Small Country, Big Ideas: Mauritius Realizes 'African Dream' With Russia's Help
The island nation of Mauritius has ambitious plans to become the Singapore or Dubai of the African continent; on a working visit to Moscow, Mauritius Foreign Minister Seetanah Lutchmeenaraidoo told Sputnik that strong ties with Russia are a vital part of the country's future development.
© Sputnik/Alexander Kovalev/The Chamarel Waterfall, one of the largest waterfalls on the island of Mauritius
While some small island economies are keen to attract offshore financial and legal institutions, the Indian Ocean country of Mauritius takes a different view.

It has come up with an innovative strategy which involves deterring the offshore finance industry while also using the island's financial institutions and geographical location to stimulate the development of the African continent instead.

Mauritius Foreign Minister Seetanah Lutchmeenaraidoo told Sputnik about the country's "African Dream," and how Russia can help to bring it to life.

"The visit here is about the partnering of Russia and Mauritius, for a win-win situation for both of us," Lutchmeenaraidoo said.

"The second aspect of the mission is also the fact that we can channel a large number of projects from Russia through Mauritius to Africa."

Lutchmeenaraidoo explained that Mauritius is home to an International Financial Center which will form a key part of the development project. He emphasized that the center "has a record of adherence to international norms and standards which prevent it from being used to hide money from tax authorities."

"Mauritius is recognized as an International Financial Center of substance and sound repute. Our jurisdiction has gained significant international recognition over the years," he added.
© CC BY-SA 3.0./Peter Kuchar/The capital city of Mauritius, Port Louis, in the evening
"Some people would like to call it a 'tax haven,' but that's not true at all. In fact, it's not true for one very simple reason: I've signed, personally, commitments whereby from January 1 2018 there'll be an automatic exchange of information with all the banks worldwide. You can't be more transparent than this. We have signed an agreement with the Americans which very few countries would sign, FATCA (Foreign Account Tax Compliance Act). FATCA is an agreement by which the Americans get access to most of your figures."

"Why are we in it? Because we don't want to become a tax haven."

"We don't want people who've got gains to hide their money in Mauritius, it doesn't make sense to us. But working, making business, makes sense. The whole Africa strategy will benefit the financial sector enormously because a large volume of business would go through the center."

Mauritius' Three Pillars of Development
According to the World Bank, Mauritius is an upper middle income country. The country has a Gross Domestic Product (GDP) per capita of USD 9,700. Two years ago, the government came up with a three-point plan to increase growth and investment.

"We identified three new pillars for the medium and long term growth of the country. One is the blue economy, the ocean economy. Number two is the construction of a maritime hub which will make Mauritius probably the most important port in the region, and number three is the African strategy."


"We are less than 2,000 square kilometers, with a population of around 1.3 million, yet we are sitting on a maritime zone of 2.3 million square kilometers. So, we are not [only] an island, we are an ocean state," Lutchmeenaraidoo said.

The "blue economy" entails making "the best use of the ocean in terms of resources and seafood, but we also have the responsibility of protecting this ocean," by ensuring the sustainable use of ocean resources in accordance with United Nations Sustainable Development Goal 14.

The second part of the strategy aims to build "a maritime hub comprising a quay for cruisers, a quay for fishing vessels, bunkering activities to supply fuel to incoming vessels and a very modern port for the handling of goods."

"To complete the maritime hub, we have a free port, on the same basis as in Dubai, in the sense that we plan to import, transform and re-export to Africa."
The "African Dream"
Mauritius Foreign Minister Seetanah Lutchmeenaraidoo // Photo, Courtesy of Mauritius Foreign Ministry
"We have signed all the agreements you can think of with African countries. We are a member of the African Union, we are a member of the SADC (Southern African Development Community), we are a member of COMESA (Common Market for Eastern and Southern Africa) and two weeks ago I signed a trilateral agreement whereby we are going to create a free trade area that will comprise 700 million consumers in Africa. It's a trilateral agreement which involves COMESA, SADC and the EAC (East African Community)."

"What is the Africa strategy, the African dream based on? When I announced it in 2015, it looked like a mad dream - how can we become a major component of Africa? And rightly so, because Africa is a tough continent to work with. But I believe that an idea is a dream until it achieves a critical mass, and then it becomes a reality. The critical mass can be 30-35%."

Mauritius has identified 12 African countries to work with, to make its "African dream" come to life.

"We had to downsize our approach and concentrate on those countries where firstly there is a level of development where you can work with those countries, secondly there is a level of ease of doing business which won't be an obstruction to investment and thirdly, of course, countries which have a good democratic background."

"We started with West Africa, very far from us - Ghana, Ivory Coast, Senegal, and then we moved to East Africa to Tanzania, Kenya and Ethiopia, then further down to Zambia and South Africa. I am also chairman of the Indian Ocean Commission. The Indian Ocean Commission regroups five out of the seven islands which form part of Africa, these are Mauritius, Madagascar, Seychelles, Comoros and Reunion Island. We have also added those countries to the project," Lutchmeenaraidoo explained.
"We have signed all the agreements you can think of with African countries. We are a member of the African Union, we are a member of the SADC (Southern African Development Community), we are a member of COMESA (Common Market for Eastern and Southern Africa) and two weeks ago I signed a trilateral agreement whereby we are going to create a free trade area that will comprise 700 million consumers in Africa. It's a trilateral agreement which involves COMESA, SADC and the EAC (East African Community)."

"What is the Africa strategy, the African dream based on? When I announced it in 2015, it looked like a mad dream - how can we become a major component of Africa? And rightly so, because Africa is a tough continent to work with. But I believe that an idea is a dream until it achieves a critical mass, and then it becomes a reality. The critical mass can be 30-35%."

Mauritius has identified 12 African countries to work with, to make its "African dream" come to life.

"We had to downsize our approach and concentrate on those countries where firstly there is a level of development where you can work with those countries, secondly there is a level of ease of doing business which won't be an obstruction to investment and thirdly, of course, countries which have a good democratic background."

"We started with West Africa, very far from us - Ghana, Ivory Coast, Senegal, and then we moved to East Africa to Tanzania, Kenya and Ethiopia, then further down to Zambia and South Africa. I am also chairman of the Indian Ocean Commission. The Indian Ocean Commission regroups five out of the seven islands which form part of Africa, these are Mauritius, Madagascar, Seychelles, Comoros and Reunion Island. We have also added those countries to the project," Lutchmeenaraidoo explained.
© Sputnik/Alexander Kovalev/The statue of the God Shiva and its pedestal (height, 36.5 meters) at a Hindu religious complex near Lake Grand Bassin or Ganga Talao
Earlier this year, Mauritius and Ghana signed a bilateral agreement to establish the Ghana-Mauritius Permanent Joint Commission on Bilateral Cooperation, a measure to facilitate trade and investment.

"The Joint Commission has only one item on the agenda - projects. The Joint Commission is not there to remove tariff barriers or facilitate movement of people, that's the AU. Our role is just to identify projects which we can work together on. In Ghana, for example, Ghana, Mauritius and outside investors are working together to set up three cyber-cities. It involves billions of dollars of investment."

"In the case of Senegal, we have agreed on the setting up of a special economic zone close to Dakar Airport. In all those countries, we are moving ahead with massive projects and we don't have the technology or the money in Mauritius. So, the magic of the whole system can only work if we can get other countries to channel their funds and technology through us into African countries. Through us, how? By the setting up of Special Purpose Vehicles (SPV's), which will channel all the funds, through Mauritius to Africa. The SPV will be in the global sector, what is also called the offshore sector."

"So, I am traveling to countries which have the funds to invest in these projects. India, China and Japan have already agreed to invest and we are setting up a financial corridor that will channel those funds to those African countries."

"The corridor also allows the transfer of technology. We haven't built any cyber-cities, so the Chinese and the Indians will rope in their own technologies to help build them," he explained.
© Sputnik/Vladimir Pesnya/Russian Foreign Minister Sergei Lavrov meets with Republic of Mauritius Foreign Minister Seetanah Lutchmeenaraidoo
Partnering With Russia
"This is where Russia comes in. Geographically, if you look at the whole area, you will find that the natural ally of China and India is Russia. And those three countries form part of BRICS. So, it makes sense that Russia, which has a declared intention to be present in a big way in Africa, can join in the process."

"So, the meeting on Tuesday [with Foreign Minister Lavrov] was basically on how we can partner together, not only for Russia and Mauritius but for a better presence on the African continent."

This strategy relies on improving connectivity between Russia and Mauritius. The national carrier Air Mauritius is in talks with Russia's Aeroflot and plans to launch direct flights between Moscow and Plaisance in 2018. About 12,000 Russian tourists per year visit Mauritius, most of whom currently travel via Dubai.

The Mauritius Board of Investment has organized several events in Moscow to foster ties with Russian businesses, including a Russia-Mauritius Business Forum. The Mauritius Tourism Promotion Authority also organized a 'Tourism Day'.

"The financial sector in Mauritius is probably one of the most sophisticated that exists in this part of the world, we have investment-grade status. The CEO of the Financial Services Commission is part of this delegation to Russia, as is the Board of Investment, the Mauritius Tourism Promotion Authority and Air Mauritius. We've brought the most important organizations when it comes to working together, to partnering."

"They are working on memorandums of understanding, where the chamber of commerce in Mauritius will partner with the chamber of commerce here in Russia and where the Board of Investment will partner with the Coordinating Committee On Economic Cooperation With Sub-Saharan Africa (AfroCom). We are also working on an MoU between the central bank of Russia and the central bank of Mauritius and the financial services commission. Those are major agreements we need to make, on which we are going to build this structure."
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