Socioeconomic Development 861. 862. Chapter 6 Mauritius’s servicing of its public and private external debt (or its reimbursement against exporting goods and services) remains moderate. It stood at between 6.5 and 7 per cent (in percent of exports of goods and services) recently compared with 9.7 per cent in 2000/2001. Finally, Mauritius is financially autonomous. It has considerable foreign exchange reserves that cover more than seven months of imports. This puts the country in a comfortable position. Resilience to shocks 863. All of these achievements and policies enabled Mauritius to resist the shock of the economic and financial crisis for the most part. Some sectors (particularly the textile and tourism sectors) did suffer significant setbacks. However, others (especially the ICT and financial sectors) progressed rapidly. This allowed Mauritius to anticipate a growth of about 2 per cent for 2009 and to register a decline in its unemployment rate.50 As the prime minister emphasised in his address to the National Assembly, Mauritius has had to overcome six combined shocks: (i) soaring energy prices; (ii) the sudden rise in food prices on the international market; (iii) the world food crisis; (iv) the sudden drop (36 per cent) in sugar prices; (v) the international economic crisis; and (vi) the financial crisis. The Economist Intelligence Unit has just classified Mauritius as one of the group of seven countries where the risk of social unrest, caused by the global financial crisis, is lowest. Preparations for the future 864. The Mauritian authorities intend to make further progress by beginning, in the midst of the global economic crisis, a vast public investment programme. It will be the most important in the country’s history. They plan to build megain-frastructural facilities (a port, an airport and major highways), develop its human capital, assist enterprises and create jobs in order to make Mauritius a regional hub for financial and professional services. Chapter 6 Box 6.2: Socioeconomic Development Investments planned for 2009–2013 Mauritius estimates that its public sector investment programme for 2009 to 2013 will cost Rs119 billion. It will spend Rs7.9 billion of the total project costs on continuing projects up to the end of June 2009. It plans investment activities that exceed Rs20 billion for 2010 and 2011, while it expects to spend an average of Rs14.8 billion in each of the two subsequent years. The projected investment, particularly for 2010 and 2011, reflects the challenging objectives that the government specified for the additional stimulus package in December 2008 in response to the global economic downturn. The focus is on accelerating investment in the infrastructure sector. Based on existing and new projects, the government predicts that public sector investment will decline in 2012 and 2013. This is mainly because it intends to complete a number of approved major infrastructure projects before the end of 2011. The sectoral breakdown of the public sector investment programme for 2009 to 2013 shows that the investment strategy for the next five years is geared to developing economic infrastructure. It will spend 50 per cent of the budget for the whole public sector investment programme. This is consistent with government’s objective to expand and modernise physical infrastructure, which is fundamental for addressing supply-side constraints to growth. There is agreement that infrastructure deficits impose additional costs, limit economic development and affect the competitiveness of the economic sectors negatively. The wheels of growth, therefore, require well-oiled infrastructure in every segment of the economy. Mauritius envisages an ambitious programme of infrastructural investment, worth Rs58 billion, for 2009 to 2013 to remedy the infrastructural deficiencies in major sectors like road, port, airport and energy sectors. This will create a more conducive environment for business development and better opportunities for private sector participation. It will also enable the government to move towards a ‘green’ island as envisaged in the Mauritius Ile Durable (MID) programme. The MID’s investment activities will focus on reducing the dependence on fossil fuels through an optimal mixture of energy sources. This will include renewable energy projects and integrated solid-waste management projects for recycling industrial, commercial and green wastes. A wind farm, with a capacity of between 25 and 40MW at Bigara, and a 20MW wasteto-energy plant at Chaumiere will be parts of the MID programme. The government will also continue to invest in developing waste water infrastructure and protecting the environment. With the completion of the first phase of the National Sewerage Programme, 50 per cent of the population will be connected to the public sewer by 2013. To ensure reliable supplies of electricity, major projects in the energy sector will include extending a 2.5MW power station at Pointe Monnier, installing two wind turbines of 275kW capacity each at Grenade Rodrigues and building two new diesel units of 15MW capacity each at Fort Victoria Power Station. Investing in the road transport sector will address the chronic traffic congestion, which is costing government around Rs3 billion annually. The government will develop a viable road infrastructure programme to facilitate access, mobility and road safety across the country through short-, medium- and long-term projects. It will consider an alternative modes of transport system in order to provide a modernised, reliable, affordable and attractive public transport system. With regard to the port sector, the government will emphasise expanding port capacity to meet the growing demand in port trade in order to make Port Louis Harbour a major transshipment hub. It will gear its investment activities at the port to extending the Mauritius Container Terminal (MCT), constructing a cruise terminal and completing the flood wall at the MCT. It will extend the quay at the MCT to a length of 710m and deepen the basin to 16m in order to maximise the yard area and increase container capacity. 300 50 - The most recent unemployment data as obtained after the CRM and reported by the Bank of Mauritius for 2009 is an increase from 7.2 per cent in 2008 to 8.8 per cent in 2009. 301