MAURITIUS: Country looks to Chinese investment as global demand for its traditional exports wane

The Indian Ocean island of Mauritius is set to benefit from 113 million US dollars in cheap Chinese loans and grants to develop roads and communications. Speaking to Reuters after a recent visit to China, the Indian Ocean island's prime minister Navin Ramgoolam said that although Mauritius -- with a population of slightly more than one million people and a roughly 6.5 billion US dollar economy -- was a minnow next to China, it offered advantages for investors. "Mauritius offers China a great deal, because we have a vision of making Mauritius the hub in the Indian Ocean. This is already becoming a reality. With this visit to China, this reinforces our position of the hub in the Indian Ocean, because you know we are a member of SADC, a member of COMESA, a member of the Indian Ocean Commission, a member of the Indian Ocean rim. All this makes China get an access to a market of around 500 million people," Ramgoolam said. The politically stable nation is working hard to improve its investment climate, and evidence of Chinese interests can already be felt in various sectors of the economy. "Yes, China is very strong, China is very strong. China has a lot. In Mauritius there are lots of Chinese clothes all over the island," said Feroz Sheikheerah, who sells clothes on the island. And not everyone is happy with the entry of Chinese business into their markets. "Yes, we are nervous about China because, how can I tell you; they can mass produce their clothes. They do the same thing everywhere," said Rishi Barah Anil, another trader in second-hand clothes. But despite the anxiety of people on the street, construction is due to begin in October on a planned 500 million US dollar Chinese investment to build a trade development zone -- the largest ever foreign direct investment into Mauritius. Facing the end of preferential trade deals on its key sugar and textile sectors, Mauritius is opening and diversifying its economy to attract foreign direct investment despite its lack of natural resources. "You know, we have to live with the reality of the situation. Today with the WTO and the globalised world we have to make efforts to restructure our economy. We cannot buck the market as they say, and so we have to face these realities," Ramgoolam said. Since Ramgoolam won elections in July 2005, the government has tried to improve the investment climate by speeding up procedures for business and registration permits and introducing flat rates of corporate and income tax at 15 percent.

ITN Source | July 25, 2007

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