Ralph Volcere's Week

Ralph Volcere’s Week

The Seychelles Economy has not changed in fifteen years!

On the re-introduction of multi-party the nominal Gross Domestic Product (GDP) was calculated at about US$407m, which converted roughly into five thousand nine hundred dollars per head of population. US$5,900 GDP per capita, that was in 1992. The figures might have changed but the economic situation has definitely not! The tourism industry was the major source of economic activities with just over 115,000 visitors, coming mostly from European countries. In 1992 the Government and the parastatals companies, all fully State-owned, employed over 60% of the labor force; just less than 40% of the work force was in the private sector. This was a situation that needed reversing if the economy was to progress positively, creating wealth for the population in general. It meant sacrificing socialism and its policies in favor of a more liberal-oriented economy allowing the private sector to grow taking over the role of creating sustainable jobs through the expansion of business activities.

In 1992 we imported most of what we consumed; only a fraction of our land was devoted to agriculture. We relied heavily on imports which consumed most of what the country was earning from tourism. Things have not changed much in that direction; today we are importing more than ever before. We are dependant on imports for most of our fruits and vegetables, meat and meat products - in fifteen years we have failed to bridge an inch of the gap that existed in 1992, it has in fact grown wider. The costs of imports was calculated at US$192m in 1992 compared to US$ 47m for the exportation of canned and frozen fish, with copra and cinnamon making a negligible contribution to that figure. Without going into the intrinsic details it is evident from the above figures that trade was operating in deficit, tourism earnings made up for part only of the difference of the excess in importation – This situation has not changed. In fact, it has got worse. The gap between imports and exports in value has widened.

Despite the claim by government of great economic successes the opposite is actually true. We are living beyond our means and after fifteen years we are still faced with the same old problems which existed in 1992 - the economy has not grown in real terms, but in fact it has been regressing. Today Seychelles is compared and spoken of economically by the International Community, at the IMF and at World Bank level in the same context as countries like Zimbabwe where there is a permanent state of economic and political instability. Although Seychelles has enjoyed peace and uninterrupted political stability, still the Government has failed in all its undertakings to transform the deficit nature of the economy. MERP, billed as the home-grown programme made no impact whatsoever and GST designed as the mechanism to mop up excess liquidity has not succeeded in curtailing imports.

The new minister of Finance has before him an insurmountable task in implementing the fiscal discipline that is necessary to reverse the trend set by President Michel in his fifteen years as the Finance Minister. The opposition needless to say will continue to act in a manner that will encourage smooth reform, in the real sense, should Minister Faure choose to go that road. We can only take the horse to water………

ANOTHER LOAN FOR THE PERSEVERANCE ISLAND HOUSING PROJECT!

According to the Seychelles Nation (18/09/06) the OPEC Fund for International Development has made available for the housing development project on Perseverance Island a loan of US$ 6.5 million. The loan agreement was signed by Lekha Nair at the OPEC Headquarters in Vienna on September 7, 2006.

If we are to believe a communique from the Ministry of Finance the loan will go towards the financing of all electricity infrastructures to be installed between the Victoria A power Station and Perseverance Island. It will include the water supply and sewerage, which involve the laying of 3 kilometre of pipeline to link it with the sewerage system in Victoria.

This is not the first loan Seychelles has obtained from the OPEC Fund. In 1988 we received assistance for the construction of the Plaisance Secondary School, followed by another loan for the Baie Ste Anne Primary School which is currently under construction.

We are indeed appreciative of the Ministry of Finance for making available this information to the general public, but it remains for the new minister to provide us with the result of the investigation about the US$ 4.5 Million that was lost, given to the original construction company commissioned to build on Perseverance Island. It was a loan from Barclays Bank Seychelles. We need to know if the people the ministry of Land Use and Habitat gave the money to have been identified and if the loan is being paid back and by whom. The President and the Minister of Land Use and Habitat promised an investigation in that matter over a year ago. It is a promise that President Michel must keep if we are to believe him that his style of government will be different from that of his predecessor.

Alphonse Resort Development Ltd, an Associate company of Corvina

Ahe company is a joint venture between Corvina and other partners to undertake investment in the Alphonse Resort, which opened in December 1999, in time to welcome the new Millennium. The hotel is situated on Alphonse Island, a magnificent unspoiled coral island. 400 km south-west of Mahe. Features include spectacular diving, bird watching and above all, fly-fishing. The shallow waters around the island are reputed to be one of the world’s most fertile grounds for fly-fishing, attracting keen anglers from as far as the USA.

The Chairman of Alphonse Resort Development Ltd is the charismatic head of the Island Development Company, Mr. Glenny Savy. The other members on the board of directors are Mr. Guy Adam, head of Seypec and Chairman of Corvina, Mr. Aboo Aumeeruddy former Central Bank governor also of Corvina, Mr. Patrice d’Hotman de Villiers and Mr. Simon Pierre Rey of which little are known locally. It will be beneficial to the local population if further information could be made available on the two gentlemen; it is always good to know who is investing in one’s country.

According to Corvina their investment in this exciting new development has enabled the opening up of a corner of Seychelles previously off limits to all but a few adventurers. Guests of the Resort will make this journey back in time in less than an hour. The Resort comprises 25 standard bungalows and five executive villas. Guests to this stunningly beautiful atoll may enjoy some of the best diving, fishing and bird watching in Seychelles.

For divers, the thrill of diving off the wall of Alphonse where the rim of the atoll plummets into the blue abyss is unforgettable. For fishermen there is the choice between fly-fishing at neighboring St Francois, or more traditional game fishing. For birdwatchers, St Francois is also a thrill. The trees are filled with nesting Fairy Terns while the lagoon itself is a haven for migratory waders including the enigmatic Crab Plover, a specialty of the north-west Indian Ocean.

Most of the above information has been extracted from Corvina’s website, but what is lacking on the site is the value of their investment and of how much the government of Seychelles and the people, who are in fact the rightful owners of the Island and property which stood on it have gained through the deal with Corvina. We are all hoping that soon the new Minister of Finance, Mr. Danny Faure will be in a position to provide us with some figures.

The involvement of Glenny Savy on both side of the fence is of major concerns to the general public, It is without doubt an issue for the ongoing debate on conflict of interest.