Quora Answer: Can Mauritius become an Economic Power like Singapore?

The following is my answer to a Quora question: “Can Mauritius become an economic power like Singapore?” 

Mauritius is an island nation in the Indian Ocean about 2,000 kilometres off the southeast coast of the African continent, east of Madagascar.  The population of Mauritius is around 1.2 million.  If we look at the position, away from the major shipping lanes, and the population, it seems a tall order.  However, we have to consider that the country is relatively high in the human development index, and has a healthy economy.  Corruption is low, healthcare is good, education is subsidised, and the country possesses one of the largest EEZs in the world. 

As the country moves further up the production food chain, and invests in biotechnology, tourism, research, and renewable energy, it will continue to attract investment.  While it is far off the major shipping lanes, it is between Asia and Africa, making it strongly placed as an investment hub for Asian companies that want to invest in Africa, while mitigating their political risk.  Banking and insurance are already almost 12% of the economy, and it will grow.  The low tax regime, with strong compliance, makes it one attractive for regional hubs. 

Given another decade or so, it is not beyond reason to expect Mauritius becoming a regional economic power.  The greatest challenge it faces is climate change; this is an island nation.  This will mean that massive infrastructure investment is necessary.  These are not funds the country has, at the moment.  The country also imports a lot of petrochemicals to fulfill its energy needs.  The push for renewables is the next challenge.  Finally, growth also means addressing the growing wealth divide, which must be addressed.  Successfully overcome these challenges, and the country is expected to grow in the next decade or so, as Africa opens up.