Mauritius: The Singapore of Africa
It is a tall order to claim that Mauritius is already the Singapore of Africa. Mauritius is synonymous with an African success story but not yet part of tiger-land. It is more of an African cub-tiger "that still sleeps at four"; however, it is gradually acquiring the wherewithals to achieve its ambition to accede to the exclusive club of the East Asian tigers that include - Singapura, the lion city.
PART I
Let us first of all examine in what sense Mauritius is an African success story.
In terms of overall performance, Mauritius has now a per capita income of around US $ 3,600. Translated in PPP terms, it amounts to $ 9,400 which positions Mauritius 44th globally and first in Africa.
Exhibit 1
Overall Performance:
Real GDP per capita 1998 | (US$) |
Mauritius | 9,400 |
Sub-Saharan Africa | 1,430 |
Other top African performers - Botswana | 8,310 |
South Africa | 6,990 |
Gabon | 6,660 |
Uganda | 1,170 |
Over a span of some 25 years, real growth averaged 6% per annum, one of the highest anywhere in Africa. And over the period 1995-1998, only 5 African countries experienced an annual per capita GDP growth well above 3%. Mauritius although with a higher base is one of them.
Exhibit 2
Growth rates:
Real GDP per capita growth rates, 1995-1998 | % |
Mauritius | 3.3 |
Sub-Saharan Africa | |
Ethiopia | 3.1 |
Mozambique | 6.3 |
Rwanda | 12.8 |
Uganda | 5.1 |
Our inflation rate has come down from 10.5% in 1993 to 6.1% in March this year. We expect the annual inflation rate to edge down to a still lower figure by the end of the fiscal year, in June. After peaking at 47% in 1994, annual inflation in Sub-Saharan Africa is still in double-digit figures.
The Budget deficit is manageable at 3.2% of GDP whereas for much of Sub-Saharan Africa it still exceeds 4% of GDP. Among the top performers of Africa, only Uganda does better than us.
Exhibit 3
Inflation & Budget deficit
| Inflation rate % | Budget deficit as % of GDP |
Mauritius | 6.9 | 3.2 |
Sub-Saharan Africa |
| 4.3 |
Other top African performers - Botswana | 6.9 | 3.3 |
South Africa | 7.0 | 5.0 |
Gabon | 2.0 | 4.1 |
Ghana | 14.6 | 6.3 |
Uganda | 5.8 | 0.6 |
On the international side, our current account balance over the last 3 years has hovered around -2% to 2% of GDP. The stock of foreign reserves is sufficient to cover six months of imports. External debt stocksare relatively low at 30% of GDP.
Exhibit 4
Other macroeconomic indicators
| Current account balance as % of GDP | External debt as % of GDP |
Mauritius | -2.5 | 30.0 |
Sub-Saharan Africa | -4.6 |
|
Other top African performers - Botswana | 2.5 | 10.5 |
South Africa | -1.2 | 19.3 |
Gabon | -6.6 | 92.0 |
Ghana | -3.7 | 73.6 |
Uganda | -10.2 | 53.6 |
You would recall that Mauritius topped the list of African countries in the Africa Competitiveness Report, 1998. The overall competitiveness was compiled by the Swiss-based World Economic Forum on the basis of an average of six indices: openness to trade and investment, government, finance, labour, infrastructure and institutions. Mauritius excels in openness, bank lending policies and standards of the banking sector and its telecommunication infrastructure.
Exhibit 5
Africa Competitiveness Report, 1998
| Competitiveness ranking | Openness ranking | Telecom. infrastructure ranking |
Mauritius | 1st | 1st | 1st |
Other top African performers - Botswana | 3rd | 8th | 2nd |
S. Africa | 7th | 11th | 5th |
Lesotho | 10th | 3rd | NA |
Ghana | 9th | 5th | 8th |
Uganda | 14th | 9th | 11th |
Mauritius outperforms most of the African countries in terms of investment. It has one of the lowest resource balance, implying that Mauritius has been able to mobilise domestic resources to fund most of its investment needs.
Exhibit 6
Saving & Investment
| Gross Domestic Saving | Gross Domestic Investment |
| As % of GDP | |
Mauritius | 24 | 28 |
Sub-Saharan Africa |
| 21 |
Other top African performers - Botswana | 45 | 26 |
South Africa | 17 | 16 |
Gabon | 48 | 26 |
Ghana | 10 | 24 |
Uganda | 8 | 15 |
Mauritius has one of the most developed information and communication networks. It outclasses most African countries in terms of competitive communication costs. Mauritius has leapfrogged to the information highway to realise the transformation to a knowledge-based economy.
Exhibit 7
Information & Communication Network
| Phone lines | Average price per call | Personal computers | Internet hosts |
| Per 1,000 people | US$ per 3 mins. call | Per 1,000 people | Per 1,000 people |
Mauritius | 162 | 5.85 | 31.9 | 1.84 |
Sub-Saharan Africa | 14.3 | 11.62 | 6.1 | 0.9 |
Other top African performers - Botswana | 48 | 6.06 | 6.7 | 1.58 |
S. Africa | 100 | 5.04 | 37.7 | 30.67 |
Gabon | 32 | NA | 6.3 | NA |
Ghana | 4 | 4.7 | 1.2 | 0.15 |
Zimbabwe | 15 | 8.2 | 6.7 | 0.24 |
Tunisia | 64 | 6.47 | 6.7 | 0.02 |
Uganda | 2 | 9.29 | 0.5 | 0.1 |
PART II
With such an outstanding performance in the region, it was no surprise that Mauritius was upgraded to the premier league. Mauritius was thus included in the Global Competitiveness Report where it was ranked 29th out of 59 of the world's most competitive economies. Singapore kept its position as the world's most competitive economy despite the fall-out from the Asian crisis, the United States moved one place to second while Hong Kong came third. With Singapore racing ahead at breakneck pace leaving us stranded far behind, it is understandable that we are somewhat reticent to lay claim to being the "Singapore of Africa".
But we do share some common characteristics. Both nations have
Exhibit 8
¨ A peculiar cocktail of races, cultures and religions;
¨ A belief in the strength of the family system providing a firm base for thrift and educational success
¨ A limited resource base and small size;
¨ Visionary leaders;
¨ Small pro-business government; and
¨ A diversified and resilient economy.
While Singapore had in Mr Lee Kuan Yew a lucid and powerful intellect, Mauritius had the father of the nation, Sir Seewoosagur Ramgoolam, a consummate democrat. Under their respective stewardships Mauritius and Singapore have had one of the best records of being lifted from poverty to modern-middle class life.
Like Singapore which came out of the devastating Asian financial whirlwind quite unbattered, Mauritius was able to weather the recent drought, showing the extent of diversification and underlying resilience of our economies.
Let us now try to consider how much of catching up Mauritius will have to do to accede to tiger-land.
Outperforming most of the countries of the African Continent, our reasonable performance of 5.7 % pales into insignificance when compared to the likes of Singapore, Hong Kong and a recent newcomer to this premier league, China.
Exhibit 9
Overall performance
| Real Growth Rate (% - 1990-98) | GNP/Capita (US$ ) | ||
|
| 1970 | 1997 | Increase (Times) |
Mauritius | 5.7 | 240 | 3,870 | 16 |
Singapore | 8.7 | 925 | 32,810 | 35 |
Thailand | 8.4 | 195 | 2,740 | 14 |
Hong Kong | 5.6 | (NA) | 25,200 | (NA) |
S. Korea | 7.2 | 270 | 10,550 | 39 |
Malaysia | 8.7 | 370 | 4,530 | 12 |
Indonesia | 7.6 | 75 | 1,110 | 15 |
The relative high weight of agriculture in our economy could have impinged on the pace of transformation to a broader base, high skill manufacturing and services sector. As a service economy we are well behind Singapore and Hong Kong where services made up two-third and four-fifths of output respectively.
Exhibit 10
Structure of output
| Agriculture | Industry | Services |
| As % of GDP | ||
Mauritius | 9 | 33 | 58 |
Singapore | 0 | 35 | 65 |
Thailand | 11 | 40 | 49 |
Hong Kong | 0 | 16 | 84 |
S. Korea | 6 | 43 | 51 |
Malaysia | 12 | 47 | 41 |
Indonesia | 16 | 43 | 41 |
In terms of our savings and investment performance, we are plodding far behind struggling to attain a 25 % and 30% rate respectively.
Exhibit 11
Saving & Investment
| Gross Domestic Saving | Gross Domestic Investment |
| As % of GDP | |
Mauritius | 24 | 28 |
Singapore | 51 | 33 |
Thailand | 36 | 40 |
S. Korea | 37 | 37 |
Malaysia | 37 | 38 |
Indonesia | 34 | 33 |
Our skill structure shows that we have marked time in graduating to more high skill, greater value added activities and our continuing dependence on low skill exports.
Exhibit 12
Skill structure
| Skill structure of manufactured exports | |
| Low skill | High skill |
Mauritius | 95.0 | 5.0 |
Singapore | 12.1 | 87.9 |
Thailand | 56.7 | 43.3 |
Malaysia | 21.4 | 78.6 |
Moreover Mauritius is still burdened by a cumbersome welfare system as opposed to the anti-welfare mentality of East Asian states. The motto of Asian Governments comes from Herbert Spencer, a British intellectual of the late nineteenth century, who wrote that "the ultimate result of shielding man from the effects of folly is to fill the world with fools". The absence of the sort of protection from life’s hazards, that people in most countries have come to expect, has created strong and resilient economies and societies Exhibit 13
PART III
Mauritius is a tiger in the making. It has a vision and the necessary strategies/policies to operationalise this vision. It is laying down the appropriate framework to join the exclusive club of Newly Industrialised Economies.
The Vision Statement
Once we got the economy on the right track and having tackled some of the short term constraints and bottlenecks, we began to recognise that excessive preoccupation with short term issues had led to the neglect of measures essential for sustainable long-term improvements in national welfare. There was a general consensus to take stock and prepare a National Long Term Perspective Study (NLTPS) for a better future.
Let us all zoom to year 2020 and take a snapshot of our vision statement. Mauritius 2020 is one where the population enjoys a standard of living which compares well with the most successful nations in the world, with a real GDP per head three times as great as in 1997.
Beyond 2000: The Vision Exhibits 14, 15 & 16
¨ Mauritius is a thriving, competitive and modern society, where the population enjoy a standard of living, which compares well with the most successful nations in the world
· It is the region's leading centre for international financial services, including banking, insurance and other financial services - secure, efficient, convenient and a pleasant place in which to do business.
· It has a liberal, well-regulated telecommunications service and world standard information technology infrastructure.
· Mauritius is an essential node in the variety of international network flows. These well-established networks enable Mauritius to create its niche in international profit bearing flows.
· It has an adaptive and flexible education system promoting the concepts of multidiscipline and professionalism.
· It has preserved its fragile ecological balance through integrated land use and coastal zone management.
·
|
· Mauritius frames its aspirations in terms of quality rather than quantity.
The short and medium-term strategies that will ensure the link-up to this long-term agenda.
But Vision 2020 is a future that begins now. We have a vision of the economy in terms of its future opportunities and challenges. Actions are needed now. We have thus also developed a short to medium -term "National Strategy for Sustainable Development" to build up the pillars that will bridge us to the Mauritius we wish to see in 2020.
And more importantly we need a Global state of mind Exhibit 17
Global state of mind
Think globally to acquire competitive rather than comparative advantage
Our institutions and economic operators will have to think globally
- in international relations, in diplomacy, in marketing, etc.
- a winning globalisation strategy
- Acquiring the crucial market and political knowledge ahead of rivals, building the best contacts and positioning for advantage will be the main elements.
Regional co-operation
Mauritius has no choice but to be a regional player. We have broadened our economic space beyond our frontiers. There are promising opportunities for our private businesses for growth and diversification in neighbouring countries. Mauritian businesses are taking advantage of these opportunities to enhance their comparative advantage and know-how by being present in the region in a number of key sectors, such as textile manufacturing, agro-industries, tourism, airline services, telecommunications and banking.
Our Government even encourages outward investments through a special incentive scheme called the Regional Development Certificate (RDC). Under the RDC scheme, Mauritian companies that hold at least 35% equity in a regional development project, (the regional groupings of which Mauritius is a member) are entitled to certain financial and fiscal incentives Exhibit 18.
Our leitmotif at the level of regional co-operation is that "the nation-state solution assumes a zero sum game for limited resources. The region-state model, opened to the global economy, is plus sum as prosperity is brought in from without." Kenichi Ohmae –The End of the Nation State
The diamond of competitiveness performs better in conditions generated by regional exchange in a borderless world.
Exhibits 19 & 20
Concluding remarks
We are the Mauritius of the Indian Ocean. If you want to call us the Singapore of Africa we accept it willingly. We are making every effort to catch up with Singapore despite being still pole apart. Let me conclude with the Oscar Wilde, the well-know British essayist, who said about America "Of course America has already been discovered before. In the past it has always been hushed up." As it is with pre-Columbus America so it is with modern-day of Mauritius. We keep being called the Singapore of Africa. Every time Mauritius has t be rediscovered all over again and again. Now that you know who we are and how do we do things around here. When you go back do spread the word around that things are happening in Africa and Mauritius is very much at the forefront.
