Africa's First "Tiger Cub": the Incredible Success-Story of Mauritius

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Africa's First The Park Place Economist Volume 4 Issue 1 Article 10 5-1996 Africa's First "Tiger Cub": The Incredible Success-Story of Mauritius Vinod Cardoza '96 Isabelle Pun Sin '97 Follow this and additional works at: https://digitalcommons.iwu.edu/parkplace Recommended Citation Cardoza '96, Vinod and Pun Sin '97, Isabelle (1996) "Africa's First "Tiger Cub": The Incredible Success-Story of Mauritius," The Park Place Economist: Vol. 4 Available at: https://digitalcommons.iwu.edu/parkplace/vol4/iss1/10 This Article is protected by copyright and/or related rights. It has been brought to you by Digital Commons @ IWU with permission from the rights-holder(s). You are free to use this material in any way that is permitted by the copyright and related rights legislation that applies to your use. For other uses you need to obtain permission from the rights-holder(s) directly, unless additional rights are indicated by a Creative Commons license in the record and/ or on the work itself. This material has been accepted for inclusion by faculty at Illinois Wesleyan University. For more information, please contact [email protected]. ©Copyright is owned by the author of this document. Africa's First "Tiger Cub": The Incredible Success-Story of Mauritius Abstract Mauritius has often been cited as the success story of the 1980s among developing countries. The country embarked on an ambitious program of industrial and commercial development in 1971, when the Export Processing Zone (EPZ) was set up (Reuters Librq Reporr 1995). According to Business America (Craig 1992), ''From 1 97 1 to 1990, the number of enterprises in the EPZ jumped fiom 10 ot 574; employment from 644 to 88,258; exports from MRS. (Mauritian Rupees) 4 million to MRS. 1 1,000 million; and exports as a percentage of total Mauritian exports fiom 1 1 ot 63 percent." This article is available in The Park Place Economist: https://digitalcommons.iwu.edu/parkplace/vol4/iss1/10 Africa's First "Tiger Cubn: The Incredible Success-Story of Mauritius Viod Cardoza and Isabelle Pun Sin ''The British stir sugar into their tea clockwise, the French stir it anti-clockwise. But we Ueuritians stir it 'zig-zag'!" - Mooniar, Mauritian tour guide. L INTRODUCTION percent, of European descent (French and English). Today, most Mauritians speak both It is believed that Mauritius was known to English and French, and Mauritius receives early Arab traders, but the first visitors fiom preferential treatment fiom both England and Europe were the Portuguese. Mauritius was France. This is a reflection of Mauritius' uninhabited when the Portuguese first came to colonial background. the island in 15 10. They used it as a stopover Mauritius gained its independence from the on the way to Goa and Malacca, but they did United Kingdom on March 12, 1968. That not settle (Craig 1992). When the Dutch came year, it became a member of the as settlers in 1598, they named the island after Commonwealth (P.C. Globe 1992). On Prince Maurice Van Nassau. They introduced March 12, 1992, Mauritius became a republic sugarcane and a herd of Javanese deer, and within the Commonwealth (Craig 1992) . exterminated the dodo bud in the process. According to me Jerusalem Post (Bittiker II. PROGRESS REPORT 1993), "The Dutch stayed only as long as it took to cut down every ebony tree and kill off Mauritius has often been cited as the all the dodo birds on the island." success story of the 1980s among developing In 1715, the French came to the island and countries. The country embarked on an renamed it "Isle de France." They too cut ambitious program of industrial and down forests, and brought in slaves fiom commercial development in 1971, when the Africa and Madagascar to work on the sugar Export Processing Zone (EPZ) was set up plantations. Mahe de Labourdonnais (who (Reuters LibrqReporr 1995). According to took over as governor in 1735) rebuilt Port- Business America (Craig 1992), ''From 197 1 Louis, the capital city, and opened the first to 1990, the number of enterprises in the EPZ sugar mill on the island (Craig 1992). jumped fiom 10 to 574; employment from 644 Following the Napoleonic Wars, the to 88,258; exports from MRS. (Mauritian British took over Mauritius in 1810. They Rupees) 4 million to MRS. 11,000 million; and abolished slavery in 1833, and imported exports as a percentage of total Mauritian indentured laborers fiom India to work on the exports fiom 11 to 63 percent." plantations (Murphy 1981). The Chinese also Mauritius was indeed in a dire economic came to the island as as shopkeepers and situation in the late 1970s and the early 1980s, busiiessmen. This explains the demography of but, within a generation, Mauritius has gone the Mauritian population today: 65 percent fiom "gloom" to "boom". Mauritius seemed Indian (both Hindu and Muslim), thirty percent to be heading toward disaster--some people Creole (a French-African mix, mostly expected the tiny island to face the same fate Catholic), three percent Chinese, and one as the extinct dodo. One of the major Cardbza and Pun Sin problems Mauritius was facing was acute In 1980, because of a cyclone, sugar population growth. In 1981, the population production was barely 475,000 tons. That doubling time was calculated to be an alarming year, Mauritius consumed 40,000 tons locally, 40 years (Murphy 1981). The Financial ind was unable to meet its quota of 500,000 Times (Hawkins et.al. 1994) writes: "Some tons that, under an agreement with the thirty years ago, an eminent economist warned European Economic Community, Mauritius that Mauritius faced 'ultimate catastrophe' was expected to supply. This resulted in a loss unless its rate of population growth was of $160 million for Mauritius (Gupte 1981). checked." In 1981, Mauritius had to devalue its Another economic problem faced by currency again. The current balance of Mauritius in the 1970s and early 1980s was payments deficit was running more than $200 that it was too dependent on the agricultural million a year, and no Western commercial sector, mainly sugar production. In 1970, bank would extend it credit (Gupte 1981). sugar cane and its by-products constituted 92 Unemployment during that period was also a percent of exports (South ChimMorning Post very serious problem for Mauritius. 1995) In the 1970s and 1980s, Mauritius was According to The Washington Post- (Murphy the ninth-largest producer of sugar in the 198l), the unemployment rate was estimated world (Gupte 1981). The economy was to be around 15 percent. earning two-thirds of its foreign exchange and To deal with these problems, the one-third of its gross domestic product fiom government of Mauritius had to come up with this primary commodity, which was already several plans to dramatically improve sugar overabundant and economically suicidal production,productivity, as well as to boost considering that the world at that time was exports. New production methods were rapidly turning to sugar substitutes (Murphy introduced (Gupte 198 1). Sugar producers 198 1). For years, the Ministry of Agriculture started using new irrigation techniques such as attempted to diversify the agricultural sector drip irrigation, a process by which fields are but these attempts were met with limited ensured of steady, below-surface watering success, a reason being that sugar is the crop through special pipes that crisscross the that is the most resistant to the cyclones that growing area (Gupte 1981). This new type of occasionally hit the island. ~c&ciii~to the irrigation was more efficient than the Euromoney Supplement (1 990), a major traditional method that caused uneven cyclone strikes the country about once every watering, waste of water and occasional fifteen years. flooding. Another innovation in the sugar In 1979, the economic situation in industry was the use of special "ripeners" (so Mauritius became catastrophic: world sugar that the crop matures more quickly) which prices and rising oil prices left Mauritius with were sprayed in the cane fields. only enough foreign exchange for two weeks A further breakthrough in the Mauritian of imports in August of that year. It was sugar industry was the construction of a bulk forced to borrow a loan of $98 million fiom sugar terminal in Port-Louis, the capital the International Monetary Fund. In return, it (Gupte 1981). The project was financed by had to devalue the Mauritian Rupee, causing sugar producers, as well as the Mauritian inflation in the island to rise to about 40 government under Sir Seewosagur percent (Murphy 198 1). Ramgoolam. The new bulk terminal-the Mauritius was a monocrop economy that largest of its kind in the Indian Ocean area-- depended heavily on sugar exports. This was was hlly automated and computerized, and the cause of many of its economic problems. had the capacity to load ships at 1,500 tons of IXe Park Place Economist, v. 4 sugar an hour. Previously, that quantity would The EPZ was set up in 1971 and by 1987 have taken manual labour a month to load it had made Mauritius the third largest (Gupte 1981). exporter of woollens (Reuters Library Re* Further, the agricultural sector experienced 1995). The development of the EPZ sector diversification throughout the 1980s. greatly contributed to a reduction in Mauritian sugar producers started producing unemployment in the country. Even though it "special sugars" which fetch far higher prices employs people mainly in textile and clothing than regular sugar-and are growing in factories, the EPZ also employs workers popularity as a result of health considerations. (mostly women) in factories that produce The production of by-products of sugar, such other products such as clocks, watches, as bagasse (molasses), was extensively carnival masks and spectacle frames.
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