Address by President James Michel at the Seychelles IMF Conference on the 5th Anniversary of the Economic Reform Programme:31st Oct. 2013

Thu, 31 October 2013 | Finance

Vice-President Danny Faure,

Ladies and Gentlemen,

A nation’s strength, its resilience, is defined by its ability to adapt, to change. Every so often in its history, certain harsh and bold decisions have to be made. They are not necessarily popular. They can cost votes. And their outcome is not necessarily predictable. But such decisions have to be made consciously, bravely and strategically.For the common good and in the public interest.

That is exactly what we did on 31st October 2008. Exactly five years to this day Seychelles took a bold decision. And we began a new chapter in our history.

It gives me great pleasure today to join you in this important conference on Seychelles’ reform experience under the theme "From Stabilization to Sustained Growth: Five years of Successful Reforms and the Challenges Ahead".

On this day five years ago, I announced to the Seychellois people the new direction that my Government had opted to take for our country.  It was not a wild gamble. It was a calculated risk. Without political considerations. Without consideration for my political career. A calculated risk, with – foremost – the welfare of the Seychellois in mind. On that day Seychelles embarked on a journey that would change its socio-economic landscape and lay the new foundation for sustainable growth and prosperity.

Ladies and gentlemen,

As with many journeys, ours was fraught with uncertainty, risk and even fear. Many – and rightly so – were concerned about the impact of measures that lay ahead. Measures of austerity that many governments across the globe had dared not take when needed. The political risks are just too great.

But I knew, without any doubt, that there was only one option and only one way forward. And that was the one that we took.  The time had come for a fundamental change; circumstances dictated it.

Domestic policies, with all the good intentions, had led to increased imbalances and significantly weakened the fundamentals. The signs were there for all to see. An over-valued rupee, empty shelves in the shops, a flourishing black market, queuing up to buy 0 for travel overseas … Our resilience against international shocks had been eroded and we could no longer honour our commitments to our international creditors. It was clear that the economic model that had served our country for so long was no longer going to take us where we wanted to go as a nation. Our economy could no longer sustain the socio-economic needs of our people. It could no longer mitigate the effects of exogenous shocks, such as rising food and fuel prices on the international markets. And as these were exacerbated by the 2008 global financial meltdown, we knew that we had to act. Act decisively, and act fast. The time and need to change direction had come.

And I did so, after consulting extensively with local and international partners. I did so, putting all political considerations aside – including my own. I did so, putting the interests of our country and our people first and foremost. Because I had absolute faith in the people of Seychelles.

In my address to the nation on 31st October 2008, I emphasised that the time had come for us all to embrace a new reality – a new beginning and a new economic model underpinned by a modern economic framework. But it wasn’t just about economics. It was about ushering Seychelles into a new era of modernity, profound change, accountability, responsibility and transparency.  It was about reassuring the people that, notwithstanding the harsh realities of the macro-economic reform program that we were about to enter into, no Seychellois would be left behind.

My message was also about the need to change our mindset. That as much as Government would look after the needy, the most vulnerable in our society, those who were capable of working had to get up and fend for themselves.

Distinguished guests,

Ladies and gentlemen,

The reform program that my Government has implemented has been – I do believe – one of the most complete and comprehensive macro-economic and structural reform programmes that the world has experienced in recent times. Whilst we are a small nation and to some we may not matter, the widespread recognition of the international community has shown that actually we DO matter.

Seychelles is today respected as a nation which has done the right thing. We have a track record that is recognized by the international community at large, from the multilateral to bilateral partners, rating agencies, as well as commercial financial organizations. We have a track record of implementing appropriate policies. And adhering to them. Our people are respected as a resilient and smart people who found the courage to stand by their Government to make our country a better place, a more prosperous, caring and happier place.

In this regard, I pay tribute to the people of Seychelles. They were presented with harsh choices during consultations that I had with them. They listened. They accepted them and they backed them. The success of our programme is entirely owned by them. And this is what we are saying to the world today: if you have the people’s backing nothing is impossible.

As President of this country, one of my primary preoccupations is how my Government can continue to improve the quality of life of our people; how we continue to create wealth, create jobs and improve the living standards of each and every Seychellois.

This conference will address the many facets of our programme: its success against overwhelming odds, its challenges and the lessons we have all learnt from the reforms. It will also explore policy actions and options on the way forward. It will also focus on growth.

But I am pleased to note that “growth” will not be an end in itself during the discussions. I strongly urge you to focus more on the quality of growth. How can we make that growth inclusive, such that it touches each and every person in our society? What is growth worth, after all, if it does not benefit everyone?

We need to promote inclusive growth that provides equal opportunities, that reduces inequality, and promotes social justice. Growth should not leave any Seychellois behind.

As we focus on the way forward, let us not forget one fundamental pre-condition for sustainable growth, which has been crucial for taking us to where we are today, five years after the introduction of the Reform Programme: that is macroeconomic stability.

We need strong macro policies and we have to continue to pursue our structural reform. Structural reforms are critical to put in place the right environment, eliminate inefficiencies and further modernize our economy. We have reached where we are today because our policies have been well designed. We have pursued our structural reform agenda with vigour and the results are there for us all to see. It is crucial therefore that we maintain the same discipline that we have shown over the past five years.

I would like to take this opportunity today to reassure our development partners that Seychelles remains more than ever committed to a stable and sustainable economy. We will continue to pursue prudent and strong macroeconomic policies. We will continue to further strengthen our economic base. We will continue to build resilience so that we can better cushion ourselves against the impact of international shocks. We will bring down our debt level to a more sustainable target, and in this regard we remain committed to our 50% debt to GDP ratio target by 2018.

In parallel, we need to continue to invest in our people, in the education of our children, in the health of our citizens and in decent housing for our people. I do recognize that achieving fiscal consolidation and the need for investment are often conflicting objectives. However, as our experience has shown in the past five years in working with key institutions like the IMF, the World Bank, the AfDB, and the European Union, to name but a few, we can actually reconcile those “conflicting objectives” when and where there is flexibility, understanding, especially when the spirit of "give and take" prevails.

Ladies and gentlemen,

I would like to thank the IMF for co-organizing this important conference. I thank all international institutions that have accepted our invitation to participate.

Let me also express, on behalf of the people of Seychelles, our utmost appreciation to the IMF, the World Bank, the African Development Bank, the European Union that have been key partners in support of our macro-economic reform program. As much as we had the will to implement our reform program we would not have succeeded without your support. Your financial support has been critical in ensuring the success of our policies, whilst technical assistance has allowed us to modernise our institutional and legal frameworks, and build capacity.

I would also like to thank our bilateral partners that agreed measures to alleviate our debt stock towards them. I would like to express, in particular, my sincere gratitude to Abu Dhabi for extending to us a generous grant, in the aftermath of the introduction of the Programme, which allowed us to weather the storm.

In conclusion, I would like, once again, to thank the people of Seychelles for their indefectible support in the implementation of the Programme. I wish to express my gratitude to Vice-President Danny Faure for driving with such passion the Reform Programme. Thank you Vice-President. I thank the technical teams from all ministries, the Central Bank and government institutions under his leadership for their contribution toward its success. I thank the Minister of Finance, Pierre Laporte. I also want to recognize the efforts and support of all other stakeholders, including the National Assembly, the private sector and civil society in general. We should be especially proud of the fact that our progress has not been at the expense of ideals that we hold dear.

Ladies and Gentlemen,

I now have the pleasure to declare open the conference "From Stabilization to Sustained Growth: Five years of Successful Reforms and the Challenges Ahead".

I thank you all.

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