Mauritius has a very good record of growth. Despite the country’s isolation from major world markets, it is among the most successful of small developing countries in diversifying its economy out of dependence on one agricultural commodity (sugar) into manufacturing, tourism, horticulture and, latterly, financial services and ICT. Manufacturing, especially of clothing and textiles (centred on the early established export processing zones, or EPZs), and tourism have developed rapidly, providing jobs and income. Manufacturing output grew by more than ten per cent p.a. during 1980–90 and more than five per cent p.a. 1990–2000, but it grew very little at all in the following decade.
By the late 1990s the textile industry was facing stiffer competition from new low-cost producers as well as the erosion of preferential tariff agreements. The government embarked on a programme of privatisation, financial market liberalisation and development of offshore activities, with the aim of turning the island into an international financial and business services centre. By 2005 financial and business services contributed 20 per cent of GDP.
Sugar continued to contribute significantly to export earnings and the economy remained vulnerable to fluctuations in world commodity prices and bad weather. It is difficult to reduce imports in lean years since both the manufacturing and tourism industries are import-intensive.
With relatively high levels of foreign investment, the economy grew well during the 2000s, and the impact of the world economic downturn and fall in world demand in 2008–09 was relatively weak. Thus after a period of strong growth in the mid-2000s, the economy continued to grow by at least three per cent p.a. during 2009–15.