Dr. Naren Prasad, in a recent article for L'Express, emphasized the importance of institutional capacity in Mauritius' next phase of development. He noted that 25 years ago, Mauritius was considered a success story for transforming its sugar-dependent economy into a competitive manufacturing center. Prasad, who researched development strategies in small island developing states while pursuing his PhD in economics in Paris, highlighted the need for sound policies and institutions capable of implementing them consistently and adapting to change.
Prasad drew comparisons between Mauritius and Fiji, two island nations with similar labor market realities. Both countries have an unemployment rate of 5.7%, with youth unemployment around 18%. However, female labor force participation was significantly lower in Fiji at 36.2% compared to 49.6% in Mauritius. Prasad pointed out that both countries have untapped potential among women and youth, and face challenges such as skills mismatches and skilled professionals leaving for opportunities abroad.
A recent World Bank report on Mauritius recognizes the country's development achievements but warns that its growth model is losing momentum. The report notes that productivity growth has weakened, and economic progress is generating insufficient productive, well-paid employment. The financial services sector accounts for approximately 13% of GDP but only 3% of employment, highlighting the need for economic diversification that creates good jobs.
The IMF's July 2026 assessment also emphasizes productivity, skills, and fuller use of available labor resources. The World Bank projects that the population aged 65 and above will rise from approximately 14% in 2024 to 19% by 2033, creating a need for workers while some talent remains underutilized. Employers report skills shortages, while qualified people seek opportunities abroad, raising questions about the causes of these outcomes.
Prasad stresses that different explanations for labor market challenges call for different policies. He notes that building institutional capacity for evidence-informed policymaking is crucial. This involves developing practical skills to define problems, find research, assess its quality, interpret statistics, and communicate findings clearly. Institutions need routines that make evidence useful, such as information-sharing, policy reviews, and cooperation across ministries.
The International Labour Organization recently opened a national capacity-development programme on evidence-informed policymaking in Mauritius. Prasad is contributing to the program, which aims to examine practical approaches to diagnosing problems, assessing research, and communicating policy options. The program's success will depend on what follows, as it seeks to translate priorities into effective programs, assess results, and improve implementation.
Mauritius already has a National Employment Policy for 2024–2028, and strengthening institutional capacity can help turn its priorities into action. The program aims to bring together different perspectives through meaningful, inclusive social dialogue, ensuring that evidence informs decisions without replacing judgments about priorities, resources, and competing interests. Effective policymaking will require ongoing monitoring and adjustments when results differ from expectations.
Key points
- Dr. Naren Prasad emphasizes the need for institutional capacity to leverage evidence and create effective policies in Mauritius.
- Mauritius faces labor market challenges, including a 5.7% unemployment rate and low female labor force participation.
- The International Labour Organization has launched a program to support evidence-informed policymaking in Mauritius.
