Mauritius was like no other country we visited. Indeed, among the so called developing countries, Mauritius is a very special case. A small .Indian Ocean Island, it has a population of slightly over one million, which is growin8" at 0.9 % (C.S.O, 1988). This is one of the lowest population growth rates in the world, and is the result of wr:ressive and impressive population control campaigns mounted since the rnid 1960s.
By the early 1980s,1ilauritius, which had relied heavily on its sugar industry (the main export commodity), faced serious economic problems. Unemployment, which had been mounting, over the years was tremendously high, and budget deficits reached Rs 604 million by 1982/83 fiscal year (budget speech, 1986/87). By 1983 we were told, many Mauritiusians had become extremely worried about the social and political implications of unemployment which was highest among male workers.
; . .Like many other countries, Mauritius had followed an import-substitution industrialization programme which, evidently, failed to generate sufficient economic growth and arrest . unemployment. The failure of this strategy.Ied to the creation and subsequent promotion of an Export Processing Zone (EPZ) in 1970', as in Taiwan or Singapore (Haine, 1981 :
n..
Anunprecedented incentive structure for the EPZ investors (in particular, the diversification of the agricultural sector and the general restructurfnz of the Mauritian economy) have led to unprecedented growth rates in that country in recent years.
, Thus, by the time the. 1986/87 and 1987/8B budgets were presented, the Mauritian Minister of Finance could report as follows:
At the sectoral level, the most strlkin« performance has been in the EPZ sector. For the second year running, the EPZ sector would achieve 11 real growth rate of 30 per cent in terms of export proceeds, this sector would show more than 50 per cent increase , to as. 3.8 billion ... the first time in our histury that the gross export earnings from
sugar sector had been overtaken by another sector.
The agricultural sector has also contributeo sirrnlflcantly to growth ... in particular the livestock and fisheries sectors which have .expanded at a faster rate than expected.
Our country has become a net exporter of fish and fish products.
The construction sector ... gathered momentum and strength this year 5984/85)... the major factor accounting for this is the sizeable increase of investment in nonresidential buildinr;s arlsing from the setting of new hotels, new units in the EPZ sector and new business premises and offices. The tourism sector, another important earner of foreign exchange, has maintained its buoyance. Tourist arrivals during. the current year would reach 150,000 which is 6 per cent hisrher than 1984/85. (Budget Speech, 1986/87 : 6-7).
By June 1988 when the 1988/89 l)udr;et speech was read, the Minister of Finance observed that The tourist arrivals would reach 220.,000 representing an increase of 20 per cent over last year. Consequently "ross earnings from tourism are expected to climb up to about Hs.
2.2 billion as compared to Hs. 1.4 billion last year" (Budget Sreech, 1988/89: 6).
Thus the recovery of the Mauritten economy in the [last few years had indeed been spectacular. This is all the more remarkable. when one recalls the fact that not only is unemployment essentially past history, but that some policy makers (according to data given to us) and some investors are apprehensive that some sectors cf the economy suchas agriculture .might, in the near future, face labour shortages. In other words, the Mauritian economy has, to all intent and purposes, practically achieved full employment, as indicated by the minister of Finance in his 1988/89 Budget Speech (P.2) where lie states:
A very important development, which has occurred, relates to the employment situation ..., for over a ear n w conditions of full em )10 ment have Drevalled in this countr
••. At the time of the preparation of the current buc(2"et, the rate 0 unemployment ... was estimated at 11 per cent. According to the recent estimate ... the' rate of unemployment in June 1987 was as low as 5 per cent. Some 29,000 jobs had actually been created during the previous fiscal year. That rate of unemployment is well within the ranee commonly referred to by economist as frictional unemployment, which is a situation of full empployment.
In addition, it is cbservecl from various statistics issued by the Central Statistics Office, and information gathered from well informed Mauritians, that the rate of inflation; a perennial problem in many developing countries, had been reduced to 4.3 per cent by 1986/87 fiscal year,
; not an Insignlficant achievement as noted by the Finance Minister who contends "VIe have finally succeeded in achieving the difficult combination of high economic growth and low
inflation" (P.2). .
Within the framework of developing or industrializing countries usually characterized by high levels of unemployment and underemployment, high inflation rates, low and sometimes negative growth rates and stagnating economies, the Mauritian example stands out. It is from this perspective that we now turn to the Mauritian informal sector.
II. INFORMAL SECTOn IN MAURITIUS
Given the "serious financial imbalances" and continuous economic problems that characterized the Mauritius economy in the decades of 1950s, 1970s and early 1980s, it was with surprise that we noted the lack of any significant data on informal sector activities in Mauritius during these periods, either by independent researchers, international agencies or the relatively efficient Central Statistical Office (C.S.O.). But, overall, Haine (op.cit : 1) notes that by 1970, "Government estimates indicated that 20 :,er cent of the labour force (mainly men) were unemployed". This rate of unemployment especially among the males, was to continue rising unabated, reaching, as we have indicated crisis proportions by the beginning of this decade.
But, of the informal sector in Mauritius little is known despite the fact that small-scale enterprises and businesses are an important feature of the Mauritius economy. Extensive search for data on Mauritius "Informal sector revealed that apart from some fragmentary information r;enerated by the Ministry of Commerce and Industry, the Central Statistical Office (C.S.O.) the Development Bank of Mauritius (DBM), the Mauritius Employers" Federation (MEF) and Virahsawmy's paper on "the informal sector in Mauritius" and a few others, little is recorded.
The extreme paucity of data on Mauritius' Informal sector leads Viraheawmy (of University of Mauritius) to conclude that "So far literature and data published
on
the informal sector in Mauritius are either out of date or deffective or too scanty to enable a ri['orous evaluation,. ,
Page 39
and analysis of this sector -(Ibid·, 7). This is despite Virahsawmy's contention (P.5) in the same paper that "one striking observation is that the growth of employment in these informal sectors from 1968 to 1972 has been tremendous increasing at an average rate of 96 per cent per annum".
Given the high levels of unemployment referred to [lCOVe, this is what we would, a priori, expect to hap[len as the unemployed workers seek alternative survival stratertes.
In this section, it is proposed to give a brief review of three pieces of data on Mauritius' Informal sector - by the Central Staistical Office, the Development Bank of Mauritius and Virahsawmy's paper on Informal sector in Mauritius. But first, it must be pointed out that there is not a single definition of the informal sector in Mauritius. For example, the report by the Development Bank. of. Mauritius (1987 , 3) notes,
That despite Government's efforts to promote the establishment of smallenterprise and the measure taken to generate the entrepreneurship spirit, data on small-scale sector is fragmentary. To begin with, there is no single cefinitton of a small-scale unit. At present there are more than three definitions for smallscale units. The Ministry of Industry has defined a small-scale unit as one having machines and equipment not exceeding Rs, 100,000 and havinf, a workforce of less than 25 persons per shift ... the Development Bank of Mauritius has defined the small unit as having fixed assets up to Us. 300,000 and employing 25 persons. The Central Statistical Office considers establishmentsemploying less than 10 perscns to be small.
Conceptual cifficulties regarding informal sector in developing countries have been discussed in the general introduction to these reports. Here it suffices to note that conceptual ,. confusion as to what constitutes an Informal sector and the subsequent back of u universally accepted definition of this sector, leads to serious problems in working out effective intervention to enterprises in Informal economies.
The report by the Development Bank of Mauritius (1937) is based on a survey of 150 beneficiaries of Small-Scale Pinancing Scheme administered by the DBM. The survey, while not representative of small entrepreneurs in Mauritius, is thought to provide important insights into the sort of problems that are likely to be face:' by operators in this sector. "The survey was carriecl out by officers of the Ministry of Economic Planning the Development Bank of Mauritius, and the Small-scale Industry Organization, durinE the months of November/December 1986 and January 1987". (pp.67).
The most important findinf,s are : (1) that "Sixty nine per cent of the enterprises were self-owned as against 23 per cent which were JOIntly owned by the family. This contradicts a generally held belief in Mauritius that small-scale enterprises are family 'concerns. More of this later; (2) that there was a general reluctance by small entrepreneurs to divulge information on investment and turnover - this has been found to be a universal phenomenon by researchers on small-scale enterprises; (3) that this reluctance notwlthstendlng, it was reported that 45 per cent of the businesses fall within the investment bracket of Rs, 1,000*
to Hs. 50,000. "The largest concentration of units is found in three brackets ranging from Rs,
50,000, to Hs.; 500,000 which altogether account for 50 per cent (69 units), (4) unlike other countries" investment is lowest in woodwork and furniture compared to, for example: garment, leather products anc Iootware; and ,chemical arid plastic products" appear to have a higher capital investment than the other sectors; in both, more than 40 per cent of units fall within
*
At the time of our mission to Mauritius, July 1988 US one dollar was roughly equal to Rs. 13-50the hs. 200,001 to lcs, 500,000 investment bracket", (5) there appears to be II concentration of businesses around foodstuff and beverage sector which also accounted for the largest turnover of Us. 200,001 to Hs. 1,000,000; (6) the' survey seems to confirm data from other countries, namely that small-scale entrepreneurs are only able to secure srnallscale loans. Thus 95 per cent of the loans "were of sums less than Es. 20D,OGO and only 3 per cent of the loans were of sums exceeding Ics. 201,000"to confi. Also, that a majority of loans obtained from commercial banks tended to be small - for example below 1'.s. 25,000. Money lenders, family members, and the like, were also found to be important sources of raisin,; capital for investment (DBM, ibid : 14-18).
It would seem from the DBM survey that in Mauritius,' most of the operators and employees of small-scale enterprise have a minimum of primary education. Those having some secondary education seem to be concentrated arouncl garment and foodstuff and beverage industries.
Only seven persons were reported to be degree and (post Secondary) diploma holders.
Confirming data on the informal sector from other countries, it is reported that the majority of the units employed between 2-5 workers. In terms of employment, garment and foodstuff and beverages sector seem to have the highest potential for expansion.
As to the book-keeping, in the majority of units - 49 per cent (70 units), it was the owner who kept the books. Twenty one per cent of the respondents, representing 30 units, said "no one was responsible for the account" which seems to indicate that "self-owned and managed units and the owner's business finance were merged into his personal account" (ibid: 19-20).
Some of the major problems faced by the entrepreneurs in this survey include: (a) lack of advice on feasibility studies. Only 2 per cent had obtained advice from Small Industrial Development Organisation (SIDO); (b) lack of technical knowledge in choosing the right type of equipment. Qualified technicians for repair and mnintenance and scarcity of spare parts, was mentioned as a constraint; (c) obtaining licenses and the necessary permits was said to be difficult and took too long, in some cases,' "more than six months" (p, 22); (d) price, availability, and equality of raw materials was said to be a problem by 85 per cent of the respondents, (e) a large number of enterprises experienced problems with labour turnover ano difficulty in getting skilled manpower; (f) as in all the other countries, financial difficulties are cited by the majority of the entrepreneurs, Thus, "More than half the small entrepreneurs interviewed (53 per cent) had inadequate working capital". Many complained of unfavourable terms of payment - i.c., either the rate of interest was said to be too high or the repayment [:eriod too short (p.23). In addition, an overwhelming number of those interviewed complained of inadequate working areas or premises and unfavouraLle locations, 1!.<7 per cent complained of competition from similar local products and another 15 per cent from similar imported goods .
. . A. Study of Informal Sector in Mauritius (1981)
The data in Virahsawmy's paper draw heavily on statistics provided by the Central Statistical Office (CSO) especially the Bi-annual Surveys of Employment and Earnings, Ministry of Commerce and Industry, and the various licensing authorities. His finoincs in the main area are as follows: (1) that "there is a clear predominance of small businesses over lal"f(e enterprises in manufacturing, construction, commerce, caterinr: services and in transport business. (2) That there were a number of businesses that were operating without licenses - e.f;., some hawkers, cabinet making businesses and small metal workshops, The high levels of unemployment at the time (1981) and strong political lobt,ying are cited as reasons for illegal operations.
(3) That small-scale production, rather than disappearing, seemed to have been on the increase
1.$ .M .. _
and had been an important feature of Mauritius" economy for at least the past two decades.
(4) That there seems to be "no correlation between the sectorial Crowth (the informal sector) and the national growth, of the economy". (5) That some enterprises and trades by shrinking demands or by changing demand structures". Cases
.1[1
point were peddlers at the docks in Mauritius consequent to containerization, and small-scale tailors as "demands shift to ready made garment". (6) That the Informal sector was provicing income and employment "to one third of Mauritian labour force (C.S.O. 1972). (7) That the informal sector in Mauritius centres around 4 main areas, namely Construction, Manufacturing, Trade, Hotels and Hestaurants and Community and Personal services. Manufacturing constituted the largest areas of informal sector employment, e.g., "much more than large manufacturing enterprises" (Ibid: 9-14).- .retail trade. As elsewhere, they are practically at-sent in trnditional male occupations and enterprises such I1S glass work, metal work, and electrical repair anc! products and the like (Ibid: 12). (7) The average employee received Es. 11,000, which would have t-een SUbstantially above the prevailing minimum wage at the time.
Unfortunately, this major survey of small establishments in Mauritius leaves important questions unanswered. For example, it WOUl,l have !'een instructive if the survey hD':' generated data on the following: (a) the demogt-aphic characteristics of operators and employees of these enterprises, (to) the data could have c)eerl fUrther disnggregatec to indicate the extent of women's, participation in the sector, (c) questions cf capital investment, inclurting the availability, or otherwise tHe scarcity, would have been instructive, (d) what kim' of climate do these firms operate in e.g., do they have adequate infrastructurnl facilities, raw materials, premises and locations, or dothey constitute important constraints to business operations, (e) why (10 people establish and operate these establishments - i,e. is it because they are unemployed, or is it because of the advantages of selfemployment or other reasons, (f) given the recent rapid pace of'industrial growth and expansion in Mauritius, what is the zrowth potential of small-scale industries and businesses in terms of their maturing into largescale enterprises, (go) what are the greatest constraints to these operations ann could such hinderances be overcome, and so on,
B. Data on Mauritian Women in the Informal Sector
Discussions with some researchers at the University of Mauritius, the bihliop:raph>, on women in Mauritius and information from well informecJ Mauritians, show that there is not a single publication dealing: specifically on werner- operators in the Mauritian informal sector.
Given the general poverty of data on the Mauritian informnl sector, this came as no surprise.
The Central Statistical Office, the institution responsible for collecting data on the various sectors of the Mauritian society, notes that "in 1982/83, there were about 5,900 establishments employing less than 10 workers which were contributirw tv the National Pensions Fund. Little information is available on the informal sector" (CSC, June 1983).
A number of factcrs combine to contribute to the dearth of information on women in the ,Mauritian informal sector. The follow in!" were frequently mentioned as factors that woulc' teno to inhibit would be researchers on women operating small scale or micro businesses :
(1) the fact that generally small-scale entrepreneurs are reticent about the husiness operations : information p;iven to us Ly some officials of the Central Stl'.tistical Ofice, tended to confirm the contention that operators of small-scale businesses are on the whole, more reluctant to discuss their business operations than, for example, owners of Iarge-scale enterprises. (2) Most women enga~~ec! in the informal sector operate within the framework of familyowneo businesses.
(3) A substantial amount of informal sector activities carried out by women are home-based
"hidden" trade. This enables a large number of women t. combine domestic functions with income earning activities. It avoids the frustrations of attcmptlngfo operate a business within a legal framework which entails, among other things, rep;isterinv a business and obtaining tracing licenses and the like. Reluctance to divulge information on micro businesses 'would tend to be even more true of those operating outside the legal framework for fear of taxation and
other considerations. "
• . . . -J
Pace 43
In addition to women who operate small businesses from their homes, such as dressmaking, leatherwork and especially hanol.ar-s, there are many women who work as domestic servants, even though we were informed that more and more women are opting for factory type of employment, thereby reducing the number of women in domestic service. The lack of data on women in this sector, the work: over, indicates perhaps, the methodological difficulties involved in trying to ascertain the structure of .ornployment and earnings in domestic ·service.
Fortunately, the data in the 1983 survey of "Employment in Small Establishments in the informal sector" is disaggregated and therefore gives the only statistical indication to date of Mauritian women's participation in the informal sector. The CSO however, points out that "in the absence of other reliable data, the results of this exercise should be treated with caution" (June 1983,1). The major findings of that survey as they relate to female participants can be summarized as follows, (1) that women are over represented in community, social and personal services where they constitute 63 per cent of all the par-ticipants in this sector, (2) No females were found in "repair (mainly motor vehicles) where there were 3,300 operators".
(3) All the 7,000 domestic workers in the survey were females. (4) Finance, insurance, business, etc are male domains, (women constitute only 23.3 per cent of those pariici;;>ating) as are transport (C.8 per cent), and construction, which had no female participants. Agriculture and Fishing (32 per cent), sugar and tea industries and manufacturing (43 per cent) have a higher percentage of women, although less than half the total (Ibid P[). 3-5).
Even in "wholesale sno retail trade", where women traditionally feature slf,;oificantly
Even in "wholesale sno retail trade", where women traditionally feature slf,;oificantly