Seychelles Economy In Free Fall and Leadership Stays The Course

For years , the International Monetary Fund (IMF) had expressed grave concern over the miss-management of Air Seychelles, and the continuous need of subventions by the Government of Seychelles  to keep the once, national air carrier afloat.

 Air Seychelles failed time and time again and again because of simple downright bad management and bad business practice, not because it was a bad business model as PL attempt to have us believe today.

Air Seychelles, was a good business model, but a sensitive one, that required all players on board, in a no nonsense way. Not with SPPF/PL, when it came to Air Seychelles, it was all nonsense, all the way. Today, we pay the price, every business, and every citizen in Seychelles. 

PL Over Reacts To IMF Pressure

Late last year, after taking on a number of older 767-200’s, changing seats, repainting, changing screws, changing engines, and building a new commercial building all in one (1) year, by Air Seychelles, it called the Minister of Finance (Mr. Danny Faure) and asked for more money again. This time, it was another subvention request in the Scr. 10 Million range to get on for another Two (2) months or so. No marketing plan was in place to fill seats.

The PL government went into a high fever mode, knee jerked, out of panic and frustration, reacted out of haste, instead of finding the root cause of the ongoing demise of Air Seychelles. As PL knee jerked, their short sightedness and lack of confidence in business building was exposed. The incompetence became glaring from October 2011 to the New Year 2012, when Air Seychelles dropped flights, without notice to key partners in Tourism.  

As IMF applied pressure, and no solution, since they say in a robotic tone that,” it is your program not ours”, PL picked up the phone and begged the Abu Dhabi Sugar Daddy for a bail out, then the deal to sell Air Seychelles interests were embarked on and the key condition to cut direct flights from Europe was agreed by the PL, a suicidal condition for all of Seychelles, from the Tourism Industry to the crèche children.

This single condition of cutting direct flights from Europe, has paved the way for a short term, painful death to the Seychelles Tourism Industry, unless reversed immediately. With the demise of Tourism, the Seychelles Rupee will devalue until it has no value, in real time. The PL government have silenced the alarm bells in the official media.

I am not criticizing, just stating facts. Don’t take it badly, take it as a wake up call. 

Cut Direct Flights Cut Tourism’s Throat

Rule: Direct Flights is an indispensible, non disposable aspect of any island Tourism Industry if it wants to remain a viable destination to any market.

In no time, with no NOTICE to the Tourism Trade and partners in Europe, PL cut Four (4) flights a week from Charles De Gaulle, which is not just a French market base, but a main reasonably acceptable hub for most of Northern Europeans flying South for holiday for sun, sea, and sand. By coincidence, Seychelles happens to have the best sun sea and sand in the World, but PL never could package that simple idea to Europe effectively.

PL, for your information, Seychelles is South of Northern Europe. The per capita of Northern Europe area averages in the range of $75,000 per year. This is about 60% more than your Southern Europe market which you relied on for many years.

PL could have gone to Two (2) Flights a week, if business was a little slow, and they could have coordinated marketing efforts with STB, Air Seychelles, hotels and agents, but they did not. Instead, they just shut the door on a key emerging market access.

Northern Europe was Seychelles emerging market. I say:”was”!

To add insult to injury over this fiasco of selling off Air Seychelles, when Kate Middleton and Prince William were on honeymoon in the Seychelles, which was a marketing bonanza for the UK market and entire English speaking world, Air Seychelles cut immediately, it’s twice a week flight at of Heathrow, and reduced it to zero flights a week, and we even lost the prized Heathrow gate for taxi. Now, we could not go to Heathrow if it was the end of the World. 

The net marketing benefit of the honeymoon for Seychelles was practically zero as the frequency of flights to UK. Coincidentally, at the turn of the new year, the UK market was at -31%e and counting every month in the deficit. 

Same for the French and Italian market, give or take a percentage or Two.

Only this month, the honeymoon was featured in Wedding Magazine, and an STB official said Seychelles is the best honeymoon destination in the world. But there is one catch: no direct flights, and the spokesperson was not named.

All of this may sound a bit surreal, but it is our reality.

I am not criticizing, just stating facts, don’t take it badly, take it as a wake up call.

Northern Europe Shut Out  

The PL tell us Europe is in recession and this is why they stop flying. But most of Northern Europe PL, is not in recession and their GDP’s are much higher than Southern Europe, your core traditional market. Northern Europe, in case you did not know, which you do not know, was your core emerging market.

Now PL is sending Air Seychelles off to Shanghai to cart Chinese navy and army soldiers for their base activity which they refer to as supply replenishment exercise that you will soon have us believe are Tourists. When General Ma visited this week, I am certain, you told him that Air Seychelles just received a Airbus A330-200  and is on schedule, to collect his soldiers in Shanghai, which will double as Tourists on arrival.

Yet, we will not do direct flights to Europe.

All a bit Surreal! But it is our reality, just like satellites, drones and anti base missiles are part of our reality, even though we do not see them.

I am not criticizing, just stating facts.

Devaluation In The Banks This Time

The Governor of the Central Bank now Minister of Finance, Mr. Pierre Laporte, is now out and about strutting his stuff. It seems he is selling himself to PL as the ultimate panacea to replace Mr. Danny Faure. Beware of carpet baggers that claim to be smart, but are looking for a job, because they cannot stand on their own Two feet in the real world. 

Mr. Laporte, who talks under his lips when he lies or attempts to cover up reality to sell his story, has actually taken us from a Black Market that was conducted in the back streets and back doors of Indian shop keepers and others, to now conducted over the counter at the commercial banks. This time, the over the counter rates are worse than the Black Market, he promised to  rid Seychelles of when he took over as Governor of the Central Bank, a post that is independent by statute, but now, Mr. Laporte (door in English) is a PL Minister. 

In the Black Market heyday, one US Dollar traded reasonably between traders for Src. 13.00 for $1.0. Today, the commercial banks are asking Scr. 15.25 or more by next week, for a single US Dollar. 

The program Mr. Laporte banked on to become  Minister of Finance, and James Michel believed him foolishly has back fired. The reason why it back fired, is Mr. Laporte’s scheme of valuing currencies from a basket of average official trader rates is fundamentally flawed. It does not include all traders, hence it has a variable of error built into it. Mr. Laporte knew about this, but he remained silent. 

PL relied on it, and thought Mr. Laporte was doing a great job. Most traders, trade currency to generate hard currency for themselves and their own businesses. This invariably will remove more money from the banking system if all traders are also wholesalers ,importers, or purchasers of soft and luxury goods imported, which require hard currency.

Under Pressure 

Now the pressure on reserves will be on in 2012 and 2013, because we have used up our Three (3) year grace period IMF helped us negotiate with Creditors, this year we must start paying interest payments on those infamous Lehman Brothers Bonds, and one party state debts, and in 2013, will start paying up on principal repayments on the same rouge debts.

 Mr. Laporte is in a panic, and he is pulling a Robert Mugabe on the Tourism trade and blaming the hotels and stakeholders for not banking in Seychelles. If he continues to follow the Robert Mugabe lines, the next thing he will suggest is that the PL nationalizes all the farms, in this case, hotels. We are ready for you Mr. Laporte.

He will even start telling James Michel that he must sell off more assets and companies owned by government of Seychelles . Sell Baby sell, and who will split the commissions? Will taxes be paid on them, or will the commissions even be banked in Seychelles?

Former Owner Of  the Plantation Club In Court Irony In Seychelles. No Place For Business

Seychelles A Bad Place To Do Business-It Is Official! 

Ironically, in a recent international index, Seychelles was listed poorly, as being one of the worse placing to do business.  Mr. Laporte seems to have had a hair of this listing, but when he realized the government bank accounts are empty when he took office, he ran into a panic, born out of pure lack of serious business experience.

Gather yourself man, next week, I will tell you a little as to why Seychelles Tourism businesses are not banking what you thought they should be banking in your text book mindset that has the expansive vision of a door frame. 

Tunnel vision may have served Robert Mugabe well, but it will not serve you much. Ironically, the man sounds like a one party state minister, threatening the business community back in the ZOMN LIB days. Your threats are in vain, because, believe it or not, we are in free fall, thanks to your text book application of a reform, that had no place in a micro state economy, with only two forms of revenue: Tourism and Fishing. A visitor you need to convince to travel 3000 miles. A fish, you need to pull from 1,000 feet while pirates attempt to catch you.

Thanks for your big part played to get us where we are today!

I wonder if you could not run even a pig farm properly. 

Look what happened at the Farmer’s cooperative, only two blocks from your office. 

Seselwa Unite!

Sesel Pou Seselwa!

May God Bless All Freedom Loving Seychellois!