Industrial development in Mauritius expanded rapidly after 1971, when the government established EPZs. In return for tax benefits, duty-free imports of raw materials and machinery, and other inducements, the owners of EPZ enterprises agree to export all their products. In the first year of operation, nine EPZ firms employing 644 persons accounted for 1 percent of export earnings. In 1992 a total of 568 EPZ enterprises employing 89,949 persons produced such items as flowers, furniture, jewelry, and leather goods. The EPZ rate of growth of employment and foreign exchange earnings slowed in the 1980s and early 1990s. However, the value of EPZ exports in 1993 set a record of MauR15.8 billion.
Textiles are the main EPZ product, accounting for 89 percent of jobs and 83 percent of exports. With regard to wearing apparel, Mauritius benefits from preferential treatment in the European Community (EC) marked under the Lomé Convention. Hong Kong, the source of 22 percent of all foreign investment, is the largest foreign investor in the textile sector. Other countries participating include France, Britain, and Germany. Two foreign firms dominate the textile industry: Socota and Woventex. In a 1991 policy paper, the government urged diversification of EPZ industries and pledged to give priority to nonclothing industries such as electronics.
The construction industry's contribution to GDP grew from 5.3 percent in 1987 to about 7.6 percent in 1992, thanks to investment in housing, roads, hotels, factories, and a new airport terminal. Average annual real growth in the construction sector between 1989 and 1992 has been around 10 percent. In 1992 an estimated 10,600 persons were employed in the industry, accounting for about 3.7 percent of total employment.
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