Emerging Economic Sectors in Mauritius

1 January 2017

We are now exploring possibilities of producing energy locally with renewable sources as far as possible. Ebene was formally just a sugarcane field is seeing the emergence of new town where many foreign businesses have outsourced some of their operations, giving rise to very important BPO sector. Developments are coming that extract the full potential of our marine resources with the introduction of land based oceanic industry and other projects to make best use of our marine resources. Also diverse enterprises have emerged in the entertainment field.

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Mauritius is positioning itself as a medical hub with the arrival of medical institutions like the Apollo Hospital and other institution in the biotechnology and biomedical field. Theses few emerging sectors are detailed below. LAND USE Three quarter of the Blue planet is covered with water and the 6 billion people around the world live on the remaining land surface, which is approximately 140 million km?. For several decades, owing to the rising world population, our land resources are constantly under pressure to supply the increasing demand for the basic needs.

Our land resources are fragile and non-renewable. They include soil for agriculture; land cover for the environment and landscapes which are important for human habitat and wellbeing. Since 1945, an estimated 1. 2 billion hectares of land worldwide have been moderately or strongly degraded as a result of human activity, implying that its productivity has been significantly reduced. Human activities can produce a diverse range of both harmful and beneficial impacts on the quality of land.

Agriculture is one example; whilst it can lead to soil erosion, salination of soils through irrigation, and nutrient depletion, on the other hand it may also act as a sink for greenhouse gases, and prevent flooding and landslides if good management practices are applied. The effects on the environment of land use are usually complex especially in a country like Mauritius where agricultural practices are confined to mono culture dominance: e. g. sugar cane. Mauritius is a densely populated small island developing state with a limited high quality area of land (out of total area of 185,000 ha) suitable for effective development.

This natural resource is therefore, under high pressure due to increasing demand for development by the various sectors of the economy. Mauritius is one of the most densely populated, agricultural islands in the world having 16% built-up space and growing at a rate of 1000 ha of residential space every year. The island of Mauritius covers some 186 500 ha of land of which 43% or 84 000 ha is estimated to be under agriculture. Of this proportion, some 77 000 ha or 39% of total land mass is under sugar cane.

Other significant land uses include forest and shrubs (estimated at 57 000 ha or 30%) and built development including roads and utilities (about 43 000 ha or 26%) (Source: National Development strategy, 2003) Management of land resources in Mauritius is presently at the cross-roads. Focus on the following policies; have been emphasized in the future land management strategies: • Judicious use of land by avoiding incompatible land uses. • Awareness on self-regulating measures by different land demanding authorities • Well planned strategy on tourism development in light of limited eco-tourist landscape and coastal land resource. Adoption of principle of common sharing amongst all utility authorities and to provide different services in a rational manner. Tourism Sector – Hotels Construction Tourism, third pillar of the economy after the E. P. Z. manufacturing sector and Agriculture, contributes significantly to economic growth and has been a key factor in the overall development of Mauritius. In the past two decades tourist arrivals increased at an average annual rate of 9 % with a corresponding increase of about 21% in tourism receipts. In 2000, gross tourism receipts were 14. 2 billion rupees (508. 3 million US $) and contributed to about 11 % of our GDP.

The National Tourism Policy emphasizes low impact, high spending tourism. Selective, up-market, quality tourism is favoured, and although such tourism is not the only type, it constitutes the major segment of our tourists who stay in high class hotels. In 1997, there were 87 hotels with a total capacity of 6,800 rooms and 14,100 bedplates. With the construction of new hotels, this will facilitate accommodation of new visitors, thus creating new employments Integrated Resort Scheme: A good example of innovative thinking on the part of policy makers in Mauritius was the introduction of the Integrated Resort Scheme (IRS) a few years ago.

Under this scheme, non-Mauritian individuals or companies are entitled to purchase luxury villas and other residential properties on the island. The property owners then receive a residence permit (and consequently the tax benefits associated with living in Mauritius). Properties under this scheme are sold at a minimum price of USD 500 000. Aside from the injection of foreign capital and the immigration of skilled business people to Mauritius, the programme has provided a very welcome boost to the construction industry (and consequently employment) in the country.

According to Sewraj Nundlall, assistant director, of Manufacturing Agri-Business Energy and Environment at the Board of Investment of Mauritius (BOI), 20 projects with an investment potential of around Rs 100 billion have already been approved. International property developers from UK, South Africa, and France have been investing in the projects and over 300 villas have already been sold out. The majority of the buyers come from France, UK, India and South Africa. One company which has very successfully marketed properties under this scheme is Pam Golding Properties.

Jonathan Tagg, managing director of Pam Golding Properties in Mauritius says, “the first IRS [the Tamarina Golf Estate and Beach Club development] is sold out. We are currently involved with an IRS development called Matala and with villas starting at USD 850 000 we have seen good sales and we expect that should take around one year to be sold out. ” When questioned about the effects of the global economic crisis on sales he said “the market has slowed down from the highs of 2007 and early 2008 but we continue to see clients investing in Mauritius where there is little supply and property prices continue to climb.

We feel the market will take another 18 months to two years to reach the highs of 2004 – 2007 where sales moved very quickly but we are optimistic that sales will continue to be steady. ” The IRS has been so successful that the government has innovated further and subsequently introduced the Real Estate Scheme, which unlike other government schemes designed to encourage inward investment, sets no minimum purchase price for foreign buyers. Agricultural Sector At the time of independence in 1968, Mauritius inherited a monocrop economy based on sugarcane.

The country had to spend a large part of the revenue obtained from the export of sugar to import its food requirements, mainly rice, flour, pulses, chicken, beef, onions and milk products. However, apart from flour, all the other food items mentioned could be produced partly or even totally in Mauritius. Thus, imports could be reduced and foreign exchange saved. For this reason, the government decided to diversity our agriculture. Agricultural diversification in Mauritius Agriculture diversification means: producing crops and livestock that were not being produced so far • producing crops and livestock, other than the main ones in larger quantities. In Mauritius, the government decided that diversification should not be at the expense of sugarcane, i. e. sugarcane should not be replaced, even partly. But other crops such as potatoes and maize and livestock should be produced in larger quantities and new crops introduced (e. g. anthurium). The government offered a number of incentives to farmers to ensure the success of the diversification programme: • agricultural credit, i. e. inancial loans from bank • a subsidy on the price of certain commodities • a guaranteed price was offered for some commodities • facilities were made available to livestock breeders. After nearly 20 years, it can be said that Mauritius has succeeded in a certain measure in its diversification program. Today the country is more than 33 % self-sufficient in its food requirements. Mauritius has derived many advantages from its agricultural diversification programs. These advantages are: • imports have been reduced and foreign currencies saved • employment has been created our dependence on sugar has been reduced • the country has become self-sufficient in certain commodities • new crops help to earn additional foreign currencies. When a country depends too much on one single crop, it runs certain risks. If the crop is severely affected by adverse weather conditions, pests and diseases or low market prices, the country may face an economical crisis. RENEWABLE ENERGY Shifting to renewable energy is becoming more & more important for Mauritius as we are very much dependent on imported petroleum products.

As per latest statistics (Source – www. gov. mu ) in year 2007 Mauritius produced 82% of its energy from Petroleum products or coal which are imported. This has a very heavy burden on the Mauritian Economy as very high imports of fuel have a negative effect on the Balance of Trade. Moreover, as the international reserves in petroleum products is expected to be depleted in a few decades, the price of petroleum products is expected to rise drastically in the future predicting more and more pressure on the Mauritian economy.

Apart from the economic aspects, there is also the ecological issue, we are all concerned with global warming and its consequences, being an island Mauritius is amongst the first countries affected by the rising sea level. All the above concerns have made the Mauritian Government engage in increasing the share of renewable and local sources in our energy production. Bagasse energy With the help of incentives from the Government, the Sugarcane industry has engaged in the diversification of its activities to use bagasse together with coal for the cogeneration of electricity.

There has been the centralisation of activities to a few major factories who use bagasse and coal for energy production , theses units have an agreement with the Central Electricity Board which allows them to sell all energy produced in excess of their own use to the CEB at a predefined rate. The firms in the sugarcane industry are allowed to raise tax free debentures for the generation of electricity from bagasse and the modernisation of their factories. These firms who invested in such systems were entitled to refund of export duty payable.

All these incentives have increased production of electricity with bagasse making it the number one source of local and renewable energy at nearly 17% of electricity production in 2007. The action plan for 2006 to 2015 (Source – Sugarcane for energy production in the future by Dr G Rajpati, Executive Director, Mauritius Sugar Authority, July 2006) is to fully tap the energy potential of the sugarcane plant. This includes doubling the production of electricity from bagasse from 300 GWh to 600 GWh, for this research is being carried out for the production of higher fibre cane.

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