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Seychelles Economy

Seychelles president announces measures to restructure island economy

Alain St. Ange  Nov 03, 2008

VICTORIA, Seychelles (eTN) - Seychelles President James Michel addressed the people of Seychelles on national television on Friday, October 31, to announce his restructuring measures for the Seychelles economy.

The new measures will be “difficult” and that public will have to “readjust their lifestyle” was the key message echoed by President James Michel.

The island nation's currency, the Seychelles rupee, will now be “floated” and market forces will now decide on the applicable value of the currency. This new measure removes the existing barriers where visitors to Seychelles were compelled to pay for all services in hard currency only. This measure is expected to make the islands more affordable to tourists visiting Seychelles.

Other measures are a smaller civil service, a freeze on capital development by the government, a fight against corruption and abuse among many other measures. The International Monetary Fund has been negotiating for a bail out package for Seychelles, which owes some US$800 million. As it stands, the country is unable to sustain and repay. This figure represents 175 percent of the Gross Domestic Product.

The IMF delegation and the Seychelles government are now advocating for a liberalized economic model for the Indian Ocean Islands. New taxation measures have also been announced which will mop up excess liquidity in the islands. The Central Bank governor, Francis Chang-Leng resigned a week ago citing health reasons. He has now been replaced by Pierre Laporte, a Seychellois national who was working for the IMF for the last couple of years.

Seychelles president announces measures to restructure island economy

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