Economic development was fuelled by the Development Bank of Mauritius and the Bank of Mauritius, founded in 1967, to formulate monetary policy and capital formation and the security of foreign exchange.
Under the pressure of population explosion in the 1960s with mass unemployment, government called upon Prof. Meade and Titmuss to submit a report on the prevailing social and economic situation. Apart from the need to control family size, Meade had recommended the setting up of import-substitution industries. Henceforth, a few industries began to sprout, among which was the thriving poultry industry.
Limited by the small size of the local market, these secondary industries could not thrive far ahead. It was the policy of Ramgoolam to encourage the dissemination of new ideas and to provide all the incentives needed for their realisation and to lay down new infrastructure.
The EPZ Act of December 1970 provided a package of incentives to foreign investors, including industrial sites, harbour, airport, road, electricity and other facilities ready made.
Thus, in 1971,after visiting the successful EPZs in Korea,Taiwan, Hong Kong, Prof. Lim Fat, affirmed that Mauritius had all the potentials for the growth of a thriving EPZ. Ramgoolam called on his Foreign Minister, the dynamic and hard-working Gaetan Duval, and the latter threw himself heart and soul into the struggle for the creation of the local EPZ. At first, it moved very slowly, leaving little impact on the mass of the unemployed. But gradually, as Mauritius picked up experience and widened its market, the EPZ achieved considerable success with Mauritian products ranking among the best in the world. The textile industry had emerged as the second pillar of the economy.
Duval was a passionate believer in the viability of tourism as a third pillar of economic diversification. And time has proved him right though, in the initial period, tourists came in trickles, rising from 10,000 in 1964 to reach 68,000 in 1973 and128, 360 in 1979. Accompanying the expansion of tourism has been the parallel growth of our national airline.
It was unfortunate that little foreign investment poured into the country in the wake of the opposition's disruption of the economy through the staging of endless strikes in a bid to embarrass and to topple the government by revolutionary means.
But despite laying down the social and economic infrastructure for progress, under the pressure of the world economic crisis, inflation, economic stagnation, instability, disruption in world trade and limited foreign investment, Ramgoolams government was dogged with the spectre of chronic unemployment which finally caught up with him and overburdened his budget with foreign debts under the heavy weight of the welfare services and an inflated civil service.
By Anand Mulloo 15.9.98