San José State University
Department of Economics

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Thayer Watkins
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The Economic History of Mauritius

Mauritius is a small island in the southwest Indian Ocean about 600 miles east of Madagascar. Despite its small size and isolated location Mauritius has shown the potential for becoming an important city-state economy on par with Singapore and Hong Kong.

History

There is no definite evidence of human contact with the island until Portuguese ships visited it in the early 1500's. The Portuguese saw no reason to establish a settlement there at that time. A Dutch fleet blown off course by a cyclone (a hurricane of the Indian Ocean) on its way to Indonesia landed there in 1598 and named it after Prince Maurice of Nassau. Again there seemed to be no reason to establish a settlement at that time. Some four decades later, in 1638, the Dutch did establish a settlement but it turned out not to be a permanent settlement, surviving only a few decades. The French who had made settlements in other islands in the region took control of Mauritius in 1715. The French established sugar cane plantations on Mauritius. However French privateers who preyed upon British shipping in the region also established a base there just as they did on the northern part of Madagascar. This made Mauritius under French control a threat to British interests.

During the Napoleonic Wars the British decided to gain control of Mauritius and they attacked. In December of 1810 the French authorities on Mauritius surrendered to the British but under the conditions that the French settlers retain their property and be governed under the French language and civil law code. Mauritius remained under British control until 1968 when the Republic of Mauritius was given independence.

Under British control the economy of Mauritius was primarily sugar cane production. Ninety percent of the land under cultivation was in sugar cane. The sugar cane economy needed workers and they were imported from British India and Africa. India was the dominant source of the immigrants. Now about 68 percent of the Mauritians are descended from those migrants from British India. Those migrants were both Hindu and Muslim so about 50 percent of the Mauritian population are Hindu in religion and 17 percent are Muslim. About 27 percent of the population are descendants of migrants from Africa, called Creoles. A small proportion, 3 percent, of the population are descendants of immigrants from China. This small proportion amounts to thirty thousand people. Most of these are Roman Catholics. There are also descendants of the French settlers of Mauritius. They total about twenty thousand people, about 2 percent of the population. Altogether about 24 percent of the population are Roman Catholic. There are another 10 percent who are also Christian. About 2.5 percent are Buddhists.

Upon independence the Republic of Mauritius adopted the parliamentary democracy of Britain. The official language is English but most Mauritians also speak French Creole. There are numerous other languages spoken by small groups in Mauritius.

During the period after independence the sugar industry dominated the economy and the politics of Mauritius. A labor movement advocating socialism led to political protests and demonstrations. The government cracked down on the radical leaders and there was violence.

The prospects for Mauritius seemed dim in the 1990's. However as the 1997 date for the turnover of control of Hong Kong to China approached some Hong Kong businesses were seeking sites for relocation. About that time Professor Lim Fat of Mauritius visited relatives in Taiwan and conceived a plan to replicate the conditions of Taiwan in Mauritius. He came home and advocated tariff-free zones to encourage businesses to locate in Mauritius. He also lobbied the Mauritius government to encourage textile fabrication in Mauritius. He himself opened up such a business.

Soon Mauritius was manufacturing sweaters and was becoming a major world supplier of such garments. Things were looking up for Mauritius. Some of the labor radicals were brought into the government and shed their radicalism. A former labor radical became minister of finance and became a strong advocate of sound fiscal policy and the encouragement of business development. Local entrepreneurs developed export businesses for such local products as peppers. Mauritius prospered and political disputes over the division of income turned into political cooperation to promote the growth of income. With political stability the tourist industries of Mauritius grew as well.

Mauritius still has problems and is vulnerable to increases in the cost of transporting the island products to world markets, but it clearly is on the right track.


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