Mauritius | Finances

July 25, 2013

Mauritius with Two Faces

Obvious inequalities between Mauritians at the bottom of the social ladder and those who can afford to travel, luxury cars and luxury apartments. A widening gap and arouses the interest of economic actors.

While a Mauritian four is still unemployed, 76% of the population is in debt and growth continues to lag behind, around 3%. In contrast, the number of Mauritians by plane or by cruise continues to grow, while car dealers pass without real difficulty cars and second hand. Sales and reservations luxury apartments are not left out either.

"There must be a widening gap between rich and poor with the effects of the crisis continue. A situation fueled because of the existence of an upper class that has the financial means to make the economy "turn, noted at the outset the Governor of the Bank of Mauritius (BoM) Rundheersing Bheenick.

He adds, however, that must be recognized that unlike some European countries affected by the recession causes shutdown of economic activities and layoffs chain, Mauritius is still growing, "even if it is downgraded from one year to another. "

Economist Swadicq Nuthay abounds in the same direction, noting that in a depressed economic climate, people at the bottom of the scale are the most financially vulnerable. "They have no safety net and suffer from high cost of living.

This forces them to choose consumer products range lower than those they used to buy, "he illustrates.

Tim Taylor, Chairman of the Cim Group and well-known personality in the private sector, it is of a different opinion. He firmly believes that consumption is still driven by the people of the middle class, contrary to popular perception that these are precisely the members of this class who are most economically crushed and suffer from weak market. "At Scott, we focus primarily consumers of the middle class and we did good business last year," said Chairman. Economist Kee Chong Li Kwong Wing, also economic spokesman Mauritian Militant Movement (MMM), joined to share the view of his colleague Swadicq Nuthay focusing on the financial fragility of a segment of the population is reflected in the quality of products bought in supermarkets. "Social inequality, he says, is obvious." "These consumers at the bottom of the ladder, adds Kee Chong Li Kwong Wing, are forced to go upmarket and buy inferior products to survive . They are forced to go into debt to make ends meet. "

About that supported the findings of the latest Household Budget Survey of 2012. They confirm the inequality in household income. According to these figures, households in the bottom have seen their share of income in thinning from 6.1% in 2006 to 5.4% in 2012.

On the other hand, the percentage of households to cope with less than Rs 20,000 per month has decreased while the proportion earning more than Rs 20,000 has increased.

Finally, even more, the number of families with incomes exceeding Rs 40,000 per month has increased considerably. If in 2007 only 8% of households had such income, the Household Budget Survey of Statistics Mauritius argues that this figure has more than doubled from 21% to pass. Such a result does not leave insensitive boss BoM sounds the alarm.

With a Gini coefficient (index that measures income inequality in a country: the number 0 represents perfect equality and 1 is perfect inequality), which grew by 0,388 in 2006/2007 to 0.412 in 2012, the risks are real, is he worried about a loss of part of the population if the fruits of growth does not benefit everyone. "Growth must be inclusive and not let one part of the population along the road. Social stability is necessarily a monetary stability. It is important not that the benefits of growth are plagued by high inflation or even devastating for the population, "says Rundheersing Bheenick. Otherwise, warns the Governor of the BoM, it is exposed to a social explosion "with people taking to the streets to demand more justice, as we have seen recently in Brazil and India."

The automotive market hubcaps

The figures in the automotive market are clear: 37,063 more cars on our roads, from January 2012 to June 2013. The National Transport Authority (NTA), meanwhile, has registered 24,654 cars last year, against 20,463 in 2011, an increase of 4,191 cars in a year.

Mauritians therefore continue to invest in new or second hand vehicles imported, despite a decline in purchasing power, in the opinion of economists.

Another observation: the crisis does not hinder either the market for luxury cars. "This segment is doing well, supported by strong growth," said Michel and Ng, Marketing Manager of ABC Automotive, dealer representing brands such as Porsche and Infiniti. For proof, 14 Porsche made their entry on our roads in 2012, not to mention the 16 or all three Jaguar Aston Martin.BMW, Mercedes, Audi, Mauritians do not skimp on the means: after recording 884 cars these luxury brands last year, statistics show that in 2013 the NTA also large potential market, with nearly 500 cars in this category already recorded in the first half.

Travel stay the course

Far from being destabilized by the crisis, many Mauritians continue to travel. Caroline Chen, Atom Travel tempers ". Admittedly are those of the upper class who have this culture of travel and go every year abroad" He continued that "the market continues to grow although there was a slight increase from 10% last year. "

Moreover, at this time, says our interlocutor, there is a strong growth in terms of departures to Europe. "At this time of year, many parents accompany their children who go to study abroad.No matter the cost, Mauritians invest in this direction, "says Caroline Chen.

Besides the aircraft, another niche is booming in travel is the cruise. But how does one explain that in Mauritius, we still can cruise in the Mediterranean, while international tourism dropped?" This market grew by 20% last year," says Caroline Chen. She explains that this is an area offering great promotions, which encourages people to ... enjoy 
The luxury apartments are always the coast

Despite the sluggish economy, the luxury apartments still have the wind in their sails with a select local clientele. This is the case of the third phase of the project "The Alleys of Helvetia" ENL group, Moka buyers of apartments and duplexes in the second phase of this project wanted to acquire more in the new .

The third phase of "The Alleys of Helvetia" includes 58 residential units whose construction will start in the second half of this year. The price of a unit vary from Rs 4.9 million to Rs 11 million.

What pushes buyers to turn to the residences of the high cost? According expertcomptable, there are young professionals of the financial sector are well paid and have more financial resources to invest in real estate.


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