Executive Summary 1.13 1.14 The French established sugar cane plantations in 1721. However, Mauritius only became a major sugar producer and exporter under British rule and after Britain’s repeal of the preferential tariff for West Indian sugar in 1825. The area under cultivation more than doubled from 25,000 to 51,000 arpents1 in the five years after 1825. Many slaves were forced to work in the sugar plantations. However, the needs of the planters began to exceed the supply of slave labour by the 1820s. Furthermore, because of the outright ban on slavery in 1835, planters had to look elsewhere for labourers. Seventy-five indentured labourers from India arrived in 1834, ahead of an immigration boom from India that led to the arrival of 451,000 labourers and their families by 1910. By 1862, immigrants from India made up 62 per cent of the island’s population. This proportion increased gradually to 68 per cent by 1971. A small number of Chinese traders also moved to Mauritius during the 19th Century. The Mauritian population of African descent, including Madagascar, is often referred to as the ‘Creole population’ or as ‘Creoles’. The ancestors of the Mauritian Creoles were slaves haphazardly brought to Mauritius from different parts of Africa. Their original social structure was hardly maintained. As a result, the Creoles inherited no common language, kinship structure or other collective cultural traditions from the home regions. The Mauritian slaves created Creole, a new language based loosely on French, which most in Mauritius now speak along with French and English. The current situation and its challenges 1.15 4 The economic history of Mauritius spans the four decades since the country’s independence. It can be divided into three periods. During the immediate post-colonial period, the legacy of a single-crop economy, dominated by the sugar industry and cane plantations, was continued. It was also characterised by the first attempts at diversifying the economy by implementing an import-substitution strategy in the late 1960s and early 1970s. The outward-looking, export-oriented strategy of the 1970s characterised the second period. It was spearheaded by the sugar and textile industries on the one hand and by tourism on the other. They were the major driving forces for launching and sustaining economic growth. The vital role played by preferential trade access to EU markets for Mauritian sugar and textiles is undeniable and was one of the main drivers of the export-led strategy. New sectors were promoted during the 1990s. They included financial services. The third period started during the 1 - The arpent was an old French unit of measurement, used primarily before the metric system was adopted in 1799. The French acre, or arpent carré, was equal to 5,107m2. Executive Summary present decade with the crisis in respect of Mauritius’s export-led growth strategy that began with the end of preferential access to EU markets. The country is now beginning a new era of diversifying into a knowledge-based economy. 1.16 A single-crop economy handicapped Mauritius when it became independent. It relied too heavily on sugar exports. It also had a high population growth rate and unemployment. World sugar prices were at a record low, labour unrest was rife and high tax rates contributed to a dismal economic climate. Personal taxes and surcharges sometimes reached 92 per cent. 1.17 The Mauritian economy blossomed initially. It depended mostly on preferential prices and terms of trade for the island’s sugar and textile sectors. An average annual growth rate of more than 5 per cent was maintained for 45 years. However, the European Union (EU) did away with preferential tariffs for Mauritian clothing and textile exports and terminated its Sugar Protocol in 2005. This affected Mauritian sugar exports to Europe. Unemployment rates began to rise and economic growth was slow. Mauritian foreign debt remained high. The Mauritian government responded by simplifying certain taxes and eliminating others, and by removing red tape and bureaucratic obstacles (such as the large number of licences required to start new businesses). It also reduced many tariffs or removed them completely. 1.18 The current Mauritian economy and political environment are strong. However, the country still faces a number of challenges. They include the following: • • • • Much of the food and energy that the country uses is imported. Recent food and energy inflation on world markets has consequently had a negative effect on Mauritius. The economy is concentrated in the hands of a few groups. Descendants of French settlers still control much of the economy, despite a recent initiative taken by the government to ‘democratise the economy’. There is no real competition in many business sectors, although the government has recently established a competition commission to better control anticompetitive practices. The Creole community is underrepresented among the political and economic elites of Mauritius. 5