World Bank: Skills, Innovation and Regional Integration Key to Foster More Inclusive Growth in Mauritius

July 2, 2015

WASHINGTON, July 2, 2015 — The World Bank issued today the Mauritius Systematic Country Diagnostic aimed at analyzing the country’s most critical constraints and opportunities in accelerating progress toward the goals of ending extreme poverty and promoting shared prosperity in a sustainable manner.

“I’m glad we have reached such an important milestone in our work in Mauritius. The SCD is a public document and its findings inform future World Bank work in Mauritius, notably the preparation of the institution’s upcoming operational plan for the next six years, called the Country Partnership Framework (CPF). I want to encourage interested parties to read this report and share their feedback with us, including during the consultations for the preparation of the CPF,” said Mark Lundell, World Bank Country Director for Mauritius.

Mauritius has been a success story since independence, moving from low income to upper middle-income status. However, the country’s economic model has been showing signs of distress, associated with the loss of preferential trade access, negative terms of trade, and growing international competition in low cost industries. The Country’s GDP growth has slowed, employment creation remains subpar, and growing inequality is slowly eroding the standard of living for the poor and the most vulnerable. As a result, the middle class has shrunk during the last five years, and some are vulnerable to falling back into poverty.

The SCD identifies a number of important social and economic challenges facing the country and proposes a prioritization based on relevance, impact and timeline needed to help Mauritius successfully pursue its development ambition of reaching high-income status in the next five years. The SCD concludes that, in the short term, the country needs to accelerate economic growth and employment by unlocking sector-specific constraints to boost domestic investments and employment generation; improving trade facilitation to augment potential for export of services, such as ICT and tourism, and to absorb job losses in traditional sectors; and improving the quality and quantity of the skilled workforce. In the medium to long term, the country could work on building a more competitive economy centered on higher valued-added sectors, through innovation policies and labor market institutions; improving governance in utility companies by establishing sustainable tariffs, and increasing investments to sustain quality of services; and investing in the quality of education in general.

“Mauritius is at a crucial juncture in its economic trajectory. The country needs a new growth model that is knowledge-intensive and supported by strengthened skills. The right inputs for this transformation include adequate skills, improved infrastructure, and increased investment and know-how. These need to be combined with a conducive environment that provides adequate incentives in terms of labor market institutions, innovation policies, sustainable infrastructure, and public services,” said Rafael Munoz, World Bank Senior Economist and lead author of the SCD.  

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