The fifth Trade Policy Review (TPR) of Mauritius is being held at the World Trade Organisation (WTO) in Geneva from the 09 to 11 November, where the country’s trade policies and practices will be examined. The Mauritian delegation is led by the Minister of Land Transport and Light Rail, Minister of Foreign Affairs, Regional Integration and International Trade, Mr Alan Ganoo.
In his opening address this afternoon, Mr Ganoo highlighted that as a Small Island Developing State (SIDS) open to the world economy, Mauritius has been hit hard by the COVID-19 pandemic. Even if the lockdowns imposed in 2020 and 2021 have effectively prevented the spread of the virus in the local community, it has nonetheless severely affected our economic activities, he added.
The Minister recalled that our Gross Domestic Product (GDP) contracted by 14.9% in 2020 and all sectors of the economy registered negative growth, except for financial services and ICT. The tourism sector, which contributes around 23% to the GDP was the most severely impacted and contracted by around 80% in 2020. All this led to an increase of deficit in the current account of the balance of payments to 12.7% of GDP compared to 5.1% in 2019, he pointed out.
In a bid to mitigate this economic crisis, Minister Ganoo underlined that the Budget Speech 2021-2022 announced three core strategies, namely: to recover from the crisis, to revive all the industries, and, to improve our social resilience. With the timely implementation of the measures announced and the reopening of borders to tourists, we expect the GDP growth to be between 5 to 7% in 2021, the Minister said.
As regards Trade Policy, Mr Ganoo emphasised that in spite of the difficult situation, Mauritius, while remaining fully committed to a fair and equitable rules-based multilateral trading system, has continued to open up markets at the bilateral and regional levels so as to consolidate and diversify market opportunities in trade in goods and services; improve competitiveness and the investment climate as well as enhance economic cooperation with as many countries as possible.
The Minister outlined the enriching journey that Mauritius has had in the year 2021 with the coming into force of four trade agreements, covering a combined 70% of the world population namely: the African Continental Free Trade Agreement (AfCFTA); the establishment of a Free Trade Agreement between Mauritius and China; an Economic Partnership Agreement with the UK in the wake of BREXIT and; a Comprehensive Economic Cooperation and Partnership Agreement (CECPA) with India.
Speaking on economic diversification, Mr Ganoo recalled that besides consolidating existing sectors such as agro-industry, textile and clothing and tourism, Mauritius has also opened up to new sectors such as ICT, the development of a Knowledge Hub and Medical Hub, the film industry, the blue economy, transshipment and bunkering and, innovation and research. The manufacturing sector is being transformed from traditional manufacturing to higher value-added activities and new segments such as vaccine and pharmaceutical production are also being promoted.
He also stated that several schemes have been put in place by the Mauritius Research and Innovation Council to promote innovation. These include: A National Training and Reskilling Programme and, the introduction of a Regulatory Sandbox License which allows projects for which no regulatory framework exists to be implemented in test environments.
Regarding financial services, the Minister stressed on the Government’s commitment to combat Money Laundering and Terrorism Financing adding that an ambitious reform of the financial sector is being implemented including the revamping of the Anti-money Laundering and Combating Financing of Terrorism Legal framework in July 2018.
Mr Ganoo also noted that the shift of Mauritius from a compliance level of 14 out of the 40 Financial Action Task Force (FATF) Recommendations to 39 out of 40 in the past years from 2018 to 2021 testifies of the effectiveness of the Mauritian Legal and Regulatory Framework and the importance Anti-Money Laundering and Combating of Terrorism Financing has on the Agenda of the Government.
Furthermore, he dwelt on the measures enunciated by the Prime Minister, Mr Pravind Jugnauth, at the 2021 United Nations Climate Change Conference (COP 26) Summit They are: reducing gas emissions by 40 per cent and achieving 60 per cent of green energy in our energy mix by 2030; phasing out coal in electricity generation before 2030; promoting a circular economy involving 70 per cent of waste from landfills by 2030; and promoting smart agriculture and island wide tree planting programmes.
In this context, the Government is implementing several measures, including the introduction of an alternative public mode of transport with environmentally sustainable approaches, through the Metro Express Project and encouraging the use of electric vehicles; developing sustainable smart cities across the island; introducing a National Flood Management Programme to counter the impact of climate change leading to flash floods; and investing in renewable energy projects with the adoption of a biomass framework.
Minister Ganoo concluded on the particular challenges that SIDS like Mauritius face as regards external shocks and stressed that the solidarity of the international community is required to help SIDS accelerate their economic recovery and combat challenges such as climate change.
