I am writing to provide another view on TODAY headline on Monday, September 26th, 2011, titled “ We have proved our resilience as a nation”.
Briefly, this headline covered an interview with President Michel of the Republic of Seychelles.
When posed with a question on how the President sees
economic future over the next Five (5) years, he said that his view is optimistic, and said that: “we have weathered the 2008 global financial crisis and we have proved our resilience as a nation, especially in the spirit of leve Debrouye”. Seychelles
The global financial crisis of 2008 started in September of that year. In July of that year, we issued a notice to Lehman Brothers that we would not be able to make the August 3, 2008 interest payment of $3 Million to Lehman Brothers.
could not raise $3 Million, think about that. The repayment date came, and it left us. We failed to make the payments, and defaulted on the Lehman Brothers Bond. Our country financial rating was downgraded and we enjoyed a dubious title of most indebted country in the world per capita. Seychelles
To refresh Mr. President’s recollection of this dark period under his leadership, by October 30, 2008, he went on SBC and announced that Seychelles will take on an IMF Standby Arrangement Facility (SAF). This money was needed, because we were running out of fuel and our suppliers had to be paid or the vehicles in Victoria, would stop running.
After we were successful in renegotiating and rescheduling our debts, and pardoning about 20% of our debts under a hair cut program, our debt repayment was rescheduled to commence in 2012 (that is next year) , allowing Mr. President sufficient time to get through another election.
Well, 2012 is just around the corner, and the debts will now have to start to be repaid. This whole scenario does not show that in the face of the first world financial crisis we were “resilient” as Mr. President Michel suggest. To the contrary, it shows we are very “vulnerable” to external shocks and external events. It is for this precise reason why
cannot afford to Seychelles
have a half baked democracy. Faced with great challenges ahead, we need the real thing in order to foster real social cohesion in order that we may with success tackle the challenges ahead as a country that is focused on those challenges.
The world is sending alarm bells of a double dip recession. This time, it is Europe, our main markets for Fish and Tourism are under threat of a long term downturn of perhaps Ten (1) years. IMF said last week, it may not have enough money to bail out
Europe economies in this crisis which is about to blow.
Already, both of our main industries are under threat of under productivity and severe under performance. A double dip recession will aggravate this. This is no time to venture under funded into emerging markets that will take years to establish. This is a time to consolidate our industries in markets where we already have a footing and a track record. This is basic business common sense when faced with a prolong downturn and shortage of cash all around to get everything done that needs to be done. Spread ourselves too thin, we will not develop any new markets and we may lose traditional ones as we saw in the UK recently.
We cannot hold our breath on oil reserves either as Mr. President suggest. As the world recession sets in, demand for oil will drop worldwide. As demand drops, the price for oil will slump. Already Sweet Crude Oil is trading at $82.00 per barrel a Four year low this week. Offshore exploration and drilling is not viable at those prices.
On New National Assembly…
Mr. Michel says he welcomes a National Assembly that keeps checks and balances on the Executive. This is a very nice wish. But in the PPB’s it is Mr. Michel himself, on SBC, that tells us, he will personally see to it that the National Assembly MNA’s do a good job and work hard. He even endorses these candidates openly without letting the Public pick them, without Executive interference. This is a complete dubious contradiction, again.
In a Democracy, the opposition is chosen by the people in the opposition community, not by the ruling party. When the ruling party chooses the opposition, this is commonly referred to as an autocracy or a one party state.
I ask Mr. Michel to clarify exactly what he means, because he has me dumfounded as to what he really means. In this light, it is important to note, that constructive debate can only come about, if one is willing to lose an argument, and not take it personally if he is wrong. It is through the fair and open battle of ideas, that a country grows.
We Are Very Vulnerable In 2011
The future of Seychelles hangs on a precipice of becoming a failed state under James Michel, though he is not responsible for all the calamities, but takes credit for some of them. A second Supplementary budget needs to be passed to keep the government running. Today, offices are running on credit. Devaluation is a high possibility in the coming months. Our Gross Domestic Product may slip by -10% this year, sending us into an official depression, not recession, like Europe is toying with. Piracy is a continued scourge, menacing Tourism and Fisheries. Inflation will creep back in less spending power of the Seychelles Rupee. This means our people, all of them, will suffer collectively.
Next year and years to come, we will have to make great sacrifices to pay down the debts that brought the title of most indebted Nation in the World upon us in those late months of 2008.
move forward, if it is highly vulnerable and our leadership is telling us we are resilient? Seychelles