Seychelles: Mounting pressure for change

Seychelles: Mounting pressure for change

President James Michel won his first presidential contest in a national election in July 2006, but he was confronted by a strong challenge from the opposition candidate, Wavel Ramkalawan. Michel was the choosen successor of former president France Albert René, who retired in 2004 and a key member of the latter’s regime for more than two decades.

Those who campaigned for change were bitterly disappointed when Michel scored 54% and Ramkalawan 46%. But the latter’s Seychelles National Party (SNP) has another chance to test its support in legislative elections in 2007, the date depending on Michel’s tactics. The status quo could now continue for at least another parliamentary term unless there is a significant shift in the balance between the ruling Seychelles Peoples Progress Front (SPPF) 23 seats and the SNP’s eleven. The total electoral of only 60,000 seems likely to remain divided between the two camps.

Pressure is mounting for change in the direction of policies that have kept Seychelles moderately developed, at the cost of quiet a few social and economic freedoms. After the SPPF’s 30 years in office, observers perceive the likelihood of a general shift in the not too distant future.

Demands for change are still put down with excessive force, as when riot police violently broke-up a demonstration by less than a 100 people, injuring several including Ramkalawan; the protest demanded an end to the state’s control of the media.

Michel will move slowly in normalising relations with the IMF and World Bank, having, over the years that he served as René finance minister, consistently rejected their advice. He has long refused to devalue the Seychelles Rupee, which is currently fixed to the US dollar at $1 = SR. 50.00. Having gone into his election campaign on a ‘no devaluation’ ticket, Michel will not change course in a hurry. He is equally committed to maintaining subsidies on fuel and some foods. His preferred option of economic policy is to use populist measures like awarding pay rises to civil servants and lowering duties on beer.

The very economic reforms on Michel’s agenda are to pursue limited privatisation and some gradual liberalisation, alongside a general encouragement of new investment. Two state-owned banks may now have 30% private shareholdings. But the government’s efforts to sell-off units of the monopolistic Seychelles Marketing Board have not gone well.

The IMF will continue to demand that the rupee be devalued as the first step to resolving the severe shortage of foreign exchange. In theory, this might be possible if the government were to relinquish its control of the central bank. Among the problems being ignored are the local build-up of excess liquidity and the operating difficulties faced by foreign companies, which are consistently prevented from repatriating dividends and royalties.

Economic growth has been negligible in recent years and negative for 2004 and 2005. The only recent area of growth has been in tourism. Several new luxury developments are successfully luring in visitors from the Middle East. Universal is opening a large complex on Silhouette Island, Southern Sun is building a villa development Mahé, while Hilton has taken over management of Mahé’s Northolme Hotel.

The government has announced plans to build up the fisheries industry, but progress in this area depends on the country’s ability to attract the substantial new investment needed.

(Courtesy The African Report 2007)