In a commentary for the Guardian, Joseph Stiglitz describes how Mauritius can afford to do this, and why there are some lessons for the US and Europe.
Now comes the painful number: Mauritius's GDP has grown faster than 5% annually for almost 30 years. Surely, this must be some "trick". Mauritius must be rich in diamonds, oil, or some other valuable commodity. But Mauritius has no exploitable natural resources. Indeed, so dismal were its prospects as it approached independence from Britain, which came in 1968, that the Nobel prize-winning economist James Meade wrote in 1961: "It is going to be a great achievement if [the country] can find productive employment for its population without a serious reduction in the existing standard of living … [The] outlook for peaceful development is weak."
As if to prove Meade wrong, the Mauritians have increased per capita income from less than $400 around the time of independence to more than $6,700 today. The country has progressed from the sugar-based monoculture of 50 years ago to a diversified economy that includes tourism, finance, textiles, and, if current plans bear fruit, advanced technology.
During my visit, my interest was to understand better what had led to what some have called the Mauritius miracle, and what others might learn from it. There are, in fact, many lessons, some of which should be borne in mind by politicians in the US and elsewhere as they fight their budget battles.
First, the question is not whether we can afford to provide healthcare or education for all, or ensure widespread home ownership. If Mauritius can afford these things, America and Europe – which are several orders of magnitude richer – can too. The question, rather, is how to organise society. Mauritians have chosen a path that leads to higher levels of social cohesion, welfare and economic growth – and to a lower level of inequality.
Second, unlike many other small countries, Mauritius has decided that most military spending is a waste. The US need not go as far: just a fraction of the money that America spends on weapons that don't work against enemies that don't exist would go a long way toward creating a more humane society, including provision of healthcare and education to those who cannot afford them.
Third, Mauritius recognised that without natural resources, its people were its only asset. Maybe that appreciation for its human resources is also what led Mauritius to realise that, particularly given the country's potential religious, ethnic, and political differences – which some tried to exploit in order to induce it to remain a British colony – education for all was crucial to social unity. So was a strong commitment to democratic institutions and co-operation between workers, government, and employers – precisely the opposite of the kind of dissension and division being engendered by conservatives in the US today.