Sir Keir Starmer, leader of the British Labour Party, was elected Prime Minister of the United Kingdom last week. What does the establishment of a new British government mean for Mauritius? Are there new opportunities or concerns to be expected? The point.

A political page is turning with the return of Labour to power in the United Kingdom. Freshly elected with a large majority of 412 seats in Westminster, the new British Prime Minister promises to “rebuild” the country. His priority: tackling the challenges that await him. Among them: public services in crisis, weak growth and weakened public finances.

At the Mauritian government level, we are given to understand that this will be the continuation of diplomatic and commercial relations with the United Kingdom. “It is a major market for Mauritius, whether in terms of international trade, investment or tourism. We will continue to collaborate in the same direction, or even further improve our relations and develop new collaborations,” it is indicated.

Bhavish Jugurnath believes that the leadership of the new British PM represents potential opportunities for partner countries like Mauritius.

Economist Bhavish Jugurnath points out that Sir Keir Starmer’s government is focused on long-term goals and aims to deliver lasting change. “Boosting economic growth is a priority. Reforming the social care system is on the agenda to improve services for citizens. These priorities signal Keir Starmer’s commitment to tackling pressing issues and rebuilding the country,” he argues. He believes the new Prime Minister’s leadership will likely have implications beyond the UK, including potential opportunities for partner countries such as Mauritius.

According to Bernard Saminaden, Mauritian diplomacy should discuss new areas of cooperation with the British government.

Economic observer Bernard Saminaden would agree: “The United Kingdom and Mauritius have shared bilateral and commercial relations for several years. With the arrival of a new government, we can expect new opportunities to open up to us.” He says that Keir Starmer was clear in his first statement as Prime Minister that he will rebuild the country while focusing on improving public services and the working class.

“So I don't think he will jeopardise the relations that Britain shares with other countries. On the contrary, he will use diplomacy more to improve the economic situation of his country,” thinks the economic observer. He believes that the new Labour government will adopt an approach focused on the former British colonies, mainly African countries.

Bernard Saminaden also points out that environmental protection is a priority for the new British government. “Mauritius can negotiate possibilities for support and collaboration on this issue, especially given our great vulnerability to climate change,” he says.

Financial sector

Business as usual

Kamal Hawabhay, Managing Director of GWMS Ltd.

The new British Prime Minister’s tax policies may impact the offshore and financial sector of Mauritius through amendments to regulatory laws. However, Kamal Hawabhay, Managing Director of GWMS Ltd, says that nothing has been said on this subject. “So far, the new British Prime Minister has not said anything about the changes he intends to make to the laws. So, for us, it is business as usual. Our operations with the UK are continuing as normal,” he says.

However, he stresses that Mauritian companies working with England will have to closely monitor the arrival of the new British government as well as all the decisions taken. “If there are revisions to certain taxes or new regulations put in place, the companies concerned in Mauritius will certainly be impacted,” he stresses.

New business opportunities on the horizon

François de Grivel is optimistic about Mauritius' tourism industry.

Mauritius exports various products to the UK, such as textiles and seafood. With a new government, changes in British trade policy could affect these sectors. However, industrialist François de Grivel says that in the immediate future, he does not see any major changes in Mauritian exports to the UK.

Regarding trade agreements between the two countries, he argues that these will be maintained even if the government changes. “Treaties are respected between states, unless there is a force majeure that would force the government to change its decision. But as a general rule, the agreements are protected,” says the businessman. According to him, with a new government, there are opportunities to further strengthen economic relations between Mauritius and Great Britain.

This view is shared by Bernard Saminaden, who believes that Mauritian diplomacy should seize this opportunity to discuss new areas of cooperation and to favour a privileged understanding with the new British government. He indicates that investments in the pharmaceutical sector in Mauritius could, for example, be on the agenda.

Bhavish Jugurnath agrees. The economist says Mauritius remains an important trading partner for the UK and its diversified economy offers opportunities for collaboration as well as growth. In 2023, he says, the UK imported £768 million worth of goods and services from Mauritius.

“Total UK imports of goods from Mauritius were £109 million during this period,” he adds. Total UK imports of services from Mauritius were £659 million. These services, he continues, cover areas such as financial services, tourism and professional consultancy. “With the economic priorities of the new government, I expect trade and investment to increase further between the two countries,” the economist maintains.

Chagos File

High anticipation

The arrival of a new British government raises several questions on the Chagos issue. At the level of the Mauritian government, it is made clear that it is a little early to discuss this issue. “The new government has just been formed,” it is suggested.

Bhavish Jugurnath, for his part, says there is no specific information linking Keir Starmer's policies directly to the Chagos issue. “However, his government's broader foreign policy decisions could indirectly influence the situation. We hope that he will find a solution to the Chagos issue in the interest of Mauritius,” he says.

François de Grivel shares this view. “We hope that the Chagos problem will finally be resolved,” he says. Bernard Saminaden is of the opinion that the general elections in Mauritius will also be a determining factor on the Chagos issue.


An increase in the purchasing power of the English expected

Our interlocutors agree that the economic policies of the Labour government are aimed at stimulating growth and purchasing power, which could encourage travel abroad, including to destinations such as Mauritius. Bernard Saminaden indicates that Great Britain is the third largest market after France and Reunion.

Moreover, it is worth noting that between January and May 2024, 54,945 English tourists set foot on Mauritian soil. “If Keir Starmer implements policies aimed at increasing the purchasing power of the English, the tourism industry in Mauritius could benefit from this increase,” he argues.

François de Grivel agrees. “Great Britain has gone through major crises in recent years, which has affected the purchasing power of the English. But the new government has expressed its intention to restore purchasing power. I remain optimistic on this subject,” he says.

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