Mauritius - Priv Sec Competitiveness Development Policy Loan (PSC - DPL)

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Mauritius has an impressive development record. Only a handful of countries have defied the odds, transformed their economies, sustained growth acceleration over decades and joined the ranks of middle income economies. Maintaining the status requires keeping up to the pace of reforms set by its competitors. Mauritius' ambitions are far greater as it envisions moving up the ladder and joining the ranks of upper middle-income countries (MIC). While among the most competitive and successful economies in Africa, Mauritius lag far behind its many MIC competitors on the global scale. Competitiveness agenda thus remains centre piece to achieving Government's program of reforms. In addition the competitiveness of the Mauritian economy is at risk amid fears of another global downturn fueled by the crisis in Europe. Accelerating reforms is the best response to emerging global uncertainties. These reforms will facilitate the nation's economic recovery in case the expected global downturn unfolds. Some troubling signals are already emerging that show a continuous downward trend in investment since 2008. The Development Policy Loan (DPL) series is consistent with the objectives of the Country Partnership Strategy 2006, and the CPS progress report of May 2011, that underlines improving competitiveness and investment climate as its central theme of reforms, along with promoting inclusion and fiscal consolidation. The DPL operation is well aligned to the new Africa strategy that focuses on competitiveness and employment, and vulnerability and resilience as its two pillars, with governance and public sector capacity as its foundation.