Handbook on Small Nations in the Global Economy
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Handbook on Small Nations in the Global Economy

The Contribution of Multinational Enterprises to National Economic Success

Edited by Daniel Van Den Bulcke, Alain Verbeke and Wenlong Yuan

This unique, extensive Handbook illustrates that multinational enterprises can contribute substantially to the competitive advantage of small countries. It advances the notion that small nations increasingly need to rely on both home-grown and foreign multinational enterprises to achieve domestic economic success in industries characterized by international competition.
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Chapter 9: The Development Trajectory of a Small Island Economy: The Successful Case of Mauritius

Jahan Ara Peerally and John Cantwell


Jahan Ara Peerally and John Cantwell Mauritius is a fast-developing, small island economy, with characteristics of small developing countries in general. The Mauritian economy, which depended solely on sugar exports until 1970, has successfully diversified into two other sectors, namely textile manufacturing and up-market tourism. The last decade has seen the development of a freeport, an offshore business centre and an information and technology sector. The private sector has responded significantly to the challenge of sustainable development and growth of the economy. Today the business scene in Mauritius is one where there is a fast-expanding network of small, medium and large enterprises. The economic landscape was, however, not always as healthy and prolific. During the pre-independence days of British rule the Nobel Prize winner and economist James Meade1 predicted that if Mauritius were given independence, the economic prospects would be very dim. His assessment of Mauritius as being essentially a monocrop economy, vulnerable to terms-of-trade shocks, rapid population growth, and potential for ethnic tensions, provided a good example for a ‘case study in Malthusian economics’ (Meade, 1961, 1967). It is therefore rather ominous that a second Nobel Laureate, novelist V.S. Naipaul, described independent Mauritius in equally gloomy terms: an agricultural colony, created by empire in an empty island and always meant to be part of something larger, now given a thing called independence and set adrift, an abandoned imperial barracoon, incapable of economic or cultural autonomy. (Naipaul, 1972, p. 270) Three decades later, defying all predictions, Mauritius has overcome economic...

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