For a small economy like Mauritius, critically dependent on export demand from the Euro Zone, there is a clear need for more vigilance, and a more aggressive diversification drive. In mid-2012, when the country’s import cover was at 4.5 months, the Bank decided to embark on ORR to increase the level of Bank foreign reserves to 6 months’ import cover.
But solid legal foundations and the discipline of the marketplace limit these aberrations. On net, vigorous competition over the years has produced a significant rise in the quality of life for the vast majority of the population in market-oriented economies, including those at the bottom of the income distribution.