under AGOA. Many of the Hong Kong based textilefirms—which account for around 25 percent of textile employment (around 15,000 workers) and 30 percent of exports—are likely to leave in the next two to three years.
Figure II.5. Ratio of EPZ Exports to Total Exports of Goods
Sources: The Mauritian authorities and staff estimates.
40. The authorities have been supporting the restructuring of EPZ textilefirms in order to avoid a possible collapse of the sector . These efforts have resulted in the establishment of the Textile Emergency Support Team (TEST
Mr. James Y. Yao, Mr. Gamal Z El-Masry, Padamja Khandelwal, and Mr. Emilio Sacerdoti
than 91,000 in 1999, had fallen to about 78,000 by end-2003. Further decline of employment is expected in the period ahead.
The authorities have promoted the restructuring of the EPZ textilefirms in order to avoid a major crisis in the sector. To that end, they established in July 2003 the Textile Emergency Support Team (TEST) initiative, under which diagnostic studies of textilefirms are conducted by the National Productivity and Competitiveness Council (NPCC), to examine their cost structure and identify areas of improvement. In addition, a corporate debt
informal seminar in the African Department for their valuable comments on this paper. Any remaining errors are the sole responsibility of the authors.
2 The majority of enterprises in the EPZ are textilefirms.
3 In its 2002 report, the Bank of Mauritius states that “while vacancies advertised have been principally for skilled and management jobs, the vast majority of persons seeking jobs do not have the necessary training, reflecting the mismatch between available labor and skills required.”
4 Mauritian unemployment figures are derived from
submit a letter of approval from the relevant local textilefirm. In practice, exporters are understandably reluctant to request such a letter for fear that the textilefirm will discriminate against them in future supplies. As a result of all these problems, Colombian garment exporters are often forced to buy fabric from domestic producers at prices 50 to 100 per cent above world levels. For cotton, the study found that four large textilefirms use their oligopolistic power behind high protective walls to raise prices. For synthetics, the problem begins further back
, came to almost $1 million a year—representing 14 percent of the company’s annual revenue. The average yearly cost of childcare for a child six months to three years old is $1,100, which means that the cost of childcare is lower than the total cost to firms of turnover and lost productivity. In another example, a small textilefirm we worked with spends $258,000 a year on childcare for its employees but saves more than $800,000 as a result of lower women’s turnover.
The EBRD operates in many countries that currently don’t have enough public
, Mexican, and U.S. textilefirms will no longer find it convenient to import fibers from Europe because products made from imported fibers cannot be exported within the NAFTA area free of charge. Therefore, while there is complete trade liberalization inside the NAFTA region, in fact there is diversion taking place with respect to the outside world. The rules for the automobile sector are not as draconian as those for the textile sector, but in any case they were carefully crafted to strengthen the competitive positions of the big three automakers in North America
, Philippine Chamber of Commerce, or the Philippine Export Confederation depending on the circumstances of the firm in question.
30 In early 2000, the tax credit scheme was embroiled in a scandal whereby textilefirms were found to have received P4.5 billion in tax credit certificates under fraudulent claims for duties paid on imported inputs to exported goods.
31 For manufacturing enterprises, the gross income tax is levied on gross sales revenue from activity within the SEZ net of allowable deductions for labor expenses, raw materials, supplies and fuels
Despite strong economic growth, a "U"-curve unemployment phenomenon in Mauritius can be observed. Unemployment plunged from 21 percent to less than 4 percent between the early 1980s and the early 1990s, but this trend was reversed and the rate increased to 10 percent by end-2002. This paper provides an analytical framework to explain this development. The growth of higher-skilled sectors coupled with rigidities in the labor market seem to account for the observed unemployment behavior. Policy makers can improve employment prospects by not only investing in education to reduce skills mismatch but also by reforming the pay-setting institutions.