Capital Formation and Economic Growth in Mauritius

Capital Formation and Economic Growth in Mauritius: Does FDI matter?ICITI 2012 ISSN: 16941225pub public gross domestic capital formation (% GDP) CSO, Mauritiusedu gross secondary school enrollment (%) CSO, Mauritiusroadroad density, km of road per 100 sq. km of landareaCSO, Mauritiusm2 broad money (% GDP) World Development Indicators(2012)tradesum of goods and services exports and imports(%GDP)World Development Indicators(2012)tradeserv sum of services exports and imports (% GDP)World Development Indicators(2012)tradegds sum of goods exports and imports (% GDP) World Development Indicators(2012)tax corporate tax as a share of total direct income tax MRA, various annual reportsNote: The data set covers the period 1976-2010, except for road and fdi1 which is available as from 1980.Preliminary AnalysisThis part presents some observations based on table 2 and the data plots at Annex 1. It isremarkable to note that for the past four decades or so, Mauritius has constantly witnessedimprovements in real income per-capita, in fact it has more than trebled from around Rs.60,000/year in 1976 to Rs. 190,000/year in 2010. Over the same period domestic capitalformation has hovered around the average of 30% of GDP, where private and public sectors hadan average share of 20% and 10%, respectively. The contribution of the private sector todomestic capital formation is two-fold higher than the public sector. This also confirms that since1976, or perhaps earlier, Mauritius has undoubtedly benefitted the status of a mixed economy12