The Export of Tradeable Services in Mauritius

The Export of Tradeable Services in Mauritius

A Commonwealth Case Study in Economic Transformation You do not have access to this content

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Percy S. Mistry, Nikhil Treebhoohun
01 Mar 2009
9781848590229 (PDF)

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How can developing country governments seek to initiate the economic transformation that so many desire?

For many countries the dramatic shift from low to high added-value activities will involve the export of tradeable services, particularly professional services. The authors look in detail at the services-driven economic transformation that is occurring in Mauritius, and make specific recommendations for improvements in infrastructure, human resource capacity and the regulatory environment.

The service sectors examined here – financial services, information and communication technologies, health care services, and human resources services – offer lessons that have much to teach economic planners in other developing country economies.
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  • Acronyms
  • Preface

    This book describes the growth pattern of a small island economy that has over the last four decades transformed itself from a poor, mono-crop sugar economy, to a diversified services economy and become a middle-income country, overcoming the constraints of economies of scale posed by an exiguous local market. The Mauritian experience reveals that size per se is not a handicap. Ultimately, economic transformation depends on: the will and the commitment of the political class to development, mobilisation and efficient management of resources, right market positioning, investment in human capital and policy flexibility to adjust to changing circumstances.

  • Introduction

    Global demand for knowledge-intensive services sectors (finance, business services, education and healthcare) is growing at breakneck speed; they face less competition than manufacturing from low-cost countries and suffer less than manufacturing from the rise in energy cost?. Financial Times, 17?18 September 2006.

  • Mauritius: from Plantation to Knowledge-based Economy

    Mauritius is an island of 1,865 km2 situated in the South West Indian Ocean, far from its major markets and suppliers. Inhabited only since the 18th century, the island was a French colony for almost a century until conquest by the British in 1810 because of its strategic importance on the route to India. The British converted it into a monocrop economy, with sugar cane as the mainstay. Since the French era, slaves had been imported to the island from neighbouring Madagascar, Mozambique and Senegal. With the abolition of slavery, indentured labourers were brought from India and a small minority even from China. Thus, by the end of the 19th century, Mauritius was already a multi-racial society. It is today a veritable melting pot of European, African and Asian cultures, with a population that stands at 1.2 million. Of these, 51 per cent is Hindu, 32 per cent Christian, 16 per cent Muslim and less than one per cent is of Buddhist faith.

  • Exporting Financial Services

    The international financial services (IFS) industry in Mauritius was based conceptually on the export processing zone (EPZ), which was established in 1970 with tax concessions and exemptions, an export orientation and prohibitions on domestic market access. The creation of the country?s offshore financial centre (OFC) some 20 years later applied the same basic idea to exporting international financial services (IFS). Although it actually materialised in 1992, studies on an OFC had been carried out by the Bank of Mauritius (BoM) at the request of the Prime Minister?s Office a decade earlier. However, the idea was put on hold during the mid-1980s, a result of the debt crisis engulfing the developing world from 1982?1992 and the salutary experience of the Seychelles during the 1980s, when it became an offshore centre for unsavoury financial dealings. Mauritius?s OFC came up again for public discussion in 1988/89, when the findings of a study commissioned from an international consulting firm became available and, concomitantly, the domestic financial sector was overhauled under an economic reform programme.

  • Exporting ICT and Business Process Outsourcing Services

    The export of information and communications technology (ICT) services ? including business process outsourcing (BPO) and information technology enabled services (ITES) ? is the fastest growing industry in Mauritius. ICT, BPO and ITES are collectively abbreviated to IBI in this chapter.

  • Exporting Healthcare Services

    Healthcare services outsourcing?, ?healthcare exports? and ?medical tourism? are widely recognised terms used interchangeably. They embrace different activities, varying from simple medical transcription, to healthcare-related BPO (such as payroll, billing and patient records functions of hospitals) and the provision of a full range of complex surgery and medical services.

  • Exporting Human Resource Development Services

    In an increasingly knowledge-intensive, knowledge-dependent world, global human resource development (HRD) exports in vocational and tertiary education (VTE) and professional training are pervasive and large. At present, such exports are dominated by OECD countries, which have a sophisticated and well-developed institutional infrastructure for the provision of VTE. They have much larger, more diversified faculties and facilities with a head start in knowledge accumulation. However, that reality is changing with two significant trends: (i) the size of the global and export market for tertiary education is increasing rapidly; and (ii) a larger share of the export market is being captured by developing countries, driven largely by cost economics.

  • Conclusions

    Chapters 3 to 6 have highlighted the potential that exists for Mauritius to export financial services, ICT services, healthcare services and education services. The four symposia held in January and April 2008 covered these four sectors, which have the greatest immediate potential for realising enhanced service export earnings. However, opportunities in other important service sectors, in which Mauritius might also become globally competitive, remain unexplored and unaddressed.

  • References and bibliography
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