In the Economic Times of India the Finance Minister stated:
"We had 5 per cent in 2006, we had 5.6 per cent in 2007, and we can keep the growth rate at 6.0 per cent in the coming year," Finance Minister Rama Sithanen told the media.
"There are five sectors which could do exceptionally well; tourism, construction, the manufacturing free zone, financial services and professional services."
Preliminary thoughts:
The biggest question for Mauritius now that we know the US will slow down and that there strong signs that the rest of the world economy has not 'decoupled' from the US is what impact will this have on growth?
Across the board from economists at the World Economic Forum to analyst's at Merill Lynch, have all predicted a recession of between 2Q to 4Q's in the US and slow down globally as consumption in the US slows liquidity gets tighter.
Mauritius should be fairly shielded from the economic slow down Europe because most of it's tourism is high end tourism - the beauty of being at the high end is that those who purchase high end services are less likely to cut back on expenditures; however we have seen a cutback in the US by the high net worth. The growth should at least be sustainable though with the air lines focusing on new markets. Most Hotels are booked out until May anyways.
Construction should remain strong because there is so much of it going on at the moment, the next five years could possibly be the biggest construction frenzy Mauritius has ever seen! It's still too early to determine how the global credit crunch will affect construction. Commodity prices remain strong.
Financial services should remain strong, although the Indian economy is showing weakness. However, this should rebound as US and European investors look for more promising returns - routing FDI through Mauritius.
Professional services may suffer a little, with companies cutting back expenditures or it could accelerate for companies trying to cut costs, who might move their operations to Mauritius. The industry faces a shortage of skilled workers though, which will probably be bigger downside on growth in this sector.
The biggest downside risk to the economy presumably could come from export manufacturing area - especially textiles, with the Mauritian Rupee strengthening and American consumers tightening their pockets the industry could be in for a major slow down depending on how long the US recession takes. With regard to the Seafood hub, it remains puzzling why this sector hasn't grown faster; there certainly is shortage of fish in world, with marginal quality cod in London now going for around $15 a pound.
Other factors: inflation was down to around 9% this year from 14% the year previous. A slower global economy should but a damper on oil prices, however food prices continue to rise and which will be of concern to the gov.
My range would probably be between 4% to 8% growth in Mauritius: a major factor to keep an eye on will be whether the FDI keeps flowing in. So far 2008 has gotten off to good start, mostly based on Chinese investments, namely, Tianli, China's expression of interest to build the "Dreambridge" across the PL Harbour, New Guibbes City, Film City, Domain des Pailles development, and the Albion IRS by Club Med. There are also smaller scale investments going on in real estate sectors, as well as other medium scale investments in the commercial and retail estate sector. The Les Salines projects, and expected investments by India would also be welcome.
Saturday, January 26, 2008
Thursday, January 24, 2008
Mauritius Competition Law [Anti-competitive Agreements]
13. Anti-competitive agreements: (1) For the purposes of this Act, and subject to subsection (2), any agreement or part thereof - (a) whereby the parties to the agreement or as a result of which such parties may supply or acquire a substantial share of the market of goods or services of same description; and (b) the object or effect of which is to significantly prevent, restrict or distort competition. shall be considered as an anti-competitive agreement. (2) The Minister may, in the public interest or where he is satisfied that such an agreement is beneficial to the consumers, exempt any agreement from the provisions of this section.
Elements of section 13: (section 13 is poorly drafted)*
(1) Any agreement
(2) resulting in the parties to the agreement supplying or acquiring a substantial share of the market (think it means - any agreement to supply or acquire substantial market share: the question would be: whether this is an agreement to acquire market share)**
(3) object or effect
(4) significantly prevent,* restrict, or distort competition
[agreement + to acquire market share + object or effect + prevent, restrict, or distort] = anticompetitive
Exemptions: I would have preferred the OFT give exemptions; which would be challengeable, and economically based; ie. going through scientific process (based on economics) to arrive at the exemption: rather than an exemption coming from the Minister; although UK's legislation does reserve some powers to SS. However, Exemptions are primarily to be granted by the OFT
EU Law:
Article 81
1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which:
UK Competition Act 1998
Section 13(2) Exemptions [serious issues]
This gives the Minister the power to issue exemptions when it is in the public interest or for the benefit of consumers. This sub-section is potentially explosive! It's just waiting to happen. That's an incredible amount of power in the Minister's hand. Does the Minister have to provide any economic evidence for his decision? How will he base his decision? (politically presumably! lo$$yists time) Can he be held accountable - this is an political decision for an economic situation; the Courts won't want to get involved. Can I challenge if I'm affected? It would've preferable if there was something akin to the EC provisions, where an agreement is economically justified if it is exempted or given block exemptions which are decided through an economic + democratic process (block exemptions need to go through the Commission, Council acceptance etc: the competition commission (although this is a political body - it's an antitrust body, which would be tasked with putting out guidelines for how (economically) and why the block exemptions should exist and be applied). It will be intersting to see how public interest and consumer welfare would be defined: this provision could be saved - if the Courts were to strictly enforce and apply - state that the Minister's exemption is void if is not in the public interest or show consumer welfare; they'd have to define the latter too.
Preferably though, something like this would've been better:
Art 81(3): provisions of paragraph 1 may, however, be declared inapplicable in the case of:
*Unecessary confusion is created in the language, in s. 13(a) especially. There should be a comma between parties and may. This doesn't really make sense to me, if you read it as "whereby the parties to the agreement ... may supply or acquire a substantial share of .." the word may doesn't belong there, I don't see why it's in there, nor is it easy to see how they've chucked in the word supply in there, appears they were trying to say 'an agreement to supply the market a substantial market share'...?
**defines the type of agreement we are looking for.
***significantly prevent, this could be a contentious issue, the others are more easily discernible.
The Sherman Act 1890
Section 1 of the Sherman Act outlaws "every contract, combination . . . , or conspiracy, in restraint of trade," but long ago, the Supreme Court decided that the Sherman Act prohibits only those contracts or agreements that restrain trade unreasonably. What kinds of agreements are unreasonable is up to the courts.
Section 2 of the Sherman Act makes it unlawful for a company to "monopolize, or attempt to monopolize," trade or commerce. As that law has been interpreted, it is not necessarily illegal for a company to have a monopoly or to try to achieve a monopoly position. The law is violated only if the company tries to maintain or acquire a monopoly position through unreasonable methods. For the courts, a key factor in determining what is unreasonable is whether the practice has a legitimate business justification.
Elements of section 13: (section 13 is poorly drafted)*
(1) Any agreement
(2) resulting in the parties to the agreement supplying or acquiring a substantial share of the market (think it means - any agreement to supply or acquire substantial market share: the question would be: whether this is an agreement to acquire market share)**
(3) object or effect
(4) significantly prevent,* restrict, or distort competition
[agreement + to acquire market share + object or effect + prevent, restrict, or distort] = anticompetitive
Exemptions: I would have preferred the OFT give exemptions; which would be challengeable, and economically based; ie. going through scientific process (based on economics) to arrive at the exemption: rather than an exemption coming from the Minister; although UK's legislation does reserve some powers to SS. However, Exemptions are primarily to be granted by the OFT
EU Law:
Article 81
1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which:
(a) | directly or indirectly fix purchase or selling prices or any other trading conditions; |
(b) | limit or control production, markets, technical development, or investment; |
(c) | share markets or sources of supply; |
(d) | apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; |
(e) | make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. |
2. Any agreements or decisions prohibited pursuant to this article shall be automatically void. 3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
- | any agreement or category of agreements between undertakings, |
- | any decision or category of decisions by associations of undertakings, |
- | any concerted practice or category of concerted practices, |
which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:
(a) | impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; |
(b) | afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question. |
UK Competition Act 1998
The prohibition
2 Agreements etc. preventing, restricting or distorting competition
(1) Subject to section 3, agreements between undertakings, decisions by associations of undertakings or concerted practices which—
(a) may affect trade within the United Kingdom, and
(b) have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom,
are prohibited unless they are exempt in accordance with the provisions of this Part.
(2) Subsection (1) applies, in particular, to agreements, decisions or practices which—
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
Section 6 allows the Secretary of State to give block exemptions, acting upon a recommendation of the OFTSection 13(2) Exemptions [serious issues]
This gives the Minister the power to issue exemptions when it is in the public interest or for the benefit of consumers. This sub-section is potentially explosive! It's just waiting to happen. That's an incredible amount of power in the Minister's hand. Does the Minister have to provide any economic evidence for his decision? How will he base his decision? (politically presumably! lo$$yists time) Can he be held accountable - this is an political decision for an economic situation; the Courts won't want to get involved. Can I challenge if I'm affected? It would've preferable if there was something akin to the EC provisions, where an agreement is economically justified if it is exempted or given block exemptions which are decided through an economic + democratic process (block exemptions need to go through the Commission, Council acceptance etc: the competition commission (although this is a political body - it's an antitrust body, which would be tasked with putting out guidelines for how (economically) and why the block exemptions should exist and be applied). It will be intersting to see how public interest and consumer welfare would be defined: this provision could be saved - if the Courts were to strictly enforce and apply - state that the Minister's exemption is void if is not in the public interest or show consumer welfare; they'd have to define the latter too.
Preferably though, something like this would've been better:
Art 81(3): provisions of paragraph 1 may, however, be declared inapplicable in the case of:
- | any agreement or category of agreements between undertakings, |
- | any decision or category of decisions by associations of undertakings, |
- | any concerted practice or category of concerted practices, |
which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:
*Unecessary confusion is created in the language, in s. 13(a) especially. There should be a comma between parties and may. This doesn't really make sense to me, if you read it as "whereby the parties to the agreement ... may supply or acquire a substantial share of .." the word may doesn't belong there, I don't see why it's in there, nor is it easy to see how they've chucked in the word supply in there, appears they were trying to say 'an agreement to supply the market a substantial market share'...?
**defines the type of agreement we are looking for.
***significantly prevent, this could be a contentious issue, the others are more easily discernible.
The Sherman Act 1890
Section 1 of the Sherman Act outlaws "every contract, combination . . . , or conspiracy, in restraint of trade," but long ago, the Supreme Court decided that the Sherman Act prohibits only those contracts or agreements that restrain trade unreasonably. What kinds of agreements are unreasonable is up to the courts.
Section 2 of the Sherman Act makes it unlawful for a company to "monopolize, or attempt to monopolize," trade or commerce. As that law has been interpreted, it is not necessarily illegal for a company to have a monopoly or to try to achieve a monopoly position. The law is violated only if the company tries to maintain or acquire a monopoly position through unreasonable methods. For the courts, a key factor in determining what is unreasonable is whether the practice has a legitimate business justification.
Tuesday, January 22, 2008
Mauritius Competition Law [Fundamental Elements]
12. Collusive agreements
(1) Where, under any agreement-
(a) the parties acquire or supply goods or services of the same
description, the object of which is, in any way, to -
(i) fix the selling or purchase prices of the goods or
services; or
(ii) share markets or sources of supply; or
(iii) restrict the supply of the goods or services to, or the
acquisition of them from, any person; and
(b) the effect of which significantly prevents, restricts or distorts
competition,
that agreement shall be regarded as a collusive agreement.
(2) Subject to subsection (3), any agreement, or provision thereof,
which amounts to a collusive agreement, is prohibited and void.
(3) Any agreement of the classes specified in the Third Schedule shall
not be considered as a collusive agreement.
14. Bid-rigging
(1) Subject to subsection (2), no person shall enter into an agreement
whereby one party –
(a) agrees not to submit a bid or tender in response to an
invitation for bids or tenders; or
(b) agrees upon the price, terms or conditions of a bid or tender
to be submitted in response to such a call or request.
(2) This section does not apply to –
(a) an agreement to which the only parties are interconnected
bodies corporate; or
(b) an agreement the terms of which are made known to the
person making the invitation for bids or tenders at or
before the time when any bid or tender is made by a party to
the agreement.
(3) A person who contravenes sub-section (1) shall commit an offence
and, on conviction, shall be liable to a fine not exceeding 500,000 rupees or to
imprisonment for a term not exceeding 5 years.
(4) Where the Director is satisfied that any person has contravened
section 14, he shall refer the matter to the Police.
13. Anti-competitive agreements
(1) For the purposes of this Act, and subject to subsection (2), any
agreement or part thereof -
(a) whereby the parties to the agreement or as a result of which
such parties may supply or acquire a substantial share of the
market of goods or services of same description; and
(b) the object or effect of which is to significantly prevent, restrict
or distort competition.
shall be considered as an anti-competitive agreement.
(2) The Minister may, in the public interest or where he is satisfied that
such an agreement is beneficial to the consumers, exempt any agreement from
the provisions of this section
Dominance
10. Monopoly situation
(1) For the purposes of this Act, and subject to subsection (2), a
monopoly situation exists in relation to the supply or acquisition of goods or
services of any description where competition is non-existent or where the
enterprise enjoys a dominant position in a given market.
(2) In determining whether a monopoly situation exists under
subsection (1), account shall be taken of the availability of substitutable goods
or services and all nearby competitors to which consumers could turn in the
short term.
(3) Subsection (1) does not apply to goods and services listed in the
Second Schedule.
(4) For the purposes of this Act, a "dominant position" means an ability
to influence unilaterally price or output of goods or services in a given market.
Joint Dominance
11. Abuse of monopoly situation
(1) Subject to subsection (2), an abuse of monopoly situation occurs
where an enterprise-
(a) which is in the position defined under section 10; and
(b) by itself or together with other enterprises -
(i) acts or behaves in such a manner as to unduly limits
the ability of other persons to supply or acquire goods
or services of the same description; and
(ii) such acts or behaviour either have or are likely to
have an adverse effect on the efficiency,
adaptability and competitiveness of the economy,
or are, or are likely to be, detrimental to the
interests of consumers.
(2) For the purposes of subsection (1), any act or behaviour
which -
(a) directly or indirectly imposes unfair purchase or selling prices
or other unfair trading conditions such as below-cost pricing;
(b) limits supply, production, markets or technical development
to the prejudice of consumers;
(c) amounts to applying dissimilar conditions to equivalent
transactions with other trading partners, thereby placing
them in a competitive disadvantage; or
(a) makes the conclusion of contracts subject to acceptance by
the other parties of supplementary obligations which by their
nature or according to commercial usage have no
connection with the subject of the contracts,
shall be taken into consideration in determining whether an abuse of monopoly
situation has arisen.
Predatory pricing Article 11
world bank Mauritius Competition
(1) Where, under any agreement-
(a) the parties acquire or supply goods or services of the same
description, the object of which is, in any way, to -
(i) fix the selling or purchase prices of the goods or
services; or
(ii) share markets or sources of supply; or
(iii) restrict the supply of the goods or services to, or the
acquisition of them from, any person; and
(b) the effect of which significantly prevents, restricts or distorts
competition,
that agreement shall be regarded as a collusive agreement.
(2) Subject to subsection (3), any agreement, or provision thereof,
which amounts to a collusive agreement, is prohibited and void.
(3) Any agreement of the classes specified in the Third Schedule shall
not be considered as a collusive agreement.
14. Bid-rigging
(1) Subject to subsection (2), no person shall enter into an agreement
whereby one party –
(a) agrees not to submit a bid or tender in response to an
invitation for bids or tenders; or
(b) agrees upon the price, terms or conditions of a bid or tender
to be submitted in response to such a call or request.
(2) This section does not apply to –
(a) an agreement to which the only parties are interconnected
bodies corporate; or
(b) an agreement the terms of which are made known to the
person making the invitation for bids or tenders at or
before the time when any bid or tender is made by a party to
the agreement.
(3) A person who contravenes sub-section (1) shall commit an offence
and, on conviction, shall be liable to a fine not exceeding 500,000 rupees or to
imprisonment for a term not exceeding 5 years.
(4) Where the Director is satisfied that any person has contravened
section 14, he shall refer the matter to the Police.
13. Anti-competitive agreements
(1) For the purposes of this Act, and subject to subsection (2), any
agreement or part thereof -
(a) whereby the parties to the agreement or as a result of which
such parties may supply or acquire a substantial share of the
market of goods or services of same description; and
(b) the object or effect of which is to significantly prevent, restrict
or distort competition.
shall be considered as an anti-competitive agreement.
(2) The Minister may, in the public interest or where he is satisfied that
such an agreement is beneficial to the consumers, exempt any agreement from
the provisions of this section
Dominance
10. Monopoly situation
(1) For the purposes of this Act, and subject to subsection (2), a
monopoly situation exists in relation to the supply or acquisition of goods or
services of any description where competition is non-existent or where the
enterprise enjoys a dominant position in a given market.
(2) In determining whether a monopoly situation exists under
subsection (1), account shall be taken of the availability of substitutable goods
or services and all nearby competitors to which consumers could turn in the
short term.
(3) Subsection (1) does not apply to goods and services listed in the
Second Schedule.
(4) For the purposes of this Act, a "dominant position" means an ability
to influence unilaterally price or output of goods or services in a given market.
Joint Dominance
11. Abuse of monopoly situation
(1) Subject to subsection (2), an abuse of monopoly situation occurs
where an enterprise-
(a) which is in the position defined under section 10; and
(b) by itself or together with other enterprises -
(i) acts or behaves in such a manner as to unduly limits
the ability of other persons to supply or acquire goods
or services of the same description; and
(ii) such acts or behaviour either have or are likely to
have an adverse effect on the efficiency,
adaptability and competitiveness of the economy,
or are, or are likely to be, detrimental to the
interests of consumers.
(2) For the purposes of subsection (1), any act or behaviour
which -
(a) directly or indirectly imposes unfair purchase or selling prices
or other unfair trading conditions such as below-cost pricing;
(b) limits supply, production, markets or technical development
to the prejudice of consumers;
(c) amounts to applying dissimilar conditions to equivalent
transactions with other trading partners, thereby placing
them in a competitive disadvantage; or
(a) makes the conclusion of contracts subject to acceptance by
the other parties of supplementary obligations which by their
nature or according to commercial usage have no
connection with the subject of the contracts,
shall be taken into consideration in determining whether an abuse of monopoly
situation has arisen.
Predatory pricing Article 11
world bank Mauritius Competition
Tuesday, January 15, 2008
Club Med Albion IRS $100m
Le Club Med construit 40 villas de luxe
L'Express
Le Club Med investit Rs 1,5 mds dans un projet d’«Integrated Resorts Scheme» comprenant 40 villas. La plus petite coûtera quelque Rs 40 m et la plus luxueuse quelque Rs 80 m. La construction débutera en mai.
L'Express
Les Salines Development
Actualité Locales
Lundi 14 janvier 2008
No - 16399
PORT-LOUIS
Un village moderne se crée aux Salines
Les nouveaux contours du port se dessinent. La Mauritius Ports Authority (MPA) a décidé vendredi de démarrer le nouveau village intégré aux Salines, à Port-Louis, avec la construction de complexes touristiques, récréatifs et commerciaux. «Nous prévoyons d’aménager un front de mer, un terminal pour des paquebots de croisières, une marina pour des yachts et bateaux de plaisance, trois à quatre hôtels, des appartements résidentiels, des restaurants, dont un restaurant tournant», explique Siddick Chady, président de la MPA.
«Il est aussi dans notre intention d’y avoir un petit hôpital, des espaces loisirs et de détente, des espaces commerciaux, des magasins et boutiques, des bâtiments intelligents, comme ceux de la cybercité, et des espaces bureau, même une esplanade pouvant accueillir 15 000 personnes ou plus. Nous voulons des bâtiments d’au moins 15 étages dans ce village.»
En raison de son envergure, la réalisation du Salines Waterfront Village nécessitera de gros investissements en plusieurs phases sur quatre à cinq ans. Selon Siddick Chady, la première devrait être prête en 2010 et se chiffrer autour de Rs 5 à Rs 7 milliards.
Le développement du Salines Waterfront Village se fera surtout par des investissements du secteur privé. Le village s’étendra sur 69 arpents à côté des installations du chargement du sucre en vrac. La MPA sera partie prenante comme partenaire. D’autant plus qu’elle a fait de gros investissements dans le passé dans les travaux de dragage et de remblaiement.
«Nous travaillons sur ce projet depuis plusieurs mois. Il y a eu plusieurs retouches », dit Siddick Chady. Le développement des Salines a été proposé depuis plusieurs années déjà, notamment dans le Master Plan de 1996 pour le port.
Un pont (foot bridge) reliera le front de mer actuel de la Place Labourdonnais au nouveau village des Salines. Le jardin Les Salines (Robert Edward Hart) aura un nouveau look car c’est un patrimoine à préserver. La mairie et le ministère des Infrastructures publiques seront impliqués. Siddick Chady se propose de discuter dans les prochaines semaines avec les promoteurs qui pourraient être intéressés à être impliqués dans le développement du Salines Waterfront Village.
Au village s’ajoute la construction du Dream Bridge. L’idée avait été jetée alors que Siddick Chady occupait le portefeuille des Infrastructures publiques du premier gouvernement Ramgoolam. Ce projet, comme celui de la route Terre Rouge - Verdun - Trianon est une des options pour décongestionner la capitale. Le plan initial prévoyait que le pont commence à Cassis, près du collège Royal de Port-Louis avant de passer par Les Salines pour rejoindre la Marine Road à Roche-Bois. Mais il appartiendra aux décideurs de voir s’il ne faudrait pas que le Dream Bridge s’étende jusqu’à Riche-Terre, à cause du développement rapide de la circulation.
Renforcement de la sécurité
«Le Dream Bridge occupe une bonne place à notre agenda. La MPA va remettre d’ici fin janvier ses propositions pour le tracé. Cela sera fait avec la collaboration du ministère des Infrastructures publiques. C’est un projet qui intéresse énormément le Premier ministre», souligne Siddick Chady.
Mais la MPA a d’autres priorités pour le développement du port comme un hub régional, notamment le renforcement de la sécurité avec l’entrée en opération de caméras de surveillance dans des points stratégiques, la construction d’un port de pêche, l’installation de deux ou trois grues au terminal polyvalent une fois qu’il aura été consolidé, l’extension du quai du Mauritius Container Terminal pour manutentionner trois porte-conteneurs à la fois, et l’aménagement du terminal de Fort William.
«Nous comptons encourager la création d’entrepôts de produits secs et frigorifiés informatisés pour le chargement et déchargement des conteneurs, la construction d’une autre cale sèche pour les travaux de carénage et de réparation de bateaux», fait ressortir Siddick Chady.
L’Oil Jetty – quai dédié au déchargement des produits pétroliers et du gaz ménager – sera en opération en mai. Dans cette optique, la MPA est en contact avec des entreprises privées intéressées à construire des cuves de stockage de ces produits.
«Nous voulons faire revivre Port Louis. Dans tous les pays, Singapour, Hong Kong, Dubayy, c’est le port qui donne vie à la capitale. C’est vrai que certains projets ont été initiés avant mon administration, mais nous allons nous évertuer à les matérialiser.»
Par Alain BARBÉ
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