The erosion of trade preferences for its main exports, coupled with the challenges stemming from globalization, make it imperative for Mauritius to raise productivity and become globally competitive. As the country shifts progressively toward a service-dominated and knowledge-  4  BIS Review 31/2008  based economy, labour-market flexibility has become vital.
The reductions achieved against their more significant 36 trading partners were even higher and, more importantly, the gains since 2008 sizably reduced the cumulative evolution of their ULCs since 1999. The significant losses of competitiveness from the inception of the euro and the beginning of the crisis in 2008 have been meanwhile corrected.