Inward FDI in Mauritius and its policy context

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Maurice ileFormerly mono-crop dependent, Mauritius is today a diversified economy thanks in large part to inward foreign direct investment (IFDI). Before the 1990s, annual IFDI flows were not significant, amounting to an average of US$ 10 million in 1980-1989. It was only in the mid-1980s that IFDI flows began to increase rapidly. With the implementation of the Export Processing Zone Act, many investors from Asia established textile factories in Mauritius to benefit from preferential access to the European market.

The Export Processing Zone (EPZ) attracted IFDI, of which roughly two thirds came from Asian economies. An open door policy and fiscal incentives undertaken by the Government in the 1990s have attracted large IFDI flows, in particular during the 2000s, from developed as well as developing economies, raising Mauritius’ IFDI stock to US$ 2.6 billion in 2011. Today, Mauritius is among the region’s most business-friendly economies.

 

Boopen Seetanah

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