Looking back, looking forward: The future of Mauritius' economy may lie in its past


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Mauritius promotes itself as a hub for Indian Ocean trade. Ships from around the world deliver their cargo in Port Louis and load up for onward trips to Asia, Europe, Africa and America. American and French companies send agents to Mauritius, anticipating big profits from trading with the region. Mauritius develops a Freeport to encourage international trade and to position the island as a regional warehousing and processing center.

These descriptions sound as if they were lifted from a modern day report analyzing the Mauritian economy. But in fact this actually describes the Mauritian economy as it was 200 years ago, when the island was a thriving French colony, known as a key stop for international ships along the lucrative trading routes to India and China.

Mauritius has indeed evolved and changed as the island marched through history, shedding its French and English colonial powers and turning itself into a prosperous and diversified economy that is often held up as an economic success story for Africa. Yet much of the country's current success, and the models on which it pins its economic future, have roots in history dating to the later part of the 1700s.

Many of the same initiatives used to develop the Mauritian economy then opening up a Freeport for trade, developing the island's port infrastructure and its internal roads, diversifying trade beyond the colonial powers and positioning the island as a center for regional commerce are being applied anew as Mauritius repositions itself in an extremely different world economy.

Like the 1780s, international trade dominates the Mauritian economy. Mauritian economic planners in the 1970s set out to diversify the economy by encouraging export-oriented manufacturing within an Export Processing Zone system. This followed in 1992 with establishment of the Mauritius Freeport. Today over 500 companies operate in the EPZ involved in textile, clothing, plastics, jewelry, and printing and publishing ventures.

Looking to the future, Mauritius is positioning itself as an international hub for trade and information technology for the Africa and Indian Ocean region, and is diversifying its trade routes even further by aggressively taking advantage of new export opportunities into the American market created by the African Growth and Opportunity Act (AGOA).

One important similarity between these two historical periods was the exploding trade between Mauritius and America. In the 1780s, it was American merchants who were getting rich on the trade, exchanging goods made in New England for those made in Mauritius and the Far East. In an opposite twist, trade today with America mostly benefits Mauritian merchants. The United States now operates a trade deficit with Mauritius, because Mauritius sells more goods to America than the United States sells to Mauritius.

The Salem-Mauritius link

These parallels between Mauritius at the turn of the 18th century and at the beginning of the 21st, become especially evident when examining historic documents. Recently, I spent a day in Salem, Massachusetts, an historic shipping port on the coast of Massachusetts, which sent hundreds of American vessels to Mauritius from the 1780s through the early 1800s. My goal was to research the early trading link between Salem and Mauritius, and determine what kinds of documents were still available in the city's libraries and museums that tell the story of this historic trading partnership.

At the Phillips Library, home to a rich collection of documents on early American seafaring history, I found a wealth of information on Mauritius. The books in their collection that focus on trade after the American Revolution all contained chapters on the importance of trade with Ile de France. The books were all written by American authors, and published in the 1920s and 1940s: Salem and the Indies, 1947, by James Duncan Phillips; Ships and Sailors of Old Salem, 1923, by Ralph Paine, and the Log of the Grand Turks, 1926, by Robert Peabody, are among the standouts. Each of these excellent resources described how Mauritius served as a key warehousing, trading and supply station for U.S. ships, and how trade there contributed greatly to the wealth of Salem's merchants.

In 1790, Salem was the richest city in America, thanks largely to its East India and China trade. The city was called "the Venice of the New World" because of the exotic goods that were brought back by its ships that were trading around the globe.

Between the American Revolutionary War around 1776 - and the War of 1812, Salem flourished as a New England maritime center second only to Boston. Most of the trade with Mauritius occurred during this time, as American shipowners took the risk and ventured for the first time beyond the Cape of Good Hope. Americans were not allowed to go beyond the Cape during British colonial rule because those routes were the exclusive domain of the British merchant fleet. The new American government allowed shipowners to prey on enemy shipping for profit and it also encouraged privateers those ships used during the war to disrupt British communications - to sail with the sole purpose of taking prizes.

The house flags of Salem's merchants flew at ports in Russia, Europe, the Mediterranean, Canada and South America. But its most extensive and profitable trade was around the Cape of Good Hope to the Far East and the Indies India and the East Indies. From a trade outpost at Mauritius, ships fanned out across the Indian Ocean to the Arabian Sea, the Bay of Bengal, the China Seas and beyond to China, Japan and Australia.

Salem merchants became rich on Mauritian trade

On a typical voyage, a Salem ship would sail with a full cargo of American and West Indian goods. After selling or trading part of the cargo in Capetown, it continued to Mauritius, where, if the prices were right, it traded the rest for coffee, pepper and tea or sold the whole ship and took the cash home. If prices were low, he'd sail to Bombay, where it picked up indigo and cotton, which would bring a good price in Jakarta. After selling there, it might try to make some more profit by buying bird's nests and opium, which could be sold for tea in Canton for a good price. During a stop in Capetown on the way home, the ship might fill the remaining cargo space with wines and possibly hides. The shipowner might expect at least a 100 percent profit from the voyage upon his return to Africa.

Also at the library was a rich collection of captains' logs from some 50 ships that left Salem and traded in Mauritius. The originals can be read from microfilm and the logs contain vivid descriptions of life onboard ship as well as life on Mauritius all written in the personal prose of the ship's captain.

A block away at the Peabody Essex Museum, which showcases the art collected by New England merchants from far reaches of the trade routes of 200 years ago, there are several items related to trade with Mauritius. Among them is a fine Chinese export porcelain bowl with a painting of the Grand Turk, the first Salem vessel to venture beyond the Cape of Good Hope and the first to trade with Mauritius in 1786.

Also of interest is the Salem Maritime National Historic Site, which is owned and operated by the U.S. National Park Service. It includes the Customs House, where merchants of the 1790s paid their customs duties, several restored homes of wealthy Salem shipowners, and two of the 50 wharves that once lined Salem harbor and were covered with dozens of warehouses. The Grand Turk left on its journey to Mauritius from these wharves. A film at the on-site visitor's center summarizes Salem's heyday as a shipping port and mentions the riches brought back from Isle de France. Visitors can also climb aboard the tall ship Friendship, a replica of a famous trading ship built in 1797 that traded with Reunion island.

The most prominent Salem merchant and probably America's first millionaire was Elias Hasket Derby. He had never been to sea, but knew all about overseas trading. His company was active in European and West Indies trade before the Revolution and was among the first to outfit their ships as privateers to fight the British. After the war, he took the lead in opening up new markets for Salem trade.

Trade between America and Mauritius was made possible by a treaty signed between the new, independent American government and France in 1783. The treaty allowed American ships to land on Mauritius for provisions. A year later, the privilege was further extended to allow American vessels to land U.S. produce in Mauritius and load products from the island or the East Indies in return.

Derby learned of this new opportunity in 1785 and decided to send the Grand Turk to Mauritius with a cargo of New England products that would be exchanged for East Indian goods. Onboard was flour, tobacco, rice, claret wine, chocolate, brandy, ham, candles, New England rum, beer and pork. Captain Ebenezer West sold his cargo and chartered the Grand Turk to a French merchant to carry goods to China, where the ship was loaded with tea, china and cinnamon. Sale of these products back in Salem doubled Derby's profits.

Derby sent more vessels and they all sold their cargoes at great profits. Encouraged, he was determined to put a large part of his resources into this trade and decided to send his 20-year-old son, Elias Hasket Derby Jr., to Mauritius to act as his agent and set up a base for the company's Far Eastern operations.

Derby Jr. arrived in 1787 onboard the second voyage of the Grand Turk to Mauritius. Port Louis thriving and busy with vessels anchored from many different countries. The quays were piled high with produce from the Indies and Europe. The streets were filled with people and everywhere there was evidence of business and prosperity. Not only did the Grand Turk sell all its cargo, but Derby's son accepted an offer from a Frenchman to buy the ship for $13,000 twice its value. With the profit from the sale, Derby bought two other ships in Port Louis, filled them with goods, sent it to Bombay, sold the cargo and returned to Salem with a handsome profit.

Derby's son had established the Derby house as the leading American firm trading in Mauritius. Over the next several years, the fleet grew and he continued to send vessels to his new base in Mauritius, which became Derby's most profitable trading partner.

Mauritius was a center for ship repair, communications

Aside from the trade it offered, Mauritius was important to the American during this time for several other reasons. First, the island served as sort of a communications hub, a place where ship captains get news and up-to-date information on the trading market in Europe or the Far East by talking to other captains who had just arrived from these places. Second, foreign ships calling on Mauritius were happy to know that they could find trained and talented craftsmen on the island who could repair damaged hulls or fix other problems with their vessels.

Traffic slowed after 1793 when war broke out between England and France and the French colonial government in Mauritius decided to confiscate enemy property found on neutral ships calling at Port Louis. All American ships arriving at this time were embargoed. After American ship captains convinced the Mauritian authorities that they supported France in its war against England, the embargoes were lifted.

Trade remained generally good and relations friendly, despite a hike in import taxes imposed by Mauritius and a brief period in which Mauritius seized American vessels during the quasi-war between France and the United States in 1799. But then in1807, President Thomas Jefferson imposed an embargo on shipping to and from England and France after those countries attacked American neutral vessels during the Napoleonic Wars. The embargo was meant to save American vessels, but instead it put most of the American fleet out of business by choking off foreign trade.

Salem never recovered from this slowdown and its maritime prominence began to fade. Bigger ports like New York and Boston started to dominate and manufacturing especially in textiles - began to replace shipping as a key industry in New England. A few American ships continued to call in Port Louis, but only to put ashore the sick or mutinous, or to secure information or supplies. By the 1830s, trade with Mauritius was becoming a distant memory as distant as the islands themselves were from American shores.

The past equals the future

Today, architects of the Mauritian economy as well as Americans who actively trade with Mauritius, are hoping that the new American trading relationship will not fade out as it did in the early 1800s. The United States has become Mauritius' second largest market.

This revived trade with the United States comes at an important time for Mauritius. The country faces many challenges into the future, as removal of preferential treatment and increased competition in world trade are expected to weaken the profitability of sugar and clothing exports. Global quotas on clothing under the Multi-Fiber Arrangement will end in December, 2004, exposing the local textile industry to competition from other exporting countries, especially in Asia.

The Mauritian government has taken steps to address these issues, such as investing in education and training, creating an information and communication technology sector and introducing more competition in key services, such as privatizing the communications industry.

As far as textiles and other exports are concerned, The Africa Growth and Opportunity Act, which offers preferential access s for apparel exports to the U.S. market, will cushion the blow caused by increased global competition with the end of preferential trade quotas at the end of 2004. Mauritius has great hopes for future growth in the U.S. market.

Just as Mauritius did in the 1790s to open the island to foreign trade, the country today is planning for the future with an eye on international trade. History can indeed repeat itself.


International Trading: Then and Now
1780-1800
Trade begins with America. France allows Mauritius to operate as a freeport and commercial shipping center. Treaty allows American ships to trade with Mauritius.
Salem merchant Elias Hasket Derby sends his son to Mauritius as his agent. Hundreds of American ships come to Mauritius to trade. America sends a consul to Mauritius to represent its commercial interests.
Mauritius positions itself as a entrepot and warehousing station for the Far East Trade, hoping to attract international shippers.
Mauritius trades sugar, coffee, cinnamon, cotton, tea, indigo with the Americans.
Americans sell beef, pork, flour, tobacco, bacon, codfish, wood, fish, butter.
Mauritius become an "information hub" where ship captains exchanged information on what is for sale in India, or what is selling well in Europe or America.
The value of imports from Mauritius to America far exceeded the value of what America exported to Mauritius. As a result, American merchants became wealthy from trade with Mauritius.
1980-2000
Mauritius aggressively promotes its freeport as a gateway to trade with Africa. U.S. Congress passes the African Growth and Opportunity Act, which gives trade benefits to Mauritius. Trade with America increases.
Some 200 American companies are represented in Mauritius: ie., The Gap stores, Microsoft, IBM; Toys R Us, McDonalds open franchises. U.S. hotels open properties. U.S. Embassy promotes commercial trade, organizes trade expo.
Mauritius promotes itself as a commercial bridge between Asia and Africa. It aggressively courts international business.
Mauritius trades sugar, clothing, textiles, carnaval masks, flowers, ship models with the Americans.
Americans sell food products, computers, telecommunications and farming equipment.
Mauritius positions iself as a "Cyber Island" to attract investment in information technology and communication technology.
The United States has a trade imbalance with Mauritius: it imports (buys) more goods (like clothing) than it exports (sells) to Mauritius. Mauritian companies enjoy great profits.


Salem History: Ships, witches, writers
The seafaring history of Salem that so much involved trade with Mauritius is only one aspect of the rich past of this Massachusetts port.
Here are some interesting facts about Salem:
- It was settled in 1626 by a small band of Englishmen, and three years later it became part of the new Massachusetts Bay Colony.
- The city was called Salem, from the Hebrew "Shalom," meaning peace, because the English settlers and the Native American Indians lived together peacefully.
- In 1692, hysteria over witchcraft arose when some young girls accused more than 150 men and women of witchcraft. The accusers claimed that certain friends' and neighbors' shapes or specters tormented them. The infamous Witchcraft Trails of 1692 sentenced 19 innocent people to death. Today visitors from around the world come to see places where the trials took place. Drawings of witches wearing black and flying on a broom have become the symbol of the city.
- By the end of the American Revolution in 1776, Salem was the seventh largest city in the American colonies. Salem's fleet helped win the war, capturing or sinking 455 British vessels. Trade with Mauritius and the Far East began after the Revolution.
- Salem merchants became wealthy with the Far East trade and built magnificent houses that still stand today.
- Famous American writer Nathaniel Hawthorne (1804-1863) was born here. He wrote The House of Seven Gables and the Scarlet Letter.
- Salem thrives in the mid-1800s as a leather and shoe-making center.
- In 1877, Alexander Graham Bell, who invented the telephone, demonstrated his phone for the first time in Salem.
- In the 1930s, factories move in, such as Sylvania, which makes lightbulbs, and Parker Brothers, which makes board games like Clue, the famous "whodunit" game.
 
 
Le Week End 25 November 2001