At the time of our independence, the Seychelles was, according to a World Bank study, a middle income country. This study was, for obvious reasons, never made public by Albert Rene and the government he led after the violent coup d’etat which he engineered on 5th June, 1977 to establish a Marxist dictatorship.
The study, entitled "SEYCHELLES Economic Memorandum (with the designation PUB 2629)" was published on August 1, 1979 and its conclusions were based on findings by a World Bank mission which visited Seychelles in June 1979. The Seychelles became a member of the World Bank in May 1979.
According to the study, at the time of our independence our country was classified as “a middle income country”. The study made the following observations:
Until the early 1970’s, Seychelles’ development prospects were limited; economic exchanges were minimal and a few agricultural commodities were exported to finance imports of rice. Today, when compared with countries at similar income levels, Seychelles fares relatively well: the population growth rate is about 2.1 percent per year; the domestic product grew by about 20 percent in the last three years and has provided employment opportunities to most of its native population; universal education has been virtually attained; the health and nutritional status of the population is particularly good; and there are no slums, half of the houses being in good condition, furnished with tap water, and on Mahe connected to the electricity network.
This is in stark contrast to our economic conditions today, after 29 years under Albert Rene and James Michel and their Marxist credo – Onward to Socialism. According officials of an IMF mission that recently visited Seychelles, our domestic product has declined by 13% on a per capita basis over the past five years.
Today, although the World Bank still classifies our country as a middle income country, it also observes that it is in serious economic decline. The label middle income is, of course, based on official exchange rate of SR 5.60 to the US dollar. In reality, no one in Seychelles can buy US dollars at that rate on demand at the financial institutions. Outside the banking system, however, US dollars can be bought at between SR 8 to SR 12. Computed at these rates of exchange our per capita income is the same as in Mauritius but declining.
In a frank statement to SBC reporters when he last visited Seychelles two years ago, the country director of the World Bank with responsibility for Seychelles, Mr James Bond, claimed that our country has one of the highest per capita official foreign debt in the world – a substantial amount of which are in arrears. Another World Bank study, published in 1994, entitled Poverty in Paradise, claimed that “in 1993 almost 20% of the population were estimated to be living in poverty and almost 7% in absolute poverty”. This poverty, the World Bank said, exists even after the benefits of a general welfare system are taken into account.
This World Bank study was done 9 years before MERP (Macro Economic Reform Programme) and GST were introduced. A more recent study by our own statistician on household incomes between 1999 and 2000 revealed that over 16% of households lived with a per capita income of less that R841, which is considered the poverty line. And that was before GST, which is estimated to have raised the cost of living for the low income bracket between 30% and 50%.
30 years ago this week, the total import bill of Seychelles was worth about SR 291 million but the foreign exchange reserves of the country was worth over SR 105 million – that is over 18 weeks (5 months) worth of imports. Seychelles was not in debt to anyone; therefore, our reserves could be used to support our imports for more than four months even if no tourists came. Foreign exchange was freely available at all the five banks, all of which were branches of foreign banks. Today our foreign exchange reserves can sustain only 4 weeks of imports, but most of which is pledged to support our external debts. That is why we have to wait for the tourists to come with foreign exchange before we can pay our bills of imports.
30 years ago just under 39,000 tourists visited the Seychelles each year staying an average of 12 days. While 43% came from Europe almost an equal number came from Africa which meant East Africa and South Africa. Two hundred new hotel beds were being added each year. The main hotels in 1976 were the Pirates Arms, the Reef Hotel (now closed); the Beau Vallon Bay Hotel; the Mahe Beach Hotel; The Coral Strand Hotel; The Sunset Hotel; the Northolme Hotel; the Fisherman’s Cove Hotel; Danzille Hotel (now closed); The Flying Dutchman (later named Marechiaro, but now closed) on Praslin and Gregoire’s Island Lodge on La Digue. Until a few years ago, these were the same hotels accommodating tourists – and most were in a poor state of disrepair.
In Victoria alone there were more than a dozen bars, restaurants and dance halls or discotheques. Victoria was always bright and lively after sundown. Today there is only one public bar and three restaurants and our capital city is dead after 5 pm. No one bothers to fix the street lights when they burn out. In 1976 a 33 centilitre bottle of Seybrew retailed at SR 2.25. The average monthly earning was SR 635 in the private sector and SR 860 in the public sector. The number of employment permits given to foreigners was 274 in 1975 with only 16 permits given for the construction industry.
In 1975 there were 3 murders; zero suicide; 628 assault and bodily harm; 1289 theft and robbery; 601 disturbances and disorderly conduct; 522 traffic offences. In 1975 zero population died of cholera or typhoid fever but 6 people died of tuberculosis. 71 died of cerebrovascular diseases and 45 of Rheumatic fever and heart disease. Altogether 433 people died in 1975; 232 of them were men. On the other hand 1806 live births were registered; 842 of them were legitimate; 740 were illegitimate and 224 were acknowledged by the father.
The World Bank also observed, when they visited in 1979, that “(i) the management capability of Seychelles’ administration is impressive; (ii) the development strategy of Seychelles is well-designed on the whole, and clear priorities have been set with a view to support long-term development.”
But that was what Albert Rene and James Michel inherited from Mancham and the Democratic Party led administration.
Then Rene and Michel introduced Onward to Socialism which heralded the beginning of the economic decline that has lasted over a quarter of a century culminating in the currency crisis and economic stagnation.
