Mauritius - Recovering from Covid

Mauritius' best strategy for economic recovery post-pandemic includes both temporary support to firms and households, and comprehensive reforms to address pre-existing structural challenges, says the World Bank's latest economic analysis for the country. The Mauritius Country Economic Memorandum, Through the Eye of a Perfect Storm - Coming Back Stronger from the Covid-19 Crisis, says the crisis presents policy makers with an opportunity to confront long-standing challenges.

The report highlights four main pillars for a strong recovery:

A new industrial policy approach that focuses state support on innovation and technology transfer, while addressing cross-cutting issues in skills development, competition, natural resource management, and public private partnerships to promote productive private sector investment.

Reversing the ongoing decline in competitiveness by leveraging foreign direct investment and new preferential trade opportunities to upgrade exports, while focusing Covid-19 support measures on managing the fallout from the pandemic in the short term.

Maintaining Mauritius' inclusive development path will require renewed and more comprehensive efforts to promote labour market participation, especially for low educated women and youth, and more attention to early childhood and second chance education. Moving resources from the overly generous basic pension system to more targeted and effective anti-poverty programmes would help cope with the increased social needs and reduced fiscal space.

Further strengthening of the public sector, in terms of policy coherence in complex, multi-sector reforms, and implementation capacity. Close collaboration with the private sector is also key.