Mauritius - Domestic policy



Although inflation was under 5% in 2000 and 2001, unemployment had been on the rise since the early 1990s (when it was under 3%) to more than 9% in 2001. The budget deficit had also grown considerably, up from about 4% of GDP in 1999–2000 (July-June) to 6.5% in 2001–02. Jugnauth promised to improve these numbers. Even though the country's traditional sugar, textile, and tourist industries have steadily improved, there is speculation that such older industries have peaked in their ability to create jobs and wealth. Upon taking office, Jugnauth began to investigate ways the Mauritius economy could participate in information and communication technology (ICT). Accordingly, the government created a development agency, Business Parks of Mauritius Ltd. (BPML), to develop business and ICT parks in the country. Construction began on a pair of projects—a business park in Rose Belle and a cyber city at Ebene—in late 2001. International software firms and training companies had been contracted to locate in these facilities. India confirmed in 2003 that it has agreed to set up a biotechnology center within Mauritius.

Whether or not the new vision for a Mauritius cyber-future succeeds, the government must prepare for upcoming changes that could have grave effects for the island's working public. The population is aging while fertility is dropping, which threatens to reduce the size of the available labor pool. By the end of the first decade of the twenty-first century, Mauritius will see many of its traditional trade protections and preferences give way to the forces of globalization, liberalization, and economic integration. In December 2004, global quotas on textiles and clothing under the Multi-Fiber Arrangement (an international trade agreement that protects the textile and apparel industries in certain developed countries) will be eliminated, opening up the Mauritius textile industry to potentially lower-cost competition from other textile-exporting countries, particularly those in Asia. To lessen the effects of these changes, U.S. presidents Bill Clinton and George W. Bush supported a trade agreement to strengthen textile and apparel trade between the United States and its trading partners in Africa. This act, the U.S. Africa Growth and Opportunity Act (AGOA), may help Mauritius cope with changing trade rules after 2004.

Likewise, global trade agreements involving the countries of the European Union were projected to have a negative effect on the profits of the country's sugar industry. The Jugnauth government responded by proposing a restructuring of the sugar industry, decreasing the number of sugar mills and employees by half.

Jugnauth's government acknowledged that a well-educated and adequately trained workforce was likely to be the key to developing technology industries in Mauritius. In early 2002 the government published goals to improve education, to offer equal access to education for all citizens, to adapt education to meet the needs of the developing technology industries, and to support the educational needs of underprivileged groups. In addition, the Jugnauth government targeted health care, social development, and financial assistance as areas for government investment.

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