Mauritius government unveils 2015-19 plan for socio-economic development
As one of the prime objectives of this new government is to relentlessly combat fraud, corruption and financial crime, a Financial Crime Commission will be set up to act as an apex body to oversee the ICAC, the Financial Intelligence Unit and the enforcement department of the Financial Services Commission. (Image: ION News)
The new government programme for the year 2015-2019, entitled “Achieving Meaningful Change’’, was officially presented by Mauritian President Kailash Purryag yesterday at Harilal Vaghjee Hall.
For 70 minutes, the President read the new government programme with the Prime Minister and other members of the parliament in close attendance. This official exercise was marked by a formal ceremony, which will allow the population to have a more precise idea of the new national political, social and economical orientation of the newly establish government of L’Alliance Lepep.
The programme mainly emphasises sustainable environment, modernisation of infrastructure, social integration, democratic reinforcement, technological innovation and ultimately, lays the path for shaping a new socio-economic miracle. Moreover, it also gives due consideration to business principles and values such as discipline, transparency, accountability and exemplary governance.
These are the main insights of the government programme from an economic standpoint:
From an economic perspective, the newly elected government is determined to steer a second new economic miracle as inspired by the first one that took Mauritius to higher phase of development in the eighties. New policies will be implemented to boost GDP growth and create jobs.
In order to give an economic leg-up to the island people, the government will develop and explore new economic areas and new pillars for economic growth, such as the launch of a regional bunkering hub, the development of the ocean economy, the implementation of the duty free shopping paradise initiative and the ICT Enabled Services sectors.
However, the state will also consolidate traditional sectors – sugar cane industry, tourism and manufacturing – and existing service sectors such as the financial services industry, and promote the expansion of business in Africa. Moreover, strong action will be taken to revitalise private investment in existing pillars of the economy with an emphasis on greater business facilitation and improvement in the investment climate.
The new Government will also revisit and unlock several investment projects that have been stuck in the pipeline for too long. These projects will be executed on a joint venture basis with the participation of local private sector and international investors.
The government believes in the emergence and rise of the SME sector as the main engine of growth, and notes that SME businesses will be the most critical factor in shaping the second economic miracle. Consequently a new SME bank will set up and some Rs 10 billion earmarked by Government to support the development of this sector over the next five years.
In addition, to meet a higher growth rate, macroeconomic stability is required, thus there will be a better coordination of monetary and fiscal policies. Inflation will be kept under control while introducing new policies in order to raise national savings. In regards to public finance and fiscal policy, the government will be very strict in terms economic wastage, unnecessary and excessive expenditure and the Finance and Audit act will be reviewed to reinforce public financial management, accountability and fiscal discipline.
The government will also establish and implement an equitable tax policy based on the philosophy ‘fiscalité légère’. Tax administration will be made more efficient, where all persons will be liable to tax pay their fair share. New legislations will be introduced to reinforce and modernise tax administration and customs management. Finally, the government will ensure that public sector debt as a ratio of GDP is on a declining trend in order to achieve the statutory requirement of 50 per cent by 2018.
The tourism sector will be called upon to play a pivotal role towards achieving the targeted second economic miracle. The development of our tourism industry will be articulated around four main axes, namely Attractiveness, Accessibility, Visibility and Sustainability of the destination. Also, a Tourism Strategic Plan covering the period from 2016 to 2020 will be formulated. In order to present a greater diversity of options in tourism, new tourism concepts will be introduced such as eco-tourism, medical tourism, shopping tourism, wellness tourism, cultural and heritage tourism and grey tourism.
Regional tourism will occupy a predominant position in our market diversification strategy. An Africa Strategy, targeting African countries registering sustained growth, will be implemented to capture a greater share of African outbound tourists.
The Mauritius Tourism Promotion Authority will be restructured and provided with a new legal and institutional framework adapted to a dynamic institution with a commercial outlook. The Tourism Authority will be transformed into a business facilitator leveraging on new technologies to provide a more efficient service to the stakeholders and reduce the costs of doing business for tourism operators.
As mentioned earlier, the new government is focusing on creating new pillars of the economy in order to boost GDP and reduce unemployment. The Ocean Economy will be an important pillar in achieving and sustaining economic diversification, job creation and wealth management. A new ministry has been created in that regard and the Mauritius Institute of Oceanography as well as all ocean related activities have been pooled together under that Ministry.
The Government will put also the fishermen community at the centre of development, will ensure their capacity building and training for improved livelihood, and will actively promote research expedition in our quest for fossil fuel and other minerals that can be sustainably exploited.
Coming to the manufacturing sector, the government will elaborate an Export Development Plan with emphasis on an Africa Export Strategy that will provide strong support to the Domestic Oriented Enterprises to tap opportunities in the African markets. This will go hand-in-hand with improved air connectivity between Mauritius and Africa and lobbying of efforts to secure the renewal of the AGOA treaty.
Moreover, the current fiscal incentives will be reviewed for enhanced competitiveness of the manufacturing sector and to improve its penetration into the regional and international markets. A new investment promotion model driven by institutional alignment will be formulated based on best investment promotion practices and value-chain analysis to attract investment in high-value added manufacturing activities.
The Government will also promote the development of a fashion industry and organise regular, seasonal fashion shows both in Mauritius and overseas that would give international visibility to the ‘Made in Mauritius’ label for greater acceptance of our products in new and emerging markets.
The new government aims at creating some 15,000 jobs annually. A new dynamism will be instilled in the existing economic sectors and, later on, from new development poles, such as regional bunkering hub, the ocean economy, duty free shopping and ICT enabled service sectors.
Moreover, to increase the chances of young jobseekers and fresh graduates to secure permanent employment at their training stations, the duration of the state-subsidised Youth Employment Programme (YEP) will be extended to two years. The Youth Employment Programme will accordingly be reviewed in order to extend the duration of the contract of employment to a period of two years.
New fiscal incentives will be granted to the private sector to encourage them to recruit unemployed people on a full time basis.
To encourage companies to hire local work force, work permit regulations will be reviewed. Recruitment of foreigners will be limited to scarcity areas and to acquiring new skills that are not locally available.
Finally, the Back to Work Programme will be implemented to facilitate women wishing to take up or resume employment.
Financial services continue to constitute a key sector of the economy and pose a huge potential for growth and job creation.
The Government will position the Stock Exchange of Mauritius as an attractive capital-raising platform for international and Africa focused financial products.
Efforts will be made to promote the development of wealth management and asset management products, as well as to position Mauritius as a centre for private placements, trading of bonds and other financial instruments.
Multinationals will be encouraged to set up their regional headquarters in Mauritius with more back office activities. Moreover, investors will be encouraged to make use of the Mauritian jurisdiction for their investments into and out of Africa.
The Government will strive to extend the network of Double Taxation Avoidance Agreements (DTAAs) and Investment Partnership and Protection Agreements (IPPAs).
Combating Financial Crime and Fraud
One of the prime objectives of this new government is to relentlessly combat fraud, corruption and financial crime. To this effect, a Financial Crime Commission will be set up to act as an apex body to oversee the ICAC, the Financial Intelligence Unit and the enforcement department of the Financial Services Commission.
This will also assist in safeguarding people’s financial security and employment and measures will be brought forward to limit household indebtedness. To prevent the possibility of a systemic financial crisis, private sector gearings will be closely monitored and regulated if necessary.
In addition, a new Declaration of Assets Act for MPs and high-ranking public officers and a Financing of Political Parties Act will be enacted. A new Code of Conduct will be introduced for all MPs and public officers.
The entire process of tendering, procurement and contract allocation will be reviewed to increase competition, transparency and accountability. The Prevention of Corruption Act will be amended to enable more effective tracking and curbing of money laundering and accumulation of wealth through back door mechanisms.
Furthermore, a significant reduction in misuse and wastage of public funds will be the order of the day in all public institutions.
Finally, the Government will also consider the findings and recommendations of the National Auditors. Ministers, their accounting officers, and directors of parastatals will be held accountable for abuse or misuse of public funds.
- By Kashish Jadoo