International Marketing Management

By Manish Jaiswal (JSB-01-007) -6th Trimester

Empirical Study of Growth of Mauritius in International Business

Republic of Mauritius

Flag

Coat of arms

Capital Port Louis

The island of Ma uritius itself is divided into nine districts:

1. Black River (Capital: Bambous) 2. Flacq (Capital: Centre de Flacq) 3. Grand Port (Capital: Mahbourg) 4. Moka (Capital: Quartier Militaire) 5. Pamplemousses (Capital: Triolet) 6. Plaines Wilhems (Capital: Beau Bassin and Rose Hill, Phoenix)

7. Port Louis (Capital of Mauritius) 8. Rivire du Rempart (Capital: Mapou) 9. Savanne (Capital: Souillac)

About Mauritius

Mauritius is the most accessible island in the Indian Ocean, boasting of a perfect tropical holiday trip at bargained and affordable prices for an exotic holiday trip. Finding yourself surrounded amidst spectacular scenery--miles of lush sugarcane plantations, mystical mountains, pretty cascading waterfalls and rainforests abound with coniferous trees and casuarinas, is a real extravaganza. Though nestled up as a small island alongside the big African continent, its culture and lifestyle is influenced by British, Indian and French ties. Bare, black volcanic peaks tower over the sugarcane fields, which cover about half of the island. The island satisfies the whims of sunbathers, beachcombers, sightseers, mountaineers, swimmers, yachtsmen, water-skiers, skin-divers, anglers, big game fishermen, philatelists, punters, golfers, gamblers, all night rovers and ultimate escapers. Physical Location: Mauritius is a volcanic island in the Indian Ocean lying in the east of Madagascar and southwest of India. Almost 11 times the size of Washington, DC, Mauritius terrain is small coastal plain rising to discontinuous mountains encircling central plateau. With about 600 people per square kilometer, Mauritius has one of the highest population densities in the world. There is no monsoon season, though cyclones hit the island every 15 years or so between November and May.

History of Mauritius

Mauritius received many visitors, intruders and rulers, who came here mostly for trade purposes. Arab traders knew of Mauritius as early as 10th century The Dutch claimed Mauritius in 1598. Later, France came and renamed it as le de France and gave it over to the French East India Company to run as a trading base. During the second half of the 18th century, the islands capital, Port Louis, became a free trading base, which lured the British. Mauritius gained its independence on March 12, 1968. It remained a member of the Commonwealth of Nations.

Tourist Attractions of Mauritius:

Port Louis is the bustling capital of Mauritius of about 1, 38,000 people and a leading port. Here you can have a rendezvous with the spirit of this fascinating land, a potpourri of cultures, colorful traditions and festivals. During the day, it bustles with big-city commercial activities, while at night in contrast all the activity takes place at the swish new Le Caudan Waterfront, where you can enjoy casino, cinemas, shops, bars and restaurants. You can drop in at the Natural History Museum to see a stuffed replica of several extinct birds as well as specimens of animals and fish; the dodo, an extinct species since the late 17th century.

There is also Mauritius Postal Museum, featuring a collection of Mauritian stamps and assorted philately. You can behold Islamic architecture, at Jummah Mosque, built in the 1850s in the middle of Chinatown, and Fort Adelaide, called as the Citadel by the locals. Fort Adelaide is a British fort offering excellent hilltop views. Its harbourside location is world-class. Parks giant Victoria regia water lilies, golden bamboo, chewing-gum trees, fish poison trees and a 200-year-old Buddha tree amuse the tourists a great deal. The wonderful Pereybere public beach is also popular due to its shopping facilities, restaurants and pubs. Important Festivals and Exhibitions: Celebration of almost all the Hindu festivals in this island is a common phenomenon. Festivals like, Teemeedee, Thaipoosam Cavadee, Diwali, Pongal, Mahashivratri, New Year, Holi, Independence and Republic days are celebrated here.

Culture and Lifestyle

The people of Mauritius are as varied as the landscape; a fascinating blend of people from Europe Africa India and the Far East has created a unique cosmopolitan island culture. Mauritius accounts a 63% of Indian majority of which 80% follow Hinduism. Roughly every other fifth person is Muslim. Both groups have descended from labourers brought to the island by the British to work the cane fields from India or China. The remaining population is of Croles, descendants of African slaves, and Franco-Mauritians, the original settlers of the island. English is the official language of the island, though you may also hear French, Crole and also Indian languages like Bhojpuri and Urdu. The islands main attraction to fun loving tourists is Crole Sga, a foot-shuffling erotic dance thats generally performed on the beach to the rhythm
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of Latin American, Caribbean and African pop. Mauritius, delicious cuisines may also attract you. The most common varieties are Crole, European, Chinese and Indian, with seafood almost always the specialty. You can feast your taste buds with a typical Mauritian buffet, which might include a Muslim biryani, Indian chicken curry, Chinese pork dish, Crole roast beef and French-style vegetables with boiled rice, which is a must. Food Habits: - The eating habits of the Mauritians inevitably reflect the ethnic diversity of its people: Creole rougailles, Indian curries, Muslim biryanis, Chinese sweet-and-sour pork, French delicate dishes, English bacon and eggs, you name it, youll get it there. Basic ingredients of the Creole cuisine are the tomatoes (known as pommes damour), onions, ginger, garlic and chilies. Palm heart and Cameroons (giant prawns), venison and wild boar are favorite items of French cuisine. Fresh fish and seafood set the keynote for Chinese cooking. The traditional blends of home crushed spices are the sauce base for mouth glowing Indian curries. The delicate blend of spiciness and subtle mix of ingredients constitute the setting for the event-related Muslim cuisine. Local vegetables and fruits abound all year round in a colorful selection of mouth watering delights

Economic Environment of Mauritius

Since independence in 1968, Mauritius has developed from a low-income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourist
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sectors. For most of the period, annual growth has been in the order of 5% to 6%. This remarkable achievement has been reflected in more equitable income distribution, increased life expectancy, lowered infant mortality, and a much-improved infrastructure. Sugarcane is grown on about 90% of the cultivated land area and accounts for 25% of export earnings. The governments development strategy centers on expanding local financial institutions and building a domestic information telecommunications industry. Mauritius has attracted more than 9,000 offshore entities, many aimed at commerce in India and South Africa, and investment in the banking sector alone has reached over $1 billion. Mauritius, with its strong textile sector, has been well poised to take advantage of the Africa Growth and Opportunity Act (AGOA). Some other Vital Info of their Economy. GDP - per capita: purchasing power parity - $13,300 (2005 est.) GDP - composition by sector: agriculture: 6.1%; industry: 29.9%; services: 64% (2005 est.) Unemployment rate: 10.5% (2005 est.) Population below poverty line: 10% (2001 est.) Agriculture - products: sugarcane, tea, corn, potatoes, bananas, pulses; cattle, goats; fish Industries: food processing (largely sugar milling), textiles, clothing; chemicals, metal products, transport equipment, non-electrical machinery; tourism Exports - partners: UK 33.1%, France 20.4%, US 14.8%, Madagascar 5.1%, Italy 4.1% (2004) Imports - partners: South Africa 11.3%, China 9.4%, India 9.3%, France 9.2%, Bahrain 5.3%, Japan 4.1% (2004) Fiscal year: 1 July - 30 June

Political Environment of Mauritius

Mauritius is a parliamentary democracy governed under the constitution of 1968, as amended in 1992. The president, who is the chief of state, is elected by the national assembly for a five-year term. The prime minister, who is the head of government, is appointed by the president, as is the council of ministers. The unicameral legislature consists of a 70-seat national assembly; 68 members are elected and, and eight, representing ethnic minorities, are appointed by the president.

Legal System in Mauritius

Mauritius has a composite legal system consisting of British common law practices and the French Napoleon Code. During the French period, the islands legal system was governed by the French Napoleonic Code and remained in force under the British rule. This entailed subsequent amendments in civil and criminal procedural laws as well as in company law. Although Mauritius has been a Republic since 1992, the country is still a member of the Commonwealth. The Privy Council in London is the Supreme Court of Appeal.

Regulatory Body in Mauritius

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Under the Mauritius Financial Services Development Act 2001, the regulating authority with regard to offshore matters is the Financial Services Commission (FSC). It is expeditious and efficient in approving applications to incorporate companies in Mauritius. The FSC has also been careful not to forsake standards in satisfying the flexible demands of offshore customers whilst protecting the investor and preserving the excellent reputation of Mauritius as an International Financial Services Centre.

Why Mauritius growing as Financial hub???

1. Political Stability

Mauritius is one of the most politically stable countries in the African region. Its various ethnic and religious components live in harmony, united in a common endeavor to enhance the nations economic growth and prosperity. Mauritius is a multiparty democracy modeled on the British parliamentary system. The separation of the legislative, the executive and the judiciary powers is built in the Constitution. The legal system is a composite of English laws and the French Code Napoleon. The highest Court of Appeal is the British Privy Council. Free and fair elections are held every five years. Democracy is solidly founded and all political parties can be represented in the National Assembly.

2. Strong Economy

Over the last three decades the island has experienced stable economic development and growth. It has emerged from a monoculture economy based on sugar cane to a diversified economy resting on four main pillars, namely agriculture, export processing industries, tourism and financial services. The information and communication technology (ICT) sector is now being developed as a fifth pillar. Grouped in the higher middle-income countries in the African region, the island now enjoys a per capita income of US$4,000. With an average GDP growth of 5.7% over the past five years, it is looked up to as a model in Africa. State-of-the-art physical infrastructure, comfortable foreign exchange reserves, a highly educated and productive workforce with a literacy rate of some 86%, and a robust and diversified economy make the island a most coveted place for business.

3. Qualified Work Force

Mauritius has a literacy rate of over 86 %. A large pool of well-educated and easily trainable young people is ready for the labour market. A skilled and bilingual (English / French) workforce, graduates and qualified professionals including lawyers, engineers, programmers, consultants, accountants and chartered secretaries are available to fill all job positions.

In addition, many Mauritians benefit from international exposure through overseas education
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namely in the UK, France, USA, Canada, India, China, Singapore, Australia and South Africa. Furthermore, a comprehensive system for vocational training through the Industrial and

Vocational Training Board (IVTB)ensures a ready supply of skills in a number of fields such as tourism, engineering, electronics, jewelry, ICT, printing and textiles.

The IVTB operates a Training Grant Scheme whereby the employer contributes 1 % as training levy and can in return recover up to 75 % of the training costs incurred. The labour laws and remuneration orders are available from the Ministry of Labour & Industrial Relations and the Mauritius Employers Federation (MEF).

4. Developed Infrastructure The government has invested heavily in infrastructure. Mauritius is today endowed with a developed and well-maintained road network, a modern international airport, a well-equipped sea port, state-of-the-art telecommunications, serviced land and new generation business parks. In 2005, the Ebene Cyber Tower was awarded the Intelligent Building of the Year by the Intelligent Community Forum (ICF), USA. The whole island is supplied with electricity, water and telephone lines. Electric power and water supply are stable.

5. Preferential Market Access The success of the Mauritian economy, particularly export-oriented manufacturing has been largely dependent on the preferential access granted to our products on overseas markets.
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Through the various trade agreements and conventions signed with other countries, Mauritian products enjoy duty and quota free access to Europe, USA and Africa and Asia. In addition, the Government of Mauritius wields economic diplomacy at bilateral as well as multilateral level in order to continuously improve market access opportunities for Mauritian products and services. 6. Dynamic Private Sector

The private sector has played a crucial role in the economic development of the country. It has been very proactive in the growth of key economic sectors, namely agriculture, manufacturing, tourism and the financial and business services. It is now venturing into the ICT sector. The shift from a predominantly monocrop economy to an industrial base has paved the way for the launching and take-off of ICT initiatives. This has been made possible because of the dedicated involvement of the local private sector in the countrys economic progress. Furthermore, the private sector is also keen on investing abroad and is enthusiastic to enter into partnership with foreign entrepreneurs and embark on joint ventures. The SMEs, on the other hand, are open to proposals for collaboration from foreign entrepreneurs.

7. Pleasant Living Environment

Mauritius is a melting pot of world civilizations, a blend of peoples of Indian, and Chinese, African and European descent. It prides itself on a uniquely rich culture embedded in a web of
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values and traditions. Known for their hospitability and warmth, Mauritians welcome foreigners into their circle of friends. The great majority is multilingual, being proficient in both English and French while mastering a third language such as Hindi, in addition to the local vernacular creole. All facilities are available in Mauritius in terms of accommodation, education, healthcare and medical services, shopping, recreation and sports. The island is not only reputed for its beautiful countryside, lagoons and beaches, but also for its heritage of colonial-style architecture, typical villages and folk traditions and festivities. Mauritius boasts a pleasant and safe environment, which makes it an attractive place to work and live. Its sub-tropical, warm and sunny climate offers a yearlong lifestyle of unsurpassed quality.

8. Attractive Incentives

The Government pursues a liberal foreign investment policy and offers attractive fiscal and nonfiscal incentives for the development of all sectors of the economy. These are grouped under two distinct categories, as detailed in the First and Second Schedules of the Investment Promotion Act 2000 (IPA 2000), according to the nature of the projects. Under the First Schedule, several investment schemes have been devised to suit the needs and requirements of investors. For projects falling under the Second Schedule, a flexible package of incentives is tailored. Incentives offered can be in the form of reduced corporate tax, exemption of customs on equipment and raw materials, preferential loan rates and reduced tariffs for electricity and water.
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Moreover, dividends paid to shareholders are tax-exempt. Free repatriation of profits, dividends and capital is allowed.

Stay in Mauritius & spend in rupees soon:

The Indian rupee may become the officially-accepted currency in faraway Mauritius if New Delhi accepts a proposal that is currently under the consideration of the Mauritian authorities. The move could also reinforce Mauritius geopolitical significance for India. Considering the strong links between the two countries and the recently-concluded free trade agreement (FTA), the idea of allowing the Indian rupee to be accepted in Mauritius is gradually gaining currency. The move will also facilitate the travel and hospitality industries of Mauritius, for whom the Indian customer is becoming increasingly important. The Mauritius travel trade is bullish on the idea and the deputy prime minister of the country, CG Xavier Luc Duval, is planning to take up the issue with Indian authorities. If the central banks of the two countries can work out a system, it is possible to allow the Indian rupee to be used in Mauritius, he told ET in an exclusive interview. Now on a visit to India, Mr Duval said he would also consult representatives of the Indian travel trade on the impact of the move.

If the proposal is accepted, the Indian tourist need not go through the trouble of first buying US dollars or euros and then converting them to Mauritian Rupees while holidaying in the Indian Ocean nation. This would result in savings in terms of conversion costs.
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For the proposed arrangement to work out, the Reserve Bank of India and the central bank of Mauritius need to work out a system by which the Indian rupees collected in the tourist paradise are deposited with the RBI through Mauritian banks. This is necessary since the Indian Rupee is not convertible. I have consulted our central bank and the issue will be taken up with the Indian authorities, Mr Duval said. The Mauritius Rupee is convertible and is currently stronger than the Indian rupee.

Nearly 30,000 Indian tourists visited Mauritius last year and Mr Duval expects the number to register a healthy increase during 06. The average speed of tourists visiting Mauritius is estimated to be around $1,000. A large business delegation is also accompanying the Mauritius deputy prime minister and Mr Duval says that the interaction between the two industries would lay the foundation for strong business growth. I would also invite the Indian hotel industry to invest in Mauritius, he said, adding that efforts are being made to help Indian tourists feel at home in his country. The Indian rupee is accepted in Nepal and bankers in Hong Kong trade in the Indian currency. The grey market at several places in the Gulf region, Singapore and Sri Lanka also accepts the Indian currency. While the operations in all other countries, except Nepal, are not legal, the acceptance of the Indian currency shows the growing confidence in the Rupee in the global arena.

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