Investment Policy Review of Mauritius

As a middle-income country, Mauritius faced the challenges of a mature developing economy. Rising labour costs were eroding the competitive edge in garment manufacture. To become a successful business hub for Africa, Mauritius needed to be internationally competitive and be viewed as the most open, investor-friendly and progressive business environment in the world - that is, beyond Africa.

The IPR´s recommendations were based around promoting a shift into higher-value sectors, including financial services, business services and information technology, in order to sustain high growth. Attracting FDI of this kind would require a focused promotional strategy and a substantial overhaul of the policy and operational framework for FDI in line with worldwide "best practice" standards. The IPR recommended the following, with a focus on the three sectors of financial services, information technology and marine resources:

• Overhauling the policy and operational framework for FDI in line with "best practice" standards.

• Shifting more forcefully into higher-value sectors.

• Improving infrastructure. Following the IPR, UNCTAD, with UNDP funding, conducted a review of the country´s fiscal incentives in order to:

• Harmonize these incentives.

• Enhance the position of the country as a regional hub in business and financial services.

• Encourage the return of the members of the Diaspora.

Report on the implementation of the IPR of Mauritius

The reform effort in Mauritius has been remarkable. Government and business operations have been streamlined and several interventions to cater for both the needs of the population and the development of the economy, have been undertaken. As a result, since the IPR FDI has increased more than tenfold, new sectors have developed and several traditional sectors have expanded, leading to significant poverty reduction. New challenges have also arisen, as discussed in the report.