Dealing with shortages of essential commodities in particular foreign exchange

Unwittingly, Mrs Potter responding to President Michel’s State of the Nation address suggested that perhaps we should resort to rationing foreign exchange to ensure that essential commodities are available at all times so that the queues would disappear, at least for onions. Indeed, unsurprisingly she was supported by the Leader of the Opposition, Wavel Ramkalawan, who seemed to be suggesting the same thing. Except that one does not know, in his case, whether he was indulging in petty (populist) politics, the kind President Michel has condemned in his State of the Nation address, or that he simply has no other solution. The wholesale rationing of foreign exchange, however, would entail the Central Bank confiscating all that comes into the country – including from the tourists. The reality is, it would not eliminate the shortage of goods, but simply transfer responsibility to manage the shortage of foreign exchange from the commercial banks to the Central Bank, the institution that is responsible to prevent the foreign exchange problem from developing in the first place but has failed dismally.

Foreign exchange is in fact being rationed in Seychelles today. Everyone is offered a limited supply of foreign currency to travel with, and the ration coupon in this case is an airline ticket. Air Seychelles, the national state airline, has even gone to the extent of spending precious foreign exchange to come up with a hologram sticker which is affixed on its e-ticket, to ensure that its passengers cannot cheat the system. The banks are compelled to keep the copy of the e-ticket containing the sticker and send it to the Central Bank. Unfortunately, this seemingly innocuous exercise requires a whole army of bureaucrats to make it function, starting with clerks at the commercial banks to specially employed clerks at the Central Bank. New schemes to “allocate” foreign exchange to importers have come and gone without much success.

5000 houses in 5 years another failed promise

One of the least noticed queues is of course, in public housing. Currently, more that 3000 people have put their names to obtain a house or flat from the government. Many have been waiting for 10 to 15 years. During the presidential election campaign, SPPF candidate, James Alix Michel promised that if elected to office, his government would build 5000 houses during his 5-year mandate. Mr Michel has indeed been elected to office. Recently, those who have been promised a flat on l’Ile Perseverance have received a letter informing them that they would not be able to occupy it until 2012, after this mandate has expired. Under the socialist system the goal post can quickly be pushed back.

The other least noticed queue is in the provision of health care by the government. Since the need for health care is not an everyday occurrence, one does not experience the shortage so readily as buying onions or even timber. In health care, the “queue” is in the form of postponed operations. Those who can afford it simply jump the queue by travelling to Singapore or Chennai where the same operation is offered on demand in exchange for money (their money not our rupees). Dr Ramados, the largest capitalist in the small socialist lake, is busy building a new hospital where health care would be available on demand to those with the ability to pay in foreign exchange not our rupees.

Currently, the SPPF is trying to charge for obtaining health care from government facilities, not in order to provide good quality healthcare on demand, but to prop up the current mediocre service which is fast falling apart. Now we will have to pay directly for the privilege of obtaining a delayed and mediocre healthcare. At the newly built casualty department at Victoria hospital, injuries are not attended to for more than three hours because of shortage of staff. Hospital officials are now resorting to sending bleeding patients to the wards for their wounds to be attended to by the few nurses trying to keep a semblance of normality tending the hospitalised patients, a fix that is damaging the health care system even further.

Under the Constitution, primary healthcare in a government establishment must be free. This is a provision of the Charter of Fundamental Rights and Freedoms inserted at the insistence of Albert Rene, the leader and founder of the SPPF, and endorsed by James Michel. Today, it appears Mr Michel wants to jettison this fundamental right because his own administration finds the promise too onerous for his government to keep.

Hoarding shows lack of confidence in the supply arrangement

One of the symptoms of shortages is bulk buying (hoarding) by the consumers. People hoard because they have no confidence in the supply arrangement. Whilst people would hoard essential goods, some things are not worth hoarding if one would not need to use them regularly. When I was growing up, in the age when many of our citizens had little money in their pockets, I never saw or experienced queuing and I am older than both Mrs Potter and Ramkalawan. Indeed, at my father’s shop, we, the children had to clean the dead leaves off the onions and let them out to dry before they were sold at much cheaper price than the fresh ones. This benefited the lower income. Today, the state marketing company pre-packs the onions they sell and you cannot return the rotten ones and ask for your money back. In my youth, intermittent shortage of onions did occur but that only happened when the cargo ship bringing them would suffer a delay, not because of shortage of foreign exchange to import. Any rationing was controlled by the shopkeeper in the interest of its regular customers, not the government.

To understand the nature of our problem today, one must take cognisance of the nature of human beings. The pursuit of prosperity, for better or worse is the deepest motivation of individual economic behaviour. Individuals not only want to survive; they want also to improve their standard of living. That is why Ramkalawan and others un-hesitatingly readily voted to give themselves a huge pay rise when they were given the privilege to do so.

Individuals everywhere do want to improve their material welfare. A government can advance the standard of living of its citizens by creating the environment that is most hospitable to developing a country’s resources. So far after 30 years of socialism, Albert Rene and the SPPF have failed miserably in advancing the standard of living of the average Seychellois in Seychelles by wasting its resources. That is why, it is not sufficient, at the next election, to simply replace the people at the top. We must jettison the system put in place, which has failed the people too.

The writer is leader of the Democratic Party

February 29, 2008
Copyright 2007: Seychelles Weekly, Victoria, Mahe, Seychelles