Coronavirus hurts Mauritius though no-one is infected so far

The government of Mauritius has put a number of safety measures in place, including a travel ban, a suspension of all direct flights to China and import stops for products from China. People arriving from China are quarantined. Rigorous medical controls have been set up at the country’s international port and airport. In short, the authorities are doing what they can to keep the island nation coronavirus-free.  

Hopefully, people’s health will not suffer – but the economy surely will. The sector feeling the impacts first is tourism. About 44,000 visitors from China were expected this year, staying an average of ten days and spending a total amount worth the equivalent of € 25 million. It will be difficult for hotels to attract more tourists from other destinations in order to make up for the losses. Moreover, industry leaders fear that the virus will affect not only business with China, but dampen the mood for travelling worldwide.

Tourism is not the only sector affected. Air Mauritius, the state-owned airline, cancelled all flights to mainland China and Hong Kong for the foreseeable future. Those flights normally add up to five percent of its total seats capacity. Part of the air travel is tourism, but business relations, academic exchange et cetera are compromised too.

The garment industry, another important pillar of Mauritius’ economy, will be short of supplies soon. It depends on imports from China. The government’s advice to companies is to find alternative sources – but the supply chains are simply not in place. It will take time to build them.

Construction normally relies on Chinese migrant labour. The industry will have to find workers elsewhere.

Retail traders and consumers will feel impacts as well: Chinese products are part of daily life in Mauritius.  Even the sugar price on the world market is falling due to the slump in Chinese demand. That matters very much to Mauritian sugar cultivators.

The only reason for optimism is the low oil price, which is another result of the spreading virus. It is expected to keep inflation low and help the economy in general. All in all, however, Mauritius expects its growth rate to suffer. Economists had predicted four to 4.2 % this year, but now expect the rate to be 0.5 % lower.

The coronavirus shows that globalisation has created much greater interdependencies than humanity knew in the past. When a major economy like China is hit by an unusual health crisis, a far away small island nation suffers – even if not a single person is infected.