BIZweek n°332 5 mar 2021
BIZweek n°332 5 mar 2021
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  • Parution : n°332 de 5 mar 2021

  • Périodicité : hebdomadaire

  • Editeur : Capital Publications Ltd

  • Format : (260 x 370) mm

  • Nombre de pages : 8

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  • Dans ce numéro : rapport world bank in mauritius.

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VENDREDI 05 MARS 2021 BIZWEEK ÉDITION 332 Iflh Figure 6  : Maur itius  : Per Capita GDP and GNI 11967-211191 1291:16 6,011 4,0116 -fis.- Z,00:1. LA TOUR WORLD BANK IN MAURITIUS - MARCH 2021 Critical areas underpinning a strong and inclusive recovery While the country has been able to avoid the acute health crisis that Covid-19 has caused around the globe, the disruptions to the economy and the wellbeing of the population are severe and will not disappear overnight. With a double-digit recession in 2020, and tourism remaining at a standstill, the challenge ahead is to reinvigorate growth and job creation and come back stronger and more resilient than before. « One thing that encourages me about Mauritius is that this country is always looking forward. In this spirit, our newest edition of ‘World Bank in Mauritius’looks past the crisis at hand, and into some of the critical areas underpinning a strong and inclusive recovery », says Erik von Uexkul, World Bank Representative for Mauritius & Seychelles, in his editorial to the March issue WOMEN IN THE LABOR MARKET - PROGRESS AND REMAINING OBSTACLES Supporting women’s successin the labor market is one of these areas. As Isis Gaddis (Senior Economist) and Marco Ranzani (Poverty Economist) show using labor force data over the last decade, Mauritius has made progressin closing the « gender gap » for labor force participation and equal pay. However, Covid-19 has reversed some of the progress by pushing women back out of the labor force, and a lot remains to be done especially for women with low educational achievement for which the disparities are the largest. Isis and Marco led a project with the aim to listen to these women to better understand the obstacles they continue to face. Key among their recommendations, in addition to investment in childcare and more equitable parental leave, are new ways to think about cultural norms and a more equitable distribution of unpaid house and care work within the family. Kathrin Plangemann(Lead Governance Expert) reflects about the importance of strategic planning, and the lessons learned from the successes and failures in this discipline around the world. One of her central points is that having an agile planning system in place is important not only in the medium termbut can also help governments respond effectively to unforeseen challenges like Covid-19, and to ensure a strong recovery. Looking even further ahead, perhaps the most critical factor for Mauritius’continued development success are the very foundations for learning and personal successinstilled today in young children. It is a historical irony that, in the midst of the 2020 recession, Mauritius reached the long-aspired status of High-Income Country as per the World Bank’s classification system. While this is based on 2019 pre-Covid data, and the 2020 recession may well bring a drop back to Upper Middle-Income status, it should nevertheless be a moment for reflection on what Mauritians have accomplished through hard work, dedication, and spirit of collaboration. mirdnaniiMield. UMIC thrediuld. HIC threshold GNI per capita GDP per capta Saure:Maine* heaed on infirmation reoeisod from Stedistim Floralies. The histaical.ies tas hem plaine in mure for a noterislogiA change owlemenad in rhe 2018 ciessilicaben enfilas 5/t'Aumale emmenons tan gerber phiimedMu. Over the past decade Mauritius enacted several reforms to enhance women’s economic opportunities. Mauritius has been highlighted as a top reformer in the 2019 edition of Women, Business and the Law and improved its overall score. These reforms included, among others, an increase in the length of maternity leave from 12 to 14 weeks in 2015, which brought the country in line with standards of the International Labour Organization on the duration of maternity leave. However, Mauritius still only scores 60 [out of 100] in the sub-indicator « Parenthood ». This reflects that there is currently no system of parental leave and that maternity leave benefits are the liability of the employer as opposed to being funded out of mandatory social security or other public funds. Public funding of maternity leave benefits would shift the financial burden away from individual employers to ensure that there is no bias against recruiting women of childbearing age. In this respect, the country lags behind other middle- and high-income countries, which often have instituted more progressive parental leave legislation funded by social security. So, what could be done to increase female labor force participation ? First, Mauritius could follow the path of an increasing number of high- and middle-income countries offering paid parental leave, which is often supplementary to specific maternity and paternity leave periods. Parental leave caneither be a sharable family entitlement or an individual entitlement that each parent can take regardless of the other and may include elements that incentivizeuptake by fathers (through bonus months or « daddy quotas »). Second, there is the issue of child care. While pre-primary education for children aged three to five years is compulsory and free of charge, there is a lack of affordable day care centers for younger children. In Mauritius, children aged three months to just under three years can attend Day Care Centers. Most of these are privately owned and charge fees in the range of Rs 2,500-3,500 per month, which can be a heavy financial burden on low-income families. Moreover, many of these centers have restrictive opening hours and hence do not meet the needs of parents working full time and/or late hours. Lack of affordable childcare affects women disproportionately because social norms assign to Mauritian women the traditional role of providing such care. Third, there may be ways to address the underlying social norms and assigned gender roles that constrain women’s economic opportunities more directly. Last, there is the gender wage gap. Mauritian women working in the private sector are paid, on average, about 20 percent less than men per hour worked. Sector of employment, occupation, job tenure, and enterprise size are important factors that can help explain differences in wages between men and women. However, other factors – such as gender discrimination in the workplace or differences between men and women in noncognitive skills (for example, confidence or assertiveness) likely also play a role. Mandating pay transparency is a policy that an increasing number of countries have adopted to reduce gender pay gaps. Mule there has been a mcdest increase in fernala labor force participation over the part demie.ti WORLD BANK CLASSIFIES MAURITIUS AS HIGH-INCOME COUNTRY Using data provided by Statistics Mauritius for 2019, the World Bank has re-classified Mauritius fromupper-middle to highincome country for the first time on July 1st 2020. Mauritius joins Seychelles as the second high-income economy in Africa. According to the figures released by the World Bank, Mauritius’GNI per capita for 2019 is US$ 12,740, a 3.5 percent increase over the 2018 figure. The annually adjusted high-income threshold is at US$ 12,535. It is important to note that this classification is done over 2019 data and thus does not yet reflect the economic impact of COVID-19. It is possible that the strong recession this year due to COVID-19 will lead Mauritius to temporarily return toupper-middle income level when the 2020 data is considered during next year’supdate. But in a longer-termperspective, reaching high income level is a great achievement that reflects the efforts and dedication of generations of Mauritians to build a better future for their children. From an operational perspective, the reclassification does not affect the World Bank’s work in Mauritius as support remains available to member countries at high-income level. Most development partners refer to the OECD list of countries eligible for Official Development Assistance to determine their support. The list is reviewed every three years (with the next review due in 2020, and then in 2023, etc.), and only if a country has, at the time of review, been classified as high-income for three consecutive years it graduates from the list. Thus, even if Mauritius were to maintain high-income status in 2020 despite the impact of COVID-19, it would not graduate before 2023. Trade preferences granted to Mauritian exports in the United States under the African Growth and Opportunity Act (AGOA) are also linked to income status. Graduation from AGOA follows a processin which the US administration,upon a country reaching high-income status, reassesses and eventually revokes eligibility following a grace period ofup to two years. In past practice, countries falling back to middle-income status in similar situations have maintained their preferential market access. 4
VENDREDI 05 MARS 2021 BIZWEEK ÉDITION 332 ACTA PUBLICA AON GLOBAL RETIREMENT INSIGHTS QUARTERLY REPORT Overview of the New Social Generalised Contribution System (CSG) introduced in Mauritius Aon Global Insights Quarterly is a quarterly publication highlighting the main requirements, proposals and opportunities affecting sponsors of retirement plans. It highlights the latest developments affecting the design, financing and operations of employer-sponsored plans, as wellas changes to State pension provision. It also includes information on key trends, earlier topics that remain live, and highlight someupcoming opportunities for knowledge sharing. In this edition, the authors include a little more insight on the New Social Generalised Contribution System in Mauritius The Minister of Finance, Economic Planning and Development announced earlier that the new contributions from the National Pension Fund (NPF) would be abolished with effect from 1 September 2020. Under the new Contribution Sociale Generalisée (CSG) system (introduced by section 42(f) of the Finance (Miscellaneous Provisions) Act 2020, employees and employers in the private sector and the self-employed are obliged to contribute to the CSG effective as of September 1, 2020. The Ministry of Finance has published Government Notice No. 214 of 2020, which introduces regulations under the National Pensions Act (Section 30B) to set tax rates for the CSG. The Regulations entered into force on September 1, 2020. Highlights include : The rate for private-sector employees with monthly basic wage/salary not exceeding 50,000 rupees each is 1.5%. The employer rate is 3% of the basic wage/salary. For those earning more than 50,000 rupees, the rate is 3% and the employer rate is 6%. These contributions have started to be collected by the Mauritius Revenue Authority (MRA) and, as previously announced by the Minister of Finance, are earmarked in the Consolidated Fund. Why does this matter to employers ? In November 2020, Business Mauritius, an association of private sector employers, lodged a case in the Supreme Court of Mauritius in relation to the following : To challenge the constitutionality of the introduction of the CSG in the absence of any consultation prior to its introduction ; To challenge the powers solely given to the Minister of Finance to make Regulations in respect of the CSG as he sees fit ; To apply for a Stay of Execution in order to suspend the coming into force of the CSG. In December 2020, The Supreme Court of Mauritius made its judgement on item 3 and refused the Stay of Execution, but it ordered the Government to keep track of the CSG contribution in a separate account in the Consolidated Fund. (At the time of writing, the judgement on items 1 and 2 was still pending.) What are employers thinking ? Will the CSG system stay (in its current form), depending on the outcomes of the outstanding cases in the Supreme Court ? How is our low earning employee population affected by the change from NPF to the new CSG system ? Depending on the final Supreme Court decision, should we be making changes to our private retirement provisions to offset the adjusted contribution rates for the high and low earning employees ? What actions should be taken now ? Ensure to submit all CSG returns and payments in line with the set deadlines by the MRA, as there are penalties with interest payment for late submission. Employers should prepare for the increased cost impact of the increased contribution rate without cap for higher earners. Employers may need to consider a review of their pension arrangements to better target retirement savings for low- and high-income earners. Hot Topics for employers  : General trends relating to retirement savings.0 o O Revisit plan designs More employee nue ponsMility Employée choirai, Funding Liabi Iity management Asset po dormance Cool of nives-Onent Complex compilance Less local expertise Employas expérience Providers Defined Benefit Defined Contribution E x pats & Mobile employas s Financial Wellbcing More pro-funchng Cross-border options Member options Transfer to insurers Broader investrnern calegories Responsible Investirent DG State changes, autoenrcirnent, matching Clounefreenng plans Rernoving guarantees Options for persona'needs I musli-rient defaulls Automatic changes EEA IORP2 risk management Cyber iisk tesling & prolectien Investirent cool transparency Mufti-employer fonds Holistic view hopreved invesirrient options WhIch pinschction and how, Multiple judsd Miens Decision-making protocols Otrisanned delegation of policy executbn Employee portale Global consistency 4e-sp for mobile employens) Admin performance & camp'rance Global contracling power Ongoing developments  : Middle East, Africa & Latin America Need for broader planning Working when reliront Educalhon A underslanding Companson to obier cornrnilrnent & saving Tac ellimency Companson to per-sonal dote Middle Eut & Africa Latin America Ghana  : reverting social security pension lotorrenigage fnancing Iran  : Social security reforrn expected due to ecrease In dependency ratio Kenya  : Nousing levy suspendes Meurthe. Awalting formel announcement on PROF ; CSG court cases Rwanda  : proposais male Io reverse prevlous barra. in retionnent Pakistan  : ellnirninnpension to rire by 2023 Swaziland  : ENPF conversion proposai Tanzanie  : State pension formula repneveuntit 2022 Togo  : Almenurn Pension proposes Zimbabwe Pension reyaluation plan & pension reforn plan  : proposai for dealline Mener. pension Contribution East African Community  : Plans to hormones merneers'pension regulatIons for omet « pOrtabrilly Ghana  : Pian na expand pensonable Salary Itiorocco  : Pension system professionats to ee restanesned South Africa  : Preclent Fund annu taxation reguirement by March 1, 2021 ugand. NSSF to be compulsory for primate senior IlArly. Naft uuldelines ro'nabie retirement fends In be dIverterd for mea.'rouerMoues. Mea., on fax deduction pervsico insreance contrant, Draft 2021 Fanante Law Hourdes. Plans for trarrafer for retirement gratte on change of ernploymenl South Africa  : Amoniment plOpOSal 100lao',redent funi Saure Arabia  : Severacce payupgrade proposai Egypt Draft law pendre scheme governance Bermuda  : Planned amendments to ihe National Pension Sarema Brashi  : Social security reforrn passes Chue  : Pension Wormproposais. Colombie, Social security reluira. Costa Rica  : Social secwity reforme. Ecuadon Review of testai secunty bandits. ▪ Change in baste state pension Nicaragua  : Social security redonna. Peru, Pension reformtalks.rteriummeno Proposas Opportunmes Chiffe  : Proposed privais pension reforma. lnclueing employer contribuions. Costa Rica  : Liplate on Compulsory Supplementary Pension Schen" Domlnican Debate over voluntary second piler Malice Flans Seingievelopee for veiuntary employer-prouldei pension schen ». Mexico  : Increased 1,1w-ou in life-cyore imestrnent fends Peru, Efforts to Sunplity pardon plOCIUCtS and pension product chokes. Mexico  : I noreased locus on employer,'communication and Inannal wellbeing. Fenil AFP longerity Mena. diecounla en menegomenri face. Ain Global Petitement insights Cluarteey I al'cm 25 Em power Results. 5

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