An unexpected gateway: The particularities of Mauritius as a hub in oil and gas GPNs

ABSTRACT

The periphery of the world economy is integrated into global production networks (GPNs) by ‘gateways’. These are intermediary places from where transnational corporations organise their business activities in close cooperation with corporate service providers. Gateways may also serve as logistics nodes as well as sites of industrial processing and knowledge generation. While some claim that gateways are engines of growth, others argue that they prosper at the expense of peripheral places. The article applies these thoughts to Mauritius, oil and gas GPNs, and the gateway's impact upon sub-Saharan Africa. The analysis indicates that Mauritius holds a certain potential for logistics and corporate control. The island serves as a hub of service provision already today. Only its status as a tax haven has a negative effect on resource peripheries. Against the backdrop of these findings, the authors discuss whether gateways should be seen as drivers or obstacles of peripheral development.

KEYWORDS:

• Financial offshoring
• gateway
• global production network
• Mauritius
• oil and gas

Acknowledgments

A first draft of this article was presented at a conference held in Stellenbosch, South Africa, in October 2017. The authors are grateful for the financial support that the Volkswagen Foundation provided to make this event possible. Comments by Anthony Black, Javier Diez and Ivan Turok were helpful to further develop the paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

1 This reflects a key conviction from GPN analysis: production networks are firm-specific, meaning that each firm has a network of its own whose particularities result from firm-specific strategies to improve the cost–capability ratio (Coe & Yeung, 2015). If networks are different from one firm to another, they are even more different from one sector to another. Our analysis of the oil and gas sector is potentially as insightful as a study of, for example, Mauritius's role in information and technology networks. The fact that we have chosen this particular sector merely results from our previous experience with oil and gas GPNs.

2 Interview with an engineering and construction company, Port Louis, 21 September 2017.

3 A full list, including detailed information on these double-taxation-avoidance agreements, is available online at: www.mra.mu/index.php/taxes-duties/double-taxation-agreements. For a complete list of the investment protection and promotion agreements, see: www.investmauritius.com/downloads/ippa.aspx.

4 Interview with the MPA, Port Louis, 11 September 2017.

5 Interview with a major downstream company, Port Louis, 28 September 2017. The oil and gas industry is usually divided into three sectors: down-, mid- and upstream. The upstream sector includes searching for oil and gas fields, drilling wells and also operating these wells. The midstream sector involves the transport, storage and wholesale marketing of crude and purified/refined products. The downstream sector comprises refining crude oil and purifying raw natural gas, as well as the marketing and distribution of consumer products.

6 Interview with an engineering company, Vacoas-Phoenix, 26 September 2017.

7 Interviews with an engineering and construction company, Moka and Port Louis, 14 and 21 September 2017.

8 Interview with an upstream service provider, Grand Baie, 18 September 2017.

9 Interview with an international consultancy, Ebène, 19 September 2017.

10 Interview with an international consultancy, Ebène, 12 September 2017.