Thursday, November 26, 2009
Saturday, November 21, 2009
Parti Le Pep (P.P.) has launched a propaganda blitz to ease the minds of Seychellois to make them believe that the Economic Reform is a success and that we are on the road to prosperity. The propaganda is so successful that it has gripped even the best business people in the Country, let alone the simple ordinary Seychellois.
In this special supplementary article, I take this propaganda machinery and half truths apart to help those in business come to grip with the big picture. Those that are part of productive workforce must take note because it concerns your future as well, regardless of political party affiliation.
From Bankruptcy To Reform Economic
I have already written about October 31, 2008 when
The term “Economic Reform” was only a term to hide the fact that Michel had driven the
This has included abolishing currency control rate regimes, cutting expenses, firing thousands of Government workers (most of them from the opposition), cutting loans which go unpaid while interest goes up, privatization of old state monopolies and industries (most of it going to party stalwarts such as the milk, juice and water factories), increasing PUC utility rates, and shutting down white elephants such as the Coetivy prawn farm and Barbaron Orchd Farm, two infamous ideas of Albert Rene and Mukesh Valabhji. The new tax laws will take effect in 2010 according to World Bank recommendations and IMF pressure. These are all good moves to try to put order into the government house. But they are not the signs of “reform”, they are the signs of a bankrupt government of failed ideas.
Grace On Debts
In that time of course, Mr. Pierre Laporte has been brought in to float the Rupee, and he has. Is the rates indicative of its true values? No. The Seychelles Rupee has gained on hard currencies like the Euro and US Dollar because of deflation and lack of demand for hard currency. The economy has shrunk. In the case of US Dollars, the Seychelles Rupee gained 70% in just one year, yet the economy shrank. Instead of the 1989 movie “Honey, I shrunk the kids”, Mr. Michel and Mr. Laporte have now given us a new comedy: “Seselwa, I shrunk the economy”!
As demand for hard currency stifled in the market, Pierre Laporte had to intervene in the market, buy the Euros and US Dollars from the commercial banks to keep rates palatable. Had he not done that, the Seychelles Rupee would have become a moon-currency. This allowed the Governor to build up a reserve of over $134 Million about 1 ½ months imports to
As he is building up reserves, interest on commercial debt is ticking and increasing. Interest rates at commercial banks are too high to encourage any economic activity beyond survival mode. Growth under this situation is out of the question.
P.P. Is Not Counting New Debts Signed
Our country is sinking with over $850 Million in external debt and another four billion rupees more in local debt. To keep this country afloat, P.P. is not counting and announcing the new debts it signs. Afif says the debt has gone down to $760 Million to mislead the Public into believing everything is a grand success. It is not. In order to fool you, he counts the $70 Million or 45% Paris Club write-off before it has been completely written off. Remember that only 22% has been written off. The remaining 23% may be written off in six (6) years, that is, if we stick to the IMF reform signed by P.P., advocated by Mr. Danny Faure, and applauded by Mr. Michel.
The total IMF obligations undertaken, plus last week’s World Bank loan exceeds US$69 Million. All to be used used to keep
Business Must See The Failure
This year property values have slumped by 60% and sales are still not happening in the local market. When a market drops over a short term by 30% it is a bubble burst effect. In
There are few properties that are holding value and resale value. Property is the basis of national wealth, but P.P. never figured that out. Hence, values are depressed not only because of market forces, but also because of poor, antiquated legislation and restrictions on alienation and property use, that protect fruit bats over humans.
By being left footed on property issues, P.P. today, has pricked a hole in the life jacket that could have saved
We will never be able to educate P.P. on how to do things as they still have the Communist mentality for us while they think Capitalism for their own pockets. These P.P. people are beyond help.
Our only hope is a strategy of debt forgiveness in
After that, we use our energy to rebuild
We must now work towards it.
More Incredible Propaganda To Fool Us
In our national newspaper, the Nation, the government goes out of its way to fool us again. In Nation, Wednesday, November 4, 2009, vol. XXXII NO. 212, headlines,” in bold face: President Addesses Special CBS Event- ECONOMIC REFORM FOR THE FUTURE OF OUR CHILDREN. What are they doing in State House?
This economic reform has nothing to do with a better future for our children. The economic reform is about our children repaying the debts created by SPPF for over 32 years. It is about our children repaying the debts the Michel Administration created, the debts the Rene Administration created. The debts of a Communist Party!
My son is 9 years old this week. Pierre Laporte says we will have a grace of five (5) years to repay loans and on the obligations. As these obligations tick interest, who will pay the interest?
It is not Rene, he is too old to pay any interest. It is not Michel, he will be too old to repay interest. It will be you and me.
In five (5) years, my son will be 14 years. He will be too young to pay interest. But in another five (5) years, when we start looking at principal debt repayment, my son will be old enough to repay the debts France Albert Rene created and James Alix Michel endorsed with pen, silence and signature. This is why I write. I will do more if called to do so.
Dear People of Seychelles, today, the debts we are talking about are the debts the next generation will inherit. Our children will repay the debts. This is not about their future as James Michel tries to fool us into believing. This is about our children assuming today’s debts, in the future. If you love your children, love your family, then you must wake up from this hypnotic sleep P.P. has put you under.
By the time they start to repay the debt, the houses built will be falling apart. The roads built will be falling to rubble, many are already. The electricity grids will be on brown out and black out scheduling. We are heading for a real social disaster. Make no mistake about it. And not even another US$70 million loan to PUC for new generators will help us as it just be more debt burden for you, me and our children!
“Leve Debourye” Program
To get us up on our feet, to move again, and get on to the productivity path, the P.P. has created a campaign called: “Leve Debourye”. The inference in the campaign is that Seychellois do not “Debourye” or hustle in English.
Never has a campaign slogan printed on T- shirts insulted the intelligence of a nation so much.
This campaign focuses on increasing work productivity in order to generate economic prosperity and hence, increase our bottom line as a Nation: increase our GDP. This year we are (minus) -8% according to the last IMF statement.
To repay our debts and make them sustainable, we must generate 10% GDP per annum every year. This is a huge challenge today. Why? Because
What is Gill saying? Well put another way, we have too many drug users and drunks in the country that is actually preventing us from succeeding as a Nation.
According to CARE the main anti-drug NGO, on the low scale, we have 9800 drug users and addicts in
According to NDEA, we have 3000 heroin users. Scary isn’t it?
Michel Blames Patients For Downturn
If Michel Administration is asking 18,000 drug users and addicts to “Leve Debourye”, then we have a serious problem down the road. President Michel and his team of communist propaganda spinners at State House are ignoring the lack of productive capacity by thinking drug users and addicts can just get up and get to work. These people are unable to maintain employment. They are unemployable. When they come for an interview, we smell the drugs or alcohol on them, we see the needle marks, we see their blood shot eyes. This is why they do not get hired.
These people are sick. They should be patients. Before you get anything out of them, you need to heal them. Any other policy is just a joke and the hard working People of Seychelles will pay the consequence of this bad policy and joke P.P. is playing on us. Stop playing politics with our unemployable people P.P. Help them in a real way and this starts with rehabilitation. But where are the centres to help those porr lost souls? And remember, we still have to learn of one Escobar that has been caught. I wonder why?
$30 Million From
Recently, Michel squeezed US$ 30 Million from Sheik Khalifa of Abu Dhabi UAE while he sipped tea and at crumpets at the Yas Marina Abu Dhabi Grand Prix Formula One race. SBC announced immediately that because the economic reform is a success, we will be investing US$ 30 Million into Ile Perseverans Housing Project. This project was to build 5000 houses in 2000 and it is now 2009. Nothing is complete, not even electricity grids, sewer, roads, houses.
Ten years late. The next project will be 25 years late.
To restart this project is putting bad money into a bad idea. We are bankrupt. Our debts are unsustainable, which means for a long time, we will not be able to borrow money as a sovereign state. Therefore, after giving away mega acres of prime state land for one rupee to the Sheikh instead of selling the land outright, after removing our proud coco-de-mer immigration-customs stamp from passports, after bending over backwards to accommodate our new “friends”, after giving duty-free tax exemptions on imports to his new-found friends, we now have to tell our children that our country needs hand-outs from rich Arabs in order to start let alone finish any capital projects for our country. There goes our sovereignty once again while the begging bowl gets larger! Shameful, shameful, shameful!
Finance Money Factor
Without financing at reasonable rates, commercial interest rates will kill growth industries that are much needed to remove us from the stagflation predicament we are now in and to create new jobs for our children leaving school.
Pierre Laporte has focused on inflation reduction and has allowed growth industries to suffer at the expense of curbing inflation. Hence, inhibiting the opportunity for us to reverse the deflationary cycle we are now in. The banks now hold our economic jugular for future growth.
Thank you Mr. Laporte. Thank you Mr. Michel. Thank you P.P.!
How Will Next Year Be?
The question is not whether we will do well next year, it is rather, how much more will we lose from the -8% this year. Will
If not, how much will it shrink?
Unless the debt is serviced, we will continue to shrink. The debt is like a cancer that eats the body of a human being. Ignore it, it will grow. Attack it, it will become smaller, perhaps. The bigger the debt, the less likelyhood you will get your economy back on track. As you fail, IMF will give you another Stand By Arrangement (more debt) to keep you alive.
Pay Down The Debt P.P.
Having said that, P.P. should have been brave with all the money it gets in donations to PAY DOWN THE DEBT, especially the commercial debts. This would show a great amount of good faith to the Creditors and it may open up negotiation space for additional debt reduction based on early settlements which could be negotiated. It would take pressure off our children tomorrow and off us today. It would prevent bankers from saying Seychelles is high risk so we charge 18% for a commercial loan while you need to include your grandmother’s farm as collateral and Granpa’s watch as a guarantee!
Find Another Option For Ile Perseverans
The houses at Ile Perseverans should be given to any Seychellois, that is in need and can provide a bank performance on completing the houses on an “as is” basis, and add 20% for infrastructural contributions. Those that cannot afford it, need to save to afford it. Those that cannot save, need to get a guarantor to vouch for them.
Government can encourage creation of civic groups to promote self-help programs to finish these houses. As a family or person helps to finish one house, they earn guarantee credits to the extent of their labour input in helping their neighbours complete a house. They can work after hours, if they have to. Surely Seychellois can “leve debourye” and mix cement and paint houses and get the carpenter Uncle or Electrician cousin to assist at this time. In return, a beautiful home with pride and “sweat equity” included. Is this so difficult a scheme that P.P. cannot think of it?
In the Western Pacific, it just so happens that a Seychellois, is building houses under this program by the hundreds every year. His name is Peter Gill, Jr.
This is not time for Government to go back to the drawing board, to handle a project in the style and fashion that led to their bankruptcy. Wake Up P.P.!
How many times will you bankrupt
I will address external factors that are real, next week. That will explain why we are in for at least a ten (10) year downturn under the P.P. “ economic reform” as we know it now.
Unless we have critical changes from them that are meaningful, we will have to throw them out at the next elections in order to survive. Be it SPUP, SPPF, P.P., SNP, NDP or whatever other party or name comes next. So keep an open mind as it will be the key to our survival. Remember, we hard-working “leve debourye” Seychellois are used to that. After all, we have been doing it for 32 years.
Fortunately for us and unfortunately for those 15 clueless P.P.’s, throwing them out will be easier than teaching them how to function in a limited environment wherein resources are very limited.
And one last word of hope for all you faithful readers. Instead of blaming the Opposition for not uniting or doing nothing, remember that it is P.P. who bankrupted our country, and not the Opposition. Remember that it is P.P. at State House with a majority in the Assembly, and not the Opposition. Remember that it is P.P. people who are rich today while our country has unsustainable debts. So point the fingers in the right direction. To Parti Le Pep (PLP) which today should stand for “Parti Le Pase”!
May God Bless
Monday, November 16, 2009
The Seychelles Government itself is currently maintaining an unsustainable debt portfolio. It has sought IMF Administration and signed a second IMF Standby Arrangement for US$ 34 Million which will last for another 3 years. Successive IMF Administration Standby Arrangements are very likely for a number of years, if not decades. The World Bank recently assisted Government of Seychelles with a US$ 9 Million loan assistance program, the repayment of which will take 25 years.
Air Seychelles for its part, secured three additional planes this year while the world went into a deep recession and air travel dropped to all time lows over -20% as the European industrial output dropped by -15.75% this year.
As Europe’s recession deepens, trips to long haul destinations such as the
What airline company in the world today can afford to lease planes and park them for a year, without placing them into a proper business plan of operation? How can any CEO or Chairman of any airline company justify this type of fat riddled business program?
21 Century Business Models
Business today is about maximizing our resources and putting them in play. As a business gets maximum output from its assets, it spreads its cost base and becomes more profitable. These planes need to be up in the air, flying with passengers.
But Colonel David Savy has told us that: “Air
What is The Money For?
The money is not for new planes. It is not for parts to keep the old Boeing 767-200 safe. It is not for marketing to put passengers on board and keep the passenger loads above 75%. The money is to be used to:
1. Reconfigure and redesign a business class seating arrangement. This is when business travellers are travelling now at an all time low, causing airline companies like British Airways that rely on that market segment for its profits to suffer a 240 Million Pound Sterling loss this year. Unprecedented in recent history.
Without regard for market forces and market indicators, Colonel Savy loves to spend money on refurbishments. Remember the renovation of the new office in
Remember the US$ 1Million spent on the water fountains and bamboo wall paper for the VIP Lounge at the
2. The money is also to be used for completing a building at the Cargo Terminal that Colonel Savy is supposed to use as his office in the future and terminate a lease from his wife’s family in town. Why does not Air
The reason why Air
Colonel Savy says to us that the Government of Seychelles cannot take any loans as it is a requirement of the IMF that they must have loans approved by IMF before proceeding.
Hence, the Parti Le Pep (P.P.) Government weasels around this condition, and drafts an appropriation bill, in the form of a supplementary budget for SCR 230 Million, and gives Air Seychelles SCR 30 Million to meet its overdraft requirements. Wise communist business style indeed!
What Is Wrong With Pierre Laporte’ Advice?
Why does Pierre Laporte tell us to go get loans from the banks to stimulate the economy and Air
The Seychelles Rupee gained 70% on the US Dollar in 2009. This is such an amazing feat that Bloomberg and Reuters are now comparing the Seychelles Rupee to the US Dollar regularly, and also to the Brazilian-Real and Mexican-Peso. But they also know our credit rating is SD (Selective Default) and that our economy collapsed last year. They are poking fun at Pierre Laporte and his funny rates. They just do not mention his name. But we do.
How To Save Air
The best way to save Air
How can Air
The airline business is not some mysterious business or more complicated than running a Tata bus line, except the engineering is aerospace not automotive. That is done mainly overseas. But the business thinking, the ideas, that make things happen for us all, come from the brain, not from the family bloodline.
This is the fundamental error Albert Rene and James Michel made when they argued against Mancham building the international airport. Simply put, Mancham was visionary while the other two were busy coming up with communist ideas and taking over the country by force.
Mancham did not put his family in place to run the show at the airport. He put the best man. People of
Be Prepared For Worse
With Etihad Airlines from
Michel’s Promises Will Finish Air
Meanwhile, President Michel is asking so much from these people in UAE in the form of favours, and giving land for one rupee in return. But Air
I will confirm the real price in a follow up article. My “Cousin” works in the factory, another exile Seychellois, this one building planes for
I will confirm the real price in a follow up article. My “Cousin” works in the factory, another exile Seychellois, this one building planes for
Michel will allow Air Seychelles to lose market share in exchange for some crazy “Don Quixote” windmills that will never work in Seychelles, a little renovation at the hospital which our own Government should have funded had we planned and budgeted properly instead of doling out Social Security money to win elections or build District Administration buildings that are never used or create prawn and orchid farms that cost us millions of dollars that we did not have. Desalination plants were just the cream on top of the already bankrupt cake.
The Airport will still have to function, and a professional ground crew operations company hopefully not managed by Savy will still have to hire you in that sector. Those engineers that have trained and under the constraints we operate under will also find employment in aerospace engineering in
Remember, at one point we had British Airways and Air France flying Boeing 747s twice a week to
Most airlines literally took off never to return because Albert Rene promised them that they could repatriate their earnings in foreign exchange and of course this never happened. So the key is in marketing the
More airlines will mean more tourists to
Time To Retrain Skills
If you do not want to be based elsewhere, this is the time to stop complaining and retrain your skills. But get moving fast. In this economic downturn you can expect the worse. If you do not retrain your skills, do not blame Colonel Savy for that. Blame yourself. The downturn will last for many years, unlike Party Le Pep (P.P.) would have you believe. It is over and things will get better. Do not get caught in P.P.’s trap. And let Michel promote Savy to a Brigadier in his armed forces if he wants.
Downturn Will Last Many Years. Is Air
“Entre Nous”, in
P.P. will revamp the tax system according to World Bank and IMF instructions. They will drop business tax from 40% to 20%. While this is good, it won’t be enough to generate new business, create employment let alone create enough wealth for our country.
Without new businesses to generate enough taxes to run the country, the Government will continue to tax the same businesses and the tourism industry to death. As we are taxed to death, naturally, we will die.
What is needed in
This will allow us to pay down debts in reasonable time. P.P. does not have an answer for this in 2009 let alone 2010. So do not be fooled by optimists that believe their time on earth is shrouded in an inherent right to succeed in this economic atmosphere. We are in for a real down turn in 2010 and beyond.
It is true some market segments will do better like those that provide essential goods for living at better prices than the Ramadoss milk and juice factory, or STC for rice, etc.... but that is not a growth sector that creates wealth. It is only a survival sector. This will not create new jobs. In fact the poorly structured businesses will fail, because their model for growth is outdated and belongs to the Rene-Michel communist one party state era.
As this sector becomes the only viable sector, more and more people will join it and it will become more competitive. Large companies built on the communist model of business will of course fail. Do not hold your breath to think this will not happen. It is already happening around us. Reminds one of the NYS failure!
Hotel Industry Needs You Badly
Today, our hotel industry has at least 500 slots available for guest hostesses, front desk assistants, managers, and so forth. Your experience in dealing with passengers is a 100% boost to you getting a job. With that experience and corresponding dedication to the industry, your pay will be increased as well. With you in the industry, we will not have Filipinos or Mauritians greeting our tourists when they arrive at our hotel resorts.
A New Beginning For Us
All is not lost. Think of it as a new beginning. In life, we all have new beginnings. As Christians, the power of renewal in our hearts and minds keeps us fresh as we face the struggles of life and the great challenges the evils of Communism and cronyism bring into our lives.
Finally, at Air
When the domino falls, do not blame us who expressed opinions over the domino and exposed the truth. We were not the CEO or Chairman and we are not on those Boards either. Be brave and blame yourselves, blame the moderate communists. Because all of us who speak the truth and expose the evil in our country pay for our flights from our own pockets and do not fly Air Seychelles for free. And we do not send our furniture and private goods via free Air
May God Bless