Mauritius: A Case Study Arvind Subramanian Few sub-saharan African…

Question Answered step-by-step Mauritius: A Case Study Arvind Subramanian Few sub-saharan African… Mauritius: A Case Study Arvind Subramanian Few sub-saharan African countries have achieved high standards of living. A notable exception has been  Mauritius. Are Mauritius’s achievements due to favorable initial conditions, good policies—especially  openness to trade and foreign investment—sound domestic institutions, or other factors? Achievements Between 1973 and 1999, real GDP in Mauritius grew 5.9 percent a year, on average, compared with 2.4  percent for sub-Saharan Africa as a whole (see chart). Through the magic of compounding, the income of  the average Mauritian more than tripled over a 40-year period, while that of the average African increased  by only 32 percent. Improvements in human development  indicators have been equally  impressive. Life expectancy at birth  increased from 61 years in 1965 to 71  years in 1996; primary school  enrollment increased from 93 to 107  per 100 children of school age  between 1980 and 1996, while it  decreased from 78 to 75 in the rest of  Africa. The income gap between the  richest and the poorest Mauritians has  narrowed considerably. High growth rates have been achieved  in a stable economic environment.  Between 1973 and 2000, annual  consumer price inflation averaged 7.8  percent in Mauritius, compared with more than 25 percent for sub-Saharan Africa as a whole. The  unemployment rate declined from nearly 20 percent in 1983 to 3 percent in the late 1980s, although it has  since edged up above 7 percent. Initial conditions Did Mauritius grow fast because of good conditions? On the one hand, a number of factors—especially  the initial level of income, geography, and commodity dependence—have exerted a drag on long-term  growth. For example, Mauritius is disadvantaged by being at least 25-30 percent more distant from world  markets than the average African country.  Globalization strategy Perhaps the most interesting aspect of Mauritius’s development has been its trade and development  strategy. At one level, Mauritius can be seen as a case study proving that openness and an embrace of  globalization are unambiguously (cannot argue over it) beneficial. Since the mid-1980s, the volume of  goods imported and exported by Mauritius has grown rapidly. Its openness ratio (the ratio of trade-in-goods to GDP) has increased from about 70 percent to 100 percent, while Africa’s openness ratio has  stagnated at around 45 percent. Particularly strong was the growth in manufacturing exports. Special factors The government in Mauritius ensured the rule of law and respect for property rights that have made  Mauritius attractive to investors. This, and opening Mauritius up to privatization and trade with the rest of  the world, is what has caused their success compared to other African countries.  Questions (1) What is the main idea of this article? (2) How does this article connect to globalization? (3) Some people would argue that the IMF and World Bank do ensure sustainable prosperity for all  people. Make a list of examples in bullet point form from this article that could be used to support  that argument.  (4) The IMF funding for Mauritius aided in speeding up their development as a nation. Where were  the funds allocated? Make sure to use the internet to find out. Document your sources you used.  (5) “Mauritius is disadvantaged by being at least 25-30 percent more distant from world markets than  the average African country.” How might this be important to their development as a country?  History World History SOCIAL 20-1 Share QuestionEmailCopy link Comments (0)