Cluster Country Program Evaluation on Small States : Mauritius Country Case Study, Enhancing Competitiveness and Private Sector Development
After nearly two decades of strong economic growth, in 2005 the economy was in difficulties. The loss of trade preferences in textiles in 2005, the anticipation of prospective reform to the European Union’s sugar protocol for 2006-10, and higher in...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/09/26820705/cluster-country-program-evaluation-small-states-mauritius-country-case-study-fy0715-enhancing-competitiveness-private-sector-development http://hdl.handle.net/10986/25195 |
| Summary: | After nearly two decades of strong
economic growth, in 2005 the economy was in difficulties.
The loss of trade preferences in textiles in 2005, the
anticipation of prospective reform to the European Union’s
sugar protocol for 2006-10, and higher international oil
prices had contributed to a slow-down in growth, rising
unemployment and widening fiscal and current account
deficits. A new government was elected in 2005 which
implemented a series of bold economic reforms (such as the
elimination of the export processing zone (EPZ) regime, a
progressive liberalization of the foreign trade and
investment regime and simplification of labor laws) to
redress the macro-economic imbalances and enhance
competitiveness to facilitate efficient restructuring of the
economy. This was achieved in large measure. Good policies
also allowed the government to deal effectively with the
global financial crisis of 2008. Following elections in
2010, a new (and fragile) coalition government was elected
which emphasized fiscal stimulus and the pace of reforms
slowed. Following a period of political instability, a new
government was elected in 2014 with an overwhelming
majority. However, as fiscal pressures mount, a sense of
policy drift continues, threatening the gains achieved in
recent years. The World Bank Group supported the
government’s reform efforts throughout the evaluation
period. Support was provided largely in the form of
development policy loans (DPLs), complemented by analytic
work and technical assistance (TA) for capacity building in
various parts of the government. The World Bank’s strategy
was aligned with the government’s priorities during 2005-10,
but it failed to adapt when the appetite for reforms waned
after a new coalition government took office following
elections in 2010. The World Bank’s strategy was flexible
and the program underwent significant changes to respond to
changing government priorities and unfavorable external
conditions. The World Bank’s program addressed the twin
challenges of building resilience (macro-economic and
social) and enhancing competitiveness that are common to
other small states. Perhaps the World Bank could have been
more selective in its areas of interventions. |
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