Industrialization: The Mauritian Model

Abstract

On March 12 1968, when Mauritius became an independent nation, it was no more than another third world economy taking its destiny in its own hands. All the development indicators were despondently off the acceptable norms. The country, facing a demographic explosion and high and rising unemployment, depended almost entirely on a one-crop sugar economy. The ratios of population to doctors, lawyers, and other professionals were extremely high. So was the infant mortality rate. Life expectancy was low. More than 50 percent of houses were vulnerable to damage by cyclone. The literacy rate was low, reflecting poor enrolment in secondary schools. Public infrastructure was dilapidated even by third world standards. For some analysts the constraints to industrialization and growth were simply too overwhelming. A few years before independence, James Meade et al. (1961) thought there was little scope for industrialization because of the lack of skills. Four years after independence, V.S. Naipaul (1972) added to such pessimism when he described Mauritius as an ‘overcrowded barracoon’ where ‘problems defy solutions’ and as a country plagued by despair.

“Today, both our countries are hailed as economic miracles, perhaps because conventional wisdom had doomed us to failure after independence”. S.R. Nathan, President of the Republic of Singapore.²

I am grateful to Ali Michael Mansoor, Financial Secretary, Government of Mauritius for very positive and instructive comments on the paper and to my other colleague Dominique Theodore for assisting with the research. However, the views expressed in this paper are mine only and not necessarily those of the Ministry of Finance.