Exploring the distributional impact of investment in the port sector on households in Mauritius: A social accounting matrix approach

Abstract

Research on the role that growth in the Ocean Economy can play on poverty reduction and income inequality has been limited to date. Using a Social Accounting Matrix framework this paper examines the distributional effects of investment in the port sector on employees and households in Mauritius. Two investment scenarios (conservative, US$1089 million and optimistic, US$1332 million) are considered. The results suggest that in the short term, investment in the development of the port sector would have an overall positive impact on the Mauritian economy. Poor and lower middle-income households would receive a very small positive impact, as would employees with lower education levels. However, in the medium to long term, impacts at the household level would be uneven with wealthy households and employees with university education receiving the greatest benefit. These results suggest the need for complementary redistributive policies.