Sekondi Accra

The government of President James Michel was victorious the in May 2011 elections. He will continue to enact International Monetary Fund (IMF) reforms to save the state from bankruptcy in the midst of the global economic crisis. The ruling Parti Lepep (formerly the Seychelles People's Progressive Front) relies on the power of incumbency and its belief that no other party is qualified to govern the country. The former single party is still popular, but its electoral monopoly has been eroding. Since 1998, however, Seychelles National Party candidate Wavel Ramkalawan has lost each time. His party has not done much to explain what it would do differently in response to the archipeligo's economic difficulties.

In a June 2010 ministerial change, Michel added the tourism portfolio to the list of defense, information and legal affairs already under his management. The change included the creation of the home affairs ministry, which is charged with managing national security and issues related to piracy in the Indian Ocean. The government has not always inspired confidence: the leader of government business, Marie-Louise Potter stated in September 2010 that members of the Parti Lepep do not possess the education and technical knowledge to understand the content and meaning of bills placed before them.

The IMF came up with $26 million dollar support deal but insisted on rigourous reforms that include fiscal restraint and the liberalisation of the state managed economy. Seychelles has a population of approximately 90,000 people and has prided itself on the generous nature of its welfare state. Michel's administration is presently auditing several parastatals with a plan toward privatisation and preparing for the implementation of personal income and value-added taxes. In July 2010, Paris Club completed a second debt-cancellation program, which will forgive about 45% of the country's $800,000 million dollar in outstanding debt. The government also completed a successful debt exchange in the first months of 2010 for the eurobond on which it defaulted in 2008.

The activity of Somali pirates in the Gulf of Aden and Indian Ocean continues to impede fishing hauls. In July 2010, the government stated that piracy had decreased fishing and port revenues by about 30%. In May 2010, the government decided to host a United Nations (UN) supported tribunal adjudicate pirates that operate in the area. The government in Victoria continues to rely on India for support in policing its territorial waters.

The Tourism National Council stated the Seychelles was on course to improve on the 2008 visitors' record of 159,000. A 14% year-on-year rebound in tourist arrivals in the first half of 2010 was due to a diversification in source countries. This encouraged the government to forecast 4% real GDP growth for the year. The IMF shared the same prediction for 2010 and forecasted economic growth of 5% for 2011. After the Seychelles rupee was allowed to float in 2008 as part of the government's response to the financial crisis, inflation increased in 2009. Price decreased from month to month in 2010: inflation rates were at -3.5% year-on-year in July 2010 and -3.6% in June 2010.

The government anticipates that petroleum will help diversify the economy away from fishing and tourism, and a delayed licensing round is planned for 2011. East Africa Exploration plans drilling opertaions on its acreage in 2011 and 2012. In August 2010, Seychelles and Mauritius continued their lobbying efforts at the UN to extend their common continental shelf so that they could jointly exploit the resources that may be found there.


Official Data


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