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October 2014 - Mauritius: An ideal platform for investment

Dear Valued Investors,

The two-day visit of the Indian Minister for External Affairs and Overseas Indian Affairs, Srimati Sushma Swaraj to Mauritius, has been a testimony to the commitment of both India and Mauritius to elevate the excellent existing relations towards new heights for the mutual benefit of both countries.

On the other hand, the month of October was marked by the World Investment Forum 2014 which was held at the Palais des Nations, the United Nations headquarters in Geneva from 13th to 16th October. This year’s theme was “Investing in Sustainable Development”. The event saw the participation of over 3,000 delegates from more than 140 countries and a broad coalition of investment stakeholders.

Following the 2012 economic slump, the forum highlighted that global FDI flows rose by 9% in 2013 to reach USD 1.45 trillion. UNCTAD projects that FDI flows could still rise to USD 1.6 trillion this year, maintaining the upswing to USD 1.8 trillion in 2016, with relatively larger increases in developed countries.

However, despite the upsurge, the challenge to reduce poverty remains part of a very harsh landscape as billions of people continue to face extreme situations all over the world. Statistics are just staggering. In 2014, out of a population of 7 billion people, 1.3 billion people live without electricity while 1.2 billion are athirst for clean water. It is forecast that by 2030, the world population will reach 8.3 billion people, while the demand and supply imbalance will worsen as energy requirements will soar by 50%. The demand for food and water are expected to rise by 40% and 35%, respectively. In addition, critical global challenges will loom as climate change and threats to biodiversity increase.

Sustainable Development Goals have very significant resource implications across the developed and developing world. UNCTAD estimates that, globally, the level of investment needed to realize these goals will be of the order of USD 5 trillion to USD 7 trillion annually on average, up to 2030. Estimates for investment needs in developing countries alone range from USD 3.3 trillion to USD 4.5 trillion per year.

Investors have been apprised of opportunities while developing countries are endeavouring to attract investments that will have significant positive impact on their national development. However, there is still a big investment gap to be bridged, especially in Least Developed Countries. At current levels of investment, an annual gap of USD 2.5 trillion in developing countries alone claims global attention.

On a another note, the newly released 2015 Doing Business Report ranks Mauritius first in Africa and 28th out of 189 countries globally. Mauritius has moved up one place compared to last year. It should be noted that there has been a significant change in the methodology to establish countries’ ranking which is henceforth based on the distance to frontier score which shows how close each economy is to global best practices in the area of business regulation. Mauritius has registered appreciable improvement in areas like the issuance of construction permits, the provision of electricity, registration of property, credit facilities, paying taxes, trading across borders, enforcing contract and resolving Insolvency.

As far as the review of the trade policy of Mauritius is concerned, the World Trade Organization has, in its 4th edition, highlighted that Mauritius is one of the top performers in Africa due to its good ranking in various international indices relating to governance, competitiveness and the business environment. Efforts to improve the environment for trade and investment have included measures to fast-track the processing of permit approvals for large investment projects while legal protection to investors has been strengthened.

We wish you a pleasant read.

Ken Poonoosamy
Managing Director

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