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International MarketingManagement

 

By

Manish Jaiswal (JSB-01-007)-6th Trimester

Empirical Study of Growth of Mauritius in International

Business

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Republic of Mauritius

Flag Coat of arms

  Capital  Port Louis

The island of Mauritius itself is divided into nine districts:

1. Black River (Capital: Bambous)

2. Flacq (Capital: Centre de Flacq)

3. Grand Port (Capital: Mahébourg)

4. Moka (Capital: Quartier Militaire)

5. Pamplemousses (Capital: Triolet)

6. Plaines Wilhems (Capital: Beau Bassin and Rose Hill, Phoenix)

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7. Port Louis (Capital of Mauritius)

8. Rivière du Rempart (Capital: Mapou)

9. Savanne (Capital: Souillac)

About Mauritius

Mauritius is the most accessible island in the Indian Ocean, boasting of a perfect tropical holiday

trip at bargained and affordable prices for an exotic holiday trip. Finding yourself surrounded

amidst spectacular scenery--miles of lush sugarcane plantations, mystical mountains, pretty

cascading waterfalls and rainforests abound with coniferous trees and casuarinas, is a real

extravaganza. Though nestled up as a small island alongside the big African continent, it’s

culture and lifestyle is influenced by British, Indian and French ties.

Bare, black volcanic peaks tower over the sugarcane fields, which cover about half of the island.

The island satisfies the whims of sunbathers, beachcombers, sightseers, mountaineers,

swimmers, yachtsmen, water-skiers, skin-divers, anglers, big game fishermen, philatelists,

 punters, golfers, gamblers, all night rovers and ultimate escapers.

Physical Location:

Mauritius is a volcanic island in the Indian Ocean lying in the east of Madagascar and southwest

of India. Almost 11 times the size of Washington, DC, Mauritius terrain is small coastal plain

rising to discontinuous mountains encircling central plateau. With about 600 people per square

kilometer,

Mauritius has one of the highest population densities in the world. There is no monsoon season,

though cyclones hit the island every 15 years or so between November and May.

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History of Mauritius…

Mauritius received many visitors, intruders and rulers, who came here mostly for trade purposes.

Arab traders knew of Mauritius as early as 10th century The Dutch claimed Mauritius in 1598.

Later, France came and renamed it as Île de France and gave it over to the French East India

Company to run as a trading base.During the second half of the 18th century, the island’s capital, Port Louis, became a free trading

 base, which lured the British. Mauritius gained its independence on March 12, 1968. It remained

a member of the Commonwealth of Nations.

Tourist Attractions of Mauritius:

Port Louis is the bustling capital of Mauritius of about 1, 38,000 people and a leading port. Here

you can have a rendezvous with the spirit of this fascinating land, a potpourri of cultures,

colorful traditions and festivals. During the day, it bustles with big-city commercial activities,

while at night in contrast all the activity takes place at the swish new Le Caudan Waterfront,

where you can enjoy casino, cinemas, shops, bars and restaurants.

You can drop in at the Natural History Museum to see a stuffed replica of several extinct birds

as well as specimens of animals and fish; the dodo, an extinct species since the late 17th century.

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There is also Mauritius Postal Museum, featuring a collection of Mauritian stamps and assorted

 philately. You can behold Islamic architecture, at Jummah Mosque, built in the 1850s in the

middle of Chinatown, and Fort Adelaide, called as the Citadel by the locals. Fort Adelaide is a

British fort offering excellent hilltop views. Its harbourside location is world-class.

Park’s giant Victoria regia water lilies, golden bamboo, chewing-gum trees, fish poison trees

and a 200-year-old Buddha tree amuse the tourists a great deal. The wonderful Pereybere public

 beach is also popular due to its shopping facilities, restaurants and pubs.

Important Festivals and Exhibitions:

Celebration of almost all the Hindu festivals in this island is a common phenomenon. Festivals

like, Teemeedee, Thaipoosam Cavadee, Diwali, Pongal, Mahashivratri, New Year, Holi,

Independence and Republic days are celebrated here.

Culture and Lifestyle…

The people of Mauritius are as varied as the landscape; a fascinating blend of people from

Europe Africa India and the Far East has created a unique cosmopolitan island culture. Mauritius

accounts a 63% of Indian majority of which 80% follow Hinduism. Roughly every other fifth

 person is Muslim. Both groups have descended from labourers brought to the island by the

British to work the cane fields from India or China. The remaining population is of Créoles,

descendants of African slaves, and Franco-Mauritians, the original settlers of the island.

English is the official language of the island, though you may also hear French, Créole and also

Indian languages like Bhojpuri and Urdu. The island’s main attraction to fun loving tourists is

Créole Séga, a foot-shuffling erotic dance that’s generally performed on the beach to the rhythm

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of Latin American, Caribbean and African pop.

Mauritius, delicious cuisines may also attract you. The most common varieties are Créole,

European, Chinese and Indian, with seafood almost always the specialty. You can feast your 

taste buds with a typical Mauritian buffet, which might include a Muslim biryani, Indian chicken

curry, Chinese pork dish, Créole roast beef and French-style vegetables with boiled rice, which

is a must.

Food Habits: - The eating habits of the Mauritians inevitably reflect the ethnic diversity of its

 people: Creole rougailles, Indian curries, Muslim biryanis, Chinese sweet-and-sour pork, French

delicate dishes, English bacon and eggs, you name it, you’ll get it there.

Basic ingredients of the Creole cuisine are the tomatoes (known as pommes d’amour), onions,

ginger, garlic and chilies. Palm heart and Cameroons (giant prawns), venison and wild boar are

favorite items of French cuisine. Fresh fish and seafood set the keynote for Chinese cooking.

The traditional blends of home crushed spices are the sauce base for mouth glowing Indian

curries. The delicate blend of spiciness and subtle mix of ingredients constitute the setting for 

the event-related Muslim cuisine. Local vegetables and fruits abound all year round in a colorfulselection of mouth watering delights

Economic Environment of Mauritius

Since independence in 1968, Mauritius has developed from a low-income, agriculturally based

economy to a middle-income diversified economy with growing industrial, financial, and tourist

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sectors.

For most of the period, annual growth has been in the order of 5% to 6%. This remarkable

achievement has been reflected in more equitable income distribution, increased life expectancy,

lowered infant mortality, and a much-improved infrastructure. Sugarcane is grown on about

90% of the cultivated land area and accounts for 25% of export earnings.

The government’s development strategy centers on expanding local financial institutions and

 building a domestic information telecommunications industry. Mauritius has attracted more than

9,000 offshore entities, many aimed at commerce in India and South Africa, and investment in

the banking sector alone has reached over $1 billion. Mauritius, with its strong textile sector, has

 been well poised to take advantage of the Africa Growth and Opportunity Act (AGOA).

Some other Vital Info of their Economy.

GDP - per capita: purchasing power parity - $13,300 (2005 est.)

GDP - composition by sector: agriculture: 6.1%; industry: 29.9%; services: 64% (2005 est.)

Unemployment rate: 10.5% (2005 est.)

Population below poverty line: 10% (2001 est.)Agriculture - products: sugarcane, tea, corn, potatoes, bananas, pulses; cattle, goats; fish

Industries: food processing (largely sugar milling), textiles, clothing; chemicals, metal products,

transport equipment, non-electrical machinery; tourism

Exports - partners: UK 33.1%, France 20.4%, US 14.8%, Madagascar 5.1%, Italy 4.1% (2004)

Imports - partners: South Africa 11.3%, China 9.4%, India 9.3%, France 9.2%, Bahrain 5.3%,

Japan 4.1% (2004)

Fiscal year: 1 July - 30 June

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Political Environment of Mauritius

Mauritius is a parliamentary democracy governed under the constitution of 1968, as amended in

1992. The president, who is the chief of state, is elected by the national assembly for a five-year 

term. The prime minister, who is the head of government, is appointed by the president, as is the

council of ministers. The unicameral legislature consists of a 70-seat national assembly; 68members are elected and, and eight, representing ethnic minorities, are appointed by the

 president.

Legal System in Mauritius

Mauritius has a composite legal system consisting of British common law practices and the

French Napoleon Code. During the French period, the island’s legal system was governed by the

French Napoleonic Code and remained in force under the British rule. This entailed subsequent

amendments in civil and criminal procedural laws as well as in company law. Although

Mauritius has been a Republic since 1992, the country is still a member of the Commonwealth.

The Privy Council in London is the Supreme Court of Appeal.

Regulatory Body in Mauritius

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Under the Mauritius Financial Services Development Act 2001, the regulating authority with

regard to offshore matters is the Financial Services Commission (FSC). It is expeditious and

efficient in approving applications to incorporate companies in Mauritius. The FSC has also

 been careful not to forsake standards in satisfying the flexible demands of offshore customers

whilst protecting the investor and preserving the excellent reputation of Mauritius as an

International Financial Services Centre.

Why Mauritius growing as Financial hub???

1. Political Stability

Mauritius is one of the most politically stable countries in the African region. Its various ethnic

and religious components live in harmony, united in a common endeavor to enhance the nation’s

economic growth and prosperity.

Mauritius is a multiparty democracy modeled on the British parliamentary system. The

separation of the legislative, the executive and the judiciary powers is built in the Constitution.

The legal system is a composite of English laws and the French Code Napoleon. The highest

Court of Appeal is the British Privy Council.

Free and fair elections are held every five years. Democracy is solidly founded and all political

 parties can be represented in the National Assembly.

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2. Strong Economy

Over the last three decades the island has experienced stable economic development and growth.

It has emerged from a monoculture economy based on sugar cane to a diversified economy

resting on four main pillars, namely agriculture, export processing industries, tourism and

financial services. The information and communication technology (ICT) sector is now being

developed as a fifth pillar.

Grouped in the higher middle-income countries in the African region, the island now enjoys a

 per capita income of US$4,000. With an average GDP growth of 5.7% over the past five years,

it is looked up to as a model in Africa. State-of-the-art physical infrastructure, comfortable

foreign exchange reserves, a highly educated and productive workforce with a literacy rate of 

some 86%, and a robust and diversified economy make the island a most coveted place for 

 business.

3. Qualified Work Force

Mauritius has a literacy rate of over 86 %. A large pool of well-educated and easily trainable

young people is ready for the labour market. A skilled and bilingual (English / French)

workforce, graduates and qualified professionals including lawyers, engineers, programmers,

consultants, accountants and chartered secretaries are available to fill all job positions.

In addition, many Mauritians benefit from international exposure through overseas education

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namely in the UK, France, USA, Canada, India, China, Singapore, Australia and South Africa.

Furthermore, a comprehensive system for vocational training through the Industrial and

Vocational Training Board (IVTB)ensures a ready supply of skills in a number of fields such as

tourism, engineering, electronics, jewelry, ICT, printing and textiles.

The IVTB operates a Training Grant Scheme whereby the employer contributes 1 % as training

levy and can in return recover up to 75 % of the training costs incurred. The labour laws and

remuneration orders are available from the Ministry of Labour & Industrial Relations

and the Mauritius Employers Federation (MEF).

4. Developed Infrastructure

The government has invested heavily in infrastructure. Mauritius is today endowed with a

developed and well-maintained road network, a modern international airport, a well-equipped

sea port, state-of-the-art telecommunications, serviced land and new generation business parks.In 2005, the Ebene Cyber Tower was awarded the Intelligent Building of the Year by the

Intelligent Community Forum (ICF), USA. The whole island is supplied with electricity, water 

and telephone lines. Electric power and water supply are stable.

5. Preferential Market Access

The success of the Mauritian economy, particularly export-oriented manufacturing has been

largely dependent on the preferential access granted to our products on overseas markets.

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Through the various trade agreements and conventions signed with other countries, Mauritian

 products enjoy duty and quota free access to Europe, USA and Africa and Asia.

In addition, the Government of Mauritius wields economic diplomacy at bilateral as well as

multilateral level in order to continuously improve market access opportunities for Mauritian

 products and services.

6. Dynamic Private Sector

The private sector has played a crucial role in the economic development of the country. It has

 been very proactive in the growth of key economic sectors, namely agriculture, manufacturing,

tourism and the financial and business services. It is now venturing into the ICT sector.

The shift from a predominantly monocrop economy to an industrial base has paved the way for 

the launching and take-off of ICT initiatives. This has been made possible because of the

dedicated involvement of the local private sector in the country’s economic progress.

Furthermore, the private sector is also keen on investing abroad and is enthusiastic to enter into

 partnership with foreign entrepreneurs and embark on joint ventures. The SMEs, on the other hand, are open to proposals for collaboration from foreign entrepreneurs.

7. Pleasant Living Environment

Mauritius is a melting pot of world civilizations, a blend of peoples of Indian, and Chinese,

African and European descent. It prides itself on a uniquely rich culture embedded in a web of 

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values and traditions.

Known for their hospitability and warmth, Mauritians welcome foreigners into their circle of 

friends. The great majority is multilingual, being proficient in both English and French while

mastering a third language such as Hindi, in addition to the local vernacular creole.

All facilities are available in Mauritius in terms of accommodation, education, healthcare and

medical services, shopping, recreation and sports. The island is not only reputed for its beautiful

countryside, lagoons and beaches, but also for its heritage of colonial-style architecture, typical

villages and folk traditions and festivities. Mauritius boasts a pleasant and safe environment,

which makes it an attractive place to work and live. Its sub-tropical, warm and sunny climate

offers a yearlong lifestyle of unsurpassed quality.

8. Attractive Incentives

The Government pursues a liberal foreign investment policy and offers attractive fiscal and non-fiscal incentives for the development of all sectors of the economy. These are grouped under two

distinct categories, as detailed in the First and Second Schedules of the Investment Promotion

Act 2000 (IPA 2000), according to the nature of the projects.

Under the First Schedule, several investment schemes have been devised to suit the needs and

requirements of investors. For projects falling under the Second Schedule, a flexible package of 

incentives is tailored.

Incentives offered can be in the form of reduced corporate tax, exemption of customs on

equipment and raw materials, preferential loan rates and reduced tariffs for electricity and water.

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Moreover, dividends paid to shareholders are tax-exempt. Free repatriation of profits, dividends

and capital is allowed.

Stay in Mauritius & spend in rupees soon:

The Indian rupee may become the officially-accepted currency in faraway Mauritius if New

Delhi accepts a proposal that is currently under the consideration of the Mauritian authorities.

The move could also reinforce Mauritius’ geopolitical significance for India. Considering the

strong links between the two countries and the recently-concluded free trade agreement (FTA),

the idea of allowing the Indian rupee to be accepted in Mauritius is gradually gaining currency.

The move will also facilitate the travel and hospitality industries of Mauritius, for whom the

Indian customer is becoming increasingly important.

The Mauritius travel trade is bullish on the idea and the deputy prime minister of the country,CG Xavier Luc Duval, is planning to take up the issue with Indian authorities. “If the central

 banks of the two countries can work out a system, it is possible to allow the Indian rupee to be

used in Mauritius,” he told ET in an exclusive interview. Now on a visit to India, Mr Duval said

he would also consult representatives of the Indian travel trade on the impact of the move.

If the proposal is accepted, the Indian tourist need not go through the trouble of first buying US

dollars or euros and then converting them to Mauritian Rupees while holidaying in the Indian

Ocean nation. This would result in savings in terms of conversion costs.

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For the proposed arrangement to work out, the Reserve Bank of India and the central bank of 

Mauritius need to work out a system by which the Indian rupees collected in the tourist paradise

are deposited with the RBI through Mauritian banks. This is necessary since the Indian Rupee is

not convertible.

I have consulted our central bank and the issue will be taken up with the Indian authorities, Mr 

Duval said. The Mauritius Rupee is convertible and is currently stronger than the Indian rupee.

 Nearly 30,000 Indian tourists visited Mauritius last year and Mr Duval expects the number to

register a healthy increase during ‘06. The average speed of tourists visiting Mauritius is

estimated to be around $1,000.

A large business delegation is also accompanying the Mauritius deputy prime minister and Mr 

Duval says that the interaction between the two industries would lay the foundation for strong

 business growth. I would also invite the Indian hotel industry to invest in Mauritius, he said,

adding that efforts are being made to help Indian tourists feel at home in his country.

The Indian rupee is accepted in Nepal and bankers in Hong Kong trade in the Indian currency.The grey market at several places in the Gulf region, Singapore and Sri Lanka also accepts the

Indian currency. While the operations in all other countries, except Nepal, are not legal, the

acceptance of the Indian currency shows the growing confidence in the Rupee in the global

arena.

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