1. The Independence debate
The 44th anniversary of the Independence of the Republic of Seychelles passed on the 29th June 2020 without the usual official march-pass ceremony and National Show or any other celebrations. The Seychelles Broadcasting Corporation did its best to re-live the experiences of the 29th June 1976. Different personalities were given opportunities to air their views about the 44 years gone by. Under scrutiny were the socio-economic impacts on the Republic and People of Seychelles.
Most attested to the fact that considerable socio-economic progress has been achieved. However, a few did not hesitate to point to the fact that things could have even been better had the event of the 5th June 1977 not taken place. Whilst others stated that the 1977 event helped break away from a very class structured past and built a cohesive and more egalitarian nation giving Seychellois of all race, creed, religion and cultural background its proud Seychellois-creole identity. This successful achievement reduced the whole wave of ‘Black Lives Matter’ protests and demonstrations in America, Europe and South Africa to a passing distant event that did not strike much resonance in the emancipated, diverse, mixed and tolerant Seychellois creoles living together in relative tolerance, peace and harmony.
It is an undeniable fact that socially and economically, Seychelles did overcome gross racial and gender prejudices and rose from a basket-case agro-reliant economy to ride the ‘napa years’ of the 2008 financial crisis with economic reforms that have been hailed by many including the International Monetary Fund and the World Bank as one to be emulated by countries in similar difficulties.
2. Pre & Present Covid-19 economic status
The economic and fiscal performance of 2019 was a record for foreign exchange receipts, thanks to the healthy expansion and growth in the tourism sector. This year, 2020, was projected to be even better until March 2020, when the unanticipated and uninvited imported Covid-19 virus became the world’s invisible killer pandemic transmitted from human to human was flown by flight passengers into Seychelles. Thanks to the Almighty our health professionals acted quickly and proficiently and were able to contain and prevent community penetration. Thus far Seychelles remains the only country in the Indian Ocean region that has recorded no Covid-19 deaths.
With the Covid-19 – the clock seems to have rapidly gone full circle and seems to be inching its way back to midnight. The years of ‘milk, honey and a relative care-free confidence’ in the socio-economic and cultural attributes of our creole and islander way of life is quickly fading away, luckily at a much slower rate than many other countries. However if we let our guard and vigilance slip, total darkness can invade our small face-to-face society in a relatively short period with major and multiple consequences as it has done for our main economic pillar – the tourism industry.
The resultant economic downturn has and continues to be felt across the archipelago with the closures of our sole international airport, our hotels and guest-houses and all other related activities that directly or indirectly benefited and depended on this pillar of our economy.
3. Lukewarm response to Covid-19
Initially the President was advised and programmed interventions for 3 months. He genuinely thought that this unknown calamity was to be a 3-month issue. Thus the intervention proposed was based on an announcement that reassured all employers and employees that all salaries will be paid. That Government will not approve any redundancies during the three referred months of April, May and June 2020. Forms were issued for employers to fill to request for assistance and with those forms latest Business Bank statements were also a requirement from employers and entrepreneurs.
Upon receipt of all the forms and Bank Statements without any further announcement, the Ministry of Finance set up a committee that conducted a ‘behind closed door ‘triage’ mainly based on who could afford to continue paying their staff and those who could not. As a result only some entrepreneurs and employers were ‘qualified’ whilst others were not or not even given any formal acknowledgement or response to their submitted requests. So far, no information on the triage for the past three months as to who received assistance has been revealed. They remain a state secret. Those whose requests were turned down or not acknowledged have on their part lost faith and confidence in the system, the President and his Government.
The opposition who is a majority in the National Assembly and who approved a budget of SCR1.2 billion, based on a SCR400 million monthly anticipated bill to pay all salaries of workers for the 3 months – April, May and June, could not muddle the waters further most probably for political expediency after having been duped to approve the relief budget. They approve a crisis budget that seems to turn out to be an election budget dragging from 3 to 6 months or more. All is being calculatedly conducted in a smart manner close to and just before the tentatively set provisional date for the Presidential election in October 2020.
4. Broken Promise
Un-phased and with as straight a seasoned poker face as he could muster, the Minister of Finance unashamedly contradicted the President’s previous lucid announcement by stressing in the National Assembly that the President “never said that the Government was to pay the salaries of all employees”. That bold Presidential public declaration that was transmitted live on national television was actually what comforted the employers to calmly abide by his subsequent and directive not to make any employee redundant as the Minister of Employment will not approve any such requests. The employers and employees took the words of the President as the most credible pronouncement and had no doubt that every promise made and directive given would be upheld and delivered by his Ministry of Finance. This was not to be!
What the people were subjected to thereafter was a complete sham and broken Presidential promise. The opposition majority in the National Assembly was paralyzed and was mute on the subject. It may be because of not wanting to be seen publicly as objecting to the extension of assistance in the middle of a crisis to affected Seychellois workers on the eve of a Presidential election.
Many did not qualify mainly because they had some savings in their Bank accounts after they submitted bank statements as part of the vetting exercise. Had the criteria for eligibility been shared, many could have saved the bureaucracy and red tape to volunteer sensitive and confidential information about their respective businesses as an exercise in futility. But instead, they all did, expecting overall coverage and payments to their employees in honor of the President’s public address. One can only guess, not very hard to know the reaction of those entrepreneurs on any of the Presidential promises!
Generally in trying to explain why so many were disqualified and why some were assisted, the Minister and his Secretary of State mainly pointed to the fact that those who did not qualify were those who had money (savings? Reinvestment funds?) in their respective bank accounts.
5. Creation of Perverse Incentives for future investors
This response has given birth to a perverse incentive that will plague investor’s confidence in the country in future. It has become clear that the more you work and make and save funds in your local account the more you will be penalized in any such event in future. Thus you either just keep a relatively small operational balance in your local business account and save your money in other forms and in jurisdictions other than the Seychelles or make sure that at any point in time the company is just keeping head above water.
6. Mixed & Contradictory messages – Exodus scenario
On the one hand the Governor of the Central Bank Ms. Caroline Abel was consistently pleading for all patriotic Seychellois to save and consider bringing their foreign exchange into the country whilst on the other hand the Ministry of Finance was doing its utmost through their ‘triage’ exercise and contradicting a clear Presidential declaration are sending out adverse signals that having savings in Bank accounts in Seychelles, is one of the main reason to be overlooked and not assisted by the government in times of crisis. The two institutions have not been playing the same tune and creating the perfect environment for entrepreneurs who feel they have been short-changed to start thinking seriously about offshore bank accounts to avoid being classified in the way they have been in this Cobid-19 crisis.
Who and what you know also played its part in the decisions as to who qualified and who did not. Let’s just say that the criteria for the ‘triage’ remain opaque and non-transparent whilst the much talked about accountability in the established process is for all intents and purposes – non-existent.
7. Enter SETS – The jury is out.
The approved budget of SCR1.2 billion initially for three months is now extending to more than the three months that it was meant for. By the end of June 2020, the private sector entrepreneurs were allowed to make their workers redundant. The Government responded with the creation of the SETS led by Mr. Guy Morel. This is a novel, government created and funded company that aims to absorb the redundant workers, to further train and retrain them and place them eventually in employment. The jury on this relatively new outfit is still out but a number of entrepreneurs are questioning the relevance of their staff being forced to be put on redundancy only to go to SETS when they could have been assisted and still be employed in their job. What is this craziness of the government seemingly wanting to once again be the main employer in the country through SETS. Some do not hesitate to ask – Is this another pre-election ploy? But this is not being asked loudly because of the political sensitivities related to the programme.
8. Living with Covid-19
Meanwhile, it is becoming increasingly clear that Covid-19 is going nowhere and instead of an anticipated V-shape or even a U-shape return to socio-economic norm it is now common knowledge that the return to any kind of normality will take quite a while –ie: 18months to 2.5 years – for a vaccine against Covid-19 to be developed, tried and tested and made available for all surviving humans on planet earth. Our economy and socio-political and cultural attributes of yester-year will have to adapt to the new normal and realities of enhanced hygiene and social distancing. The road ahead is precarious and full of risks as we open up to jump-start the economy especially tourism. We all have to be vigilant and take extra precautions whilst we follow the directives of our health experts who are on the frontline.