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Reunion - Economy

Growth in Réunion grew strongly in 2015 and increased by 3.1% in volume compared to 2014. Yet this is still insufficient to reduce unemployment. Indeed, the pressure linked to the population growth is strong, as is the increase in the activity rate of Reunion Islanders and especially women.

Reunion's GDP was, in 2014, 17.17 billion euros. It relies heavily on household consumption (around € 11 billion) and general government expenditure (around € 7 billion). However, private investment remains low at around 3.5 billion euros. Because of its island situation and its geographical location, Réunion is obliged to import enormously: imports represent nearly 5 billion euros. Reunion's trade balance is extremely deficient, as exports are 500 million euros.

In 2015, growth was 3.1% and 2.8% for the first quarter of 2016, it is still well above that of metropolitan France (0.6%). As a result, purchasing power increases and household consumption increases (+ 3.2% in volume). Investment is growing, but slower than in 2014. Imports are slowed down by lower fuel prices but are increasing in volume. Exports are on the rise again.

The labor market in Réunion faces a paradoxical situation. Reunion is the French region with the highest unemployment rate. In 2015, it was 24.6%, compared with 9.9% in metropolitan France. Unemployment particularly affects the youngest, with nearly 60% of them facing it. However, job creation in Réunion is very dynamic: between 2001 and 2013, it increased by 2% per year on average (ie 4,600 additional jobs per year), compared to 0.4% in Metropolitan France. In addition, growth in Réunion grew strongly in 2015 and increased by 3.1% in volume compared to 2014. But this is still insufficient to reduce unemployment. Indeed, the pressure linked to the population growth is strong, as is the increase in the activity rate of Reunion Islanders and especially women. While the unemployment rate is very high among young people (52.4% in 2015, notably because 37 100 of them leave the education system without any diploma), they are less likely than older people to participate in the increase in Population, as many of them leave the department. The number of job seekers over the age of 50 has increased by 11.6% in 2015 compared to 2014.

While the employment situation remains worrisome in Réunion, the unemployment rate has decreased slightly. It is down from 2014, where it reached 26.8% (compared with 24.6% in 2015). It decreased by 1.6% in the first quarter of 2016. It thus reached its "best" level since 2008. Same trend among young people where the unemployment rate declined by 2% in 2015 compared to the previous year. In 2015, 5,500 private salaried jobs were created, double the number created in 2014.

Employment policies are mainly targeted at those most remote from employment (young people with little or no qualifications, senior citizens, etc.). In 2015, the State allocated 287 million euros to the financing of integration and support measures. This is 50 million euros more than in 2014. In total in 2015, 32,740 Reunionese beneficiaries either benefit from an aid contract or an accompanying measure for employment. As regards training for jobseekers, there were 9185 in 2015. 6615 additional trainings are to be carried out in 2016 by the Region and for which the State will pay a financial compensation of 19.8 million euros.

The use of assisted employment and integration schemes must endure, but can not in itself meet the challenges of today and tomorrow. It is indeed through the creation of wealth and values, and therefore of merchant jobs, that a new economic model of Reunion or a positive evolution of activity and employment could be sketched out.

The most emblematic of the measures is the tax credit for competitiveness and employment (IECC), the rate is increased in the departments overseas and, since 1 st January 2016, 9% against 7 , 5% last year and 6% in metropolitan France. In total, € 98 million went to more than 11,500 companies in Réunion in 2015. In 2016, all else being equal, and due to the increase in the rate, nearly € 120 million will benefit To companies, to invest, to recruit, to gain in competitiveness.

The Emergency Plan for Employment, which concerns SMEs with fewer than 250 employees, that is to say the majority of companies in La Réunion. Since January 18, 2016 and for the year 2016, every new hire of an employee paid up to 1.3 times the SMIC, receives a premium of € 500 per quarter for two years ("SME hiring" .

Agriculture is the main spearhead of the Reunion economy. It is based notably on sugar cane but also on breeding and on the exploitation of other plants. Local production covers almost half of the island's food demand. The agricultural area used represents nearly 45 000 ha and 56% of this is for sugar cane. Agricultural production amounts to almost 450 million euros and the sector represents 6% of the active population, ie almost 22 000 jobs. Sugar and fishery products are the first two export items, with 70 and 65 million euros respectively. Regarding livestock production, the poultry sector is the largest producer of meat in Réunion. The agri-food sector is the main industrial sector of the island and constitutes 32% of its jobs and 42% of its turnover. In 2015, agricultural incomes increased by 9.8%, continuing their growth and benefiting from lower raw material prices.

Reunion Island farms are very small, with an average of 5.8 hectares per farm, compared with 78 hectares in metropolitan France. There are 7600 farms on the department.

The cane sector represents the main source of employment in Reunion's agriculture. Nearly 200,000 tons of sugar are produced every year (201,000 t in 2015, 196,000 t in 2014). In addition to sugar production, the cane is also used for rum production and its bagasse is used as a source of energy and is transformed into two thermal power stations. The cane is processed in two factories, located in Bois-Rouge and Gol (owned by the TEREOS Indian Ocean group), with a processing capacity of one million tons of cane. Cane production varies, depending on the year, between 1.5 and 2 million tons. The year 2015, with 1 896 104 tonnes of cane (compared to 1 763 656 tonnes of cane in 2014), with an average wealth of 13.28% (13.91% in 2014) remains the best campaign after 3 years marked by successive droughts.

However, the cane sector remains fragile and is subject to weather conditions (in particular cyclones: in 2007 the cyclone "Gamède" made the sugar campaign disastrous) as well as fluctuations in the world sugar market. It is largely subsidized and has a mechanism to help people lose income. The cane-sugar-rum-energy sector receives a total of € 139 million per year in public aid. It is largely subsidized and has a mechanism to help people lose income. The cane-sugar-rum-energy sector receives a total of € 139 million per year in public aid. It is largely subsidized and has a mechanism to help people lose income. The cane-sugar-rum-energy sector receives a total of € 139 million per year in public aid.

In the case of unsold stock, the European Union had undertaken to intervene in order to buy back the surplus at a price higher than that of the market. However, a reform has been put in place, which provides for the end of sugar quotas and guaranteed prices by October 2017. This reform is of great concern to planters in Réunion and will put them in direct competition with red sugar from other countries ( Brazil, Vietnam) but also with beet sugar.

Beyond the likely downward trend in world prices, the end of quotas will further accentuate the competitiveness deficit of the French overseas departments due to their limited margin in terms of productivity gains. Yet the role of this sector is important in terms of land use planning. The future of agriculture in Reunion can not be envisaged without the cane-sugar sector.

The halting of quotas in 2017 is a change of business model that profoundly changed the conditions of exercise for both manufacturers and cane growers. As a result, in 2014, the President of the Republic announced that a request for additional state aid of € 38 million for the cane-sugar sector would be submitted to the European Commission. European and national Of the reform of the sugar CMO are included in the new 2015/2021 "State-planter-miller" agreement, which includes a commitment to ensure the sustainability of the Canne-Sugar sector by 2015 and 2016, Stage in 2016.

With an exclusive Economic Zone of 315,000km², virtually identical to that of mainland France, Réunion intends to make the most of the resources available, including fishery products. In addition, Reunion Island fishermen are allowed to visit the Malagasy EEZ, following a bilateral agreement between Antananarivo and Brussels. However, it is clear that the importance of fishing in Réunion decreases over time.

The fishing activity in La Réunion is divided into three categories: small-scale fishing, Longline fisheries and large-scale industrial fisheries. Artisanal fishing is carried out for periods of less than 24 hours, near the coast of the island. By 2015, the number of registered seafarers is 277 fishermen (4 less), after increasing by 6 in 2014. Artisanal fishing activity has been declining steadily since 2004, with a contraction of one-quarter Vessels and manpower. The products of this fishery mainly flow on the local market.

The longline fishery consists of inshore and offshore fishing. The first is characterized by sea trips lasting more than 24 hours to 4 days, while the second takes place over longer periods of sea outing but less than 21 days. In 2015, there are 182 registered seamen in the longline fishery (-6.2% in one year), mainly engaged in offshore fishing. The total number of active vessels is 24, 3 less than in 2014. Longline production is estimated at between 2 000 and 3 000 tonnes per year, of which almost half is exported.

The economic situation of the sector remains fragile, marked by the disappearance of several actors in recent years, the consequences of overfishing but also by the depredation of fish caught by longlines by pilot whales. The trade balance of fishery products (including industrial fisheries) is in excess of € 1.9 million in 2015 due to value exports, which are up sharply in comparison with 2014. The increase in the Toothfish accounts for most of this increase. Imports increased more moderately with + 3.7% in value terms. India and Vietnam are the main suppliers.

After experiencing strong growth from the beginning of the 1990s, the sector encountered great difficulties related to the decline of the fishery resource. The restructuring of the sector since 2008 has revitalized this sector. Industrial fishing offshore is currently practiced by six armaments, which operate mainly in the area of Kerguelen, of which Reunion is the rear base.

Fishing in these sub-Antarctic waters is mainly directed at toothfish, but also lobster and other species of fish subject to quotas (icefish, pooch and Antarctic redfish) and others without quota (skate and grenadier). Quotas are set annually by the TAAF administration and the National Museum of Natural History to ensure the long-term conservation and optimal use of fishery resources in the exclusive economic zone of Kerguelen and Crozet.

The total allowable catch (TAC) for toothfish was set at 6,300 tonnes for the 2015-2016 season, up 5% from the previous year, the largest in the entire Southern Ocean for this species. The toothfish fishery is mainly for export: the United States and Asian countries, including Vietnam and China. It is the second largest export sector in La Réunion and generates 300 direct jobs and between 4 and 5 times more indirect jobs

Tourism is also an important part of the economy of Reunion Island. In 2015, for the first time in 3 years, tourism visitation has risen again (+ 5.1%) and amounted to 427 000 tourists visiting the island for the whole year . They spent around € 300 million during their stay (equivalent to an expenditure of € 717 per person on average, for an average stay of 17 days), which is considerable for the local economy. After having fallen sharply in previous years, notably due to the chikungunya epidemic or the "shark crisis", the tourist sector in Reunion seems to be getting better.

The ranking, in 2010, of the pitons, Circuses and ramparts of the island (which correspond to the central zone of the national park) to the UNESCO World Heritage has contributed greatly. However, it should be recognized that all the islands in the area benefit from this strong recovery in tourism, and that Réunion enjoys less than others (5.1% compared with 10.8% for Mauritius and 18.7% For the Seychelles).Three quarters of tourists come from metropolitan France and come mostly for affinity. However, pleasure tourism is also increasing, accounting for almost 40% of total tourism in 2015 (hotel occupancy is up by 11% in 2015 compared with 2014). The island is therefore continuing its efforts to diversify tourism structures and customers.

With a share of 4.4% of total value added in 2011, industry occupies a modest place in the economy of Réunion compared to the national level (13.8% of the VA). Agri-food industries (IAAs) account for almost half of the VA created by the sector. This branch historically results from the combination of an important agricultural potential, based in particular on the cane-sugar-rum sector, and the development of import-substitution.

Fishing, the second most important export sector after sugar, also plays an important role in LPNs. The intermediate goods and capital goods industries, whose activities are dependent on the construction sector, complete the industrial landscape of Réunion. The sector as a whole employs 5.5% of employees in Réunion in 2014, ie 16 481 people. They are divided equally between LPNs and manufacturing industries. The sector has 3,529 companies, or 7.0% of the business park in 2015, and creations in this sector represent 5.1% of the companies created in Reunion.

The Chamber of Crafts registered 16,200 small craft enterprises active in 2015, 4.9% more than in 2014. The vast majority (96%) are companies with fewer than 10 employees. The distribution by occupational branch shows the clear predominance of the construction sector (39.3% of the total number of craft enterprises), compared with services (31.2%). As in 2014, the year 2015 saw an increase in the number of companies in all branches. Food supply was the most dynamic (+ 8.6%). However, turnover in the construction and public works sector fell significantly by 4.9% compared with 2014. It is heavily dependent on public procurement, which accounts for 86% of total orders.

Registrations of the Chamber of Trades increased by 3.3% (2,015 registrations). At the same time, write-offs decreased by 14.5% (1,270), resulting in a net balance of +745, 60.2% more than in 2014. Crafts represent 42,208 jobs in Reunion in 2015.

The turnover of handicrafts increased again in 2015 (+5.5%) and reached 1.74 billion euros, much more than that of tourism or agriculture. All sectors are concerned. As in the previous year, the biggest increase occurred in the food sector, particularly in food and beverages (+ 13.1%).