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International Monetary Fund. African Dept.

Introduction 1. The Mauritian economy has been growing steadily despite weak activity in Europe—its main trading partner . This resilience has been supported by successive fiscal stimuli together with increased diversification of export destinations. However, the economy still operates slightly below potential and domestic investment has been falling. Going forward renewed reform efforts are needed to accelerate the country’s objective of attaining high-income status. Addressing infrastructure gaps and enhancing the efficiency of the public sector

International Monetary Fund

the observed real exchange rate has appreciated over the recent past. One possible significant shortcoming of these indicators is that they may put too much emphasis on industrialized countries, when comparing the Mauritian economy to the rest of the world. The weighting system used puts 75 percent of total weights on industrialized countries. However, Mauritius competes on the world markets relatively more with other developing countries, in particular in the clothing sector, than with developed ones. It is indeed recognized that the bulk of EPZ production is at

International Monetary Fund

Introduction The background papers in this report examine selected aspects or issues pertaining to the Mauritian economy, which are all related to the question of how Mauritius will be able in the future to sustain its export-led development and diversify its economy. Four chapters are included. The first chapter discusses the impact of the Uruguay Round agreement on the Mauritian economy. It attempts to quantify, where possible, the potential costs which the Round could entail for Mauritius in terms of higher cost of imported food, preference erosion

Mr. James Y. Yao, Mr. Gamal Z El-Masry, Padamja Khandelwal, and Mr. Emilio Sacerdoti

A critical question in the search for an explanation of Mauritius’s successful growth performance is why the Mauritian economy has been able to continuously diversify its production base. Broadly, the reasons for the success can be summarized in the phrase “good government policies.” Indeed, the government has played a leading role in the diversification process. The strategy involved an active role for the government in promoting industry, by means such as tax and other incentives and reforms of the regulatory environment. However, the ability of the

International Monetary Fund
This Background Paper and Statistical Annex examines selected issues pertaining to the Mauritian economy, which are all related to the question of how Mauritius will be able in the future to sustain its export-led development and diversify its economy. The paper discusses the impact of the Uruguay Round agreement on the Mauritian economy. The paper also utilizes available data to assess Mauritius’s external competitiveness, which is a major issue as regards the sustainability of high export growth.