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Mauritius Overview

    Context

    Mauritius covers a surface area of 2,040 square kilometers with an estimated population of 1.3 million and a population density of 635 individuals per square kilometer. With a population growth rate estimated at 0.4%, official projections show that Mauritius will soon face the ageing population syndrome (the population 60 years of age and over is projected to increase from 9% in 2000 to 23% by 2040). Ethnically, the country is made up of a majority of people of Indian descent and individuals of African, European and Chinese descent. The spoken languages are English, French and Mauritian Creole.

    Political context:  

    Mauritius enjoys a relatively stable political landscape. The country has a multiparty parliamentary democracy. The President is the Head of State while the Prime Minister has full executive powers and heads the Government. The Mauritius Labour Party under the leadership of the current Prime Minister Dr. Navinchandra Ramgoolam, won the general elections of May 2010 and formed a coalition government with the Parti Mauricien Social Democrate (PMSD) and the Mouvement Socialiste Militant (MSM).  The next legislative elections will take place in 2015.

    Economic context

    Mauritius is considered an upper middle income country with a gross national income (GNI) per capita at US$9,227 (2013). The poverty rate, whether measured as relative poverty, absolute poverty, or with respect to food poverty, is low (8.7% when using the relative poverty measure, which is low compared to the average in Sub-Saharan Africa). Despite its small size, regional variations in poverty exist in Mauritius, with incidence of relative poverty higher in urban areas.

    The Mauritian economy is still performing reasonably well. Growth in 2013 was 3.2% and 3.3% in 2014, revised downwards from the 3.8% forecast in the 2014 budget, due to contraction in textile and construction sectors. Overall the macroeconomic policies are supportive of sustainable growth at current rates, although fiscal consolidation may need to be accelerated further to meet Government’s debt-to-GDP target of 50% by 2018.

    Monetary policy is supporting economic growth given stable inflation at 4.3% and the need to stimulate domestic demand. A relatively large current account deficit is comfortably financed by financial flows and Foreign Direct Investments. The current account deficit has widened to an estimated 9.1% of GDP in 2013. While exports of goods are performing well, tourism earnings are declining

    The country is ranked high in terms of competitiveness, investment climate and governance. The World Economic Forum’s global competitiveness index ranked Mauritius at 45 out of 148 countries in 2013-2014, ahead of all African countries. It topped the 2014 Mo Ibrahim Index of African Governance. Mauritius has solid economic fundamentals and high standards of governance and a business friendly environment (ranked 20th globally in the 2014 World Bank Doing Business report).

    The remarkable performance of the economy is attributed to sound economic governance, accelerated reforms to sustain long-term growth and effective State-business relations. These factors together with timely and targeted responses helped Mauritius to weather the negative effects of the global crisis.

    Development Challenges

    Mauritius has a successful development record, but many challenges remain. The external shocks demonstrated the heavy reliance of the economy few sectors and markets. However, Mauritius is not yet ready to fully take advantage of the global re-balancing of export markets. It is not yet well integrated in the production chain and final markets of those countries which are bound to increase domestic absorption (particularly in Asia).

    The main challenges of the country are the:

    • Infrastructure system - mainly in terms of road congestion and water delivery;
    • Scarcity of skilled human resources due to limited capacity to reform the traditional education system, the country’s brain drain and the limited ability to make use of the large diaspora community; and
    • Large and relatively inefficient public companies and parastatals.

    Mauritius is set to accelerate the reforms to diversify the economy, both in terms of climbing the value chain and reorienting exports toward emerging markets. Reforms with regards to trade barriers, education and infrastructure will be crucial to achieve this. Moreover, the acceleration of fiscal consolidation is essential to achieve substantial efficiency gains in the budget and ensure effective expenditure in priority areas, most notably, by strengthening the social safety net system to cope with the poverty impact of a potential downturn which would fuel unemployment.

    Last Updated: Oct 10, 2014

    LENDING
    Mauritius: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Strategy

    The World Bank Group Country Partnership Strategy (CPS) establishes a framework for World Bank Group engagement in Mauritius until 2013. The Progress Report of the CPS provides the context and rationale for the proposed WBG program for the remainder of the CPS period which has been extended to FY2015.  The CPS, which was prepared in close coordination with the European Union, was structured around the government’s four pillars of reform: (i) fiscal consolidation and improving public sector efficiency; (ii) improving trade competitiveness; (iii) improving investment climate; and (iv) democratizing the economy through participation, inclusion and sustainability. The mid-term review of the CPS last year provided an update on recent developments in Mauritius including the impact of the global economic recession and reports on progress in implementing the CPS. While the objectives of the CPS remain relevant and aligned to the country’s development agenda the programs have been adjusted to respond to the changing global environment. The WBG is currently engaged with Mauritius authorities in the updating process of its strategy for Mauritius. The official consultation process to that effect has begun for the preparation of the Systematic Country Diagnostic (SCD), which will inform the preparation of the next strategy for the WBG in Mauritius.

    World Bank Lending and Non-lending

    The Bank's role in Mauritius is evolving, reflecting the country's past success in gaining access to capital markets. Because of its relatively high income, Mauritius is one of only a few African countries eligible for International Bank for Reconstruction and Development (IBRD).

    The World Bank assists Mauritius in implementing a series of reforms to raise the effectiveness of its public sector and support private sector competitiveness. Some of its support include the recent series of Development Policy Lending (DPL) operations for US$20 million and US$15 million. The Bank is presently engaged in the provision of an investment loan of around US$50 million for road investment and technical assistance in infrastructure projects including water, energy, sanitation, transportation and food protection, and in the preparation of a new DPL series to support private sector competitiveness, as well as in the preparation of a new investment loan to improve road safety and asset management in the transport sector.

    The World Bank lending has been complemented with just-in-time technical and analytical support on a variety of topics including infrastructure, review of public expenditure, health, tourism, education, social protection and poverty, public enterprises and civil service reforms, finance, diaspora, and institutional strengthening with the government. A number of knowledge and technical assistance products are in the pipeline related to monitoring and assessment of poverty and inequality.

    Last Updated: Oct 10, 2014

    LENDING
    Mauritius: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Results

    The Bank has a very strong partnership with Mauritius, a middle-income high performer country which has implemented a series of major reforms to diversify the economy and respond to external shocks over these past years, with the support of a series of World Bank development policy loans (DPLs) and investment lending projects. Results have been encouraging. While Mauritius is an example of a country which has embarked on a successful developmental journey, the rising international competitiveness and a volatile external environment call for sustained reforms. With a facilitation from the World Bank, Mauritius has emerged as an exporter of “how to reform” expertise to peer African governments but also as an importer of inbound knowledge services in selected areas of their reform program. Facilitating these knowledge transfers is an important part of the work of the World Bank Office. 

    Last Updated: Oct 10, 2014

    LENDING
    Mauritius: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Partners

    The World Bank has been actively engaging with other partners in Mauritius, including local and international ones. One such example of close collaboration has been visible during the preparation of the World Bank CPS, which included very close collaboration with European Union and other partners, as well as in the preparation and delivery of DPLs. As the World Bank Group embarks in the process of revising its strategy with the recent consultation for the preparation of the SCD, it has been systematically engaging with partners and the society in general. 

    Last Updated: Oct 10, 2014

Country Office Contacts
Main Office Contact
+230 203 2500

In Mozambique:
Rafael Saute
Sr. Communications Officer
+258-21-482-944

Av. Kenneth Kaunda, 1224
Maputo, Mozambique

rsaute@worldbank.org
In Washington:
Thomas Buckley
Country Program Coordinator
+1-202-473-0075

1818 H Street NW
Washington, DC 20433

tbuckley@worldbank.org