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Mauritius: The Thinking Mans’ ICT-BPO Island

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By Martin Conboy

There are great capital flows moving between Asia and Africa and a lot of it is finding a home in Mauritius because of its benign and stable environment. Mauritius’ strategic position is analogous to Hong Kong and Singapore in that all three are island states on the edge of large continents. Mauritius has the potential to become a financial/services hub for Africa in the same way that Hong Kong and Singapore are gateways to Asia. I can see great opportunities for Asian BPO players to partner with Mauritian players to pitch for bilingual projects as the market starts to shift towards emerging offshore locations.

Mauritius is situated off the African continent east of Madagascar and has a population of 1.3 million. The population is an unconventional fusion of Arabic, Indian, Creole, Singhalese, French, English and European influences.  Despite their diverse cultural backgrounds they have found the magic formula of how to get along . Part of Mauritius’ charm is the peaceful nature of its people.

Although known to Arab and Malay sailors as early as the 10th century, Mauritius was first explored by the Portuguese in the 16th century and subsequently settled by the Dutch – who named it in honour of Prince Maurits van NASSAU – in the 17th century. The French assumed control in 1715, developing the island into an important naval base overseeing Indian Ocean trade, and establishing a plantation economy of sugar cane.

The British captured the island from the French in 1810, during the Napoleonic Wars leaving the British in complete control of the Indian Ocean. The Indian Ocean was a vital part of the chain of trade links that connected the British Empire. The defeat marked the end of French hopes of seriously disrupting British trade with India.

With strategic bases placed along their trade routes, British convoys were assured a greater degree of safety that the Royal Navy provided with the infrastructure to operate worldwide. History shows us that Mauritius has always been an important strategically located island and so it is again in our new hyper connected world. Its history of being a well placed strategic trading cross road will stand it in good stead as the information super highway opens up new and exciting opportunities in Africa as the major coaxial   submarine cable between Asia and Africa bisects Mauritius and as there are two independent cables its has double redundancy

Independence from the UK was attained in 1968. A secure stable democracy with regular free elections and a positive human rights record, the country has attracted considerable foreign investment and has earned one of Africa’s highest per capita incomes.

Since independence in 1968, Mauritius has developed from a low-income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourist sectors. For most of the period, annual growth has been in the order of 5% to 6%.

The government’s development strategy centres on creating vertical and horizontal clusters of development in these sectors. Mauritius has attracted more than 32,000 offshore entities, many aimed at commerce in India, South Africa, and China. Investment in the banking sector alone has reached over US$1 billion. The economy is gradually shifting from light manufacturing and agriculture towards a services based economy. The services sector now represents over 70% of GDP and the ICT/ BPO sector contributes 6.8% of GDP, up from 2 % a few short years ago.

The country now promotes its ‘five pillars’, Tourism, agriculture, off shore financial services, manufacturing and ICT- BPO. Mauritius is well poised to take advantage of African BPO Growth.

Mauritius’ sound economic policies and prudent banking practices helped to mitigate negative effects from the global financial crisis in 2008-09. GDP grew more than 4% per year in 2010-11, and the country continues to expand its trade and investment outreach around the globe.

Over the last five years, Mauritius has embraced some bold economic reforms that have positioned the country among the most open, competitive and lowest tax economies in the world. It has a flat company tax rate of 15%. Capitalizing on its strategic location and relying on its sound domestic economic base, Mauritius is increasingly being viewed as a global business platform for many international players in the ICT/BPO industry. The island has a well-developed digital network infrastructure and high bandwidth capabilities.

The outsourcing industry has witnessed significant transformation over the last 5 years. Starting with basic data entry tasks, the industry graduated to a high proportion of voice-based services and a range of back-office processing activities. The last 3-4 years have seen the scope of services expanding to include increasingly KPO complex processes involving rule-based decision making and even research services requiring informed individual judgment. The sector has achieved annual growth of over 16% per annum.

Today, the sector faces a unique opportunity to enhance its role as a high value added service provider and capitalize on the expanding BPO landscape especially in Africa. The country is gradually being recognized as a centre of excellence in the areas of finance, accounting and IT services.  Mauritius has developed technology and free trade zones like Ebene Cyber city, which houses 52 IT/BPO companies.

What Makes Mauritius an attractive destination for BPO?

Mauritius has a proven track record of political stability and has developed a pro-business environment. Outsourcing of services has been possible only because of the tremendous advancements in telecommunication technology over the years. Mauritius has a strong IT infrastructure and support. This technological support forms the backbone of this booming outsourcing industry. Moreover, the country has also broadcast its Data Protection Act and is working with the European Union for the “Adequacy Finding” thus ensuring the safe transfer of sensitive and personal data.

Ken Poonoosamy, The managing Director of the Mauritius Board of Investments said,” Mauritius has already embraced the opportunity presented by ICT and offshoring, and is currently handling BPO projects from around the world and specifically in Eastern Canada, the USA and France”.

The BPO industry in Mauritius is poised for future development and it is exquisitely positioned on the edge of Africa as that geography opens up to BPO. While India and Philippines have well articulated attributes and are recognized as mature BPO centres, Mauritius can be used as a complementary destination targeting both English and French speaking markets.  This bilingual capability of easily switching between French and English with ease is impressive. According to Everest Research Mauritius is a low cost, stable, investor friendly location suited to support moderate scale facilities.

Mr. Poonoosamy went on to say, “Mauritius is well situated, politically stable and has a very steady economy. The population is bilingual with a strong service culture. This is a function of Mauritius being a well known first class tourism destination and superior customer service is in our DNA.”

This is supported by Accenture, who has been operating in Mauritius since 2002 and who now has over 1,100 employees.  Yves Bernaert commented, “Mauritius is a destination of choice for French-speaking, English-speaking and other European-based clients of Accenture because of the availability of multilingual workforce at competitive rates, modern and reliable infrastructure and the country’s political and social stability.”
May 27, 2013
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