Speaking Notes of the Chairman of JEC Deputy Prime Minister,
Financial Secretary

• On behalf of the Mauritius private sector and members of the JEC, I am indeed honoured to welcome you this afternoon. Let me once again congratulate you on your accession to the position of Deputy Prime Minister and Minister of Finance.

• Deputy Prime Minister, the responsibility which besets you as Minister of Finance, at a time when the economy of Mauritius is undergoing a very complex transition is both huge and challenging but also exciting. As stated in our 2003/2004 Budget Memorandum the present economic context is best described as the dilemma between reaping the benefits of long term economic reforms and the immediate concerns of investment, unemployment and cooperate re-engineering in an international economic architecture which is becoming more and more competitive.

• We believe that the Government and the business community should focus on the issues of investment, employability, corporate social responsibility and further reduction of the budget deficit in order to put Mauritius on a high growth trajectory.

• Ways and means to “dynamise” investment

  It is essential to identify investment opportunities and continue to improve the overall investment climate. While we have to consolidate existing sectors (as we have been doing), we must endeavour to encourage the development of new sectors. The work undertaken to kick-start the ICT sector and the knowledge industry is indeed laudable. Other areas where we believe there is huge potential are the fishing and environment clusters. We will come forward with specific suggestions in the near future.

• Raising the general level of employability

  The economic transformation of Mauritius over the last 30 years was successful as a result of our country increasing substantially the share of manufactured goods in its export structure. Manufacturing exports exceeded primary exports in 1986 and reached 70% of total exports to the OECD countries by the end of the 1990’s. However, it is a matter of concern to note that the average share of “high-skill manufactures” in total exports has remained constant at 2.5% over the 1980-2000 period. The distribution of our labour force by skills unfortunately confirms that around 97% of employment is in the categories of semi-skilled and unskilled as compared to 76% in Singapore.

• In this context, building a high skilled human resource base in a business friendly labour environment is a key factor for our future economic progress. The present work being undertaken jointly by the Government and the Private Sector regarding the emergence of Mauritius as a knowledge hub goes clearly in this direction.

• Corporate social responsibility

  The JEC is conscious of the need for a more structured participation of the private sector in community development. We will soon come forward with proposals to this effect.

• Reducing the budget deficit

  The budget deficit though is expected to go below 6% of GDP, remains high. Public debt has reached some Rs 100 billion representing around 65% of GDP. Though we acknowledge that significant capital expenditure has been necessary to improve the infrastructure in vital sectors such as education and ICT, Government must avoid getting into the debt trap and continue to work towards reducing the present budget deficit.

• Putting Mauritius on a higher GDP growth trajectory

  Notwithstanding the present challenges pertaining to the difficult international environment, to the unfavourable weather conditions of the past year and to the recent political crisis in Madagascar, the economy of Mauritius, is beyond doubt, facing structural difficulties. The real GDP growth, excluding the climatic factor has been on the decline. Most of the productive sectors of the economy, as well as financial services did not perform satisfactorily in 2002.

  We believe that the present structural problems are typical of economies which have undergone the first stage of industrialisation on their way to becoming more mature and service oriented economies. Mauritius with its culture of hard work, discipline and strong public/private sector partnership has the right ingredients to rise to these challenges.

• Public/Private Sector partnership

  Indeed, the tradition of partnership between Government and Private Sector which is well known beyond our shores will be an indispensable factor to finding concrete solutions to the challenges facing us. Our partnership, in facing problems in sectors like sugar, textile, ICT and financial services has shown that we have the means and the ability to overcome them. We are convinced, at the JEC that our economic transition will be successful and Mauritius will definitely move to a new economic threshold.

  Before ending, DPM, I would like to assure you of the full support and cooperation of the Mauritius Private Sector in this endeavour.

  DPM, we look forward to working closely with you during the coming years.

  
  JEC
  13 October 2003