{"id":46996,"date":"2026-10-12T13:14:09","date_gmt":"2026-10-12T09:14:09","guid":{"rendered":"https:\/\/www.mauritiustimes.com\/mt\/?p=46996"},"modified":"2026-10-12T13:14:09","modified_gmt":"2026-10-12T09:14:09","slug":"the-babywalker-economy-mauritius-is-running-out-of-crutches","status":"publish","type":"post","link":"https:\/\/www.mauritiustimes.com\/mt\/the-babywalker-economy-mauritius-is-running-out-of-crutches\/","title":{"rendered":"The Babywalker Economy: Mauritius is Running Out of Crutches"},"content":{"rendered":"

By Samad Ramoly<\/strong><\/span><\/p>\n

For thirty years, Mauritius was Africa’s success story \u2014 the small island that got rich without the resource curse, the coups, or the chaos. But look past the brochure and a less comfortable story emerges: much of that success was borrowed, not built, and the bill is arriving.<\/span><\/p>\n

Start with what’s easy to verify. Transparency International’s Corruption Perceptions Index scores public-sector integrity across more than 180 countries on a 0-to-100 scale, where 100 is very clean and 0 is highly corrupt. Mauritius’s score tells a clear story of decay: it peaked at 57 points in 2012, held roughly steady through the early 2020s, then fell to 51 in 2024 and to 48 in 2025 \u2014 its lowest score since 2012, and the sharpest single-year drop the country has recorded in over a decade. This isn’t just a matter of other countries improving and Mauritius standing still; the underlying score itself is falling, meaning the actual perceived integrity of the public sector is getting worse in absolute terms, not just relative to peers. (Its global rank has slipped accordingly, from the low 40s a decade ago to 61st in 2025, but the score is the more telling number \u2014 it isn’t affected by how many countries are added to the index each year).<\/span><\/p>\n

\"\"<\/span><\/p>\n

The miracle ran on crutches, not muscle<\/strong><\/span><\/p>\n

Mauritius’s post-independence growth was real, but it was substantially manufactured by two mechanisms that had nothing to do with underlying competitiveness. The first was preferential trade access \u2014 guaranteed sugar quotas to Europe, then textile quotas under the Multi-Fibre Arrangement that let Mauritian exporters sell into rich markets without having to compete on price or quality against the rest of the world. The second was currency management: persistent rupee depreciation intended to restore export competitiveness by making Mauritian goods cheaper in dollar terms, without requiring a single factory to become more efficient.<\/span><\/p>\n

But even this second crutch was weaker than it looked. Mauritius imports most of its raw materials, machinery, fuel, and intermediate inputs \u2014 the textile sector, for instance, imports much of its fabric and yarn. When imported inputs make up a large share of production costs, depreciation raises those input costs in local-currency terms at the same time as it’s supposed to be making exports cheaper abroad, and the two effects partly cancel out. The competitiveness gain is smaller and shorter-lived than the policy assumes, while the pass-through to domestic inflation is immediate and real. In other words, one of Mauritius’s two main levers for staying competitive was less effective than advertised even while it was being used.<\/span><\/p>\n

Both tools are legitimate parts of any small open economy’s toolkit. The trouble is what happens when they become the primary strategy instead of a bridge to something else. A country can look competitive for decades this way while the underlying capacity to compete without the crutch \u2014 productivity growth, technological upgrading, workforce skills, efficient logistics, deeper local supply chains \u2014 never actually gets built. The trade preference or the weaker currency absorbs the cost of inefficiency instead of forcing anyone to fix it.<\/span><\/p>\n

Why this produces exactly the pathologies critics complain about<\/strong><\/span><\/p>\n

This is the part that connects a trade-policy story to a governance story. Firms that face real competitive pressure have no choice but to cut costs, modernise, and demand efficient, predictable regulation \u2014 because inefficiency shows up directly in their margins. Firms operating behind quota walls and a managed currency face no such discipline. They can absorb rent-seeking, weak enforcement, and cronyism indefinitely, because something else is quietly paying for the inefficiency.<\/span><\/p>\n

Over enough decades, that dynamic doesn’t just tolerate a certain kind of elite \u2014 it selects for one. It rewards people who are skilled at securing and defending privileged arrangements, not people who are skilled at building competitive enterprises. And once that elite exists, its incentives run in a consistent direction at every level of the system: rent-seeking at the top, in finance and real estate and licensing, where privileged access is worth the most; corner-cutting in the middle, in planning permits and labour inspections and procurement, because enforcement is something that can be quietly relaxed for the right people once competitive pressure isn’t there to punish the laxity; and fence-sitting at the political level, where a small number of families have rotated power for decades and no coalition partner has much incentive to prosecute another.<\/span><\/p>\n

The crutches are being taken away<\/strong><\/span><\/p>\n

None of this was fatal as long as the crutches held. But both are failing simultaneously. Preferential trade access has eroded steadily since the WTO liberalized global trade and the Multi-Fibre Arrangement quotas expired. Currency depreciation was never as effective as it looked given the import-heavy cost base, and its returns diminish further once markets and domestic actors price it into their expectations \u2014 leaving mostly the inflationary cost without the competitiveness benefit. At the same time, Mauritius’s offshore financial sector \u2014 one of the newer pillars of the growth model \u2014 has drawn its own scrutiny, including a period on the FATF’s watchlist over concerns that its tax treaty network functioned as a conduit for capital seeking to avoid taxation elsewhere.<\/span><\/p>\n

Strip away the trade preferences and the currency trick at the same moment, and what’s left is whatever institutional capacity the country actually built during the years it didn’t need to. Judging by the declining Corruption Perceptions Index scores, that capacity was thin. It was never load-bearing because it was never load-tested.<\/span><\/p>\n

Seychelles and Cabo Verde started from similar positions and chose, over the same twenty-year window, to build enforcement capacity and diversify their economies. Mauritius chose, largely, to protect the coalition arrangements and preferential deals that had worked before. The falling score is what that choice looks like once you can no longer put it off.<\/span><\/p>\n

\n

Mauritius Times ePaper Friday 9 October 2026<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

By Samad Ramoly For thirty years, Mauritius was Africa’s success story \u2014 the small island that got rich without the resource curse, the coups, or the chaos. But look past the brochure and a less comfortable story emerges: much of that success was borrowed, not built, and the bill is arriving. Start with what’s easy […]<\/p>\n","protected":false},"author":24,"featured_media":46997,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[22],"tags":[16668,3814,60291,55943,43905,3077,1544,50794,30072,4322,12330,17566,62952,27229,119,36,63128,63126,41786,3030,27903,4001,288,43564,9206,63127,2298],"class_list":["post-46996","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-competitiveness","tag-corruption","tag-currency","tag-currency-management","tag-diversification","tag-economic-growth","tag-economy","tag-enforcement","tag-exports","tag-financial-sector","tag-governance","tag-inflation","tag-institutional-capacity","tag-logistics","tag-mauritius","tag-mauritius-times","tag-multi-fibre-arrangement","tag-preferential-trade","tag-productivity","tag-public-sector","tag-rent-seeking","tag-rupee-depreciation","tag-samad-ramoly","tag-supply-chains","tag-trade","tag-workforce-skills","tag-wto"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p8QzSF-ce0","jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.mauritiustimes.com\/mt\/wp-content\/uploads\/2026\/10\/The-Babywalker-Economy-1.jpg?fit=1200%2C682&ssl=1","_links":{"self":[{"href":"https:\/\/www.mauritiustimes.com\/mt\/wp-json\/wp\/v2\/posts\/46996","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mauritiustimes.com\/mt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mauritiustimes.com\/mt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mauritiustimes.com\/mt\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mauritiustimes.com\/mt\/wp-json\/wp\/v2\/comments?post=46996"}],"version-history":[{"count":1,"href":"https:\/\/www.mauritiustimes.com\/mt\/wp-json\/wp\/v2\/posts\/46996\/revisions"}],"predecessor-version":[{"id":46998,"href":"https:\/\/www.mauritiustimes.com\/mt\/wp-json\/wp\/v2\/posts\/46996\/revisions\/46998"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mauritiustimes.com\/mt\/wp-json\/wp\/v2\/media\/46997"}],"wp:attachment":[{"href":"https:\/\/www.mauritiustimes.com\/mt\/wp-json\/wp\/v2\/media?parent=46996"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mauritiustimes.com\/mt\/wp-json\/wp\/v2\/categories?post=46996"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mauritiustimes.com\/mt\/wp-json\/wp\/v2\/tags?post=46996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}