentives directly improve their working conditions. Investments in new road and transportation networks, security, public healthcare and education, social housing and pensioners among others, will positively affect the quality of life of all residents. Investors benefit from the greater productivity and business facilitation environment that make Mauritius a better place to live, work and play.
The IMF is now estimating a smaller contraction in world output of 1.1% in 2009 and a 3.3% growth in 2010. The United States, Japan, and most of the Euro area countries will have positive output growth in the second half of this year. GDP in China and India are forecast to expand by 9% and 6.4% in 2010, respectively. The economies of Africa are expected to grow by 1.7%in 2009 and 4% in 2010. World trade volume which is estimated to contract by 12% this year is forecast to expand by 2.5% next year. Clearly, 2010 will be the year of the global economic recovery. For Mauritius, there is manifestly a return to the trend growth path. The Central Statistical Office (CSO) is predicting a growth rate of around 2.8%for 2009 and 4.3% for 2010. By 2011, it is expected that the economy will return to its growth path of 5% and higher.
