Réunion

Territorial description

Located in the southwest of the Indian Ocean, Réunion is the only European region in the southern hemisphere and the furthest one from continental Europe. As outermost region (OR) of the European Union, the island of Réunion represents an internal market that will grow from more than 800,000 inhabitants to 1 million inhabitants in 2030. The island has modern and efficient infrastructures at European level, thus it is at the forefront of equipment in the Indian Ocean. With more than 1200 km of national and departmental roads, the road network is efficient and endowed with exceptional structures. The New Coastal Road project will also permanently assure this vital communication axis connecting the two main economic centres of the island, between the North and West of the island. Facing future demographic trends, the construction of a monorail is already scheduled in the Saint-Denis urban area and the implementation of cable transport in urban areas is underway.

Two international airports allow Réunion to be permanently open to the rest of the world: 2.2 million passengers pass through it every year. The large seaport which is an international deep-water port is the 4th largest French port in terms of container volume handled. 99% of the territory is connected to broadband thanks to a quality network mixing several technologies. Réunion also has modern sanitary facilities, equipped with the most efficient public facilities in the Indian Ocean area.

The economic development of Reunion Island also relies on a dynamic and efficient workforce, 40% of the population of Reunion is aged under 25 and there is a quality European training system. The University of La Réunion hosts 12,000 students each year and offers 140 different degrees. Engineering courses are also offered in the fields of technology, food processing, construction and sustainable development. The island also has higher education structures specialized in management, catering, hotels, image and arts.

Thanks to exceptional natural resources, Réunion has a privileged environment for research and innovation in renewable energies, environmental technologies, biodiversity and health. It brings together no less than 40 public and private research laboratories. It is the home of the sole oversea competitiveness cluster for innovation and natural resources – Qualitropic – and one of the ten French cyclotrons – le Cyroi – a biomedical technology platform. In addition to this, there are one remote sensing space station and one atmosphere observation station.

As land of racial and ethnic intermixing of cultures, the identity of Réunion has been built, and is still built, in the dialogue, in a dynamic process of ethnic intermixing with multiple forms: social, cultural, artistic and heritage, which create Réunion’s identity. This diversity of origins is accompanied by strong cultural and economic relations with the relevant countries of origin – in Africa, Asia and Europe – whose potential is far from being fully exploited.

In this context, Réunion should be able to promote this successful symbiosis of populations and cultures that make it up, become a privileged place of experimentation, and the acquired know-how can be transferred to the countries in the area, a European technological showcase from which a new economy of Réunion can be developed.

Geographical and climatic profile

Subtropical volcanic island subject to climatic hazards and natural hazards, Réunion is mainly characterized by a mountainous terrain, microclimates, an exceptional wealth and diversity of its environments and natural resources. Given its geographical location, this region is an ideal European relay for atmospheric observation and satellite-assisted environmental monitoring.

Due to its unique biodiversity, concentrating thousands of natural and endemic species, Réunion is one of the thirty-four global “hot spots” of terrestrial and marine biodiversity. The Pitons, Cirques and Ramparts of Réunion have been listed as UNESCO World Heritage since 2010. The territory is protected as regards the Natural Park des Hauts and the Marine Reserve, that is 42% of the surface area and 80 km of coastline are protected.

Finally, the rugged relief implies a concentration of the population mainly on the coastline directly impacting on the living conditions of the inhabitants. This imbalance between highs and lows results in significant disparities in terms of attractiveness, employment and accessibility, as well as access to services to the detriment of rural áreas.

Description of the productive system

Economic profile

50,400 companies make up the mainly non-agricultural and non-financial commercial sectors in Réunion. These companies generate a value added of EUR 6.9 billion for a turnover of EUR 24.2 billion.

Human health, social action and education (excluding the public sector), scientific and technical activities, administrative and business support services, retail trade and building sectors contribute most to wealth creation.

Three-quarters of businesses in Réunion have no employees. The rest employ 88,500 people in full-time equivalents. Réunion has 11,500 companies with 1 to 9 employees, 1,600 with 10 to 249 employees and 18 with more than 250 employees.

In recent years, Réunion’s economy is proving to be particularly dynamic. Since 2014, growth has been lasting and spreading in Réunion for the third consecutive year: the gross domestic product grew + 3.1% in volume after + 2.8% in 2015 and + 3.1% in 2014.

This improvement benefits in 2017 most sectors. Agriculture is maintaining its activity, with a growing cane campaign. The building activity is supported by road, airport and hospital infrastructure works. The situation of the tourist industry is particularly favourable. The upturn in the tourist sector continues, with more than 500,000 foreign tourists in 2017 and EUR 356.2 million in revenues, up to 10.8% and 9.5% respectively.

If traditional sectors (building, agriculture, fishing) are successful, Réunion has decided to meet in parallel the “bio-economy” challenge and make it one of the main drivers of its economic growth for the coming years. The development of renewable energies, ecotourism, digital economy, innovation, and research, allows at once the protection and enhancement of the natural heritage of the island, reduce its vulnerability and its dependence by supporting sustainable competitiveness and prosperity. The social and economic context of Réunion (chiefly low employment rate) also gives it a particular dimension: green growth in Réunion should also offer training and employment to people who are furthest from the labour market. Therefore, the strategy aims at the same time at promoting new growth drivers respecting the environment, improving the population’s quality of life, and contribution to international efforts to fight against climate change.

Renewable energies

 As a non-interconnected zone (NIZ), Réunion has been early positioned as a real renewable energy (RE) laboratory, which represents 36.5% of the electricity produced on the island.

Hydropower, the oldest renewable energy source, accounts for 17.1% of total Réunion production. Six hydroelectric power stations are in operation and the dams in Rivière de l’Est (67.2 MW) and Takamaka (43.3 MW) are the two largest electricity suppliers. In view of the exceptional rainfall at the east of the island, these dams are safe sources of available energy to compensate for the unexpected consumption peaks and production lack of other renewable energy sources.

The Bois-Rouge power station produces up to 10% of the territory’s electricity by burning bagasse, fibrous residues from sugar cane.

Photovoltaic energy is also highly developed: given the surface solar thermal collectors installed in the island, it is among the very first European regions. It also has a real precedence that allows it to exceed today the target of 150,000 installed solar water heaters.

Another renewable energy source is waste methanization, which produces biogas and then transformed into electricity. Véolia, at the plant of Saint-Louis, supplies 2 MW of electricity per year. Finally, marine energy demonstrators aim to look for other clean energy resources. The exploitation of the wave power (Pelamis and Ceto projects) and cooling by deep sea water are tested on the island or beginning to be used.

Faced with the issues at the heart of the Sustainable Development Goals (SDGs) adopted by the United Nations in September 2015 (demographic pressure, trade globalization, climate change, natural resource management, food security), Réunion is determined to raise the challenge of a world without carbon, mainly by encouraging self-consumption, and include such action in the objectives set up by the energy transition law for green growth: half of its electricity production will come from renewable energies in 2020 and the energy autonomy will be achieved in 2030.

Tourism

Since 2010, new strategic perspectives, such as the structuring of territorial offers, the set-up of differentiated tourist circuits, a better asserted positioning of the Réunion destination and the “new jobs” of the tourist sector, have been implemented in the field of tourism.

The year 2017 has been particularly intense and profitable for tourism professionals of the island, since more than 500,000 tourists have been here accommodated. This is 11% more than in 2016, which had already known an unprecedented affluence.

2017 has also allowed the cruise industry to develop further as the number of passengers on the island is a complete success: 35 vessels and more than 43,276 cruise passengers landed on the island during this period. It is important to note that the increase in tourist visits in 2017 has had an immediate effect on the local economy, since the bar of EUR 350 million concerning external revenues linked to tourism has been exceeded.

All these data demonstrate not only the effectiveness of the transversal strategies implemented by the IRT and the Réunion Region, but also and above all the tourist dynamics in which Réunion’s destination is today involved, especially through Vanilla Islands, which include Mauritius, Madagascar, Comoros and Seychelles.

Digital economy

 The development of high- and very-high-speed networks (VHS) has become essential to the digital opening and competitiveness of the territory. In order to ensure the access of Réunionese people to VHS, wherever they may be located, and provide the whole territory with the necessary flows to access new services and uses of tomorrow, the community acts in addition to the private initiative and will deploy an optical fibre network in areas abandoned by operators, starting in 2018.

By 2020, 400,000 Réunion Islanders will be eligible for optical fibre, making Réunion the first French region fully covered in VHS. In addition, free Wi-Fi in nearly 80 public areas – the Wirun tool – is part of this dynamic, like measures such as the digital check, which aim to support businesses in their digital transition. Finally, the regional community provides young people with the necessary means to succeed and flourish. Also, in 2016, 42 high schools are interconnected through a private and secure network, 198 secure Wi-Fi terminals have been installed in the 44 public high schools of the island, and 18 high schools have been wired with optical fibre. All high schools should be connected by fibre by the end of 2018.

Réunion in photos

  • Piton de la Fournaise