Analysis of the Foreign Direct Investment

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Beginning: Bank of Mauritius * Figures for 2009 are for the period January-September merely http: //www.state.gov/e/eeb/rls/othr/ics/2010/138111.htm Analysis of the FDI:

Following legion old ages of ruin, FDI lifted strongly in 2006, after of import economic reform steps taken by the authorization to widen the economic system, smooth the advancement of concern, and develop the investing clime. In the period 2006 to 2009, more than USD 1 billion of foreign investors was attracted in Mauritius as shown in the tabular array above.

In the twelvemonth 2008, the major supply of FDI inflows into Mauritius were U.K, accompanied by India, South Africa, France and the United States and as we can detect, all of them apart from United States have DTTs with Mauritius. Wholly, these five states contributed about three one-fourth of the entire investings. Tourism and Banking Sector were the chief drive force to pull the mass FDI. In the first nine months of 2009, FDI amounted to USD 195 1000000s with chief lending states being France, UK and the United States along with Switzerland, Dubai and South Africa. The sectors which contributed most in 2009 were Hotel and Tourism, development in existent estate through the Integrated Resort Scheme ( Luxury Hotels ) , and banking.

As we can see, there has been a big figure of companies coming in Mauritius to shoot capital as Mauritius has provided them with many inducements viz. entree to custom-free zone for goods peculiarly for re-exportation intents and taking the advantages of Mauritius being a member of IOC, COMESA and SADC would give them favoured right of entry to a 380 million based clients market, stand foring imports chance of USD 90 billion. Four chief US investors in Freeport zone of Mauritius are Mauriden Ltd, Amazing Stone, Boxmore Plastic Ltd and Casamar Ltd in the Freeport Zone.

To profit from the ideal location of Mauritius that connects South Africa to India and China, Apollo-Blake and Teleforma Inc, two US investors, have started their Business Procedure Outsourcing ( BPO ) company which is based on client dealingss services. Mauritanian investors have been in joint venture with several Gallic and British companies to inculcate capital in the ICT sector following the authorities strong inducements to force technology-related concerns. Business Process Outsourcing activities, catastrophe recovery and concern continuity Centres, call Centres, and package development are Fieldss that have been undertaken by taking planetary participants including Accenture, Hinduja, Huawei, Infosys and Orange Business Services.

Then we have the Covance Laboratories Ltd keeping two fifth of the entire portion capital of Noveprim Ltd, a domestic company which exports guinea hogs to U.S and European medical research research labs. Furthermore, in 2006, Coventa Energy and Gamma Civic Ltd in joint venture were to utilize USD 160 million for a green environmental undertaking in Mauritius.

Mauritius have an emerging Land-Based Oceanic Industry sector which is yet to be exploited. Eco-friendly engineerings will be used to pump pure deep sea H2O for bottling and air conditioning intents in the IT and touristry industries. Thompson-Chalon Associates ( US and South African joint venture ) have undertaken this undertaking with executing of the first phase of the eco-park costing USD 150 million.

Indian companies besides have made important investings in the last few old ages. Due to miss of competition in the retail crude oil station, Indian Oil Ltd jumped in to work the market with USD 18 million in storage terminuss of fuel and retail distribution. Furthermore, Phoenix Beer holding monopoly power in the local state encouraged Universal Breweries Ltd to establish Black Eagle Beer with an investing of USD 9. In add-on, in 2006, Mauritius Telecom, the local public-service corporation, was the lone fixed phone supplier in Mauritius before Mahanagar Telephone Mauritius Ltd ( MTML ) commenced its ain telephone service in Mauritius. The State Bank of India took over the domestic Bank, Indian Ocean International Bank ( IOIB ) for the sum of USD 8 million to supply a easier frontier for people puting in India as Mauritius was reported in 2009 to be the largest investor in India. The Tourism sector being one of the most performing sectors in Mauritius in footings of grosss, has been a major inducement for Sagar Hotels & A ; Resorts to build a Hotel with a USD 47 million appraisal in 2006. Due to miss of medical services in the local state or from an investor ‘s point of position, medical services being a market yet to be exploited, Apollo Hospitals Groups from India constructed a hi-tech infirmary with 200-bed capacity with estimated cost of USD 30 million in 2007.

In 2008, a Chinese company invested MUR 200 million in a paper recycling undertaking for the fabrication of lavatory and photocopy paper. China intends to put massively in the Jin Fei Economic and Trade Cooperation Zone in Mauritius to profit from the trade zone that benefits Mauritius. First, to develop the substructure for the publicity of the Trading zone, the Chinese house Shanxi Tianli Enterprise Group is fixing to put USD 100 million. Furthermore, the Chinese authorities is back uping the entire cost of the Trade and Economic Zone undertaking estimated at around USD 770 million and is looking frontward to catch the attending of Chinese investors in a assorted sectors in order to suppress the regional markets of COMESA and SADC. In late 2009, the undertaking ‘s work started and is expected to finish in 2016. Over 30000 occupations will be available and will be bring forthing around USD 215 million in export net incomes per annum.

Indian Ocean Commission ( IOC ) , Eastern and Southern Africa ( COMESA ) and the Southern African Development Community ( SADC ) , African Growth and Opportunity Act ( AGOA )

Direct Invest Abroad by Sector

( USD 1000000s )

Manufacturing

Tourism

Banking

Real estate

Other

Entire

2006

10.6

12.4

0.4

2.9

9.7

36

2007

7.3

33.4

3.5

7.6

5.2

57

2008

7

31.7

7.2

7.3

2.2

55.4

2009*

3.2

17.4

6.4

3.7

1.5

32.2

Direct Investment Abroad by Mauritius, 2006-2009A

USD 1000000s

Maldives

Malagasy republic

Seychelles

Mocambique

France

Reunion Island

USA

India

South Africa

Others

2006

3.4

9.2

5.9

8.6

2

0.2

0.4

8.1

2007

9.3

8.3

5.4

4.5

5.2

4

2.9

1

1.1

18.5

2008

21

8

5.7

0.3

6

4.8

0.4

0.9

0.7

8.4

2009*

9.8

2.7

6.3

0.3

1

0.8

0.4

4.9

Entire

43.5

28.2

23.3

13.7

13.2

10

4.1

2.3

2.2

39.9

Beginning: Bank of Mauritius

* Figures for 2009 are for the period January-September merely

hypertext transfer protocol: //www.sardc.net/Editorial/sadctoday/view.asp? vol=685 & A ; pubno=v11n1

From the tabular array above, we can detect that Maldives, Madagascar and Seychelles are the most influential states in footings of capital escapes. Maldives has attracted capital through their touristry and Banking sector. The ground for puting in Maldives ‘ touristry sector is thatA the significant demand from the emerging economic systems in Asia has boosted the hotel industry in Maldives, and has even offset the lessening in demand from Europe due to recession. Maldives going an ideal location for tourers can besides be translated to Maldives going an ideal location for investors to put.

Seychelles is in competition with Mauritius in footings of the Tourists and seaward investors preferred location. Not to set all eggs in one basket, investors in Mauritius went to the Seychelles to diversify their investing as both states have plentifulness to offer. Local makers in Mauritius have been allowed to utilize cloth from “ Third Country Source ” under African Growth and Opportunity Act ( AGOA ) . Mauritius fabric and garment sector can profit well through this Third Country Fabric proviso as it is traveling to assist Mauritian fabric mills to catch the attending of more US dress buyers.A This is the ground why a few local fabric enterprisers have been motivated to open mills in the nearby part, largely in Madagascar and Mozambique.

A Regional Food Company ( RFC ) has been set up by Mauritius, Madagascar and Mozambique as a step to advance nutrient security. African Development Bank has agreed to assist Mauritius in this undertaking with Mozambique and Madagascar. Under this cross-border enterprises, Mauritius envisage to turn a broad scope of harvests chiefly rice, maizes, onions and murphies in Madagascar and Mozambique.

Banks in Mauritius has started to open up their wings abroad in a position to widen their concern. The Mauritius Commercial Bank Ltd has already settled itself in the Indian Ocean viz. Seychelles, Madagascar, Mozambique, Reunion and Maldives. On the other manus, the State Bank of Mauritius has started covering in Madagascar and in India in a position of enlargement. Mauritius, holding been involved in the production of sugar from more than one century, is utilizing its know-how to re-establish and organise sugar production in Mozambique, Ivory Coast, Tanzania, Uganda and Madagascar.