MCB Focus: Mauritius must power own growth ambitions by nurturing needed talent
The latest edition of the MCB Focus report encourages the island economy to power its own growth ambitions of transforming into a regional hub for investment and trade, by undertaking a wide-scale yet carefully-executed opening up of the labour market to foreign talents, notably those displaying extensive experience in dealing with broad-based African markets and businesses/investors.
The MCB Group’s latest Focus edition noted that, against the backdrop of the difficult international environment, growth and employment creation in Mauritius have evolved at a tempered pace during the past few years, bearing in mind the entrenched structural inefficiencies inhibiting the country’s productivity and competitiveness levels.
Notwithstanding some healing signs, especially in selected trading partners, the generally subdued economic conditions prevailing globally remain a drag on the performance of the Mauritian economy.
Over the longer run, and as a further source of apprehension, the global economy is set to grapple with low total factor productivity levels, broad-based weaknesses in investment and ageing population trends. These taken together suggest that the world would remain under the clutches of a “new normal” of lower growth, which not only tends to inhibit growth, but also diminishes future potential growth.
The report also identifies and investigates the linkages between the productivity concept and its application to the Mauritian economy. The report observes that multifactor productivity – which takes into account the efficiency of labour and capital resources as well as qualitative factors such better management and the improved quality of inputs – witnessed a marginal average annual growth rate of 0.4% during the 2008- 2014 period.
Unemployment is expected to increase from 7.8% in 2014 to 8.0% in 2015, with related trends continuing to warrant attention. Moreover, over and above the official estimations, it might be even more disquieting to note, after undertaking an adequately holistic statistical interpretation of actual labour market trends, that the country might presently be marked by a quite sizeable level of nationwide underemployment , which is associated with structural or cyclical dynamics, thus reflecting the apparent under-utilisation of a segment of the overall labour force, compared to their competencies, levels of experience and educational attainment.
Overall, notwithstanding the headway realised over time to shore up its in-built productive capacities and enhance the quality of its business facilitation framework, the Mauritian economy has, in recent times, been confronted with lingering structural bottlenecks that are deemed to have restrained the evolution of its productivity metrics.
Hence, from a policy determination standpoint, the main prerequisites for enhanced productivity outcomes involve: the combating of entrenched structural bottlenecks towards improving the quality of human and physical capital; and the extensive recourse to innovative platforms and technological techniques in the course of the value creation journey.
The report also present specific policy moves upholding conducive framework conditions — anchoring the country’s economic management on stable foundations to ensure solid performances throughout the real, fiscal, financial and external sectors of the economy; promoting efficient and well-functioning market mechanisms and removing market and price distortions, chiefly by instilling competition and innovation across product and labour markets; and supporting the diligent, yet prudent, international openness of the Mauritian economy to foreign capital and expertise, especially in the highly-skilled segment, whilst further integrating the country within global value chains and international markets in terms of investment and trade.
Finally, to power its ambition of transforming into a regional hub for investment and trade, Mauritius must undertake a wide-scale yet carefully-executed opening up of the labour market to foreign talents, notably those displaying extensive experience in dealing with broad-based African markets and businesses/investors. This effort would be pivotal in spearheading the quality of the economy’s value proposition to more globally-competitive heights.