THE LAW OF UNINTENDED CONSEQUENCES

Economists have observed a phenomenon called the “the law of unintended consequences”. This rule simply means that policies designed to affect certain behaviour among the public, end up instead creating new but unexpected behaviour from the individuals affected or targeted. A number of these unintended consequences have manifested themselves over the past few years because of measures to prevent the spread of the parallel market in foreign exchange.

The most notable one is the fact that, on a per population basis, the Seychellois travels overseas more than any other nationalities. In the year 2000/2001, records show that 42,000 Seychellois nationals or passport holders took trips abroad – out of a population of 80,000. This was the unintended consequence of the policy of declaring that all foreign currencies in the hands of nationals had to be sold to the commercial banks, at a rate of exchange well below the parallel market rates. As a result of the shortages of goods in the shops it was more convenient to catch a plane and go shopping abroad, especially since there was a guaranteed US$ 400 from the commercial banks to take with you.

In our last issue, we revealed how the government was borrowing US$10 million from the OPEC Fund, on terms so ridiculous that defies economic or financial sense, in order to circumvent or buy time in its tortuous attempt to beat the foreign exchange shortage which is threatening the supply of fuel to the country. This week we reveal another tortuous arrangement designed to circumvent the obstacles caused by foreign exchange shortage and the decision by foreign airlines not to accept payment in local currency anymore. This time, however, the scheme is conjured up by the travel industry.

When Emirates Airline announced that it would start flying to Seychelles from Dubai some years ago, officials of the airline claimed that it would be possible to fly anywhere in the world on their aeroplanes by paying in rupees. A few years later, the same officials had to eat humble pie and admitted that they could no longer sustain this practice. Soon afterwards, they refused to accept rupees to travel even to Dubai. However, the ingenuity of the human race and the extent it will go to survive against the odds overrides any obstacles.

Now it appears you can fly to Dubai and back in return for payment in local currency, the rupee. To do so, however, you must find an appropriate travel company who will take your rupees to fly you on Emirates. Then you will be issued with a ticket by the airline that will first take you to Dubai. Although you would disembark, you would not be allowed to enter Dubai. Instead, you will have to board another Emirates flight that will take you to Singapore where you will have to enter the country and spend one night. The next day you can board another Emirates flight which will fly you back to Dubai. This time you will be allowed to enter Dubai and stay as long as your precious foreign exchange lasts – which for most travellers from Seychelles means three days, Hence, a journey that takes barely 5 hours has been stretched to 24 or 36 hours to spend three days in Dubai.

Where there is a will there is a way, as they say.