On the Determinants of Foreign Capital Flows - DAAD partnership ...

From the findings and analysis, it is imperative to discuss the recommendations which can
be brought about to the Mauritian economy in order for the country to lure more. As it is, the
main implications came from are the surprising interconnectedness of domestic and foreign
investment along with the relationship of productivity and FDI. These two areas have
unfortunately never been the basis of foundation of any measures or incentives to make
Mauritius a better platform. Thus, it would be thus interesting for the BOI to try to
implement incentives which tend to promote foreign investment as increases will also
induce domestic investment and such benefits will be more apparent in the long run which
will finally uphold the economy as a whole.
Concerning productivity, this area is still of exploratory stage. Since in the short run,
productivity is said to encourage FDI, it would be interesting if this could be used to lure
investors to the country in promising them to get better workers at cheaper costs. The
problem of unemployment will also be catered for while increasing standard of living of
people and decreasing poverty level. This convergence of macroeconomic objectives can be
well achieved though the right proportion of FDI determinants.
On a concluding note, an important area which the government should not neglect is trying
to attract FDI from other economies which have never dealt with Mauritius before by
implementing measures which will cater for the investment profile of the financier of the
foreign market. This will bring the country to an international recognition and promote
sectors such as the tourism industry or enhance communication in between economies.
References
Akinlo E, 2004. Foreign direct investment and growth in Nigeria: An empirical
investigation, Journal of Policy Modeling 26 (2004) 627–639
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