Macro-Economic Impacts of COVID-19 in Mauritius: Research Findings and Policy Recommendations

The webinar conducted by Dr. T. Juwaheer and Ms. K. Appadoo from the University of Mauritius shed light on the significant macro-economic impacts of COVID-19 in Mauritius. They discussed the current status, negative impacts on various industries, industries likely to receive boosts, and key facts and figures such as the GDP contraction and rising unemployment rate. Policy suggestions were proposed to address the challenges faced by the country in weathering the economic storm caused by the pandemic.

• COVID-19
• Mauritius
• Economic Impacts
• Policy Suggestions
• Research

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1. MACRO ECONOMIC IMPACTS OF COVID-19 IN MAURITIUS RESEARCH METHODOLGIES AND POLICY SUGGESTIONS: HOW ARE WE WEATHERING THE STORM? Webinar Speakers Dr. T Juwaheer , Associate Professor Dr. T Juwaheer , Associate Professor & Miss K Appadoo, Lecturer & Miss K Appadoo, Lecturer University of Mauritius University of Mauritius Date: Date: 29 October 2020 29 October 2020 Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 1

2. CURRENT STATUS AND PROSPECTS In Africa, the pandemic is gaining momentum and the continent is bracing unprecedented health and economic crisis The loss in GDP during a 30-day period will be 0.85, assuming the uniform trend set by IMF (2020) The Government of Mauritius promptly committed around 12 billion rupees ($300 million) to support its businesses and workers, but it is unlikely to suffice, as the effect of COVID-19 is likely to be felt well into 2021 itself for an Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 2

3. CURRENT STATUS AND PROSPECTS The World Bank (2020) estimates that in Sub- Saharan Africa s first recession in 25 years, the region s pace of economic growth may drop from 2.4% in 2019 to between -2.1% and -5.1% in 2020. For Mauritius, its ban on international travel makes its situation worse Countries like Mauritius that rely on foreign- exchange earnings from tourism to purchase food, medicines, and other basic necessities are likely to find themselves in very difficult situations Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 3

4. NEGATIVELY IMPACTED INDUSTRIES Culture, hospitality Movies and entertainment Catering and retail Transportation industry (Airlines and Passenger traffic) Manufacturing industry & SMEs Real estate and Construction Industry leisure and tourism and Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 4

5. INDUSTRIES LIKELY TO GET BREAKS AND BOOSTS Medical supplies and pharmaceuticals E-commerce & Digital Transformation Online entertainment education Teleworking industries Insurance and online Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 5

6. FACTS & FIGURES The Ministry of Finance forecasts GDP to shrink between 7 and 11 % this year Estimates point to the Mauritian economy contracting by around 10 % as a consequence of Covid-19 (Min of Finance, 2020) The unemployment rate is expected to more than double from 6.9 % to 17.5 %: an increase of around 60, 000 unemployed people (Luke et al, 2020) The tourism sector + ancillary business make up around 25 % of GDP: the impact to this industry has been significant prior to the pandemic, the Mauritian government s target of 1.6 million tourist arrivals in 2020 will clearly not be met Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 6

7. TOP 3 CHALLENGES FACED BY MAURITIAN COMPANIES AT THE HEIGHT OF THE CRISIS Lack of operational cash flow Drop in demand for goods and services Reduced opportunities to meet new customers and establish business relationships Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 7

8. BRIEF INSIGHTS INTO ACADEMIC RESEARCH ON IMPACT OF COVID-19 ON AGRI-BUSINESS SECTOR IN MAURITIUS Title of research: The relationship between Covid-19 impacts on the tourism sector and agri-business: A case study of Mauritius as an island destination Authors: S. Hardowar, K Appadoo and K. Ansaram (September 2020) Research objectives: Identify challenges faced by farmers during the Covid-19 pandemic to supply hotels with fresh farm produce; Investigate farmers practices to mitigate the effects of the pandemic on their livelihoods Evaluate the effectiveness of recovery strategies adopted by government during and post Covid-19 Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 8

9. RESEARCH METHODOLOGY Research methodology adopted was through a case study, where questionnaires were administered to and interviews were held with farmers who supply to major hotels across Mauritius It was difficult to conduct face to face interviews at the beginning of the study due to sanitary restrictions The approach used was a mixed method of in-depth and semi-structured interviews. Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 9

10. MAIN FINDINGS OF STUDY Farmers have been severely affected by the disruption in food supply to hotels Whilst short term fiscal policies have been put in place farmers are looking forward for more support for the tourism and agribusiness in terms of securing market share from imports, debt and tax reliefs Farmers may diversify and reflect on the possibility and potential of sustainable agriculture practices in future Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 10

11. IMPACT OF THE COVID-19 OUTBREAK ON THE ECONOMIC GROWTH OF MAURITIUS Due to the sanitary control measures and isolation techniques, shopping, online ordering, and online entertainment remain relatively active, which may partially offset the adverse effects described above by year 2021 online Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 11

12. IMPACT OF THE OUTBREAK ON DIFFERENT INDUSTRIES The COVID-19 disease will have different effects on different industries in Mauritius It will have huge adverse impacts on tourism, offline entertainment, hotels, aviation, logistics, and labor-intensive manufacturing, while it will have a relatively favorable pharmaceuticals, e-commerce, online entertainment and insurance impact on Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 12

13. REMEDIAL MEASURES Government has successively introduced a series of measures to support the production and supply of disease prevention and control materials, and begun to gradually introduce more macroeconomic policies to bolster the economy and support enterprises Firstly, the relationship between resumption of production must be handled carefully and effectively Production and services may resume in areas where the risk is well under control, because, should the outbreak not be effectively controlled, there would be greater uncertainties facing the overall economic growth and the ensuing costs would be so much the higher. It would be advisable for the decision makers to moderately lower the target for this year s GDP growth disease control and Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 13

14. REMEDIAL MEASURES As we approach the dates of large-scale resumption of work and production nationwide, different places may adopt policies to facilitate a differentiated and staggered process of return to normal based on the local outbreak status as well as the different characteristics of enterprises and industries and also the business models, and should maintain flexibility in these policies Major efforts should be made to increase investments in infrastructure projects in medical/health sectors to increase the overall level of demand, as well as facilitate high-quality economic development. Researchers showed that the effectiveness of interventions varies across countries, depending on the economic status and government dimensions, indicating that there is no "one size fits all" strategy, and a combination of non-pharmaceutical interventions is more effective than single measures to control COVID-19. cultural, education and Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 14

15. REFERENCES Georgieva, K (2020), Confronting the crisis: Priorities for the global economy , IMF speech, 9 April. Hale, T, N Angrist, B Kira, A Petherick, T Philips and S Webster (2020), Variation in government responses to COVID-19 , BSG Working Paper Series, BSG-WP-2020/032. Fortmann-Roe, S (2014), Insight Maker: A general purpose tool for web-based modelling and simulation , Simulation Modelling Practice and Theory 47: 28 45. International Monetary Fund (2020), World economic outlook (April 2020) , IMF Data Mapper. Stiglitz, J E (2011), The Mauritius miracle , Project Syndicate, 7 May. Frost, I, G Osena, J Craig, S Hauck, E Kalanxhi, O Gatalo, Y Yang, K Tseng, E Schueller, E Klein and G Lin (2020), COVID-19 in East Africa: National projections of exposed, contagious, symptomatic and severe cases , The Center for Disease Dynamics, Economics and Policy. World Bank (2020), COVID-19 (coronavirus) drives Sub-Saharan Africa toward first recession in 25 years , press release, 9 April. Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 15

16. Macro Economic Impacts of Covid-19 on Mauritius Dr T. Juwaheer and Ms K Appadoo 16