Mauritius PESTLE Analysis: Tourism and Economy

Mauritius

Republic of Mauritius

Republic Moris

République de Maurice

Country Name – Mauritius

Area-2040km2(179th)

Population 12,88,000

Density -631.4/km2

Capital City -Port Louis

Currency -Muritiunrupee (Mur)

Languages -Mauritian creole,French,English,Bhojpuri.

Mauritian government parliamentary Republic

President- President Sir Anerood Jugnauth

Primeminister-NavinRamgoolam

Independence from -U.K in 12 march 1968

RepublicDay-12march1992.

Pestle Analysis of Mauritius

In PESTLE analysis of Mauritius, I analysis the political, economic, social, technological, legal, and environmental structure of Mauritius

Uses of Country Analysis Report:

Understanding gained from country profiles can be used to plan business investment or market entry in a particular country. The insights provide idea key business opportunities. The profiles also provide an overview of the legal and regulatory framework to start and operate a business in the country.

Typical uses of each PESTLE segment are :

Typical uses of each PESTLE SEGMENT:-

Political section provides understanding about the political system and key figures relevant to business in the country and governance indicators.

Economic section deals with the economic theory of a country that provides a balanced assessment of significant macro-economic issues.

Social section enables understanding of customer demographics through income distribution,

Rural-urban segmentation and centers of affluence, healthcare and educational scenario.

Technological section provides strategic information on technology and telecom, technological laws and policies, technological gaps, patents and opportunity sectors in the country.

Legal section provides information about the legal structure, corporate laws, laws to start a new business and tax regime.

Environmental section provides information on country’s performance on environmental indicators and polices.

Economic condition of Mauritius

As far as we consider the country, this is not a very big county, the total area of the country is 2040 square k.m.

The present economic condition of the country very good and growing with the good pace in every sector like:

If talk about the GDP of the country the it grows by $9.156 billion from 2009 to 2010 and real growth rate is of 2.1% from last year.

The per capita income in 2010 is $12,400 which is far more than India i.e. $1007(Rs.44345/year)

The avg. inflation rate is 3.4% in 2010 which also less than the India i.e. 8% approx.

The agriculture sector has grown by 4.5 % of the GDP: Products in which they have grown :

Sugar, Sugar derivatives, Tea, Tobacco, vegetables, fruits, flowers, cattle and and fishing.

The manufacturing sector, including export processing zone of the country has grown by 19.4% that shows that it has grown in good pace in comparison to other sectors like agriculture, tourism.

The reason for growing in such a pace is…

Mauritius was in labor intensive growth for export, including textiles, and clothing, watches, and clocks, jewelry, optical goods, toys and games and cut flowers.

Tourism sector in Mauritius has grown by 8.7% of GDP: The tourism of the country is grow due to its good climatic, weather condition, covered by Indian ocean (sea shore)i.e. beach and all tourist come and enjoy the natural environment of the Mauritius.

They attract so many countries like India, France, U.S, South Africa, and other European countries.

The export is increased by $2.55 billion, in textiles and clothing, watches ,and clocks ,jewelry ,optical goods ,toys and games travel goods and hand bags.

The major market for this export: European countries and U.S.

The import of the country is $3.552 billion. The country mainly import manufactured goods, capital equipment, food stuffs, petroleum products,chemicals,dairy products,fish,wheat,rice,iron and steel,cenment,fertilizers,and other industrial raw materials. They mainly import from India, France, South Africa, China, Japan, Spain, Italy, Germany, Malaysia, and Thailand.

Political Factors

In the present time political environment play a very important role to overcome country from every problem and make the country perfect in every section like economical, social, environmental and and technological and the same thing happened with Mauritius. Since from 2002 economy started to face some serious challenges as result of globalization, involving the erosion of trade preferences for both Textiles and sugar, two pillars of the economy. Economic growth declined by 3%-4%, while unemployment, Budget deficit and public debt increased steadily.

So for overcome from these problems government took so many action. These actions are as follows:

In July 2005, they concentrated on a bold economic reform so that it handle and easily face all the global competitive challenges of global market. This reform or changes was not only to improve or remedy to fiscal weakness but also increase business, improve the investment condition in the country, and also increased the FDI investment.

The government promoting the restructuring and modernization of textile and sugar industry.

They are also promoting ICT (information communication technology) sector, made sea food hub, Freeport (free trade zone at the port and airport).

Government also focuses on the various issues like:

The land based oceanic industry,

Hospitality and property development.

Healthcare and biomedical industry.

Agro-processing and biotechnology.

The knowledge industry and renewable energy.

Social factor

Social section enables understanding of customer demographics through income distribution,

Rural-urban segmentation and centers of affluence, healthcare and educational scenario.

In the country, there are governmental as well as non governmental org.work for the social development of the country. The government offers so many projects for the private and other organization.

The Amssador’s Special self help programme (SSH) is the development programme.

The above programme is to promote and assist small scale project and improving the socioeconomic condition of the country at grassroot level.

The basic aim of SSH funds projects are as follows:

Addressing global issues such as HIV/AIDS prevention and drug use.

Women empowerment.

Children’s education.

Environmental protection.

Mauritius Health and Welfare

The Mauritius govt. funded for health services for all the public(easily accessible)

Government funded health services and facilities are widespread and accessible to most of the population although facilities are concentrated in urban areas.

Ministry of Economic Planning and Development provide more facilities to public

So for that government allocated 7.7% of the GDP to healthcare (US$57.9 million)

The government has given more emphasis on the healthcare and addressed more doctors and more beds in the hospitals for the easy convenience of the public.

Now a days govt. give more emphasis to some important issues like:

Easy access to drinking water

Nutritional value increased by 2680 to 124% per capita caloric intake.

In the present time govt. provides family welfare allowances to the poor.

Government provides support to the economically weak students:

They provide wheelchairs to the physically weak(handicap) for use at the university of Mauritius and university of technology Mauritius.

Government refunds the taxi fares who is physically unfit.

They provide discount in the examination fee.

Technological

Mauritius govt. has been increased upto Rs.24billion in which 11 billion has been invested by the Mauritius govt.

The govt has been invested on various project like:

Road construction :

11 road projects.

Many bi directional lanes.

Phase 1 of the ring road

The Bus rapid transit system

Airport :

To meeting more vessel and container at the port govt. expand the port and for that it invested Rs.3.5 billion.

Agriculture

Government opened agricultural research and extension unit to provide information to planters and breeders regarding price and production level.

It provide technical assistance for the development of high tech. sheltered level.

It provide consultancy charge up to 75% and application fee Rs.150000 for promoting sugar business to gaining the fair trade from the EU.

Environmental Factor

Government for protection and enhancement of the country environment they take 3 major steps

Energy efficienct

Encouraging public, industry, private for using energy efficient light bulbs for that they provide additional subsidy.

They also frame a regulatory institution Energy efficiency management office.

They encourage by providing economic incentives for not to purchase polluting vehicles and bio fuels.

Green buildings:

For reducing the green house gas emission they transform and construt more energy efficient building.

Create awareness regarding new energy efficient parameters for building.

Measures existing buildings energy efficiency.

Construct building with such materials which do not affect the environment.

Solar Energy

For utilizing solar energy ministry of renewable energies grant a new subsidy of 5000 of each of the 50000 household to purchases the solar water heaters.

Other improvement in local environment

To protect the environment from unforeseen condition they take various measures like

The drainage flood prone areas

Enhance awareness about waste management and biodiversity.

Made a disaster management unit.

Legal factors

Tax policy -decreased the tax at source on royalties to non residents from 10% to 15%.

They provide tax benefits to the big companies till 31 December.

The individual liable to national residency property tax has been increases from Rs.385000 to 400000.

Government removed the custom duties on rice, milk, oats milk, almond milk, street light lamps.

Removed the duties on T.Vs up to 32 inches and up to 15% on T.V sets above 32 inches.

They charged higher tax on energy inefficient electrical and electronic appliances.

Ministry of renewable energy will decide the tax on car which emits CO2.

Country using Porter’s diamonds model

Porter’s Diamond

The Determinants of National Advantage

In the there is demand of two main sector:

1.Tourism

2. Sugar industry.

The country is surround by the Indian ocean (island),so it takes the advantage tourism.

The country was in cane production very well developed before the independence, and still now. There are so many sugar industries has been established in the Mauritius, and they export sugar to his neighboring country at in large amount.

With the development of technology country witnessed constant evolution in this sector.

The country in the begning produced sugar in the large amount and increases its production by increasing by the mills at every decade.

But due to competition in the globalised market so many rivalry are present like Cuba,India,etc.and cost of sugar increases due to increasing the inflation as well as factor of production of sugar.

For the making the sugar industry prospers govt. made a future plan from 2005 to 2015.

In which they showed various cost which is incurred in producing sugar. By considering all factors (competition, cost of production, inflation) govt. has decide to reduced the production of sugar.

Usually country produces 600000 tonnes sugar annually in which they exported 530000 tonnes exported to the Europian union .While domestic consumption of sugar is 40000 tonnes per annum.The success of sugar industry has good agreement between U.K and other europian union.

The upliftment of sugar production in country due availability of water and avg. rain fall is 2500mm per year

So from the above facts it appears that the demand of the sugar is present in the country and outside the country. But due to the inflation factors of production cost become high.

The cost of the skilled labor is very high.

Supporting industry for the Mauritius to increase the GDP in 2010 are industrial growth and tourism, which participate 19.4% and 8.7 %.

Mauritius is like a heaven for the tourists and for promoting this sector govt. play a very important role

For promoting this sector govt. advertise the country in all over the world like:

“TOURIST ARE DRAWN TO THE UNSPOILED NATURAL BEAUTY OF MAURITIUS”

“WITHOUT ENVIRONMENT WE WON’T ANY TOURISM”

Mauritius take economic advantage from tourism, with this sector so many hotels industry at the peak seasons generate revenue in good amount and from hotels govt. collect the tax in large amount.

Every year in Mauritius approx. 9 lakh visitors come to the country.

The Mauritius now becomes the investment hub due to tourism.

In the present times many rivalry are emerges out of Mauritius in tourism sector like South Africa, U.S.A etc.

Mauritius infrastural development

Mauritius govt. has been increased up to Rs.24billion in which 11 billion has been invested by the Mauritius govt.

The govt. has been invested on various project like:

Road construction:

1.11 road projects.

2. Many bi directional lanes.

3. Phase 1 of the ring road

4. The Bus rapid transit system