Socioeconomic Development Chapter 6 (EIB), which is supporting Mauritius in its transition to a competitive economy and in the development of its social sectors. 845. The CSAR has proposed the following: • • • • That the government strengthens local industries so that they can adapt to the highly competitive markets and production centres that result from globalisation. That Enterprise Mauritius (EM) and the Small Enterprise and Handicraft Development Authority (SEHDA) combine their efforts to help local companies to make the most of opportunities in the region and look for new markets. That regional organisations, like the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA), accelerate the elimination of all obstacles to intraregional trade. That the SADC, COMESA and the Indian Ocean Commission (IOC) promote the free movement of capital and other resources within the region further. ii. Findings of the CRM 846. Since its independence, Mauritius has been advancing its sustainable development programme (it has had an average annual growth of 6 per cent for the past three decades) in a difficult environment. This environment is characterised by geographical isolation, high transportation costs and a low human dimension. These severely constrain economies of scale. Its capacity to develop and implement development strategies by diversifying its economy rapidly made these achievements possible. Development strategies and diversification policies 847. 296 Its vision and political will enabled the country to move from being only a sugar cane producer to an industrial and tourist economy and, quite recently, to a financial and service-based economy. Sugar production, which contributed nearly 20 per cent to the country’s GDP in the mid-1970s, now contributed only 1.8 per cent in 2007. Tourism, initially insignificant, accounts for 10 per cent of GDP in recent times, while the textile sector, virtually nonexistent in the days following independence, exceeded 10 per cent of GDP during the 1990s. Dismantling the Multi-Fibre Agreements (MFAs) forced GDP to decline. However, the new ICTs and financial services have created new avenues for economic growth. Chapter 6 Socioeconomic Development 848. During the past three decades, successive governments have implemented policies aimed at diversifying the economy. The first phase of economic diversification began by implementing an importsubstitution strategy in the 1960s. The development of an externally oriented strategy completed it in the 1970s. This strategy focused on exports conducted within the framework of the law on export processing zones (EPZs) and on developing tourism. Agriculture, manufacturing and tourism became the main development sectors of the economy during the 1970s and 1980s. 849. The vital role played by the preferential access of Mauritian sugar and textiles to the EU market was one of the main components of the export-oriented strategy. The performance of the export sector was the main driver of growth. Real annual GDP reached an average of between 5 and 6 per cent between 1976 and 1990. 850. Tourism experienced a boost during the 1980s. The number of tourists increased from 115,080 in 1980 to 291,500 in 1990, an average annual growth of 10 per cent. Gross revenue from tourism, only Rs0.36 billion in 1980, increased to Rs3.5 billion in 1990. 851. The diversification strategy was intensified in the 1990s, with the development of the financial sector, following the arrival of new growth sectors based mainly on businesses, insurance, securities and port activities as well as the new ICT sector. 852. After less than 40 years of independence, Mauritius, which was classified among the poorest countries with an average per capita income of about USD260, was classified among the top mediumincome countries with an average per capita income of USD6,431, or USD11,643 in PPP, in 2006.48 853. Agriculture remained in the background of this vast drive to diversify. Sugar cane cultivation had been its main activity. It had used 72,000 hectares of a useful agricultural area of 87,000 hectares (or nearly nine-tenths of the total) and a few major landowners still control it. Mauritius has not concentrated on producing food. It continues to face a huge food bill, which amounted to Rs15.4 billion in 2008 (excluding imports of fish and by-products). This is nearly 12 per cent of all its imports. In an environment characterised by constant food deficits and high agricultural prices, Mauritius has not made any significant progress in diversifying its agricultural production to ensure food security. 48 - The most recent GDP data obtained after the CRM has GDP per capita at 215100 Rupees for 2009 (using CSO data). At an average exchange rate of 31.94 Rs /USD in 2009, this corresponds to more than $ 6700 USD per capita.. 297