Investing in Mauritius
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FT SPECIAL REPORT Investing in Mauritius Wednesday September 23 2015 www.ft.com/reports | @ftreports message he campaigned on as he led his Mouvement Socialiste Militant (MSM) Inside party back to power — as part of L’Alli- anceLepep,atieupwithtwootherpolit- Uncertainty lingers in Nation needs ical parties — after nearly a decade of rule by his rival, Navinchandra Ram- wake of scandals goolam,leaderoftheLabourparty. Government ‘clean-up’ Thepledgestotacklecorruptionwere policy has been generally welcomed. And with gross criticised by some to reignite domestic product growth averaging about 3 per cent in the past nine years, Page 2 there was a palpable sense that a fresh directionwasneeded. Ambitions to become a A report on Mauritius by the World regional entrepôt the engine Bank published in June describes the country as being at a “crossroads”, say- As Europe stagnates ing the government faces “mounting Mauritius looks to Africa socialandeconomicchallengesthatwill Page 3 make it more difficult to achieve high- of growth incomestatusinthemediumterm”. Offshore ambitions InhisAugustspeech,SirAneroodout- lined his government’s plans to target The country is trying to average annual growth of 5.5 per cent raise its profile as a A lacklustre economy and corruption scandals from 2017 and to raise per capita financial centre income, which was about $9,000 in Page 3 dominate the agenda, reports Andrew England 2013,tomorethan$13,500by2018.The plans include revamping manufactur- ing, developing a so-called ocean econ- First Muslim female t was no coincidence that Sir Aner- But as the country of 1.26m looks omy focused on marine activities, ood Jugnauth, Mauritius’s prime aheadtoitsnextstageofdevelopment— expanding the financial services sector head of state minister,chose a conference centre with Sir Anerood targeting a “second andsupporting“smartcities”. Ameenah at CyberCity last month to deliver economic miracle” — a sense of uncer- There is also a push to tap into the Gurib- I the first big economic speech of his taintyhasbeenlingeringfollowinglack- potential of faster growing, less devel- latesttermofoffice. lustregrowthandaspateofscandals. opednationsonmainlandAfrica. Fakim is CyberCity, about 15 minutes drive And Sir Anerood, an 85-year-old Yet within business circles there is a set to from the capital, Port Louis, in many politicalveteranandformerprimemin- perceptionthattheso-called“clean-up” make her ways epitomises the strides the small, ister who took office after leading an and scandals have distracted from eco- Indian Ocean nation has taken as it has opposition alliance to a surprise victory nomicpoliciesanddevelopment. mark evolved into one of Africa’s most devel- in last December’s election, is brutal in Arnaud Lagesse, chief executive of Page 4 oped,stableandwealthynations. hisassessmentofthesituation. GML, one of Mauritius’s biggest con- Clusters of gleaming, high rise office “Onceagain,weinheritedadisastrous glomerates, says: “They need to take blocks, housing local and international legacy. During the past nine years, the action for the economic development, groups, including HSBC, Deutsche Bank countryhadapoorleadershipthatsank there’snothingmuchbeingdelivered.” and Standard Chartered, stand as sym- the economy,” he told the audience of Other business people say there is a Producers aim to find bols of the economy’s diversification politicians, business leaders and diplo- need for a long -term vision and see the from reliance on traditional industries matsinAugust.“Weinheritedacountry “clean-up”aspartlybeingaboutsettling a sweeter future suchassugarandtextiles. where corruption, nepotism and fraud politicalscores. As concessionary Indeed, its economic success in the hadbecometheoperatingculture.” The most prominent scandals con- quotas end, companies years after independence from Britain Such comments clearly have a cern the collapse of British American in 1968 earned so much fame that ana- political dimension. But they were in Looking festive in Port Louis: business people say the new government needs Investment — a company that the look for solutions lystsrefertothe“Mauritiusmiracle”. tune with the “nettoyer” or “clean-up” long-term vision to meet its goals — Dreamstime Continuedonpage2 Page 4 2 ★ FINANCIALTIMES Wednesday 23 September 2015 Investing in Mauritius Need for both Uncertainty lingers as investment scandal rocks establishment Now, however, the futures of all three Bérenger says. Mr Boolell counters that Politics are shrouded in uncertainty at a time the allegations against Labour party when Mauritian politics have been rat- officials have been driven by vendettas Critics say a government-led tledbyscandalsandcontroversy. and revenge from within the current and reforms ‘clean-up’ campaign is really At 85, Sir Anerood is expected to bow administration. out of politics when his term ends. His “When he [Sir Anerood] came to about settling political son Pravind — who has taken over as power, he was hell-bent not on running scores, says Andrew England MSM leader — is groomed to be his suc- the country but settling scores,” Mr Economy Infrastructure is inadequate and there cessor.ButtheyoungerJugnauth’spolit- Boolellsays. ical future is in jeopardy, after he was Government officials dismiss sugges- are worries about inequality, writes Andrew Jack While numerous African nations have sentenced to 12 months in prison for a tions of a vendetta against political Hope for the future: CyberCity endured periods of political turbulence conflict of interest relating to a previous opponents, countering that they were in their post-independence years, the tenureasfinanceminister. elected on promises to “clean up” short drive from the tatty tured education system to be at the core development,”saysVishnuLutchmeen- political landscape in Mauritius has He resigned from his current cabinet allegedcorruption. shopfronts and slow- ofchange. araidoo,thefinanceminister. tendedtobeoneofstability. post, but proclaims his innocence and is “The clean-up will continue,” says moving traffic of Vacoas- For much of the period since inde- Ministers have called for an emphasis Indeed, the island nation has stood appealingagainsttheconviction. Nandcoomar Bodha, MSM’s secretary- Phoenix in central Mauri- pendence, Mauritius grew strongly, on creating an “Ocean Economy” out as a beacon of flourishing democ- Mr Ramgoolam’s political future has general and the minister of infrastruc- A tius, Jean-Louis Roule, shifting from sugar cane into textiles focused on marine activities, and large- racy for Africa, as the country’spolitical also been cast in doubt after he was ture. “Everything was dysfunc- headofCIDP,apharmaceuticalandcos- and fish processing, and then into out- scale infrastructure investment includ- parties have peacefully jostled for provisionally charged with offences tional . Weneverdreamtthecleaning metic-testing company,sits surrounded sourcingandoffshorefinancialservices. ingaseriesof“SmartCities”. power, and, more often than not, ended including money laundering after wouldgosodeep.” by modern art in a slick first-floor office It avoided the disruptions of many of Yet Mr Lutchmeenaraidoo concedes up divvying up cabinet posts among police raided his home and seized large Yet even he was surprised by the that would not look out of place in the its African peers. Instead there was that meeting election pledges and fund- themselves, as a series of alliances have sumsofmoney. MSM-led alliance’s victory at Decem- high-tech centres of San Francisco or politicalstability,relativeharmonywith ing ambitious new projects will require formedgovernments. He has denied the allegations, and ber’selection,giventhatitwastakingon Boston. the private sector, and an unusually increasedtaxrevenues. Yetasenseofpoliticaluncertaintyhas claimed that the money was legitimate a rival alliance containing two of the In a neighbouring unit occupied by strong social services system offering Physical infrastructure has lagged been rippling across the country, nine fundingforhisparty. three largest parties — the Labour party Quantilab, dozens of sophisticated pensions,freeeducationandhealth. behind growth. The M2 motorway that months after an opposition alliance, Several of Mr Ramgoolam’s former andtheMMM. machines are silently at work, support- The ethnic mix — with a legacy of connects BioPark to Port Louis is fre- L’Alliance Lepep, defied the odds and ministers have also been questioned, as Inpart,thevictoryisexplainedbythe ing the company’s growing interna- FrenchaswellasBritishrule,andIndian quently clogged with traffic, slowed securedvictoryatDecemberpolls. the new government presses on with its fact that the electorate had grown tired tional reputation as a centre for anti- and European settlers alongside Afri- downbytrafficlightsandroundabouts. “We have had periods of uncertainty “clean-up”campaign. of nine years of Labour-led government doping controls and food and drug cans and Chinese — has given the coun- It passes CyberCity, a cluster of mod- before, but suddenly we have fragility “Never in the years since my child- andwantedchange. safetytesting. tryastronginternationaloutlook.Many ern skyscrapers, which is impressive everywhere,” says a Mauritian com- hoodhasMauritiusgonethroughsucha But politicians and analysts say there Such companies in Mauritius’s Bio- oftherelativelyhighlyskilledworkforce from afar. But at the foot of the build- mentator. wildcat, political turbulence,” says are also signs the traditional role of eth- park offer glimpses