JAMES MICHEL THE HYPOCRITE?
GOES XMAS SHOPPING IN SINGAPORE
The official announcement released to the State controlled media on Tuesday said that President Michel has gone to Singapore on holiday and he will spend five days there together with his family. The Air Seychelles flight, which leaves every Tuesday night, is generally full especially close to Christmas. Almost no one in Seychelles, however, believes the official line - that the trip of the First Family to Singapore is for a holiday.
The leader of the Democratic Party, Mr Paul Chow, has described the President’s “holiday” trip to Singapore as hypocritical. “Mr Michel has presided over the destruction of the international value of our currency. As a result we, as a country, are unable to use our currency to import the goods we need or desire. Our shops are mostly empty. There are critical shortages of most small items that families need. This Christmas – like all the Christmases over the past 10 years or so - many parents with low incomes are finding it difficult to find suitable toys in the shops for their children, even if they have the rupees to buy them. This will not be the case for the President and his family this Christmas. They will be able to shop at leisure and enjoy all the choices of Christmas toys imaginable, using precious foreign exchange in the process. Mr Michel is a hypocrite in this respect.”
But everyone is asking how Mr Michel survived five days in Singapore, in the kind of comfort he is accustomed too in Seychelles, on US$ 400 per adult. For, that is all that commercial banks have been allowed to give; and only to those who present an airline ticket and have a bank account. The smallest member of the First Family would be too young to qualify for an allocation. That means the President and the First Lady would have survived only on US$ 800 for their five days there. It is possible that the Singapore Government laid out some welcoming perks in the name of diplomacy. This is not evident from the official announcement, though
Mr Michel also promised, before the election that by the beginning of October this year the lack of foreign exchange would start to be a thing of the past. The Minister of Finance, in response to Members from his own party during the budget debate who claim that those who have no bank accounts are ostracised by the commercial banks, promised he would implore the banks to be more kind hearted. Critics remark that the Minister did not encourage the public to keep their money in the banks rather than under the mattress.
The reasons given by most Seychellois who travel Singapore, some on overnight sojourns, are that they all go there on holiday. That’s according to the statistics collated by the National Statistical Bureau. In fact, observers point out, President Michel too made an overnight trip to Singapore not so long ago accompanied by the Governor of the Central Bank, Mr Francis Chang Leng. Granted, the official explanation on the State controlled media was that they went on a private visit. Could it have been sex tourism, one bright spark asked rhetorically?
Last year, according to official statistics, 26 922 trips made by Seychellois nationals overseas were described as holiday. Another 4 455 described their trips as business or work, while 1278 said they were going for medical treatment. 1 927 others gave other reasons for travelling overseas – which the statisticians preferred to categorise as other as well. Presumably this would include President’s Michel’s earlier overnight trip to Singapore together with the Central Bank Governor. Altogether 35,718 trips overseas, made by Seychellois passport holders in 2005, were for less than one year duration. In fact a large number just go for one day only to return with excess baggage. In addition, 9731 similar trips were made by aliens (non-Seychellois) who were living in Seychelles; 1454 of them claimed they went for medical treatment.
Singapore is a shopping city and advertises itself as such. Singapore has one of the lowest taxes on trade as well as on individual incomes. It is a capitalist free wheeling society which stands, together with Hong Kong, at the top of the Economic Freedom Index published by the New York based Freedom House organisation, as the freest economy in the world ahead even of the United States of America. In Singapore there are no price controls and no one believes that the merchants are fleecing everyone as a result. In fact everyone talks of bargains and discounts. Singapore does not even produce most of the goods which Seychellois go there to buy. Neither does Dubai for that matter.
It is under Michel’s management of the finances of the country over the last ten years or so that the economic condition of Seychelles have deteriorated. During that time, until today, there are shortages of everything. This week the State Marketing Board received another consignment of imported timber in many months. Long queues have formed from early morning and the stock is expected to be sold out within a week. All the timber will end up in the yards of building contractors who have plenty of money and therefore can afford to hoard. For those who need just one piece of timber for an essential repair of their home, the only choice is to wait until the hoarders decide to resell their stock at an inflated price. This means that the lowest income earners pay the highest price for the goods they need.
Michel’s government has created one foreign exchange pipeline after another over the years to no effect, promising each time that this time all the problems of foreign exchange will be solved. When the last pipeline was launched in May 2004 by the Central Bank, it quickly inflated to over SR 600 million. In its latest balance sheet at the end of November this year, two and a half years later, it still stands a SR460 million. At the current official rate of exchange it is worth just about US$ 100 million, about half the proceeds of the recent sale of government 5 year bonds. But that money will not be made available to the importers at any rate of exchange.
The parallel market for foreign exchange has come into existence under Michel’s management of the economy. A parallel market in foreign exchange is a symptom of a major disequilibrium between the demand for foreign currency by holders of rupees and the supply of foreign currencies in the economy. Instead of adjusting the price (exchange rate) or reduce the demand by removing rupees from circulation, Michel preferred to enact laws to punish anyone who would not surrender foreign currencies to the commercial banks at the official rate. When he became President, Michel decided he would not enforce his own laws rather than abolish it from the statute books, another hypocritical stand. The parallel exchange rate today is more than twice the official rate and most of the goods available in the shops in Seychelles today have been financed by foreign currencies obtained from the parallel market. As a result, their prices are very high compared to years ago when there was no parallel market.
As the First Family returns to paradise with Christmas gifts and other goodies it has bought in the shops in Singapore – goods not readily available in the shops in Seychelles - one hopes that President Michel will not be filmed dishing them out to needy children. This would compound the hypocrisy. Meanwhile, all the families of the lowest income earners or those who rely on Social Security benefits are still waiting for the foreign exchange liberalisation and the hope they will be able to make their children happy too. They do not count on this Christmas though.
