Dr Amit Kapoor: “Turning Mauritius into one of the job creators of the world”

Mauritius has all the promising traits of another Singapore in the making, observes the Honorary Chairman of the Institute for Competitiveness, India. He discusses the areas for improvement to achieve this goal in an exclusive interview with Business Magazine.

BUSINESSMAG. The purpose of your visit is to present a competitiveness initiative project for Mauritius and the region. Please tell us more about it.

There are two things that I wanted to do upon coming here. The idea was to really understand the economy at ground level and what this place is about. The second thing was how to really create an initiative where we are able to bring various actors together and help push forward the agenda of making Mauritius a high income economy. Primarily, it is to get those three sets of people: government and the bureaucracy, the private sector and the civil society which would include the trade unions and so forth, working together.

Of course as we go along, the idea is to create a platform of sorts. I strongly believe that Mauritius is set to take a very strong leadership role from its original economic perspective. It has the potential to become the place where the next level of discussions for the region takes place over time. Even within the country there is so much potential to go to the next level in different clusters.

BUSINESSMAG. One important source of investments into India is through the Double Taxation Avoidance Agreement (DTAA) it shares with Mauritius. This treaty has been in the limelight o-wing to non-conclusive renegotiations. What is your opinion on the whole issue?

I think right now we are at the stage where the government officials are talking about it and respective Prime Ministers have also had a meeting about it earlier. I will keep it at that. According to me, things will settle down for the benefit of both countries.

BUSINESSMAG. Is the treaty headed for a slow death in the wake of the Indian General Anti-Avoidance Rule (GAAR), the coming into force of the Foreign Account Tax Compliance Act (FATCA) and the Base Erosion and Profit Shifting (BEPS)? Or is there some particular issue that we are not aware of?

I don’t think so. I think the present regime is a very, very committed one that we have in India and they have given a lot of credence to what has happened in the past. There could be some rationalisation that would happen but I don’t think they would supersede it.

BUSINESSMAG. Coming back to Mauritius, how would you assess the country in terms of competitiveness? How can the proposed council help the country in meeting its goals?

Mauritius is an interesting country. Of course, it is a small one and can be regarded as a city state; which is doing fairly well in certain areas without a doubt. Now the question is going to be: how do we move up the value chain and actually extract value? How do we get more people to step in? If you look at tourism itself, the number of tourists coming in (one million) is fairly small compared to the potential this beautiful country has. You will have to create a stronger ecosystem to attract more visitors. How do you do that? The answer is more connectivity. The air corridor between Mauritius and Singapore is going to be a smart thing but you will also have to work on improving the level of services in the tourism sector.

I see some exciting things that actually happen across the world. Singapore is a very interesting model state and there is the potential for Mauritius to be like Singapore. It might perhaps not be in five years’ time but you may be able to get there in ten to twenty years.

Singapore does amazing things for its tourists. The destination has great shopping venues and restaurants while here, in Mauritius, everything closes down at five in the afternoon. As a tourist, I would like to see more activity and engage with the local culture; which you have to develop.

The other thing that surprises me is the productivity loss that the country has right now in traffic. I thought only Delhi could have this kind of traffic. If on average a person spends three hours on the road not doing anything it is a waste of time.

How do we look at solutions for travel which are going to be unique and different? I am a big supporter of walking and cycling solutions. Can we create those in the city? Can we create situations supporting a walking mechanism?

The other thing I feel where Mauritius should do something about is its social progress. There is a certain level of disparity that exists which needs to be reduced since disparity creates anxiety in society; without a doubt. Your level of higher education, if you look at it from a global level point of view, needs to do better and you need to make investments there and in healthcare infrastructure as well. The directional things that I am seeing here are very strong and very smart. The PM’s vision statement is a good thing if it is implemented right.

The question is whether it is feasible or not. If you look at the Smart Cities programme, which I would rather term as the ‘smart neighbourhood’ programme, the question is how do you ensure the technology aspect and make sure the quality of life and creativity aspects are present?

BUSINESSMAG. From a more corporate perspective, why would any business leave aside any country in the world to choose to invest in or via Mauritius?

Investments are always driven by the potential that we see. If the potential is there, and the right steps are taken, people will notice that this venture is going to be profitable over the next few years.

In the tourism sector for example, there are a set of people who believe in the multiplier effect it could have on the economy if tourist arrivals increase from a million people to five million people.

When businesses do well, countries prosper and have a higher income and only then it reduces disparity. You have to look at those solutions. Every additional plane that gets into the flight ecosystem represents the potential of creating 90 to 120 more jobs.

I must however observe one thing: Mauritius is an interesting financial hub but you need to find a way where you have far better trained talent. There is the presence of smart talent here but you have to train them better in order to get them into the financial services sector because you have skilled products. Businesses look at those things and then you will see social progress happening. It is businesses that solve employability problems while government can only enable businesses to set up.

BUSINESSMAG. Private sector investment in Mauritius has been plummeting since a few years and one of the main arguments put forward has been the lack of governmental support…

That is a very important remark. The common vision and question is: what do we want to achieve? Government can create an enabling environment and then businesses can invest but you have to move from being job seekers to job creators. So how do we create this system where Mauritius becomes one of the job creators of the world rather than one of the job seekers?

Entrepreneurship can drive this move. Let us assume for a moment that something like Skype happens out of Mauritius. We are talking here of about a $3 billion’s worth of valuation, which came out of a small country like Estonia. The youth of today are very talented, are aware and have access to information. We have to make use of that through incubators and systems where they can experiment and create new ideas.