Touted as the gateway to Asia and Africa, the Republic of Mauritius’ small size (720 sq mi) understates its importance to the Indian Ocean region as a secure constitutional democracy and exemplary economy that claims control of approximately 1.9 million sq km of Exclusive Economic Zone (EEZ).
Mauritius has one of the most successful and competitive economies in Africa. The bold economic reform program first implemented in 2005 to counteract the erosion of trade preferences helped Mauritius’ economy evolve into the top ranked country for doing business in Africa for 2008 and 2009, according to the World Bank’s Doing Business Survey. The government says it will continue to open up the economy, facilitate business, improve the investment climate, and mobilize foreign direct investment (FDI) and expertise in hopes to be among the top ten countries in the world for ease of doing business.
The reforms have resulted in a strong and balanced growth across all sectors of the economy and have spurred foreign investment to unprecedented levels. In three years, since July 2005, Mauritius received close to $700 million of FDI, more than the FDI inflows of the preceding 20 years. The reforms have also enabled Mauritius to build enough economic resilience to cushion the adverse impact of the international financial and economic crisis.
In 2008, Gross Domestic Product (GDP) was close to $8 billion, with a GDP growth rate of 5.2% and a per capita income of $7,000. Over the past two decades, real output growth averaged 5.3% per year, which led to the per capita income more than doubling and social indicators significantly improving. The economy is based on tourism, textiles, sugar, and financial and business services. In recent years, Information and Communications Technology (ICT), seafood, hospitality and real estate development, healthcare, and education and training have emerged as important sectors, attracting substantial investment from both local and foreign investors.
The United States and Mauritius enjoy an excellent bilateral relationship that largely revolves around trade. In 2006 the United States and Mauritius signed a Trade and Investment Framework Agreement aimed at strengthening and expanding trade and investment ties between the two countries. Negotiations on a Bilateral Investment Treaty are expected to start in 2009. Mauritian products that meet the rules of origin are eligible for duty-free entry into the U.S. market under the African Growth an Opportunity Act (AGOA).
The United States is Mauritius’ third largest market but ranks 12th in terms of exports to Mauritius, behind India, China, France, South Africa, Japan, U.K., Italy, Germany, Spain, and Malaysia. More than 200 U.S. firms/brands are represented in Mauritius through agent, distributor, licensing or joint venture relationships. About 30 of them have offices in Mauritius serving the domestic and/or the regional market, mainly in IT, fast food, express courier, freight forwarding, hotel management, and energy sectors. Currently, the best prospects for U.S. exports to Mauritius are in food products (including grains and seeds); renewable energy; port equipment; agricultural machinery and supplies; construction equipment, materials and services; cold chain equipment and training; hotel management services; IT and telecommunication products and services; healthcare equipment and services; pharmaceuticals; and consultancy services.
The location of Mauritius, situated in the Indian Ocean between Africa, Asia, and Australia, offers a successful business base for both regional and international trade. U.S. companies can use Mauritius as a platform to tap regional markets through Mauritius’ membership in the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), and the Indian Ocean Commission (IOC), which offer preferential access to a market of more than 400 million consumers. Mauritius also has a free trade agreement with Pakistan and is in the process of finalizing a Comprehensive Economic Cooperation and Partnership Agreement with India. Mauritian products also enjoy duty- and quota-free access to the European Union. Mauritius has Double Taxation Avoidance Treaty with 33 countries in Europe, Asia, and Africa. Many U.S. corporations use the Mauritius offshore financial center to channel their investments to India.
The business climate is friendly yet extremely competitive. The majority of consumer demand is price sensitive. Distribution of goods is uncomplicated given the small size of the island. Mauritius has a long tradition of private entrepreneurship, which has led to a strong and dynamic private sector. Firms entering the market will find a well-developed legal and commercial infrastructure. Mauritius has a well-developed digital infrastructure and offers state-of-the-art telecommunications facilities including international leased lines and high speed Internet access. The government policy is to act as a facilitator to business, leaving production to the private sector. The government, however, still controls key utility services directly or through parastatals, including electricity, water, waste water, postal services, and broadcasting.
