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Agriculture
The agricultural sector which constitutes essentially of sugar production, has been the backbone of the Mauritian economy for more than three centuries
until the 1 980s when the manufacturing sector, comprising mainly of textile products spearheaded economic growth in Mauritius. The shift in GDP composition within a decade was remarkable: the sugar industry which
accounted for 25% in the I970s reduced its GDP share to 1 5% in the 1 980s, while the manufacturing sector GDP share grew up to 25% in the 1 980s.
The sugar sector continues to bear less importance in relative terms to both the agricultural sector and the economy as a whole. Its contribution to
national GDP in 1 999 was 3.1% whilst employment in that sector decreased to 6% of total employment. In terms of export earnings, total sugar exports currently represent 23% of total domestic exports compared to
over 70% two decades ago. The sugar industry has long benefited from guaranteed prices and preferential access into the European markets under the Sugar Protocol of the Lomé Convention. However, such preferential
treatment will gradually be eroded with increasing globalisation of trade. Furthermore, the rising cost of production fuelled by rise in labour costs remains a structural problem afflicting the sugar industry. To
enhance overall competitiveness of the sugar sector, the Government and the private sector have joined forces — efforts are underway to rationalise costs through centralisation and increased mechanisation of sugar
cane fields, a diversification programme in particular into energy production has been implemented, research for desugarisation of molasses to increase total sugar production is being currently experimented. On the
external front, the sugar industry is exporting its know-how in sugar producing countries of the region such as Mozambique, Benin, Tanzania and Ivory Coast, through equity participation or take-over bids. These
undertakings constitute a definite contribution towards consolidating economic integration of Mauritius into the region.
Manufacturing
Manufactured exports have brought about a structural transformation of the Mauritian economy. Between 1 980 and 1 990, there was a
five-fold increase in the number of EPZ companies as investors from France, Germany, Hong Kong, the Netherlands and Singapore sought the preferential access into European markets. During this period, employment in
the EPZ grew from approximately 21,000 to almost 90,000. Over the last decade the share of the EPZ sector in GDP averaged 12.3% while net EPZ exports constituted an average of 36.1% of total exports during the same
period. The manufacturing sector overall contributed 25% to GOP in 1998 of which the EPZ accounted for
50.1%. In terms of gross earnings, EPZ exports represented 72.7% of total domestic exports, remaining by far the largest gross and net foreign exchange
earner of the island. In terms of employment figures, the manufacturing sector absorbs 30% of the total workforce in 1 999, of which the EPZ sectors account for 59%.
EPZ exports have remained largely dependent on markets where Mauritius enjoys preferential access, namely the EU and the US. The competitiveness of the
textile industry will be increasingly undermined by the Iiberalisation of trade in textiles and the competitive devaluation of some South East Asian competitors. Nevertheless, the outlook for the EPZ sector in the
coming years looks positive given the favourable economic prospects in the EU, and immense opportunities under the Africa Growth and Opportunity Act.
Tourism
Since 1 988, Government’s stated policy towards tourism in Mauritius has been to emphasize low-impact, high-spending tourism, so as
to maintain the island’s up market profile, as a Iuxury beach holiday destination. The GOP contribution of the tourism sector which was 2% in mid 1 increased marginally to 3% in mid 1 980s and reached 5% in 1 998.
Tourist arrivals in mid 1 hovered over 200,000 and reached 578,100 in 1999 indicating the growing popularity of Maui as a holiday destination. The 1990s witnessed a dramatic change in the structure of tourist
arrivals by country of residence. Back in 1 990, South Africa and Reunion Island were the main m~ sources, but in 1 999, 66% of arrivals came from Europe with 30% from France. The tourism sector witnessed
significant growth rates in mid 1980s of almost 20%. In 1 998 this sector remain fastest growing sector of the Mauritian economy registering a growth rate of 6%. Gross to earnings have continued to increase since
the mid 1 980s, from Rs. 1 .8 billion in 1987 to read 13.7 billion in 1999. Direct employment in the tourism sector in 1999 was 3.4% of total workforce.
Business & Financial Services
The modernisation of the onshore financial sector through financial liberalisation, the sustained efforts of Government to widen the pool of financial
institutions, and the establishment a offshore sector and stock exchange have elevated the Business and Financial Sector to the rank of engine of growth and significant contributor to National Income. The necessary
synergy bets the sub-sectors is being created to generate more value-added. Over the past six years the business and financial services sector (comprising of the banking, insurance, capital market, offshore other
financial intermediaries components) has witnessed annual growth rates averaging This sector overall contributed 13.2% of GOP in 1999 with the banking sector contributing dir 9% to GDR The direct contribution of
offshore services is estimated at 2-3 % of GDP, while c employment in that sector has been estimated to over 1 000. However, the indirect benefits c offshore sector are more important though not easily quantifiable.
The WTO meeting on trade in financial services held in Geneva in November 1 998, marked a proactive stance in Mauritian policy orientation as regards
trade in financial services. As such Mau departed from the Most Favoured Nation principle it adhered to as regards supply of financial services. Mauritius tabled for the first time a schedule of commitments as
regards cross bi supply, consumption abroad and commercial presence in the sectors of banking, insurance and capital market. The underlying objective was a lowering of barriers to trade in financial ser between WTO
members. The stance adopted by Mauritius is very much in line with the objective making the business and financial services the fourth pillar of the economy and establishing island as a regional hub in the provision
of financial services.
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