In addition to tourism, the government of Mauritius has also made encouraged diversification of the economy into Business Process Outsourcing (BPO), financial services, and information technology.According to Government figures, the BPO industry in Mauritius has been growing 70 percent a year and is currently worth $1.6 billion, employing more than 100,000 people. Offshore banking was introduced in 1988 as a first step toward developing Mauritius into an international financial center, and the offshore sector is playing an increasingly important role in the financial services sector and emerging as a growth vehicle for the economy.18Development of the information technology sector, meanwhile, is intended to transform Mauritius into “a cyber island” by creating a high-tech multi-storeyed tower with strong technological capabilities that provides a home to companies from all over the world to set up operations, manage data, facilitate e-commerce, and establish call centers. The government has also encouraged use of Mauritius as a transshipment center and a re-export base and, more recently, as an international medical hub and a regional knowledge center. As a result of all of these efforts, the Ministry of Finance finds that the services sector showed consistent growth over 2006–09, with financial intermediation growing by 10.1 percent in 2008. Lessons of the three sectors The story of the three sectors in Mauritius has a number of lessons.Most importantly, the constant search for new drivers of economic growth reflects a desire by policy makers to adapt to the future rather wait and respond to shocks. The central lesson here is that the public sector can effectively formulate and implement sectoral policies to stimulate the private sector. In the case of sugar, the protocols were signed and the private sector rushed into the activity. In the case of EPZs and tourism, a well-articulated policy framework led to a strong private sector response. And in all cases, the government acted as a facilitator of private sector expansion. 18At the end of October 2002, the number of companies registered in the offshore sector reached 20,111. The Mauritius Freeport, the duty-free zone in the port and airport, aims at transforming Mauritius into a major regional distribution, transshipment, and marketing center.
26 Business Climate and Investment Alongside successful trade policy aside and adaptability, another major reason for Mauritius’economic success has been its business climate and incentives for foreign companies to locate there. Mauritius has no capital controls, a relatively stable currency, a low flat corporate tax rate of 15 percent, and a large number of double taxation avoidance agreements; together, these attributes sometimes make Mauritius more attractive than larger financial sectors for businesses. International rankings consistently give Mauritius high marks for business and investment climate. In contrast to many developing countries, Mauritius has never had a government advocating confiscation and nationalization policies.