Seychelles 2008 Economic Reform: Are We Living The Same Reality?

Barely a week ago, the 85K population of the Seychelles were released from the anxiety of the awaited and feared program of economic reforms. Since then, a lot has been said and written and, I warrant, still a lot more awaits to be said and written on the announced Reform Package.

There are those who saw in the reform package clear signs that the country was on the verge of economic collapse and had been forced to call on the IMF for economic bail- out.
Some would find not unreasonable cause to see the current national economic dire straits as the cumulative results of misguided policies and short-term planning as the national and political leaders chased one mirage of economic robustness after another and thus steered the country to the edge of the abyss.
Others saw in the reform package, a mere transitory moment of national hardship, on the way to the visionary future of national prosperity, charted under the current incumbent political party that has ruled the destiny of the nation these past 30 years.
Some others yet, strengthened in their self-imposed delusion, see in the reform package, a rallying call for national unity and an opportunity for the sons and daughters of the land to dig deep into their patriotic resolves to forget the past and strive harder to keep the country upright.

It is enough to make one wonder whether we all live in the same country and therefore exposed to the same realities.

Let there be no doubt about both the bitterness and the painful bite of the ’economic reform’ program proposed by the Government. All indications are that the measures announced are simply the tip of the iceberg. As with any self-respecting iceberg, as the exposed tip melts, it is replaced by part of the greater submerged, hidden mass until the whole mess suddenly looses that subtle balance and tips over, causing supremely dangerous conditions for anyone in close orbit. So it shall be with the Seychelles Reform.
The exposed tip is the floating rupee. The submerged mass is the repercussions from escalating costs that will come from market adjustment to its true value that it will be granted by local and international traders.
As it stands, the value of the rupee is already fluctuating wildly. Conflicting local and international reports give its value as at 3rd November at an average 16.97 to the US $ (20:1, 18:1, 15.58:1,14.29:1). This represents a near 100% depreciation translated into a halving of its pre-November 08 purchasing power.

For the average household with non-elastic income, this dramatic reduction of purchasing power will likely be further exacerbated when retailers will start to adjust local commodity prices.
Then will come the crunching moment where families will have to confront the reality of being turned into paupers in so far as their income no longer allows them to be decently fed, clothed and housed.
Whatever money they had, in the bank or under the mattress, will have suddenly lost half its worth in the space of a few days! Those lucky enough to have retained their employment in the public service will likely be bemused by the 17% pay rise against the 50% devaluation and 20% rise in service costs.
I fear for my country. I fear for the welfare of my fellow countrymen. We have stoically endured, over the past 30 years, a plethora of empty promises from our national leaders.
Wasn’t it in the mid 1990s, therefore some 15 years ago, that the erstwhile single party President demanded of us that we make a little sacrifice and tighten our belts while we trudge through the dark tunnel of economic dire straits towards the brilliant light of prosperity that he and his party had prepared for the nation?

What happened since then? Why is it that the nation seems forever condemned to travel the path of illusory and therefore elusive prosperity? Did the former President finally understand that he had been a lousy captain and had not stopped the ship of the nation to drift and finally coast dangerously towards the reefs of economic collapse?
Was this ultimate dawning of the truth the compelling motivation for him to step down and allow his 2IC to handle the emergency manoeuvres to keep the ship of state afloat?
And why does the new man have to tell us today, that the national economic hardship is a “transitory phase for us to see the light at the end of the tunnel.”
Is there no one with the guts to swim through the bilge water of the state-engineered misinformation to admit that the ship of state is truly in poor condition and will sink unless all hands come on deck to receive precise orders of where to go and with what tools and in what manner to carry out emergency repairs?

Before we even begin to start thinking about pulling “our resources and ideas together and work so as to keep our country standing and strong” we need to be certain that our individual and collective actions will not be another fart in the wind.
We need to know in precise details what went wrong, when and how.
From there, we can make an informed decision about the best course of action to take so as to avoid the same pitfalls of yesterday.
Above all, we must resolve not to heed the advice of those who steered and led us to the edge of the precipice. If they had any sense of decency, they would have at least accepted their failures as leaders and stepped aside to allow others from the ranks to come forward and take the lead.

We had no, or little, say in the decision our leaders took to draw huge financial loans to pave the way to their vision of economic progress and stability. If our understanding of the complexities of directing and running national economic affairs is limited, we know that it shares some basic truths with the more modest family business. Progress is ensured by getting your priorities right. By only investing after a careful and realistic appraisal of your growth and returns potential. By shunning big short-term relief in favour of small sustainable returns to cumulate in long-term benefits.

Somewhere along the line we, as a nation, lost interest in the bigger picture and naively surrendered our destiny in the hands of those who had nice words to lull our vigilance. Time and again, at each election time, we allowed ourselves to be too easily bought by the little honey and big promises handed out.
The country’s economic recovery will be launched. Investor confidence will be boosted. Houses will be built for all, and GDP will be doubled by 2017!!.
Those were big promises that required equally big investment and loans.

Ironically, the real cause of the country taking that final step that led into our current economic abyss, may be the defaulting on the repayment on one such big loan and investment that instead of launching us off, bowled us over and could very well bury us in.

There will be hard times indeed for us now to face.

Some average families will be forced on their knees, as they see their live savings and projects to safeguard the future of their children and their own retirement suddenly wiped away.
When the basic Rs.100K Life Insurance Policy matures after 15 years to a potentially only 50% purchasing value!
When contributions over the past years into the Pension Scheme are wiped down to a fraction of their worth.

Some families will fade away in silent disavowal, with memories of what life used to be and the acid taste of dreams for the children that would now never be fulfilled. Others will seek to understand how they were so wrong and so easily fooled, and in the process, break and tear themselves apart, unwilling to accept the inevitable and will seek to demand from their local leaders, at the least, an explanation that is not another rehearsal in the usual empty rhetoric.
It will be a moment of greatest risk to national peace and cohesion when a man will be faced with the sight of his family forced on its knees, his children going hungry, his house falling in disrepair, apathy pushing him further into depression and an overwhelming sense of powerlessness to stay the descent into despair.
Then there will rise such a wail of protest at being so humiliated, of hopes and dreams nurtured on empty promises, of being reduced to paupers as the inevitable result of poor national vision, planning and leadership.
There will then be no place for national unity. There will then be no place for forgiveness. The time to swallow bitter pills coated in honey will have passed.

The only thing left to do before we start the rebuilding process shall be to force those responsible for our woes, to account!
It will be the time when we as a nation will ask of the current President, to explain why after so many years, his ruling party is, in 2008, still locked in “working to put the national economy on a sound footing,” and how do we make the difference of the “right track “ of today from all the other right tracks of yesterday?

You, who may be a completely lost surfer who accidentally strayed onto this page, don’t read it as an incitement “to riot or create disturbances or to insult others”. Don’t read it as simply another ‘Red-Basher’. It is intended to be a mere small contribution towards national mind awakening to embrace reality.