Q&A > James Michel - President of The Republic of Seychelles
| February 2nd, 2012
The Report Company: In 2007, your government launched “Strategy 2017” – a ten-year plan to double the GDP of the country through focused fisheries and tourism expansion programmes, the development of the financial services industry and the growth of other economic sectors. Today, at the halfway point of this ten-year plan, how would you define the progress made so far?
James Michel: Seychelles has limited natural resources and the three sectors remain important for the future development of the economy. Despite its openness, the economy has shown strong resilience against the recent global financial crisis. In the aftermath of the introduction of a series of comprehensive measures to address certain macroeconomic imbalances, a contraction of only around 1% in real GDP was recorded in 2008. In the subsequent years, growth in real GDP has been positive and above expectations. For the year 2010, this was 6.7% whilst the projection for 2011 is 5%. Consequently, in the absence of major external shocks, the country is on track for achieving its medium- to long-term objective.
We have a successful international financial services sector that continues to undergo legislation modernisation, as we abide by international standards. More airlines are flying to Seychelles, boosting tourism arrivals. Drilling for petroleum in our waters will start in 2013, after the latest harvest of encouraging seismic data, and a fibre optic submarine cable is being laid between Seychelles and Tanzania. The potential of our fisheries is yet to be fully tapped, as outlined in Strategy 2017, after piracy from Somalia began affecting the waters of the Indian Ocean. Still, we continue to operate one of the biggest tuna canning factory in the world.
TRC: How is today’s Seychelles to be perceived by potential investors?
JM: Since 2008, with the liberalisation of the economy, namely in the foreign exchange market, there is greater confidence for investors, both domestic and foreign, that there is now free movement of capital that will assist in the growth of more investment into the country. Seychelles has also signed a number of double taxation avoidance treaties (DTAs) that also encourage investors to engage in businesses in Seychelles and other jurisdictions with which Seychelles has signed these agreements.
Seychelles is a vibrant democracy which, in spite of its small size, has half a dozen political parties and movements. I have also been promoting a form of governance that is practicable, consultative and involves public participation in government affairs.
TRC: What was the outcome of the Commonwealth Heads of Government Meeting in Perth, Australia in October 2011 and how would you describe your ties with the Commonwealth?
JM: Our ties with the Commonwealth are similar to being part of a large family. In the Commonwealth all countries, big and small, are able to share views on important issues. We build bonds of friendship. We help each other in having proper governance structures to promote democracy and economic growth.
I was happy on returning from Perth, knowing that Commonwealth leaders have recognised the inherent vulnerabilities of Small Island Developing States (SIDS) like Seychelles and their need for specific developmental mechanisms to address core challenges such as food security and climate change. Islands can be the true laboratories for sustainable development and I am urging leaders to consider green economy and blue economy projects to be targeted in SIDS.
TRC: What are your views on the bilateral relationship with Great Britain’s political and business leadership?
JM: We very much value the historical relations between Seychelles and the United Kingdom. Today, however, our bilateral relations are focused on education and piracy.
Since 2009, the University of Seychelles degree programmes have been jointly operated with the University of London, and we also had a twinning programme with the University of Manchester between 2001-2010. As the Seychelles secondary education system is based on the British IGCSE and A Level examinations, many students also study in the UK for university degrees.
Britain has also trained a number of our police and military officers and the Attorney General’s Office has hosted barristers from the UK Crown Prosecution Service to help prosecute piracy cases. We have also been discussing with law enforcement personnel from the UK Serious Organised Crime Agency the setting up a new maritime intelligence and information centre, which will target the financiers of piracy.
I believe Seychelles and Britain can work together to garner support for anti-piracy engagements from other key members of the international community, in order to find and implement a lasting solution for the instability in Somalia.
TRC: As the holder of the Tourism portfolio, what are the key priorities for the sector’s development in 2012?
JM: The main priority now is to restructure our national airline, Air Seychelles, to boost its performance in the fierce competitive environment. At the same time we must attract as many airlines as possible to fly to our islands, as we diversify the sources of visitors. The major carriers of the Gulf countries have increased their operations to Seychelles.
We continually look for ways to produce the new generation of travel trade staff. In 2012 the construction of the new building for the Tourism Academy will start, to give students the opportunities to learn in a new environment that is also commercial. Meanwhile, we have launched the Seychelles Brand. This is not merely about promotion of the Seychelles holiday destination, but also about preserving our natural environment at all times, because this is what attracts visitors to our islands. Seychelles Brand also favours increased participation by the Seychellois in all aspects of the tourism industry.
TRC: What other key projects are you undertaking as President in order to expand the country’s economy?
JM: Seychelles has a large expanse of Exclusive Economic Zone, where the potential for oil exploration is enormous and this is attracting investment for a resource that is becoming scarcer. According to recently completed seismic surveys, there is potential for oil discovery estimated to be as large as the Saudi Arabian oil fields. Seychelles is working with international partners to discover the oil and foreign investment in oil exploration is being encouraged.
We also have many opportunities for developing our fisheries resources and have a thriving tuna industry. As fisheries is the second pillar of our economy, we are encouraging the development of new processing plants in Seychelles, as well as international partnerships with recognised brands that deal in fish processing and exportation.
TRC: What are the key challenges to combining environmentally friendly and sustainable development with the stimulation of economic growth in a Small Island Developing State?
JM: During my tenure as Minister for Environment I ensured that we implemented strict protection laws and started to educate our young people on the importance of preserving the most valuable riches that we have.
As tourism is our main economic activity, we felt it was important to marry the two activities by developing our tourism business model as the ‘ecotourism’ model, where economic development and the protection of our cultural and environmental diversity are fused into our planning systems. I also believe that we must preserve the environment we have in order to ensure that our people have a healthy life, because by respecting Nature and nurturing it, people experience vast health benefits and lead a better quality of life.
One of our key challenges is climate change. We are islands; if climate change continues at the current rate we will disappear, it is as simple as that. It is not enough to have a political agreement for the countries of the world to stop climate change, we need a legally binding one and that will take courage and leadership by the large industrialised countries.
TRC: What is the strategic role of Seychelles in the fight against piracy?
JM: Let me first reassure you that the Seychelles islands are safe. Piracy has not affected our tourism industry in general – in fact last year we had a record number of visitors –but piracy has affected our yachting and maritime tourism to the outer islands, although chartering in the inner islands is still operational. Our fisheries industry has been highly affected and our fishermen have been taken hostage on several occasions. In fact two fishermen are currently being held in Somalia.
It is fundamental that the international community is fully aware that the threat of piracy is a major one for Seychelles as it is really affecting our economy, particularly in terms of fishing activities.
Piracy has also become the biggest threat to international trade and I have asked the world community to address this problem with urgency, by ensuring that peace and stability are brought back to Somalia.
We are very grateful to Britain for the support given to us in the fight against piracy. I have, however, asked the British government to increase its engagement as a matter of priority, in order to ensure security in the Indian Ocean region, through which over two thirds of the world’s oil is shipped and where trade and commerce is becoming exceedingly costly.
TRC: How are you trying to position Seychelles as an international finance centre and what are its competitive advantages?
JM: We have one of the most favourable legal and regulatory regimes for financial services in the world. We have focused our efforts on ensuring that the financial services sector complies with international standards and continues to stay on the OECD’s white list. Furthermore, our location is strategic, as we have excellent sea and air links with Europe, Asia and Africa, and our time zone (+4GMT) allows for communication at reasonable hours with major financial centres around the world.
TRC: What is your personal vision about the country’s potential to become a hub for international commerce?
JM: Investing in Seychelles is very attractive as foreign investors can enjoy our oasis of safety and security. This has always been our strength. We are a very stable country and this has been the key to our development and our appeal. Our strategic location also makes us an ideal port of call between the journeys of the East and the West. We have the advantage of being part of the free trade areas of SADC, COMESA and EAC, and also having the reputation as a multilingual and multicultural society that is highly adaptable to changing working environments.
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