Group 5 paper‐ Diplomacy of Small States

Diplomacy of Small States with a focus on Malta and Mauritius

By Yolanda Taylor and Jessica Rees‐Jones

Overview introduction

In looking at small state diplomacy two islands stood out that really punch above their weight shy

Malta and Mauritius Both embrace and promote tax advantages to invite citizenship and

investment and both are tourist destinations of choice As small islands that could be sidelined or

ignored in international diplomacy they have been proactive and energetic in finding their niche

Both of these countries can offer valuable and insightful lessons learned and examples of best

practice They also present cases of lsquowhat not to dorsquo and how to avoid or prevent possible pitfalls

We will explore both of these aspects and showcase some possible solutions

There are some possible questions to pose in this discussion How much of the tourist tax offering

and niche positioning is sustainable What is the 20 year horizon and focus Is Malta at risk in EU

post Brexit How African is Mauritius when SADC and other alignments are not effective Is there

an opportunity for an African initiative to link small states together Are they both at risk of being

lsquocast to searsquo Are they seen as islands and not relevant to the mainland and if so ndash which

mainland Would it be Italy or Sicily or Morocco for Malta How long can they hold their own

These are not going to be investigated in this paper but are worthy of discussion in another forum

as a follow on of this topic of small state diplomacy

As part of identifying these two countries here is a snapshot view and comparison of both Malta

and Mauritius

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 1

Group 5 paper‐ Diplomacy of Small States

Inset table of comparative aspects

Malta Mauritius

Land territory Size sq mts 312 2040

Population size 400000 1260000

Per capita GDP $25000 $11000

Trade amp Investment

Total contribution of Travel amp

Tourism to GDP

40 25

Average number of tourists per

year

1500000 1200000

Proactive MFA Law of the Sea Head quarters of

IOCshyAARC

Small State Network for

Economic Development (SSNED)

Foreign Embassies 117 26

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 2

Group 5 paper‐ Diplomacy of Small States

Lessons learnedbest practisewhat to do

Once again there are shared best prac뛕ces from both countries but perhaps the most relevant is that both taken a proac뛕ve approach to embrace their unique offering ndash holiday tax investment= magne뛕c arac뛕on to secure financial sustainability Neither has allowed limited resources etc to limit their vision eg non resident ambassadors however each also deserves to be showcased separately Malta

A key component of Maltarsquos foreign policy is to exploit its location between Europe and North Africa in order to increase its international influence As a member of the European Union it has been able to increase its regional profile In addition since Malta enjoys good relations with the states of North Africa and the Middle East it seeks to use that advantage to serve as an intermediary between those states and Europe This strategy allows Malta to be a leader in promoting peace in the region and to bring the states of Europe North Africa and the Middle East together (MFA 2016)

Another area in which Malta has excelled is in attracting foreign investment FinanceMalta a collaboration between the government and private sector is responsible for advertising Malta as an ideal place to invest based on factors such as the highlyshyqualified labour force location relatively low cost of doing business special tax treaties and an Englishshyspeaking environment This organization also safeguards the financial sector so that it will continue to function at the highest possible standard (FinanceMalta 2014) Malta Enterprise lsquoa oneshystop shop for foreign investorsrsquo is tasked with making the process of investing in Malta go smoothly (Hedgecoe 2014) It also connects companies in Malta with other businesses in Europe (Malta Enterprise 2016)

Another government agency Identity Malta manages the Individual Investor Programme which recruits wealthy individuals lsquowho can share their talent expertise and business connectionsrsquo In

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 3

Group 5 paper‐ Diplomacy of Small States

order to qualify the individual is required to have lived in Malta for a year and must buy property and invest in Malta In exchange the successful applicant receives citizenship in Malta along with an EU passport tax advantages and the opportunity to live in a safe country with a good educational system (Identity Malta no date) The Malta Tourism Authority aims to strengthen the economy by increasing the number of tourist arrivals The government realized that it cannot compete with bigger countries that have equally beautiful weather and beaches so it was decided that they would lsquono longer promote Malta as a destination buthellip start promoting it as an experiencersquo (Grech 2004 p 1) Malta now markets itself as a country where visitors can encounter fascinating history and an incredible architectural heritage as well participate in sports and language study (Malta Tourism Authority no date) Having the capital city Valletta designated as a UNESCO World Heritage Site (UNESCO 2016) and as 2018 European Capital of Culture (European Commission 2016) adds value to the tourism product

Mauritius

The first steps that Mauritius took in the days after independence were a factor in its economic success In 1970 Mauritius created an Export Processing Zone (EPZ) in which it offered tax breaks to companies removed certain import duties and relaxed labour rules (Frankel 2010) The country attracted a great deal of investment from overseas and many textile manufacturing companies were established As a result the economy soared in the first half of the 1970s (Vandemoortele and Bird 2011) In addition Mauritius took full advantage of the lsquofavorable trade preferencesrsquo from overseas markets As a signatory to the 1975 Sugar Protocol of the Lome Convention it had the option of accepting high prices while limiting its exports or exporting a much larger amount of sugar to the EU at a lower price Eventually the price of the sugar increased and Mauritian economy benefitted

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 4

Group 5 paper‐ Diplomacy of Small States

tremendously (Frankel 2010) Mauritius has continued to expand its textile export base with the Africa Growth and Opportunity Act which provides easier access to the US market (CIA no date) In times of economic crisis the government of Mauritius is proactive and takes the necessary steps to strengthen the economy When economic progress stalled in the late 1970s Mauritius worked with the World Bank and the International Monetary Fund to make changes such as lsquofiscal stabilisation exchange rate alignment income policy heterodox trade liberalisation and financial consolidationrsquo which revived the economy Similarly when the sugar and textile agreements with the EU ended and Mauritius lost its special exporter status it responded by branching out into financial services and ICT and by changing its focus from manufacturing inexpensive products to designing and making highshyend products (Vandemoortele and Bird p 16) Furthermore Mauritius attempted to remove obstacles to starting a business by enacting the Business Facilitation Act of 2006 which makes it possible for companies to be operational within days (Zafar 2011) Another factor in the success of Mauritius is its approach to the development of its tourism industry The Mauritius Tourism Authority oversees the industry and ensures that environmental and natural resources are protected The agency is also responsible for marketing Mauritius as a luxury vacation spot managing tourist attractions and granting various licenses (Mauritius Tourism Authority no date) Creating a luxury tourist brand and allowing local and international investors to develop the brand proved to be an excellent strategy and Mauritius has reaped the financial rewards (Vandemoortele and Bird 2011) After independence the government of Mauritius understood the need for societal reforms and thus implemented a number of policies that paved the way for economic success To deal with ethnic discord and underrepresentation of certain groups a political system in which all groups are represented was developed Mauritius also decided against having an army In addition free education became the right of every Mauritian (Frankel 2010) Against this social and political backdrop Mauritius has continued to prosper

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 5

Group 5 paper‐ Diplomacy of Small States

Teachings Possible pitfallswhat to avoid shy with possible solutions

While Mauri뛕us has been economic prowess one of the most prevalent comments has been on the standard of educa뛕on and the educa뛕onal system In order to remain compe뛕뛕ve this should be considered as it will be significant if this is to be sustainable Will people see the country as more than just a tourist spot but rather a des뛕na뛕on of choice and home if they have school going age children Will this become a place for business tax haven seekers and re뛕rees

hpwwwdevelopmentprogressorgsitesdevelopmentprogressorgfilesresource_reportmauritius_report_‐_master_0pdf ( last paragraph on p 16 men뛕ons the fact that Mauri뛕ans donrsquot have the special skills required for the service sector

Malta is seen as a robust and stable poli뛕cal space but perhaps needs to deal with its public debt Is Fiscal Responsibility Act of 2014 one step towards solving the problem

hpwwwindependentcommtar뛕cles2014‐07‐19opinionswith‐6‐bn‐of‐debt‐a‐welcome‐fiscal‐responsibility‐act‐5897355268

hpwwwimforgexternalpubs횦scr2016cr1621pdf

Conclusion

Could Mauri뛕us possibly be a catalyst to link small African states together Shared best prac뛕se etcbring CARICOM to Africa Embrace more ICT

References

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 6

Group 5 paper‐ Diplomacy of Small States

Inset table of comparative aspects

Malta Mauritius

Land territory Size sq mts 312 2040

Population size 400000 1260000

Per capita GDP $25000 $11000

Trade amp Investment

Total contribution of Travel amp

Tourism to GDP

40 25

Average number of tourists per

year

1500000 1200000

Proactive MFA Law of the Sea Head quarters of

IOCshyAARC

Small State Network for

Economic Development (SSNED)

Foreign Embassies 117 26

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 2

Group 5 paper‐ Diplomacy of Small States

Lessons learnedbest practisewhat to do

Once again there are shared best prac뛕ces from both countries but perhaps the most relevant is that both taken a proac뛕ve approach to embrace their unique offering ndash holiday tax investment= magne뛕c arac뛕on to secure financial sustainability Neither has allowed limited resources etc to limit their vision eg non resident ambassadors however each also deserves to be showcased separately Malta

A key component of Maltarsquos foreign policy is to exploit its location between Europe and North Africa in order to increase its international influence As a member of the European Union it has been able to increase its regional profile In addition since Malta enjoys good relations with the states of North Africa and the Middle East it seeks to use that advantage to serve as an intermediary between those states and Europe This strategy allows Malta to be a leader in promoting peace in the region and to bring the states of Europe North Africa and the Middle East together (MFA 2016)

Another area in which Malta has excelled is in attracting foreign investment FinanceMalta a collaboration between the government and private sector is responsible for advertising Malta as an ideal place to invest based on factors such as the highlyshyqualified labour force location relatively low cost of doing business special tax treaties and an Englishshyspeaking environment This organization also safeguards the financial sector so that it will continue to function at the highest possible standard (FinanceMalta 2014) Malta Enterprise lsquoa oneshystop shop for foreign investorsrsquo is tasked with making the process of investing in Malta go smoothly (Hedgecoe 2014) It also connects companies in Malta with other businesses in Europe (Malta Enterprise 2016)

Another government agency Identity Malta manages the Individual Investor Programme which recruits wealthy individuals lsquowho can share their talent expertise and business connectionsrsquo In

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 3

Group 5 paper‐ Diplomacy of Small States

order to qualify the individual is required to have lived in Malta for a year and must buy property and invest in Malta In exchange the successful applicant receives citizenship in Malta along with an EU passport tax advantages and the opportunity to live in a safe country with a good educational system (Identity Malta no date) The Malta Tourism Authority aims to strengthen the economy by increasing the number of tourist arrivals The government realized that it cannot compete with bigger countries that have equally beautiful weather and beaches so it was decided that they would lsquono longer promote Malta as a destination buthellip start promoting it as an experiencersquo (Grech 2004 p 1) Malta now markets itself as a country where visitors can encounter fascinating history and an incredible architectural heritage as well participate in sports and language study (Malta Tourism Authority no date) Having the capital city Valletta designated as a UNESCO World Heritage Site (UNESCO 2016) and as 2018 European Capital of Culture (European Commission 2016) adds value to the tourism product

Mauritius

The first steps that Mauritius took in the days after independence were a factor in its economic success In 1970 Mauritius created an Export Processing Zone (EPZ) in which it offered tax breaks to companies removed certain import duties and relaxed labour rules (Frankel 2010) The country attracted a great deal of investment from overseas and many textile manufacturing companies were established As a result the economy soared in the first half of the 1970s (Vandemoortele and Bird 2011) In addition Mauritius took full advantage of the lsquofavorable trade preferencesrsquo from overseas markets As a signatory to the 1975 Sugar Protocol of the Lome Convention it had the option of accepting high prices while limiting its exports or exporting a much larger amount of sugar to the EU at a lower price Eventually the price of the sugar increased and Mauritian economy benefitted

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 4

Group 5 paper‐ Diplomacy of Small States

tremendously (Frankel 2010) Mauritius has continued to expand its textile export base with the Africa Growth and Opportunity Act which provides easier access to the US market (CIA no date) In times of economic crisis the government of Mauritius is proactive and takes the necessary steps to strengthen the economy When economic progress stalled in the late 1970s Mauritius worked with the World Bank and the International Monetary Fund to make changes such as lsquofiscal stabilisation exchange rate alignment income policy heterodox trade liberalisation and financial consolidationrsquo which revived the economy Similarly when the sugar and textile agreements with the EU ended and Mauritius lost its special exporter status it responded by branching out into financial services and ICT and by changing its focus from manufacturing inexpensive products to designing and making highshyend products (Vandemoortele and Bird p 16) Furthermore Mauritius attempted to remove obstacles to starting a business by enacting the Business Facilitation Act of 2006 which makes it possible for companies to be operational within days (Zafar 2011) Another factor in the success of Mauritius is its approach to the development of its tourism industry The Mauritius Tourism Authority oversees the industry and ensures that environmental and natural resources are protected The agency is also responsible for marketing Mauritius as a luxury vacation spot managing tourist attractions and granting various licenses (Mauritius Tourism Authority no date) Creating a luxury tourist brand and allowing local and international investors to develop the brand proved to be an excellent strategy and Mauritius has reaped the financial rewards (Vandemoortele and Bird 2011) After independence the government of Mauritius understood the need for societal reforms and thus implemented a number of policies that paved the way for economic success To deal with ethnic discord and underrepresentation of certain groups a political system in which all groups are represented was developed Mauritius also decided against having an army In addition free education became the right of every Mauritian (Frankel 2010) Against this social and political backdrop Mauritius has continued to prosper

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 5

Group 5 paper‐ Diplomacy of Small States

Teachings Possible pitfallswhat to avoid shy with possible solutions

While Mauri뛕us has been economic prowess one of the most prevalent comments has been on the standard of educa뛕on and the educa뛕onal system In order to remain compe뛕뛕ve this should be considered as it will be significant if this is to be sustainable Will people see the country as more than just a tourist spot but rather a des뛕na뛕on of choice and home if they have school going age children Will this become a place for business tax haven seekers and re뛕rees

hpwwwdevelopmentprogressorgsitesdevelopmentprogressorgfilesresource_reportmauritius_report_‐_master_0pdf ( last paragraph on p 16 men뛕ons the fact that Mauri뛕ans donrsquot have the special skills required for the service sector

Malta is seen as a robust and stable poli뛕cal space but perhaps needs to deal with its public debt Is Fiscal Responsibility Act of 2014 one step towards solving the problem

hpwwwindependentcommtar뛕cles2014‐07‐19opinionswith‐6‐bn‐of‐debt‐a‐welcome‐fiscal‐responsibility‐act‐5897355268

hpwwwimforgexternalpubs횦scr2016cr1621pdf

Conclusion

Could Mauri뛕us possibly be a catalyst to link small African states together Shared best prac뛕se etcbring CARICOM to Africa Embrace more ICT

References

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 6

Group 5 paper‐ Diplomacy of Small States

Lessons learnedbest practisewhat to do

Once again there are shared best prac뛕ces from both countries but perhaps the most relevant is that both taken a proac뛕ve approach to embrace their unique offering ndash holiday tax investment= magne뛕c arac뛕on to secure financial sustainability Neither has allowed limited resources etc to limit their vision eg non resident ambassadors however each also deserves to be showcased separately Malta

A key component of Maltarsquos foreign policy is to exploit its location between Europe and North Africa in order to increase its international influence As a member of the European Union it has been able to increase its regional profile In addition since Malta enjoys good relations with the states of North Africa and the Middle East it seeks to use that advantage to serve as an intermediary between those states and Europe This strategy allows Malta to be a leader in promoting peace in the region and to bring the states of Europe North Africa and the Middle East together (MFA 2016)

Another area in which Malta has excelled is in attracting foreign investment FinanceMalta a collaboration between the government and private sector is responsible for advertising Malta as an ideal place to invest based on factors such as the highlyshyqualified labour force location relatively low cost of doing business special tax treaties and an Englishshyspeaking environment This organization also safeguards the financial sector so that it will continue to function at the highest possible standard (FinanceMalta 2014) Malta Enterprise lsquoa oneshystop shop for foreign investorsrsquo is tasked with making the process of investing in Malta go smoothly (Hedgecoe 2014) It also connects companies in Malta with other businesses in Europe (Malta Enterprise 2016)

Another government agency Identity Malta manages the Individual Investor Programme which recruits wealthy individuals lsquowho can share their talent expertise and business connectionsrsquo In

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 3

Group 5 paper‐ Diplomacy of Small States

order to qualify the individual is required to have lived in Malta for a year and must buy property and invest in Malta In exchange the successful applicant receives citizenship in Malta along with an EU passport tax advantages and the opportunity to live in a safe country with a good educational system (Identity Malta no date) The Malta Tourism Authority aims to strengthen the economy by increasing the number of tourist arrivals The government realized that it cannot compete with bigger countries that have equally beautiful weather and beaches so it was decided that they would lsquono longer promote Malta as a destination buthellip start promoting it as an experiencersquo (Grech 2004 p 1) Malta now markets itself as a country where visitors can encounter fascinating history and an incredible architectural heritage as well participate in sports and language study (Malta Tourism Authority no date) Having the capital city Valletta designated as a UNESCO World Heritage Site (UNESCO 2016) and as 2018 European Capital of Culture (European Commission 2016) adds value to the tourism product

Mauritius

The first steps that Mauritius took in the days after independence were a factor in its economic success In 1970 Mauritius created an Export Processing Zone (EPZ) in which it offered tax breaks to companies removed certain import duties and relaxed labour rules (Frankel 2010) The country attracted a great deal of investment from overseas and many textile manufacturing companies were established As a result the economy soared in the first half of the 1970s (Vandemoortele and Bird 2011) In addition Mauritius took full advantage of the lsquofavorable trade preferencesrsquo from overseas markets As a signatory to the 1975 Sugar Protocol of the Lome Convention it had the option of accepting high prices while limiting its exports or exporting a much larger amount of sugar to the EU at a lower price Eventually the price of the sugar increased and Mauritian economy benefitted

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 4

Group 5 paper‐ Diplomacy of Small States

tremendously (Frankel 2010) Mauritius has continued to expand its textile export base with the Africa Growth and Opportunity Act which provides easier access to the US market (CIA no date) In times of economic crisis the government of Mauritius is proactive and takes the necessary steps to strengthen the economy When economic progress stalled in the late 1970s Mauritius worked with the World Bank and the International Monetary Fund to make changes such as lsquofiscal stabilisation exchange rate alignment income policy heterodox trade liberalisation and financial consolidationrsquo which revived the economy Similarly when the sugar and textile agreements with the EU ended and Mauritius lost its special exporter status it responded by branching out into financial services and ICT and by changing its focus from manufacturing inexpensive products to designing and making highshyend products (Vandemoortele and Bird p 16) Furthermore Mauritius attempted to remove obstacles to starting a business by enacting the Business Facilitation Act of 2006 which makes it possible for companies to be operational within days (Zafar 2011) Another factor in the success of Mauritius is its approach to the development of its tourism industry The Mauritius Tourism Authority oversees the industry and ensures that environmental and natural resources are protected The agency is also responsible for marketing Mauritius as a luxury vacation spot managing tourist attractions and granting various licenses (Mauritius Tourism Authority no date) Creating a luxury tourist brand and allowing local and international investors to develop the brand proved to be an excellent strategy and Mauritius has reaped the financial rewards (Vandemoortele and Bird 2011) After independence the government of Mauritius understood the need for societal reforms and thus implemented a number of policies that paved the way for economic success To deal with ethnic discord and underrepresentation of certain groups a political system in which all groups are represented was developed Mauritius also decided against having an army In addition free education became the right of every Mauritian (Frankel 2010) Against this social and political backdrop Mauritius has continued to prosper

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 5

Group 5 paper‐ Diplomacy of Small States

Teachings Possible pitfallswhat to avoid shy with possible solutions

While Mauri뛕us has been economic prowess one of the most prevalent comments has been on the standard of educa뛕on and the educa뛕onal system In order to remain compe뛕뛕ve this should be considered as it will be significant if this is to be sustainable Will people see the country as more than just a tourist spot but rather a des뛕na뛕on of choice and home if they have school going age children Will this become a place for business tax haven seekers and re뛕rees

hpwwwdevelopmentprogressorgsitesdevelopmentprogressorgfilesresource_reportmauritius_report_‐_master_0pdf ( last paragraph on p 16 men뛕ons the fact that Mauri뛕ans donrsquot have the special skills required for the service sector

Malta is seen as a robust and stable poli뛕cal space but perhaps needs to deal with its public debt Is Fiscal Responsibility Act of 2014 one step towards solving the problem

hpwwwindependentcommtar뛕cles2014‐07‐19opinionswith‐6‐bn‐of‐debt‐a‐welcome‐fiscal‐responsibility‐act‐5897355268

hpwwwimforgexternalpubs횦scr2016cr1621pdf

Conclusion

Could Mauri뛕us possibly be a catalyst to link small African states together Shared best prac뛕se etcbring CARICOM to Africa Embrace more ICT

References

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 6

Group 5 paper‐ Diplomacy of Small States

order to qualify the individual is required to have lived in Malta for a year and must buy property and invest in Malta In exchange the successful applicant receives citizenship in Malta along with an EU passport tax advantages and the opportunity to live in a safe country with a good educational system (Identity Malta no date) The Malta Tourism Authority aims to strengthen the economy by increasing the number of tourist arrivals The government realized that it cannot compete with bigger countries that have equally beautiful weather and beaches so it was decided that they would lsquono longer promote Malta as a destination buthellip start promoting it as an experiencersquo (Grech 2004 p 1) Malta now markets itself as a country where visitors can encounter fascinating history and an incredible architectural heritage as well participate in sports and language study (Malta Tourism Authority no date) Having the capital city Valletta designated as a UNESCO World Heritage Site (UNESCO 2016) and as 2018 European Capital of Culture (European Commission 2016) adds value to the tourism product

Mauritius

The first steps that Mauritius took in the days after independence were a factor in its economic success In 1970 Mauritius created an Export Processing Zone (EPZ) in which it offered tax breaks to companies removed certain import duties and relaxed labour rules (Frankel 2010) The country attracted a great deal of investment from overseas and many textile manufacturing companies were established As a result the economy soared in the first half of the 1970s (Vandemoortele and Bird 2011) In addition Mauritius took full advantage of the lsquofavorable trade preferencesrsquo from overseas markets As a signatory to the 1975 Sugar Protocol of the Lome Convention it had the option of accepting high prices while limiting its exports or exporting a much larger amount of sugar to the EU at a lower price Eventually the price of the sugar increased and Mauritian economy benefitted

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 4

Group 5 paper‐ Diplomacy of Small States

tremendously (Frankel 2010) Mauritius has continued to expand its textile export base with the Africa Growth and Opportunity Act which provides easier access to the US market (CIA no date) In times of economic crisis the government of Mauritius is proactive and takes the necessary steps to strengthen the economy When economic progress stalled in the late 1970s Mauritius worked with the World Bank and the International Monetary Fund to make changes such as lsquofiscal stabilisation exchange rate alignment income policy heterodox trade liberalisation and financial consolidationrsquo which revived the economy Similarly when the sugar and textile agreements with the EU ended and Mauritius lost its special exporter status it responded by branching out into financial services and ICT and by changing its focus from manufacturing inexpensive products to designing and making highshyend products (Vandemoortele and Bird p 16) Furthermore Mauritius attempted to remove obstacles to starting a business by enacting the Business Facilitation Act of 2006 which makes it possible for companies to be operational within days (Zafar 2011) Another factor in the success of Mauritius is its approach to the development of its tourism industry The Mauritius Tourism Authority oversees the industry and ensures that environmental and natural resources are protected The agency is also responsible for marketing Mauritius as a luxury vacation spot managing tourist attractions and granting various licenses (Mauritius Tourism Authority no date) Creating a luxury tourist brand and allowing local and international investors to develop the brand proved to be an excellent strategy and Mauritius has reaped the financial rewards (Vandemoortele and Bird 2011) After independence the government of Mauritius understood the need for societal reforms and thus implemented a number of policies that paved the way for economic success To deal with ethnic discord and underrepresentation of certain groups a political system in which all groups are represented was developed Mauritius also decided against having an army In addition free education became the right of every Mauritian (Frankel 2010) Against this social and political backdrop Mauritius has continued to prosper

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 5

Group 5 paper‐ Diplomacy of Small States

Teachings Possible pitfallswhat to avoid shy with possible solutions

While Mauri뛕us has been economic prowess one of the most prevalent comments has been on the standard of educa뛕on and the educa뛕onal system In order to remain compe뛕뛕ve this should be considered as it will be significant if this is to be sustainable Will people see the country as more than just a tourist spot but rather a des뛕na뛕on of choice and home if they have school going age children Will this become a place for business tax haven seekers and re뛕rees

hpwwwdevelopmentprogressorgsitesdevelopmentprogressorgfilesresource_reportmauritius_report_‐_master_0pdf ( last paragraph on p 16 men뛕ons the fact that Mauri뛕ans donrsquot have the special skills required for the service sector

Malta is seen as a robust and stable poli뛕cal space but perhaps needs to deal with its public debt Is Fiscal Responsibility Act of 2014 one step towards solving the problem

hpwwwindependentcommtar뛕cles2014‐07‐19opinionswith‐6‐bn‐of‐debt‐a‐welcome‐fiscal‐responsibility‐act‐5897355268

hpwwwimforgexternalpubs횦scr2016cr1621pdf

Conclusion

Could Mauri뛕us possibly be a catalyst to link small African states together Shared best prac뛕se etcbring CARICOM to Africa Embrace more ICT

References

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 6

Group 5 paper‐ Diplomacy of Small States

tremendously (Frankel 2010) Mauritius has continued to expand its textile export base with the Africa Growth and Opportunity Act which provides easier access to the US market (CIA no date) In times of economic crisis the government of Mauritius is proactive and takes the necessary steps to strengthen the economy When economic progress stalled in the late 1970s Mauritius worked with the World Bank and the International Monetary Fund to make changes such as lsquofiscal stabilisation exchange rate alignment income policy heterodox trade liberalisation and financial consolidationrsquo which revived the economy Similarly when the sugar and textile agreements with the EU ended and Mauritius lost its special exporter status it responded by branching out into financial services and ICT and by changing its focus from manufacturing inexpensive products to designing and making highshyend products (Vandemoortele and Bird p 16) Furthermore Mauritius attempted to remove obstacles to starting a business by enacting the Business Facilitation Act of 2006 which makes it possible for companies to be operational within days (Zafar 2011) Another factor in the success of Mauritius is its approach to the development of its tourism industry The Mauritius Tourism Authority oversees the industry and ensures that environmental and natural resources are protected The agency is also responsible for marketing Mauritius as a luxury vacation spot managing tourist attractions and granting various licenses (Mauritius Tourism Authority no date) Creating a luxury tourist brand and allowing local and international investors to develop the brand proved to be an excellent strategy and Mauritius has reaped the financial rewards (Vandemoortele and Bird 2011) After independence the government of Mauritius understood the need for societal reforms and thus implemented a number of policies that paved the way for economic success To deal with ethnic discord and underrepresentation of certain groups a political system in which all groups are represented was developed Mauritius also decided against having an army In addition free education became the right of every Mauritian (Frankel 2010) Against this social and political backdrop Mauritius has continued to prosper

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 5

Group 5 paper‐ Diplomacy of Small States

Teachings Possible pitfallswhat to avoid shy with possible solutions

While Mauri뛕us has been economic prowess one of the most prevalent comments has been on the standard of educa뛕on and the educa뛕onal system In order to remain compe뛕뛕ve this should be considered as it will be significant if this is to be sustainable Will people see the country as more than just a tourist spot but rather a des뛕na뛕on of choice and home if they have school going age children Will this become a place for business tax haven seekers and re뛕rees

hpwwwdevelopmentprogressorgsitesdevelopmentprogressorgfilesresource_reportmauritius_report_‐_master_0pdf ( last paragraph on p 16 men뛕ons the fact that Mauri뛕ans donrsquot have the special skills required for the service sector

Malta is seen as a robust and stable poli뛕cal space but perhaps needs to deal with its public debt Is Fiscal Responsibility Act of 2014 one step towards solving the problem

hpwwwindependentcommtar뛕cles2014‐07‐19opinionswith‐6‐bn‐of‐debt‐a‐welcome‐fiscal‐responsibility‐act‐5897355268

hpwwwimforgexternalpubs횦scr2016cr1621pdf

Conclusion

Could Mauri뛕us possibly be a catalyst to link small African states together Shared best prac뛕se etcbring CARICOM to Africa Embrace more ICT

References

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 6

Group 5 paper‐ Diplomacy of Small States

Teachings Possible pitfallswhat to avoid shy with possible solutions

While Mauri뛕us has been economic prowess one of the most prevalent comments has been on the standard of educa뛕on and the educa뛕onal system In order to remain compe뛕뛕ve this should be considered as it will be significant if this is to be sustainable Will people see the country as more than just a tourist spot but rather a des뛕na뛕on of choice and home if they have school going age children Will this become a place for business tax haven seekers and re뛕rees

hpwwwdevelopmentprogressorgsitesdevelopmentprogressorgfilesresource_reportmauritius_report_‐_master_0pdf ( last paragraph on p 16 men뛕ons the fact that Mauri뛕ans donrsquot have the special skills required for the service sector

Malta is seen as a robust and stable poli뛕cal space but perhaps needs to deal with its public debt Is Fiscal Responsibility Act of 2014 one step towards solving the problem

hpwwwindependentcommtar뛕cles2014‐07‐19opinionswith‐6‐bn‐of‐debt‐a‐welcome‐fiscal‐responsibility‐act‐5897355268

hpwwwimforgexternalpubs횦scr2016cr1621pdf

Conclusion

Could Mauri뛕us possibly be a catalyst to link small African states together Shared best prac뛕se etcbring CARICOM to Africa Embrace more ICT

References

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 6

Group 5 paper‐ Diplomacy of Small States

Central Intelligence Agency (no date) The World Factbook Available at httpswwwciagovlibrarypublicationstheshyworldshyfactbookgeosmphtml [accessed 3 September 2016]

European Commission (2016) European Capitals of Culture Available at httpseceuropaeuprogrammescreativeshyeuropeactionscapitalsshyculture_en [accessed 3 September 2016]

FinanceMalta (2014) About FinanceMalta Available at httpwwwfinancemaltaorgaboutshyfinanceshymalta [accessed 2 September 2016]

Frankel JA (2010) Mauritius African Success Story NBER Working Paper Series pp 1shy42 Available at httpwwwnberorgpapersw16569pdf [access 3 September 2016]

Grech JC (2004) Malta A Permanent Process of Innovation in Tourism OECD Available at httpswwwoecdorgcfetourism34268084pdf [accessed 2 September 2016]

Hedgecoe G (2014) Malta An Attractive Investment Location The Report Company Available at httpwwwtheshyreportcomreportsmaltaopenshyforshybusinessshyandshylookingshyeastanshyattractiveshyinvestmentshylocation [accessed 2 September 2016]

Identity Malta (no date) Individual Investor Programme Available at httpiipgovmt [accessed 2 September 2016]

Identity Malta (no date) Individual Investor Programme of the Republic of Malta Available at httpiipgovmtwpshycontentuploads201407IIPshyBrochureshyv12_updatedpdf [accessed 2 September 2016]

Malta Enterprise (2016) About Malta Enterprise Available at httpwwwmaltaenterprisecomaboutshymaltashyenterprise [accessed 2 September 2016]

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 7

Group 5 paper‐ Diplomacy of Small States

Malta Tourism Authority (no date) What to See and Do Available at httpwwwvisitmaltacom [accessed 3 September 2016]

Mauritius Tourism Authority (no date) About the Mauritius Tourism Authority Available at httptagovshymuorgEnglishPagesdefaultaspx [accessed 4 September 2016]

Ministry for Foreign Affairs (2016) Harness Maltarsquos Geopolitical Relevance Available at httpforeignaffairsgovmtenPagesGeopoliticalshyRelevanceaspx [accessed 1 September 2016]

Vandermoortele M and Bird K (2011) Progress in Economic Conditions Sustained Success Against the Odds in Mauritius Overseas Development Institute Available at httpwwwdevelopmentprogressorgsitesdevelopmentprogressorgfilesresource_reportmauritius_report_shy_master_0pdf [accessed 3 September 2016]

Zafar A (2011) Mauritius An Economic Success Story [Draft] Available at httpsiteresourcesworldbankorgAFRICAEXTResourcesMauritius_successpdf [accessed 4 September 2016]

World Travel and Tourism Council 2015 Malta httpswwwwttcorgshymediafilesreportseconomic20impact20researchcountries202015malta2015pdf

World Travel and Tourism COuncil 2015 Mauritius

httpswwwwttcorgshymediafilesreportseconomic20impact20researchcountries202015mauritius2015pdf

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 8

Group 5 paper‐ Diplomacy of Small States

Notes

1 Map of Malta

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 9

Group 5 paper‐ Diplomacy of Small States

2 Map of Mauri뛕us

3 Malta Public Debt

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 10

Group 5 paper‐ Diplomacy of Small States

httpcountryeconomycomnationalshydebtmalta hpwwwmaltatodaycommtbusinessbusiness_news48755malta_has_second_biggest_drop_in_na뛕onal_debt_in_the_eu

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 11

Group 5 paper‐ Diplomacy of Small States

2 Map of Mauri뛕us

3 Malta Public Debt

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 10

Group 5 paper‐ Diplomacy of Small States

httpcountryeconomycomnationalshydebtmalta hpwwwmaltatodaycommtbusinessbusiness_news48755malta_has_second_biggest_drop_in_na뛕onal_debt_in_the_eu

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 11

Group 5 paper‐ Diplomacy of Small States

httpcountryeconomycomnationalshydebtmalta hpwwwmaltatodaycommtbusinessbusiness_news48755malta_has_second_biggest_drop_in_na뛕onal_debt_in_the_eu

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 11

Group 5 paper‐ Diplomacy of Small States

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 12

Group 5 paper‐ Diplomacy of Small States

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 13

Group 5 paper‐ Diplomacy of Small States

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 14

Group 5 paper‐ Diplomacy of Small States

Economic Freedom comparison scale of Global Malta and Mauri뛕us

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 15

Group 5 paper‐ Diplomacy of Small States

2016 Index of World Economic Freedom

hpwwwheritageorgindexvisualizecnts=malta|mauri뛕usampsrc=country

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 16

Group 5 paper‐ Diplomacy of Small States

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 13

Group 5 paper‐ Diplomacy of Small States

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 14

Group 5 paper‐ Diplomacy of Small States

Economic Freedom comparison scale of Global Malta and Mauri뛕us

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 15

Group 5 paper‐ Diplomacy of Small States

2016 Index of World Economic Freedom

hpwwwheritageorgindexvisualizecnts=malta|mauri뛕usampsrc=country

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 16

Group 5 paper‐ Diplomacy of Small States

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 14

Group 5 paper‐ Diplomacy of Small States

Economic Freedom comparison scale of Global Malta and Mauri뛕us

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 15

Group 5 paper‐ Diplomacy of Small States

2016 Index of World Economic Freedom

hpwwwheritageorgindexvisualizecnts=malta|mauri뛕usampsrc=country

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 16

Group 5 paper‐ Diplomacy of Small States

Economic Freedom comparison scale of Global Malta and Mauri뛕us

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 15

Group 5 paper‐ Diplomacy of Small States

2016 Index of World Economic Freedom

hpwwwheritageorgindexvisualizecnts=malta|mauri뛕usampsrc=country

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 16

Group 5 paper‐ Diplomacy of Small States

2016 Index of World Economic Freedom

hpwwwheritageorgindexvisualizecnts=malta|mauri뛕usampsrc=country

Presented by Yolanda Taylor and Jessica Rees‐Jones 21 st Century Diplomacy 1607 Assignment 25 August 2016Page 16