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April 2012: Market Diversification

Ken EnDear Valued Investors,

The above quote translates the tension between the threats and the promises which the present state of the world economy holds. The Board of Investment will not “waste a crisis”.

Regarding the promises, we remain optimistic as the world economy gives signs, however erratic, of a painful recovery. At the recent World Investment Forum held in Qatar, we were given to understand that emerging markets will play a key role in the acceleration of a global rebound. Also, the April 2012 World Economic Outlook projections for Sub-Saharan Africa indicate a 5.4% growth for the region.

Amidst global unpredictability, we are confident that we have closed the first quarter of this year with an honourable level of FDI stock, thus maintaining the inflow of investments. In fact, we are on target as regards nominal investment. Diverse sectors, including property development, ICT and telecommunications, logistics and distribution, and high-tech manufacturing continue to attract significant levels of capital.

This explains our strategy of diversification through the enhancement of our visibility in the fast growing emerging markets as investors intensify their outward investment thrust into Africa. However, despite our confidence in global FDI flows, we remain very attentive to both existing and prospective investors, and we pursue a close monitoring of our projects in the pipeline while ensuring their prompt materialisation.

Our optimism in the face of a possible recurrence of a financial crisis is tempered by a cautious approach which allows us to balance any temporary adverse effect of interruption of inflows of FDI.

But more importantly, our concern is how every dollar of investment is transmuted into the overall advancement of the country and its people. Employment generation for professionals and our multi-skilled workforce, enhancement of productivity, transfer of knowledge and technology, modernisation of infrastructure and nation building, betterment of the standard of living and alleviation of poverty, all furrow down as the benefits created by FDI inflows are soundly absorbed in the economy.

As part of our continual diversification strategy, we are promoting new and high value-added sectors like pharmaceuticals, biotech, knowledge, green energies and marinas. In addition, our efforts to see Mauritius assuming fully its role as the gateway to the huge Africa market for the development of trade, financial services and investment are on-going.

To this end, we have been on the front in new source markets including Australia, South Africa, China and the United States. With Chinese investors’ interest in real estate development and Australian companies’ focus on mining and exploration in Africa, a new trend is emerging. We are, therefore, accentuating our visibility on these markets.

In this context, speaking at a select gathering of around 90 leading private equity funds and investment advisors at the Harvard Club in New York, Honourable Xavier Luc Duval, GCSK, Vice Prime Minister and Minister of Finance & Economic Development showcased the use of Mauritius as a sound and recognised financial centre to gain access to Africa.

He equally reassured the global investors’ community regarding recent developments in international taxation issues.

Furthermore, Mauritius continues to offer new opportunities to investors, hence the opening up of the ocean Industry as announced by the Government earlier this month. Our foreign investor friends know that Mauritius boasts an exclusive economic zone (EEZ) of 1.9 million km2 plus an additional 400,000 km2 comanaged with the Republic of Seychelles, an expanse bigger than the combined land area of France, Germany, Italy, Spain and UK. This truly sizes up the huge potential for operators in the ocean industry, comprising offshore wind farms, district cooling, geothermal projects and sea food processing activities, amongst others.

Last but not least, in our pursuit to be on the cutting edge of innovative strategic thinking, I join Mr. Maurice Lam, Chairman of the Board of Investment, in announcing the first meeting of our International Advisory Board (IAB) for mid-May 2012. The IAB regroups leading thinkers and strategists who will advise us on how to continue to build the Mauritian platform into a hub of innovation and excellence.

Ken Poonoosamy

Managing Director