The Seychelles Column - By Christopher Gill

Did U Hear The President’s National Day Speech?

First The Good News
Kudos to the National Day Committee for listening to Alain St. Ange to engage the business community in the National Day festivities. Finally!

The participation of the private sector brought the festivities to life, in a real tangible way that will also have an effect on the national bottom line: Gross Domestic Product (GDP). SBC reporters could improve by asking questions, instead of just nodding their heads up and down.
After 17 years of military and paramilitary parades, guns, uniforms, the same cultural shows from the central committee over and over, it was nice to see a proper National Day weekend display of things that make the country move.

Antoine Moustache from the Ministry of Agriculture has been a total flop in his food security arguments and agricultural production. He should give it a rest and start running a farm, to put those lovely words into action. 34 years after, agriculture in Seychelles, is almost dead, representing only 2% of GDP. It no longer needs a minister. It needs full privatization and the ropes that keep it from progressing need to simply be cut to set the farmers free. Stop enslaving them.

Now the Bad News
The most grotesque display of exaggerated opulence which is found traditionally in African states with despots at as Head of State was outdone by James Michel himself. As Rene sat back to watch the show, he must have been awed by President Michel’s entry into the stadium. Two Black Land Cruisers, bodyguards, at each door-opened, standing on side gate rails, Seven (7) Honda Gold Wings, donated by the Kingdom of Morocco for the Seychelles Police, but used only for display shows, escorted the President who rode in a BMW 5 series metallic black sedan.

Not a bad entry into the stadium for the President of a country that has been declared bankrupt and is currently under IMF administration. I suppose we know why we are bankrupt, when we see such displays of wealth and resources being squandered openly in public.
In public only last month the same President had to tell the students at the Polytechnic that Seychelles does not have money for enough buses, and was waiting for a donation of buses from Communist China.

The National Day Speech
The speech said very little, and announced nothing. This is not good news. It is bad news. Bus fares went from Scr. 7.00 to Scr. 5.00. Sheik Khalifa will likely fund that until elections are over. Then the fares will go back up. Knowing James Michel now, he likely did not even consult with SPTC on the fares and just made the announcement. He did the same thing with PUC tariffs at the beginning of the year. He announced a reduction to appease the public over high electricity rates, but PUC had no clue what was going on. This practice is not bad management, it is NO management.

The second plea James Michel made was to the commercial banks of Seychelles to drop interest rates on loans. He has made the plea in the past, and the banks all but ignored him, except to the extent of a couple of point’s reductions, nothing substantial to turn the economy around.

Michel did say that parastatal banks Saving Bank and Nouvobanq will be reducing interest rates to spur competition. This is a total joke, Saving Bank hardly has any money itself to lend. Nouvobanq has money but it is government and parastatal money mostly. They tend to lend to SPPF/PP businesses and those businesses tend to not repay the loans or are bad performers. Nouvobanq will do little to spur upward growth in the economy.

I have spoken to the commercial banks concerning interest rates. I too have made the plea in the past that commercial banks reduce rates to spur growth and get money back into the economy to get it moving. But it is not that simple according to the commercial banks.

The problem the commercial banks have is the cost of bad debt on their books. That bad debt happens to be Government of Seychelles bad debt. SPPF/PP have borrowed Billions of Seychelles Rupees from these commercial banks James Michel is insulting in his speech. His government has not paid them back and has asked them to forgive them the debts, take a haircut if you will. But someone has to pay; it ends up being new borrowers. Everyone pays a few extra points in interest rates, to keep the banks in the black. Banks are not supposed to lose money, especially when they lend money. After all, that is the business they are in.

If Michel’s Administration would pay its bills, I am certain the banks would drop interest rates to more palatable figures for business.

Michel Gripes About The Cost of Doing Business In Seychelles
Michel seemed to be griping about the cost of doing business in Seychelles. He is right. It is expensive, especially in a downturn. The business community is currently in a cutting losses mode instead of maximizing profits, with the exception of some business that have enjoyed an overwhelming advantage of calling in concessions from SPPF/PP.

But Michel is right. It is expensive to do business in Seychelles. His government’s overburdening taxes does not make doing business cheaper.

The underlying premise of the Free Market is that the individual will spend his/her money on the thing that will generate him/her, the most benefit. As the individual benefits, society progresses. Each Rupee paid in taxes, and misspent by Michel’s government, wasted by his government, lost to corruption, huge ministerial salaries and retirement pensions, will make doing business more expensive in Seychelles. So Michel has not told us anything we do not know, on National Day.

Aside from the fancy motorcade he rode in on, it would appear Michel has come down to earth and has abandoned the grandiose talk about doubling GDP by 2017 and so forth. Now he seems to be preoccupied with dropping the price of bus fares, just to keep on going a little more, before people take to the streets.
Beware of the coward for a hundred years that becomes brave for one day, Michel.

DBS BONDS?
Michel announced that DBS would issue a Bond to raise money, to lend out to get the economy moving. He said that the Government of Seychelles would guarantee the BOND. Totally absurd!

Khalifa Bonds or Siva Bonds?
The Government of Seychelles cannot guarantee the next consignment of fuel or even onions, how will it guarantee a BOND? That would only be possible if the person or entity subscribing to the bonds did not care if Government of Seychelles could not repay the bonds. Only Sheik Khalifa or SIVA would be in such a position to take these bonds. In which case, the financial instrument would be used to just implement the “Sell Baby Sell” program at another dimension. As Government of Seychelles and DBS default, Michel or SPPF/PP will just give Khalifa or Siva an island or a district on Mahe, to pay off the debt.

What Michel Should Have Announced, But Cannot!

I say it again, what Government of Seychelles should be doing right now is collecting the $200 Million Sheik Khalifa owes us in taxes and we should then pay off our commercial debts, improve our country credit rating, and move on as a country. With an improved credit rating, in no time, it would give Seychelles the impetus, to issue bonds internationally and use that money to improve our infrastructure in the areas of water catchments, electricity megawatts capacity and additional grids, improved roads, improved public transport system, possibly electric rail from Anse Royale to Victoria, improved domestic and international airport facilities with additional capacity to take more planes. Then when banks drop interest rates and lend money it will go into real growth expansion. Right now, money put in a market with no infrastructure, will only go to waste and create more bad debt.

Micro State-Micro Economy Rule
Remember the rule you must never break Michel: More beds and more rooms means you have to have more planes and more seats on planes. You do not break this rule and allow new rooms and new hotels on line, only to destroy other viable establishments and in turn breed chaos in the tourism market and foster instability. If you do, you destroy the perception of our country as a viable investment centre. Stability requires proper planning, not shooting from the teleprompter that looks at you from the right and left of your speech podium.

The Harmony Thing
Michel started his speech harping about harmony in society. He said we all came from different continents and we are happy and harmonious. As such, we must not disturb that harmony. What Michel was saying really, is that today, with SPPF/PP losing support, the need to bring in tourist and navy seamen from foreign lands to fill the Unity Stadium is now ever more critical to keep the regime that has bankrupted Seychelles to keep on looking good.
Michel is telling us really that “Sesel Pou Seselwa” does not apply today. Because if it does, it will mean that he will lose power and SPPF/PP will be finished.

I was amazed, that Michel‘s introduction targeted the founding philosophy of the Republic and he said it was no longer valid. He also targeted the Creed of MSR, a party that has not even registered yet. I wonder why he is more worried about MSR then he is worried about SNP?

We in MSR are full on when it concerns harmony. But harmony must centre around “Sesel Pou Seselwa” the founding principle of the Republic. Now if the President of the Republic has gone astray and now thinks that he is the President for the World, well, I did not put the man there, and perhaps whoever did, should seriously consider having him replaced soon.

Even Danny Faure is starting to look like a plausible alternative to Michel in the PP camp. At least Faure wears sunglasses and drives his government issued Honda, at the same time. Hurray to that.

“Sesel Pou Seselwa”, Michel, on this National Day, not for every continent, as you suggest. Is it because we come from different continents that we should just abandon a founding principle and close the immigration desk at the airport? Are we first citizens of a country then of the World, or the other way around?

How can a Presidential speech rest on such a hair brain idea?

I suppose Buzz Light-Year wrote that one.

May God Bless All Freedom Loving Seychellois!