Mauritius - Industry



Mauritius's so-called "economic miracle" is largely due to the growth of the manufacturing sector since the inception of the EPZs. The EPZs attracted significant investment from abroad as foreign companies looked for cheaper locations for production. The reduction in unemployment experienced by Mauritius over the last 20 years can generally be attributed to the rapid growth of the EPZs.

The EPZs offer duty-free imports, lower tax rates, subsidized rates on electricity and other utilities, access to credit, favorable transport costs, and institutional support facilities.

Clothing and textiles still form the mainstay of Mauritian industry and dominate the EPZ sector. Mauritian clothing and textiles are competitive, both in terms of price and quality, in foreign markets such as Europe, United States, Japan, Australia, South Africa, and Scandinavian countries.

Growth in the EPZ sector has been slowing since the early 1990s, however, in terms of employment, new investment, and the number of enterprises operating in the sector. Most of the capital in the EPZs is now locally-owned, reflecting declining foreign interest. This is partly due to the fact that wages have risen as a result of full employment, and this in turn has pushed up production costs. Many Mauritian clothing and textile companies are re-locating to cheaper production locations, notably to the nearby island of Madagascar, with which it shares a common language (French) and, to some extent, culture. The focus is also shifting towards high fashion garments as competition in the global market becomes stiffer.

The Mauritian government is also trying to promote a shift towards more high-tech industries, such as electronics, software development, and light engineering. As of the late 1990s, however, Mauritius had not been able to attract the level of foreign investment into these sectors that it had been hoping for. Other industries in Mauritius include food processing (mostly sugar milling), chemicals, metal products, transport equipment, and non-electrical machinery.

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