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Growth, Debt and Competitiveness in Small Economies

Growth, Debt and Competitiveness in Small Economies. The case of MAURITIUS Ali Mansoor Financial Secretary . Economic Situation at Independence Mauritius was among the least developed economies in the world :. Low per capita income : USD 200

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Growth, Debt and Competitiveness in Small Economies

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  1. Growth, Debt and Competitiveness in Small Economies The case of MAURITIUS Ali Mansoor Financial Secretary

  2. Economic Situation at Independence Mauritius was among the least developed economies in the world : • Low per capita income : USD 200 • Agricultural and monocrop economy : Sugar >91% of total fob exports • Labour: high unemployment (>16%) and low labour productivity • Education: Very poor enrollment rate secondary education • Quality of Life: low standard of living, poor access to water, electricity and decent dwelling • Demography: high population growth (>2%), low life expectancy (61 male; 66 female) and high infant mortality rate (64) • Infrastructure: poor quality road networks, administrative buildings, communication network, provincial airport

  3. ECONOMIC DIVERSIFICATION

  4. Evolving Development Strategy

  5. Mid 2000s: Fundamental Shift & New Development Paradigm1. INCOME GENERATION: INVESTMENT AND GROWTH • Fiscal Reforms /Consolidation • Low flat income tax rates of 15% • Removed discretionary power of Minster of finance to remit custom duty and excise duty • Tax expenditure reforms • Indexation of non tax revenue • Broadened tax base: (solidarity levy on bank, telecom. Sector; extension of environment protection fee to new items, levy on SMS); • Improved tax Administration • Programme Based Budget (PBB) • PFM Reforms • Debt Management : New Public Debt Management Act

  6. Mid 2000s: Fundamental Shift & New Development Paradigm1. INCOME GENERATION: INVESTMENT AND GROWTH (cont) • Ease of Doing Business • Investment facilitation • Greater openness/attracting foreign capital, skills, talents, expertise, ideas • Labour Market Reforms • From job protection to worker protection • Flexibility • Workfare Programme • Institutional Reform • Operatinalisation of MRA (2006) • MRA regional office in Rodrigues • Public Enterprise Reforms • Statistics Mauritius • Setting up of Office of Public Sector Governance • Setting up of Public Procurement Office • Establishment of Monetary Policy Committee (2007)

  7. Mid 2000s: Fundamental Shift & New Development Paradigm2. Social • Arts & Culture • Promotion & Development of artists via grants, training, and festivals • Partnership with private sector to preserve heritage • Solidarity • Targeted social safety nets • Social housing • Education & Healthcare • CSR (1 percent of profits but used by firm within National Priorities) • Empowerment Programme • National Empowerment Fund(NEF) targets the highly vulnerable • Training programmes in Literacy & Numeracy, and Life-skills • Special programme for re-training of unemployed women • Integrated Social Development (Housing) Programme:

  8. Mid 2000s: Fundamental Shift & New Development Paradigm3. Environmental Sustainability • Maurice Ile Durable • Reducing energy consumption • Leveraging renewable sources: Solar, Wind, Ocean-based • Incandescent bulbs replaced with CFLs (1 Million to date) • Government subsidy for solar water heaters • Bus modernisation scheme • Replacement of fleets with energy efficient and less polluting buses • Street & Traffic light replacement • Large scale composting for agriculture

  9. IMPACT OF REFORMS DESPITE DRAG FROM GREAT RECESSION

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