Can Seychelles learn from the Georgia experience?

CAN SEYCHELLES LEARN FROM THE GEORGIA EXPERIENCE?

This week the IMF announced that Georgia has made more progress than any other country in smoothing the way for business. In Seychelles, since taking over the reign of power, President James Michel, armed with the realization that the country needs to drastically change the way it does business, in order to attract foreign investors and create local entrepreneurs, has brought about some changes in the law in an effort to facilitate business here. The laws were geared towards providing incentives to certain sectors of the economy namely, tourism and fisheries. These exempted 5 star hotels from paying taxes, gop, gst, trades tax, pension scheme, provisional tax, and allowed them to repatriate their profits abroad. Similar benefits were also given to investors in the fishing industry and agriculture although not as extensive and wide ranging.

The mechanism by which business was going to be facilitated was the creation of the Seychelles Investment Bureau (SIB) which was going to be a one stop shop for investors. However, many have since accused SIB of being ineffective, useless and not fulfilling the purpose for which it was set up. After hastily herding its staff in make-shift and over-crowded offices at Maison du Peuple, the offices have now moved to Caravelle House. Many of its senior staff has left to take up employment elsewhere and there is now talk that it may close down completely.

It seems that the main problem is the delay. Although a 30 day limit was set as the maximum time it would take for a project to be considered and a decision taken, this has now stretched into 6 months and in some cases even more. Staff at SIB has explained that they are not to blame for the delay as the various arms of government are not working in sync and some are not making their decisions within the 30 day time limit. The SIB has to wait therefore until all the decisions have been taken from the various ministries and government departments before it can communicate the decisions already taken to the investors. Unlike the Offshore Sector (SIBA) which has seen unprecedented success because of its professionalism, efficiency and speed, SIB has laboured and is still finding its feet.

Others have complained that the delay is due to the fact that the SIB has no real decisive powers and all projects have to be approved either by the Cabinet or the President personally. One investor has even gone as far as to criticize the fact that no reason is given by SIB when a project is not approved. The investor who had submitted a project to SIB was only informed that his project had not been approved six months later without reason or reasons being given at all. Whatever the reason, the fact remains that SIB is ineffective in its role and unless it is given the necessary wide ranging powers to decide on projects and even over-rule other Ministerial decisions if, in its view, a project deserves to get approval, the trend is set to continue.