Seychelles Faces Potentially Severe Downturn Ahead!
The numbers on Tourism and Fisheries are yet to come in, but the situation does not look good for Seychelles. Many are waiting on pins and needles for declaration of a new direction, new approach by government to deal with economic downturn ahead. However, Le Pep government is famous, famous for practicing the methods of St. Thomas, doubting Thomas who said: " Oh Lord, I must see God to believe in God". Le Pep must see economic catastrophe to believe it will happen. Unfortunately, for Seychelles this will mean we will now face a downturn worse then in 2007-2008.
Why?
In 2007-2008 only Seychelles went Bankrupt with the highest Debt- GDP Ratio 137% in the World. Today, while we have reduced Debt - GDP ratio to 62%, it will increase because many of our main markets are now facing Bankruptcy, or severe hardships ahead. Seychelles has not adjusted to this market marginalization in time to not be adversely affected.
France- Facing Terrorism
Italy- Facing Banking Crisis
UK- Facing chaos
Belgium - Failed State
Russia- Economy Collapsing
South Africa - Economy and currency Crisis
Central Bank Send Cautious Alert
The Central Bank of Seychelles has sent a yellow card out last week, with alarming figures: 1. 21% shortfall in Foreign Exchange Supply, 2. Abrupt increase of 11% in Demand for the same, 3. Depreciation of the Euro, 4. Depreciation of the Pound Sterling. All these figures paint a picture of the monetary policy derailing faster then the Central Bank can adjust itself and move away from the now certain artificial rate of the Seychelles Rupee that now makes Tourism and Fish Exports at least 25% more costly or out of market. Enter Tourism disaster pending.
Tourism Disaster Looms
The Tourism Industry is undergoing a tremendous amount of stress and distress. Minister St. Ange has done his best over the years to launch and build up this Industry. However, the Industry today can no longer grow, no longer expand with the obstacles in place, created by Le Pep ministries, who focus more on excuses then on solutions. The reality that we do not see in the statistics is daunting on the ground. Hotels on Mahe, Praslin, La Digue have gone empty for near Three (3) months. As July set in, a Peak Period, only two weeks of Four weeks, are rooms booked 60% or less. August is another Peak Period, for Two (2) weeks. The expected hard currency levels will shock Le Pep in September. The shortfalls will cause Le Pep to go into crisis management mode, to find solutions, find money, to pay for feel good projects and expenses.
Agents are telling us over and over, again, again, " Seychelles is beautiful, but your product is too, too expensive, your service sucks, your environment is filthy, as if you are destroying what you have ....,,,,,,,,,..deliberately."
With this type of comment running on email, Facebook, blogs, by agents, Minister Alain St. Ange will simply not be able to deliver the impossible. The Industry will now bleed, bleed, bleed unless government changes it's tap dance routine.
Fisheries Industry
The Fisheries Industry offers great potential. Mr. James Michel has written a book on the subject. But Mr. Michel has not address the -25% labor force needed to develop Fisheries Industry. Where will we get the manpower to develop Fisheries? Where? This platonic question erases the chapters on chapters of opportunity Mr. Michel thinks we have. The fish will grow, not because we plant them, because we do not have the manpower to pull them out of the sea.
Support Services Will Crumble
With the lack of hard currency in the country over the next three months, increase demand for the same, increase offer of support services such as Education, Health care, road maintenance, port upgrades, airport expansion, will all face distress as the hard cash just does not come into Seychelles. If prolonged over a long term, by years end, secondary hospitals like Logan on La Digue , Praslin, will be beyond use since they are already near beyond use. Roads on Praslin will cease upgrade in September, cars will continue to break, demand for parts will continue to increase. Trash will be collected less if at all, when GOS starts to stagger contract payments to refuse collectors.
Debt Servicing
External Debt servicing with IMF for the $55 Million has been paid consistently under Pierre Laportes management of the economy. Under Caroline Abel and Jean Paul Adam, the repayments have been less. What has become of the $ 850 Million external commercial debt is unclear. The last we heard, it had been reduced to under $ 500 Million. This was three years ago, hence, we expect it now to be back above $650 Million unless GOS can clear this matter for us.
Debt- GDP Ratio Back Up
The national debt GDP ratio is going back up. Jean Paul Adam has advise the National Assembly, that Seychelles will not meet the 2017 50% Debt GDP ratio. He has ask for a Two (2) year extension, but that was before the Second Round Presidential Election and before the Le Pep Anse Royale Rally. Foolishly, the National Assembly remained silent on the issue as they snored right through his presentation. It is never wise to snore when the Minister of Finance is before the legislature, even if you are being kicked out by your party.
Dialogue To Solve Our Issues
When GOS fails we all fail. When PL fails we all fail. They drag us with them. They destroy your dreams of a better life when they make bad decisions, employ bad ministers who let the entire system fall, as they allow to be drop, your files. When they fail, they master the art of excuses,to cover up until they can get on the next flight, to another international conference which brings with it, the VIP limousines, protocol, cocktails and shopping bliss. Rarely do they ever convert contacts into any thing material for Seychelles, with the exception of St. Ange of course.
In the opposition, it is the same. With bad leaders, we all fail. When they kouyon us for a contribution and import a BMW on our backs, we fail. We fail the 40% who live in poverty in this country! We fail those who have invested dearly in Seychelles with their money, blood, sweat and yes, tears, there are many tears for the Seychellois investor.
Those that remain silent, fail the mass of supporters begging for a better life, and better deal.
I call on all parties to dialogue, chart a course forward. Retire your deadbeat leaders on each side. Make room for the young, let us move this country forward, before the young are also too old to carry this big burden, whose seeds are planted by France Albert Rene, nurtured to an incredible level by James Michel.
Sesel Pou Seselwa!
May God Bless All Freedom Loving Seychellois!
14 comments:
A bleak picture with Parti Lepep in power, it can only mean a total breakdown is imminent. It is high time these bunch of incompetent criminals who only seek to enrich themselves on the backs of the poor, the dwindling marginalised middle class, the enterprising enterpreneurs, and the established old-money who do not support the system, but just play along to survive. Seychelles is crying for real change, a breath of fresh air, new ideas, dynamism, an optimistic outlook, visionary leadership and brave patriotic hearts who would seek to bring true democracy, freedom and prosperity. This cannot be achieved with the present Government, and so they need to step aside before we all suffer the consequences of their lack in so many areas.
IMF suspects hotels are price transferring. Perhaps some large hotels must be doing that. But IMF needs to walk around year round to see the mess GOS has created. IMF relies on arrival statistics which are crap and un reliable, untrustworthy.
The type of tourist coming here need a reality check by government.
At least someone has noted the economy issues. Everyone else is ignoring them. This is the key issue for everyone. Everything else follows.
What I am worried for is Gill is 99% right all the time.
The situation is getring beyond advice of how thow eal with the matter. .... political ineptitude has direectly resulted in the economic morass .
Abel does not know wherevto get started whilr Jenpa is confronted wizh his lack of economic knowledge.Seychelles balance of pament is in dire straits.The countrys mounting foreign and domestic public debt ,a huge fiscal deficit and a severe foreign Exchange shortfall is leading to potentially calamilous economic circumstances.Zhe country lack a clear sense of direction on economic policy.
Pl has no effective economic solution for zhe morass it has created while Opposition seems equally unable to even propose a bad solution.
Since 2008,though all the foreign load and sacrifices made by the people,pl has not been.all to effectively getvuss out of the crisis...........litlle has bern done....we still face monopoly,huge financial leakage,endemic corruption,mis management,bad economic policy...............productivity stagnation etc..
Addendum 2 Article-
GDP Debt Ratio For government Debt is 62% in 2015
GDP Debr Ratio For Government + Private Commerical Debt is a whopping = 117% making us very close to Greece.
The IMF expects it to increase by 2018 if GOS does not react to external vulnerabilities in a timely manner and maintain monetary and fiscal policies on a right rope.
They have deviated on both fronts.
Sesel Pou Seselwa!
Christopher Gill
" tight rope" eyes going bad.
C Gill
There is a growing of persistent secular stagnation in which weak demand,weak potential output growth reinforcing each other in a vicious circle.
Persistent stagnation is likely to be due to a multitude of factors,affecting both zhe demand and supply side.This cals for a broad policy package to accommodative monetary and fiscal policies will bold structural reforms that can deliver WIN/WINS;an immediate impact via a boost to demand and hugher potential growth.
Policy action in FOUR areas could deliver zhis effectively:Investment,trade,employment activation and small/medium firms and entepreneurship.
Zhe country badly needs a contigency plan to escape zhe stagnation trip.Plhowever,seems unable to overcome zhe legacies of zhe economic crisis,with hugh unemployment,hugh inequality,and low trust still weighing heavily.It is imperative to swiftlyinplement reforms zhat boost demand and supply,employment and raise potential growth.
Pl does not act on fiscal and monetary policy until. They see death in the face.
They lack ability to adjust quickly.
Hence, they threaten investments and livelihood of workers.
The Genie Index did not err when it found 40% of the population lives in poverty.
On a World scale only 18% of the world population lives below the poverty line.
Pl obviously has deep rooted fault lines given poverty eradication was the official reason for the coup of 1977 in the first place.
Pl, you just need to sharpen up and sharpen up fast. When it comes tot he economy you still relying on the typewriter.
This makes us all look bad.
Well said.
Panic sets- clear thinking vanishes.
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