This country profile was published in November 2008 in our annual 'Africa in 2009' issue. The next edition, 'Africa in 2010' will be on sale 23 November 2009.

Click on the drop-down menu above to see Mauritius's Top Companies and Top Banks.

Thanks to its tradition of well-structured responses to global market realities, Mauritius has managed to maintain a positive economic outlook right up until the most recent talk of a global recession, which is one eventuality that the country cannot easily withstand; the island economy's tourism and textiles markets would almost certainly be victims. Yet, judging from its past performance, Mauritius would be keenly looking to detect and exploit opportunities to its benefit. A short-term hit can be expected but, in the medium term, the economy's moves towards greater competitiveness should pay off. The outlook was for 6% real GDP growth in 2009, in the wake of a projection of 5.8% in 2008.

Economic policy has been geared towards diversification from the existing 'four pillars' of sugar, textiles, tourism and financial services, and to achieving greater competitiveness as well as resilience to shocks. The government of Prime Minister Navin Ramgoolam has adopted policies of low taxes and deregulation to promote supply-side growth, and their effectiveness will now be tested to the full. High unemployment will require further action to reform the labour market and more training to help those who have lost their jobs to set up small and medium-sized enterprises. Investment is ongoing in education and in modernising infrastructure.

The hope has been that falling guaranteed prices for sugar in the EU will be compensated by increased output from the manufacturing sector operating in low-tax, export processing zones. The growth industries will be seafood, textiles and clothing. Exports have been expanding, with fish constituting an unprecedented 12% of total exports in 2007, almost as much as sugar.

Finance minister Rama Sithanen has been warning about the risks facing Mauritius since mid-2008 and has been chiefly concerned to maintain economic growth - even if this meant higher inflation. Sithanen has noted that the anticipated slowdown of the country's main export markets in the EU and US would in any case lower domestic inflationary pressure. The minister's arguments have been at variance with the approach of the Bank of Mauritius governor Rundheersing Bheenick, who has been arguing for high interest rates to counteract the inflationary pressure resulting from public-sector pay increases. Other experts tend towards the government view that the central bank's policy should be to combat inflation without impairing growth.

The island's usual political game of musical chairs is set to continue between the three leading parties, the Labour Party, the Mouvement Socialiste Mauricien (MSM) and the Mouvement Militant Mauricien (MMM). With the Labour Party's current five-year term ending in 2010, the manoeuvring has already begun, with MMM leader Paul Bérenger angling to pick and choose individuals from the other parties with whom to offer a new kind of coalition to the electorate. Relations between the MMM and MSM have gone sour because of sharp differences of opinion between Bérenger and MSM leader Pravind Jugnauth. A significant development has been the return to the MMM of one of its original MPs, Madan Dulloo, who broke away in 1983 to help form the MSM, staying with it until he set up a new, but very small, party in 1994. In coalition with Labour in 2005, Dulloo took the key post of foreign minister in Ramgoolam's government until he was fired for voicing criticism in March 2008.