July 2012

Mauritius Flash

The ocean state


Mauritius has in March 2012 struck an agreement with Seychelles for the joint management of an additional 396,000 square kilometers of maritime zone over the Mascarene Plateau region in the Indian Ocean. This agreement extends the Exclusive Economic Zone (“EEZ”) of Mauritius, an island whose land size falls short of 2,000 square kilometers, to 2.3 million square kilometers of maritime zone, an area larger than the combined land size of France, Germany, Italy, Spain and the United Kingdom. Within the EEZ lies an array of different economic opportunities for Mauritius. Economic reliance on marine resources has been mentioned as early as the 1970’s. However, as well thought government policies and coordinated investment plans were found lacking, Mauritius has arguably under achieved its economic potential as an ocean state. The story could now take a twist as the government looks firmly set on giving additional impetus to the ‘ocean industry’. The government program 2012-2015 includes ambitious announcements on the transformation of the industry into a major GDP contributor, with expectations of spill-over effects on national productivity.

Deep sea currents

Much of the potential of the ocean industry lies in the ideal geographic position of Mauritius in the Indian Ocean to exploit deep sea currents. Deep sea currents travel around some 1,000 metres below the surface of the sea and involve movement of water of exceptional quality. The applications of deep sea water are multiple and range from thalassotherapy, production of bottled water, air conditioning, pearl culture, renewable energy, to production of high quality marine salt.

Avenues for the ocean economy

Thalassotherapy is therapeutic use of the sea water and marine products like algae, seaweed and alluvial mud. The principle behind thalassotherapy is that repeated exposure to sea, air and immersion in warm seawater, mud, clay, and protein-rich algae helps restore the body's natural chemical balance. It is an interesting avenue as it would constitute a value addition to an established tourism industry, and only requires low levels of initial investment.

Bottled water
Considering that the world market for bottled water currently stands at 89 billion litres with a steady growth of 15% per year over the last fifteen years, exploitation of deep sea mineral water constitutes a very lucrative proposition. Deep sea water is full of minerals and becomes a very sought after beverage following salt extraction.

Cooling applications
One of the characteristics of deep sea currents is that they involve movement of water of temperature averaging 5 degrees Celsius. Successful applications have been made to air conditioning systems with most notable progress made in Hawaii. The Mauritius tourism industry would welcome any initiative on this front as air conditioning currently accounts for 40% of the electricity bills for hotels. However, the favoured option for the time being is to use deep sea currents for cooling data centres. The former managing director of the Board of Investment (“BOI”) announced this application of deep sea currents as an alternative to energy cooling was in development phase and that a 212 hectares site had been earmarked for the project. A system of pipes operating 1,000 metres beneath the sea level will be built and will tap water from 2 kilometers offshore. Initial investments are set to be very significant but long run energy savings will be a competitive breakthrough for the emerging ICT and BPO sector in Mauritius.

With recent economic developments, Mauritius has had to deal with strained water resources. According to the United Nation Development Program (“UNDP”), Mauritius is a water stress country with yearly water consumption per capita at 1,083 cube metres, a figure well below UNDP’s acceptable threshold of 1,700 cube metres per year. Desalination (the process by which sea water is converted into water suitable for domestic consumption) should provide an alternative in the medium term as an alternative to faltering fresh water resources. Since Mauritius was hit by a severe draught in 1999, the government has come up with a policy for all coastal hotels to embark on a desalination programme. A plan for desalination to be put to the wider use of the population is widely anticipated.

The exploitation of seaweed, with its multiple industrial applications, is an interesting opportunity. Sea weed is in effect widely used as an organic fertilizer component, in the cosmetic and pharmaceutical industries. Seaweed is considered as a delicacy in many Asian countries and the annual production of Nori (one of the main food sea weed species) in Japan alone amounts to US$ 2 billion (http://www.seaweed.ie/). Sea weed extracts appear in the oddest of places; you almost certainly have eaten some sort of sea weed extract in the last 24 hours as many processed foods such as chocolate milk, yoghurts, health drinks and even the highest quality German beers contain sea weed polysaccharides.

The way forward

Framing Mauritius into an ocean economy will require a fair deal of foreign direct investment and a considerable improvement to national research capabilities. The Mauritius Oceanography Institute (“MOI”) is earmarked in the government program 2012-2015 to lead scientific research over the EEZ and as an advisor for potential economic opportunities. The MOI also has among its achievements the Mascarene Plateau agreement and a corporation agreement for hydrocarbon exploration with the Oil and Natural Gas Commission Videsh Limited in July 2006. Two further extensions of the EEZ are being looked at to enhance the economic potential of Mauritius as an ocean state. The MOI already has various research programs for aquaculture, sea weed exploitation and thalassotherapy.

The major challenge, however, lies in the apparent lack of a skilled labour force to bring the industry forward. Such labour force will arguably have to be attracted from elsewhere as newly implemented local formation programs take longer to reap benefits.

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