{"id":12761,"date":"2022-04-01T08:09:28","date_gmt":"2022-04-01T08:09:28","guid":{"rendered":"https:\/\/www.africa-press.net\/mauritius\/all-news\/mauritius-drives-to-diversify-as-manufacturing-stalls"},"modified":"2022-04-01T12:22:28","modified_gmt":"2022-04-01T12:22:28","slug":"mauritius-drives-to-diversify-as-manufacturing-stalls","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/mauritius\/all-news\/mauritius-drives-to-diversify-as-manufacturing-stalls","title":{"rendered":"Mauritius drives to diversify as manufacturing stalls"},"content":{"rendered":"

Africa-Press – Mauritius. <\/strong><\/span>Next to the motorway, heading north from Mauritius\u2019 international airport, is a row of boxy apartment blocks festooned with washing hung out to dry. These are the cramped dormitories of thousands of foreign textile workers, the majority from Bangladesh.<\/p>\n

The hostels, which also house workers from Madagascar and Nepal, illustrate a dilemma for Mauritius. As the economy has grown more successful, wages have risen sharply, forcing manufacturers \u2014 at least those in labour-intensive industries \u2014 to either relocate abroad or import cheap labour.<\/p>\n

At its peak in 2000, manufacturing made up more than 21 per cent of the island\u2019s GDP. That proportion has since halved to 10.7 per cent, according to the World Bank.<\/p>\n

That is partly because other industries \u2014 notably financial services \u2014 have expanded, producing what economists consider a beneficial diversification of the economy. But it also reflects what some say is the manufacturing sector\u2019s inability to move sufficiently quickly up the value chain.<\/p>\n

\u201cWhen you look at other countries like Singapore, Malaysia and Thailand, they also started with textiles but they moved upmarket into higher-value addition and a more diversified range of products including electronics,\u201d says Vinaye Ancharaz, an economic consultant and expert in manufacturing.<\/p>\n

Somehow, he says, Mauritius never quite made that leap. These days many textile manufacturers can only survive in Mauritius by employing lower-wage workers from abroad. Others have decamped to Madagascar.<\/p>\n

Minimum wage legislation has pushed up local pay: unemployment, partly a result of a mismatch of skills, has jumped from 6.7 per cent three years ago to above 9 per cent.<\/p>\n

\u201cBangladeshis are doing us a big service,\u201d says Ancharaz.<\/p>\n

\u201cThey are doing jobs that Mauritians don\u2019t want to do, not only in textiles but also in the seafood industry and even in construction, sectors that have been abandoned by Mauritians.<\/p>\n

\u201d Mauritius\u2019 economic take-off was built on manufacturing.<\/p>\n

Even in the final years of British rule, when the island\u2019s economy was almost totally dependent on sugar exports, the government sought to catalyse a manufacturing sector.<\/p>\n

Import-substitution policy used tariff barriers to protect local producers, thus encouraging the manufacture within the country of essential goods, from margarine to toilet paper.<\/p>\n

The island\u2019s small population \u2014 about 1.3mn \u2014 limits economies of scale. To be more competitive, the government opened export processing zones, offering various tax, credit and other incentives.<\/p>\n

This enabled textile manufacturers to import cotton and fabric duty free and to export finished garments. \u201cThe good thing about textiles is it requires low-skilled labour, which we had in abundance,\u201d says Ancharaz of those early days.<\/p>\n

Gradually, manufacturers began to source fabric locally and to make more sophisticated products, including highly priced knitwear. \u201cWe got more and more immersed into the textile industry and that inhibited diversification,\u201d says Ancharaz.<\/p>\n

In recent years, he argues, too much foreign direct investment has gone into luxury property and not enough into productive investment. Ken Poonoosamy, chief executive of the Economic Development Board of Mauritius, says there is more to the manufacturing sector than its detractors suggest.<\/p>\n

He points to other areas, including fish processing (mainly tuna canning), jewellery and medical devices, as evidence that industry has not stood still.<\/p>\n

Natec Medical, based in the island\u2019s high-tech Ebene business park, about 10km from the capital, Port Louis, is a leading producer of stents and balloon catheters.<\/p>\n

This is a niche area that, Poonoosamy says, benefits from Mauritius\u2019 commitment to good infrastructure, a business-friendly environment and free tertiary education.<\/p>\n

Fred Swaniker, a Ghanaian entrepreneur who opened the campus of the African Leadership University on the island, testifies to Mauritius\u2019 ease of doing business.<\/p>\n

\u201cThey really rolled out the red carpet,\u201d he says.<\/p>\n

\u201cThis was a country that was serious about attracting foreign investors .<\/p>\n

.<\/p>\n

. I didn\u2019t see that anywhere else on the continent.<\/p>\n

\u201d Swaniker argues that the development of the island rests on its continued openness to skilled labour.<\/p>\n

\u201cTo really drive the next phase of economic development they need to let in a wave of immigrants,\u201d he says, recalling similar policies in Singapore.<\/p>\n

\u201cThe population is ageing and, without increasing the size of the workforce, it will be harder to raise GDP.<\/p>\n

\u201d Poonoosamy acknowledges the limitations of size but says one of the island\u2019s biggest competitive advantages is its market access.<\/p>\n

\u201cWe are one of the countries that have made the most benefit out of Agoa,\u201d he says of the African Growth and Opportunity Act, that enables tariff-free access for many Mauritian goods to the US.<\/p>\n

In 2019, Mauritius became the first African country to conclude a trade agreement with China and it is a member of the African Continental Free Trade Area.<\/p>\n

Such agreements, says Poonoosamy, will allow local manufacturers to move more aggressively into new areas, including pharmaceuticals, nutraceuticals (food-based substances \u2014 for example, such as vitamin supplements and often of herbal origin \u2014 used for treating and preventing diseases) and auto-parts.<\/p>\n

Ravin Dajee, managing director of Absa Bank, Mauritius, says the island needs to reduce its current account deficit, which widened to 15.6 per cent of GDP last year from 5.4 per cent in 2019.<\/p>\n

As tourists return and as manufacturers fill order books \u2014 boosted by the weak rupee, which makes Mauritian exports more competitive \u2014 the deficit should rapidly narrow.<\/p>\n

The IMF expects a figure of 6.8 per cent this year. Dajee says manufacturing can stage a longer-term recovery, but that this should not be predicated on a weak rupee.<\/p>\n

\u201cI wouldn\u2019t want to build an industry on that basis,\u201d he says.<\/p>\n

\u201cWe want to build our competitive advantage on product quality and reliability.\u201d<\/p>\n

For More News And Analysis About Mauritius<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Mauritius. Next to the motorway, heading north from Mauritius\u2019 international airport, is a row of boxy apartment blocks festooned with washing hung out to dry. These are the cramped dormitories of thousands of foreign textile workers, the majority from Bangladesh. The hostels, which also house workers from Madagascar and Nepal, illustrate a dilemma […]<\/p>\n","protected":false},"author":84,"featured_media":12760,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,7,8,16],"tags":[233,245,241],"class_list":["post-12761","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-head-lines","category-homepage-english","category-twitter","tag-africa-press","tag-africa-press-mauritius","tag-mauritius"],"yoast_head":"\nMauritius drives to diversify as manufacturing stalls - Mauritius<\/title>\n<meta name=\"description\" content=\"Next to the motorway, heading north from Mauritius\u2019 international airport, is a row of boxy apartment blocks festooned w ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/mauritius\/all-news\/mauritius-drives-to-diversify-as-manufacturing-stalls\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mauritius drives to diversify as manufacturing stalls\" \/>\n<meta property=\"og:description\" content=\"Next to the motorway, heading north from Mauritius\u2019 international airport, is a row of boxy apartment blocks festooned w ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/mauritius\/all-news\/mauritius-drives-to-diversify-as-manufacturing-stalls\" \/>\n<meta property=\"og:site_name\" content=\"Mauritius\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2022-04-01T08:09:28+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-04-01T12:22:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/mauritius\/sites\/61\/2022\/04\/img-6246ee67275dd.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"510\" \/>\n\t<meta property=\"og:image:height\" content=\"285\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/mauritius-drives-to-diversify-as-manufacturing-stalls#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/mauritius-drives-to-diversify-as-manufacturing-stalls\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Mauritius drives to diversify as manufacturing stalls\",\"datePublished\":\"2022-04-01T08:09:28+00:00\",\"dateModified\":\"2022-04-01T12:22:28+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/mauritius-drives-to-diversify-as-manufacturing-stalls\"},\"wordCount\":930,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/mauritius-drives-to-diversify-as-manufacturing-stalls#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/mauritius\/sites\/61\/2022\/04\/img-6246ee67275dd.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Mauritius\",\"Mauritius\"],\"articleSection\":[\"all news\",\"economy\",\"head lines\",\"homepage-english\",\"twitter\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/mauritius\/all-news\/mauritius-drives-to-diversify-as-manufacturing-stalls#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/mauritius-drives-to-diversify-as-manufacturing-stalls\",\"url\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/mauritius-drives-to-diversify-as-manufacturing-stalls\",\"name\":\"Mauritius drives to diversify as manufacturing stalls - 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