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To cite this article: Zaheer Allam & David Sydney Jones (2019): Attracting investment by
introducing the city as a special economic zone: a perspective from Mauritius, Urban Research &
Practice, DOI: 10.1080/17535069.2019.1607017
Article views: 17
1. Introduction
Increasing urbanisation, while catering for basic amenities for both residential and
transient populations, is expected to require substantial investments in public infra-
structure per urban centre. This priority is occurring in parallel with a global aware-
ness about the impacts of climate change. These impacts are clearly articulated by the
IPCC (IPCC 2018), and which highlights the sensitivity of low income and emerging
economies. These impacts, specifically for low-lying nations like the Small Islands
Developing States (SIDS), include submergence from the increasing frequency of
tidal surges, urban flooding and coastal erosion that eventually adds to the burden of
existing concerns relating to population growth, economic development and
urbanisation.
SIDS, first recognised as a distinct group of developing countries at the United
Nations Conference on Environment and Development in June 1992, are a group of
small island countries that share similar sustainable development challenges, includ-
ing small but rapidly growing populations, limited resources, remoteness, suscept-
ibility to natural disasters, vulnerability to external shocks, excessive dependence
on international trade and fragile environments. Their economic growth and human
development are hampered by high communication, energy and transportation costs,
irregular international transport volumes, disproportionately expensive public
administration and infrastructure, and little to no opportunity to create economies
of scale.
*Email: zaheerallam@gmail.com
There are calls by many researchers for the strengthening of local capacity to enable
both infrastructural and economic viability (Folke et al. 2002; Berke, Kartez, and Wenger
1993; Marsden and Smith 2005), but this remains a challenge as the financing of these
much-required urban climate change mitigation projects entails high economic inputs
that emerging nation economies struggle to meet (Allam 2018a; Allam and Newman
2018a). The economic aspects of how to adequately address this urban challenge are
scarce in the literature, as while wealthy Western countries can ably subsidise climate
mitigation plans, in contrast, low-income nations default to seeking funding through
foreign aid (e.g. UNESCO, AusAid, other nations) mechanisms and long-term loans. The
latter ultimately impacts upon the local liveability levels in the long term for a nation,
making it highly debt dependent upon the source of the aid and/or loan, often resulting in
problems when repayment capacities are not able to be met. Haque (Haque 1999) warns
about the indifference of such conventional economic models for addressing environ-
mental issues including those that are ultimately unsustainable. However, while aid and/
or a loan provides for immediate economic relief and encourages investment in key-
specific projects, the borrower often does not encourage the implementation of
a sustainable economic ecosystem strategy to catalyse local societal and economic
empowerment and enhancement. The question then arises as to how to seek investment
in the urban realm, and more specifically in projects of public good in the public domain,
with no visible or tangible direct economic return.
This practice paper suggests approaching this problem by exploring traditional
economic ecosystems that allow the public sector to seek funds to invest in the public
domain. A case study from the City of Port Louis, the capital of the nation of Mauritius,
is discussed profiling how this approach can benefit other comparable cities that are
looking at building economic resilience strategies whilst attracting private investment in
both private projects as well as in the public realm.
Regeneration Scheme (NRS), which is comprises a set of fiscal and planning incen-
tives, was adopted by the Government of Mauritius in 2018 (Government of
Mauritius 2018), as evidenced in Table 1.
To ensure the densification of Port Louis’ urban fabric, and to further promote
a healthier urban environment, a designated area was delineated where the NRS would
be applicable. Ideally, the Central Business District (CBD) is desired precinct as this
would allow further economic growth through the attraction of commerce and business.
The development of the NRS was influenced by Mauritius’ exploration of Smart City
models that seek to infuse Smart City technologies into existing cities, as opposed to the
contemporary practice of creating new cities. As such, to ensure that this particular
dimension was addressed, and would be applicable to Port Louis, models devised for the
context had to be explored. As such, a Smart City Framework (Figure 1) (Allam 2017)
was proposed that contains the three key dimensions of Culture, Governance and
Metabolism. Further to this, the authors performed a Focus Group inquiry to identify
the desired dimensions that could promote an inclusive urban regeneration process in that
particular context (Allam 2018a). The result of this inquiry was an Extended Smart
Framework (ESF) (Figure 2), where incentives were calibrated regrouping the additional
identified dimensions of Business Support and Collaboration, and further testing in
conjunction with the dimensions of Governance, Culture, Metabolism. Those dimensions
were then translated into fiscal measures to economically incentivise developments
towards those desired outcomes.
Allam and Newman (Allam and Newman 2018a) have demonstrated that quantifica-
tion over a 6-year period, from the application of the NRS to the Action Plan Zones
(APZ) within the NRS, revealed positive results. These results included an estimated
USD 1.18 billion was foreseen from private investments, while USD 32 million and USD
180 million was anticipated for public revenue and from new business ventures, respec-
tively. From the perspective of job creation, it was concluded that some 94,588 con-
struction jobs and 9,210 permanent jobs could be generated.
Thus, the practice of looking at designated areas such as SEZs can be made to work if
the proposed package of incentives is tailored to the local context. While the above was
Table 1. The National Regeneration Scheme (NRS) as proposed in Port Louis, Mauritius
(Government of Mauritius 2018).
Figure 1. The smart framework for Port Louis. Adapted from Allam (Allam 2017).
Disclosure statement
No potential conflict of interest was reported by the authors.
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