WHO IS RESPONSIBLE FOR ECONOMIC POLICY?
One of the most striking omissions in President Michel’s administration is the lack of a Ministry of Economic Planning, for lack of a better name. At a time when the country is facing a severe economic crisis, this throws everything up in the air as what Michel intends to do about the redressing the economy.
His decision to setup a national economic planning council would suggest that he plans to undertake broad consultations before undertaking reforms that may have a serious negative impact on the livelihood of a majority of Seychellois, especially those who voted him in office. But the lack of a ministry means that in practice, there is a lack of leadership and commitment and a lack of structure especially of trained technicians who would normally be responsible for carrying out studies of the impact various scenarios might have on the economy, as well as implementing the programs once announced.
It seems as if Michel has opted out of a ministry responsible for the economy because he would rather the economic council gets the blame(instead of him) for any ill-effects his reforms might have. However, we all know that the people did not elect an economic council but a President in the person of James Michel, who they expected to be brave enough to take brave decisions on their behalf. If he couldn’t he should have stepped aside in favour of those braver.
Enter Minister Danny, Roland, Antoine Faure. He comes into familiar territory, having spent a good number of his formative years training for a political science degree (no mention of finance or economy) in
Until an announcement is made to the contrary, Mr. Faure’s ministry will be directly responsible for financial planning and control, internal audit, trade and commerce, funds management, postal services, taxation, and import and price control. The ‘independent’ central bank will be responsible for monetary policy which means that financial planning will be the only important facet of his portfolio. In layman’s terms, financial planning and control (or fiscal policy) involves setting the level of taxation from which the budgetary allocations to government departments and parastatals are made.
Apart from being given the privilege of imposing his authority on the rest of the government by virtue of the fact that he holds the purse strings, Faure will be responsible for raising or reducing (unlikely) taxes. Will he? That seems very likely since the government needs to pay for the recent electioneering costs, namely the reduction or buy-back of housing loans. And there may be more to come before the National Assembly elections. Where will the money come from, if not from more tax? Or maybe, Minister Faure has been promoted as Minister of Finance because SPPF has plans to go after the business community through the taxation division. Already some businesses, especially those who are known to have links with the opposition have been slapped with tax bills, some up to Rs. 250,000. But that is still taxation under a different name, in this case victimization tax!
Nowhere is it mentioned that Minister Faure will have the task of planning the economic reforms (his Mauritian counterpart, the Deputy Prime Minister Hon Rama Krishna SITHANEN, is responsible for both finance and economic development matters as minister of Minister of Finance & Economic Development. But if you talk to everybody in the streets they will tell you that this is what Faure’s appointment is about. Not true.
Maybe this is the kind of ambiguity that Michel wants. The appointment of Faure in the finance post may have been part of deal struck over two years ago when Rene handed Michel half of his 5-year term. Michel also knows very well that the economic reforms he has promised the IMF will be very unpopular. Better to blame Faure. After all, there is a school of thought, and this includes President Michel, that Faure covets the presidency with a passion. But Michel has waited 30 years for his opportunity and may not be about to hand it over on a platter.
Clearly, President Michel and Minister Faure seem to want to have their economic (or is it presidential) cake and eat it.
Editor’s note: To answer your question as to who controls the economy: have you considered that it’s probably not big J nor small j but most likely capital f!