IS THE RUPEE IN FREEFALL?
After vowing to keep the rupee stable and not to succumb to the temptation to devalue, all signs are that the value of the rupee is now being intentionally allowed to plummet against all major currencies. For instance in October 2006 the rupee was selling at R.10.49 for one Pound Sterling. In July 2007 the rupee is now selling at R.13.40 for one pound sterling. Despite several measures to curtail the foreign exchange crisis the situation has continued unabated with banks unable to sell the bare minimum of foreign exchange. The much anticipated economic reform promised by President James Michel to turn Seychelles from a centrally controlled communist economy dominated by government owned monopolies to a modern free market economy with a view to double GDP by 2017 has all but stalled. The privatization of parastatals has also been abandoned as the government adopts a wait-and-see approach which is responsible for keeping the economy in the doldrums. The blame for the economic quagmire can and must be laid squarely at the feet of the government who took over a vibrant and thriving economy in June 1977 and managed to squander economic prosperity in little over 30 years of SPPF rule.
The government in turn has pointed at the Welfare State as its major accomplishment and has argued that the Country’s wealth has been used for the most part to create and then expand its benefits to all and asunder. However, others have argued that in order to create a sustainable welfare system the country needs to create wealth first and foremost. The SPPF government has proved that it is averse to capitalism and people creating wealth for the country by introducing a multiple of laws such as foreign exchange controls and the price control to stifle enterprise. At the same time it has in the same breath passed laws exonerating the State controlled SMB from the application of the price control laws. What is good for the goose is also good for the gander and if the price control is not good for SMB it cannot be good for other merchants. By exonerating SMB from the application of the price control regulations for example the government has tacitly acknowledged that the price control is simply a bad law and has no place in a democratic society with a modern and free market economy. However, the government clearly lacks the courage to take the bull by the horns and do away with all the one party state legislations which are clearly responsible for plunging Seychelles in economic abyss and oblivion. In the meantime Countries like communist China, for example, has maintained its political fabric but dismantled its communist styled economy. The economic benefits are now clear for all to see as the country has recorded record economic growth year after year. It is beyond reason and comprehension why the government of President James Michel continues to obstinately flout reason and stick to the old system dragging Seychelles down in the process. After his inaugural speech in the lawns of State House in 2004 in which President Michel delivered what many considered a brilliant speech marking a departure from the failed economic policies of his predecessor and giving hope to all, irrespective of political affiliation, President Michel has all but forgotten his bold plans for the country. As the people of Seychelles breathed a sign of relief and rally behind the President hoping that he was the man who would transform Seychelles, disappointment and a general sense of despondency and failure now reigns in the country. The current feeling is that the President has badly let the people down even though some have argued that he needs more time. Patience is now wearing thin as things have not improved dramatically since James Michel has taken over the reign of the presidency from his predecessor Albert Rene.
