The Prime minister, Navin Ramgoolam, is confident that Mauritius will reap the benefits of his government?s economic reform. Back from quite a long trip abroad, he held a press conference where he insisted on the spin-off effects his trip might have on the economic situation of Mauritius. Though he conceded that ?all Mauritians are going through tough times?, he made it clear that the results of the ?difficult reforms of the budget? should be felt before the end of his present mandate.

At the same time, the leader of the Mauritian Militant Movement (MMM), Paul Bérenger, was expressing his anger with the government?s actions concerning price rises. He declared, at his own press conference, that he would write a letter to the speaker to ask him to call upon the National Assembly to ?vote an additional wage compensation? in view of the recent price increases. But the PM does not appear ready for any concessions?

?It should be clear in our minds that the world does not revolve around Mauritius,? the PM declared. This is why it was ?so important for him? to attend all the summits he was invited to.

His meeting with the Indian prime minister, Manmohan Singh, helped him obtain the guarantee that ?India would do nothing that would undermine the interests of Mauritius especially concerning the double taxation agreement?. The recent visit of the financial secretary, Ali Mansoor, to India was also aimed at making sure Mauritius would continue to benefit from this unique agreement. But as lobbies continue in India, Mauritius should continue to be vigilant to ensure the continuity of the agreement.

The new budget relies a lot on foreign direct investment to boost the economy and Chinese businessmen are among the government?s targets. Next month, the PM will attend an African-Chinese summit in Beijing where he will seize the opportunity to convince investors. As he met the Chinese PM, Navin Ramgoolam expressed his determination to bring more Chinese investors to Mauritius.

The PM pointed out that many of the heads of state and governments he met during his recent mission were aware of his government?s reforms and ?congratulated him? on them. He expressed his awareness that some of these measures are unpopular but also his conviction that the first results could already be felt. ?For the first time since 1991, the unemployment rate, our enemy n°1, is starting to decrease.? He also insisted on the increasing export revenue and FDI.

The number of tourist arrivals is also on the increase . ?The air access policy, which is slowly becoming more flexible, will certainly help, with the arrival of a number of new airlines.? His meeting with Richard Branson, director of Virgin Airlines, could lead to this airline serving Mauritius ?but we must have more discussions on the terms of the contract first?.

Even though the PM made it clear that he fully supported his Finance minister?s budget, he however mentioned the fact that the National Residential Property Tax could include a certain degree of unfairness. To clear this feeling, a committee has been set up to study changes that could help improve this fiscal measure? This should help to lessen the number of detractors of the budget.

An economist?s point of view

Though the increase is hardly perceptible, the Economic Outlook of the MCB Focus has upgraded its economic forecast. While it planned a 4.3% gross domestic product (GDP) growth last July, the forecast is now 4.4%. This optimism is due to a more dynamic local industry than expected and the fact that the textile-clothing industry has achieved more stability. While former estimates had forecast that tourism would undergo a 10% growth, the MCB focus has reviewed it down to 4%. As expected, the chikungunya virus has had a disastrous impact on our biggest tourist market, France. Fortunately, other measures taken at the same time have allowed the industry to call a halt before things get any worse. The liberalisation of air access, the increase in flight capacities and aggressive marketing campaigns are among these measures. The MCB Focus also gives an insight into its forecasts for next year. According to the bank?s economists, 2007 will be a year of transition. After the budget measures announced last July aimed at bringing a major reform to the Mauritian economy, the MCB Focus does not think results will be seen. The MCB economists believe the growth rate should be the same this year.