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From Poverty to Power Green, Oxfam 2008 - weman

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FROM POVERTY TO POWERCASE STUDYThe main reason for Mauritius’ success was its intelligent use oftrade as a mo<strong>to</strong>r of development. Rather than liberalising thewhole economy, the government set up export-processing zonesin which duty-free access was granted <strong>to</strong> imported inputs, alongwith tax breaks for inves<strong>to</strong>rs. While the workforce in these zonesoriginally earned 40 per cent less than in the rest of the economy,the wage gap dwindled by the 1990s. Mauritius also benefitedfrom preferential access <strong>to</strong> European and US markets for itssugar and textiles.Policy success required an effective state, and Mauritius rankswell above the average African country in terms of its institutions,with less corruption, a tradition of transparency and publicparticipation, and a well-paid and effective civil service. Othersuccess fac<strong>to</strong>rs include the very ethnic diversity that Meadeidentified as a curse: the Chinese population brokered the initialinvestments in garment fac<strong>to</strong>ries from Hong Kong, while theIndian diaspora turned Mauritius in<strong>to</strong> a major offshore financialcentre.Sources: author trip report (July 2007); J. Clark Leith (2005) ‘Why Botswana Prospered’;M. Lockwood (2005) The State They’re In, ITDG Publishing; Acemoglu, Johnson, andRobinson, ‘Botswana, an African success s<strong>to</strong>ry’; Subramanian and Roy (2003) ‘Who canexplain the Mauritian miracle?’ in D. Rodrik In Search of Prosperity: Analytic Narratives onEconomic Growth, Prince<strong>to</strong>n University Press.194

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