Speech of

 

Dr. the Hon. Rajesh Jeetah

Minister of Industry, Small and Medium Enterprises, Commerce and Cooperatives

 

 

 

 

on the occasion of the

 

Workshop

on

New Business Environment

 

 

 

 

 

 

 

 

 

on

Monday 11 September 2006 at 09.30 hrs

Swami vivekanand International Conference Centre

Honourable Rama Sithanen, Deputy Prime Minister and Minister of Finance and Economic Development

Honourable Dr. James Burty David, Minister of Local Government

Mr. Lam, Chairman of the Board of Investment

Excellencies

The Director of the Joint Economic Council

The Secretary General of the MCCI

Distinguished Guests

Ladies and Gentlemen,

 

        It gives me great pleasure to be here among you on the occasion of the workshop for the new business environment and the reforms that have been brought to the business and investment climate in Mauritius.

 

2.     I would like to congratulate the Board of Investment for taking the initiative in organising this sensitization workshop.

 

3.     As you are all aware, government came up with two important legislations in parliament in August of this year, namely the Finance Act and Business Facilitation (Miscellaneous Provisions) Act, to provide a clear, simple, transparent and coherent business framework within which our local entrepreneurs, traders, manufacturers as well as the foreign investors can invest, operate and do business in Mauritius. With the fast pace of the globalization of the economy and of trade liberalization which have brought in their wake, daunting economic challenges for a number of countries, we cannot afford to miss investment opportunities. We want to provide the opportunity to everyone who wish to invest and contribute to the development of the island.

 

Ladies and gentlemen,

 

4.     Our country is going through a difficult transition period as, in the wake of globalization and trade liberalization, it is confronted with various challenges, that is, rising unemployment, increase in oil prices on the world market which impinges directly on the performance of the industrial sector, tough competition facing our EPZ and sugar sectors.  To put us back on the growth trajectory and trigger a new wave of prosperity to our economy needs pervasive reforms, and business facilitation is one of them.

 

5.     The Government is determined to overcome the bottlenecks in the implementation of investment projects both local and foreign. Clearly, there was a need to move away from the bureaucratic operations and long delays to a more responsive, output focused, institutional arrangement.

 

6.     The proposed new business environment aims at making  Mauritius more attractive to FDI through the rationalisation and simplification of taxation and with the dismantling of unnecessary obstacles. An important issue that we have addressed is to let people come and go without the kind of hassles that they have had with getting visas. Mauritius must open itself up completely to the movement of people, goods, ideas, investment. Clearly the new legislations by themselves will not galvanise inward investment with investors queuing up. Given that, where FDI is concerned Mauritius has indulged in harming itself senselessly for so long, it will have to work assiduously at convincing foreign investors. That will require aggressive marketing on a country-by-country, sector-by sector basis. My recent visit to the UK and USA and my various interactions with businessmen operators there confirms that the economic reforms that we are implementing goes in the right direction to bring more FDI to Mauritius. 

 

7.     We want to open the door to investors but an open door does not mean that global investors and wealthy residents will walk through it, unless they see something beyond that door.  Mauritius will now exert every sinew to make sure the world does see positively what lies beyond that open door and encourages all comers to walk through invest and reside. For that, all the package of new measures that will be exposed today by the different stakeholders will make sure that Mauritius presents all the prerequisites for doing business and make life for business easy. Our intent for entrepreneurs to start their business in 3 days is today achievable and not just a hype.

 

8.     In their recent report on ‘Countries’ Investment Environment’ the World Bank has classified Mauritius 2nd among African countries. South Africa ranks first among African countries.  With the reform measures undertaken, our ambition is to move further up the rank to eventually be among the top 10 in the world.

 

9.     We have to recognize that the decision to set up an enterprise and ensure its survival and growth during the enterprise life cycle is already a cumbersome process.  Besides the business acumen and risk taking , one has to go through a whole series of sequential and critical tasks involving business ideas identification,

examine the appropriate technology and processes draw up your business plan, mobilize the appropriate resources and look for the appropriate infrastructure and location.  This, in itself, is already a hercules task and the different requirements for pre-operational permits and clearances should not be made to compound this complexity and stifle private initiatives.  However, this is exactly what has been happening over the years.

 

10.    Entrepreneurs will recall the plethora of licences that used to be a real hassle to them.  These permits acted as a real discouragement and have often killed private business initiatives at the very inception stage.  Some of the permits have outlived their usefulness and have no raison d’être.  The way of doing business has changed.  Things which used to work in the past are no longer relevant.  We needed to rethink and improve the process.

 

Ladies and gentlemen,

 

11.    I would like to underline that the new business environment forms part of the bold reforms that have been undertaken by this government since it came to power in July 2005.  Government set up a task force under the chairmanship of the Deputy Prime Minister and Minister of Tourism to examine the issue of permits and licences and to come forward with appropriate recommendations to improve the business climate and stimulate entrepreneurship development.

 

12.    Recently at the level of my Ministry we had set up an Industrial Monitoring Cell to look into all aspects of industrial development including the issue of permits and licences.  The inputs and recommendations from these two exercises have been instrumental in designing the current reforms proposed under the new Business Environment.

 

13.    My Ministry is implementing a number of projects and activities directly related to promoting, developing and empowering the small and medium enterprises. As part of a programme on incremental assistance to local entrepreneur, Enterprise Mauritius is promoting clustering of enterprises and developing the concept of value chain models With a view to enhance the competitiveness of our enterprise to face challenges on the global market.

 

14.    As you are aware, promotion of SMEs is a key thrust of our economic development policy as Government believes in the potential of this sectoral.  We have the vision to create a nation of creative and innovative entrepreneurs.  The new economic model focuses on empowering entrepreneurs so that they can contribute more effectively to job and wealth creation, thereby ensuring greater democratization of the economy.  We have to unlock the full potential of small entrepreneurs particularly first generation entrepreneurs, by providing business facilitation, access to finance, and industrial space and by providing them necessary support. 

 

15.    As part of the initiative to foster entrepreneurship development, we have recently embarked on outreach campaign known as the “Caravan de l’Entreprenariat” and targeted remote areas and vulnerable groups.  The objective is to enable greater access to information and increase awareness of potential entrepreneurs on the various incentives and facilities for starting a business.  Two such programmes have already been organized at Rivière du Rempart and St. Hilaire and the target is to cover the whole island as soon as possible.

 

16.    In parallel, to ensure better proximity to entrepreneurs, the services of SEHDA have been decentralized with the setting up of 3 outstations at Goodlands, Flacq and Rose Belle.  A counter has been put up at AREU in the Ministry of Agro Industry and Fisheries and another one at my Ministry.  In addition, the services of CAB offices, Youth Centres, Women Centres, Employment Centres around the island have been enlisted to provide some basic information to entrepreneurs.

These facilities have been well received as evidenced by some 4000 persons who have called at these different points for information and assistance.

 

17.    Another major task undertaken by my Ministry is the streamlining of the registration process.  Certificates are now issued within a couple of days contrary to almost three months as in the past.  As a result of this simplification in the process we witnessed an increasing number of newly registered enterprises. For August 2006 alone 487 applications were processed, the largest number of applications ever recorded in a single month.

 

18.    In contrast for the first 6 months of January 2005 to June 2005 prior to election, only 34 new enterprises were registered which indicates no doubt the tremendous amount of work that has been done.

 

19.    But all these measures will be futile without the proper environment to encourage the actual setting up and implementation of new businesses.

 

Ladies and Gentlemen

 

20.   We, in Government, firmly believe that the new economic model can and will reconcile economic efficiency and social justice. We need to stimulate investment and attract FDI. But above all, we need to promote self-employment and entrepreneurship from the smallest trader or artisan or mechanic or planter or fishermen to the small start ups in trade or manufacturing or agro industry or services.

 

21.    That time has gone where we can make the life of investors difficult. The world is different now and Mauritius has to adjust to that difference. All the distortionary incentives, policies, tariffs and prices that provided periods of prolonged protection supposedly to benefit the domestic economy - in ways that did not recognise fully that a business exists to make a profit in the best way it can - have been abolished. Any business that does not continuously seek to minimise all its costs, maximise revenues,  while optimising stakeholder returns, and keep gaining market advantage by being at the cutting edge of product, market, and customer preference curves, should not be in business. In this new world trading system, it would equally be difficult for businesses that seek favours and protection to be profitable for long.

 

22.   With these words, I wish this workshop plenty of success. Thank you.