Inclusive Development: The Case of MAURITIUS Kirsten Koop Joseph Fourier University Grenoble, France “Leveraging Social Protection for Inclusive Growth: Theory, Case Studies, and the Role of Policy” Praia, 7-8 May, 2013

Key factors of Inclusive Development Economic, political, social and cultural key factors of the Mauritian success story Contribution of the social protection system to the Mauritian success story : institutional innovation for social inclusion

Mauritius after independance (1968): a classical case of under-development Lack of natural resources Sugar monoculture (95% of export earnings) Lack of infrastructure High rate of unemployment (27%) High relative poverty rate (estimated 70%) GDP growth: -10,1% in 1980

Basic indicators 2012 1980 GNI per capita in PPP terms 13.300 1,780 Source: Human Development Report 2013, Central Statistics Office, Mauritius Source: Human Development Report 2013, Central Statistics Office, Mauritius Source: Human Development Report 2013, Central Statistics Office, Mauritius Basic indicators 2012 1980 GNI per capita in PPP terms (constant 2005 international $) 13.300 1,780 GDP growth rate 4.5% -10.1% HDI 0.737 (80th) 0.551 Relative Poverty (Income less than 50% of median income) 8,5% Estimated : 40% Absolute Poverty (less than 5000 MUR =122 Euros/month) > 2% n.a. Unemployment rate 8.2% 27% GINI index 0.34 0.42 Source: Human Development Report 2013, Central Statistics Office, 2013

The Mauritian development strategy: from generic to specific resources 1970s: Sugar industry 1980s: Export Processing Zone and tourism full employment Growth based on generic resources (assets) 1990s: Offshore banking and insurance, Freeport, ICT-sector (Cyber Island) From 2000 on : Further diversification: seafood hub, medical hub, high class tourism, Integrated Resort Scheme  Growth based on the revelation of specific territorial resources (assets): geographic position, cultural proximity with countries of origin, bilingualism.

External conditions and national/local key drivers of inclusive growth 1980s: Preferential access to EU under Lomé Convention From 2000 on: Market liberalisation and increased global competition Global scale Good governance: SAP, diversification of sectors and markets, exploitation of country specific resources (assets) Cultural ties of the different communities with their countries of origin (attraction of new investors, diversification of markets, transnationalisation of Mauritian enterprises) High investment of local capital Social consensus (strong syndicates, tripartite committee, social protection system and programs focusing on social inclusion National scale Local scale Social cohesion (among extended families and neighbors)

The Social Security System in Mauritius Figure 2 - Mauritius' Main Social Protection Programmes The Social Security System in Mauritius Free education and health care 365.6 Million $; 4,4 % of national budget Cash Transfers: Basic Retirement Pension, widow's, orphan's and invalid's pension, social aid, food aid, Unemployment Hardship Relief, etc. In-Kind Assistance: School Feeding Programme, Textbook Loan Scheme, School Supplies, Grant Scheme for Tertiary Education, Overseas Medical Care, Social Housing, Bus Subsidy, Starter kits to poor farmers, Funeral Grant, Fishermen’s Bad Weather Allowance, etc.

Components of Government Expenditure on Social Security and Welfare (2010) Source: Central Statistics Office, 2012  Cash transfer towards vulnerable does contributes to breaking cycles of poverty, but is not sufficient alone.

Institutional innovation for social inclusion and empowerment: the National Empowerment Foundation (NEF) Training Increase capacity of getting job through professional education for young and unemployed Circular migration Propose short or mid term job opportunities of foreign countries Child Welfare Programme Pré-primary schooling Assistance for students Community Empowerment Programme Training and Placement Empowerment of Women Entrepreneurship Integrated Social Development Corporate Social Responsibility Socio-economic Development Health Leisure and Sports Environment Education and Training Desaster Risk Reduction Eradiction of Absolute Poverty (EAP) Integrated Community Development Trust Fond for the integration of vulnerable Groups Housing assistance Micro-credits Created in 2008 Problem of overlapping Lack of clear definition of poverty reduction and empowerment Need for Monitoring and Evaluation System The programmes that have been integrated in the NEF have been constituted into 7 programmes (see Figure 1). Under these programmes are about 26 active projects with different start dates. Figure1: National Empowerment Foundation Programmes

Conclusion Overall aim of programmes of inclusion: access to social housing, education and employment. Need for a clear government’s vision of WHAT Inclusive Growth should be and HOW it can be reached.