Academic journal article The European Journal of Comparative Economics

International Trade in Outermost Europe: A Comparative Analysis of Mayotte Island and French Overseas Departments

Academic journal article The European Journal of Comparative Economics

International Trade in Outermost Europe: A Comparative Analysis of Mayotte Island and French Overseas Departments

Article excerpt

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1. Introduction

Our aim is to help the outermost regions to become more self-reliant.

-Johannes Hahn, European commissioner, 20 June 2012

Situated throughout the Atlantic and Indian Oceans, the Caribbean Sea, and in South America, the outermost regions of Europe account for more than 4 million inhabitants and represent a particular challenge for European integration. These regions-defined by their remoteness, economic dependence on a few products, small size, and insularity2-include the four French overseas departments of French Guiana, Guadeloupe, La Reunion, and Martinique; the Portuguese regions of Azores and Madeira; and Spain's Canary Islands. Mayotte Island will join this group in 2014. With this study, we seek to analyze the trade integration of these regions, which is a central focus of European policy. Because extended trade data are not available for the Spanish or Portuguese regions, we investigate French overseas departments during 1990-2011. Very few studies analyze these regions;3 no previous studies have considered Mayotte.

Mayotte belongs to the Comoros Islands archipelago4 and has a long history with France. As a component of the French colonial empire, starting in 1840, Mayotte became an overseas territory in 1946, along with the other islands of the Comoros: Grande Comore, Anjouan, and Moheli. In December 1974, a referendum on the independence of the Comoros Islands was organized, involving consultation with the population, island by island. Among the four islands, only Mayotte refused independence, with a 63.8% majority. In early 1976, the population of Mayotte again confirmed overwhelmingly that it wanted to remain French (99.4%). A law passed 24 December 1976 thus granted it the status of territorial collectivity; in 2001, that status changed to a "departmental collectivity," though Mayotte did not become an actual department. The law prompted the transfer of executive power from the Prefect to the President of the General Council. Finally, on 21 February 2007, another new law shifted the status of Mayotte, in view of its possible transformation into an overseas department. On 31 March 2011, it thus became the fifth overseas department and 101st French department overall, and on 11 July 2012, the European Council recommended that it take the status of a "ultra-peripheral region" (UPR) of the European Union, starting on 1 January 2014. Considering its unique characteristics, remoteness, and insularity, Mayotte can expect to receive significant EU structural funds of approximately 475 million Euros during 2014-2020. These funds will help it complete priority projects to improve sanitation, roads, ports and airports, electrification, and education-projects for which the costs are likely to exceed 1 billion Euros.

With an estimated 2009 gross domestic product (GDP) per capita of 6570 Euros (INSEE, economic accounts), Mayotte differs considerably from mainland France, as well as in relation to other overseas departments, at both economic and social levels. Specifically, its GDP per capita is approximately two times lower than that of France's other overseas departments and four times lower than that of the mainland France. But Mayotte Island represents a rich region for its immediate surroundings. Its GDP per capita is ten times higher than that of the Comoros Islands and Kenya and twenty times higher than in Madagascar, Mozambique, or Tanzania.5

Its location at the entrance of the Mozambique Channel also makes Mayotte a potential point of passage for maritime trade across South Asia, the Indian Ocean, Africa, and Europe. Historically, Mayotte has served as a port of call and supply port, as have Reunion and Mauritius. Although Mayotte seemingly should be open to foreign trade and seek to take advantage of its position, its openness rate, measured as the ratio of trade flows (exports plus imports) to GDP, is actually very low and similar to that of struggling countries such as Rwanda, Sierra Leone, and Somalia. …

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