Letter to the Editor |16 July 2020

Proposition for a new Seychelles amid COVID-19

There seems to be a serious misunderstanding out there that COVID-19 might change the world and that it could inflict serious damages to our life and lifestyle.

It’s wrong. COVID-19 HAS ALREADY changed the world and our life but many of us haven’t woken up to smell the coffee, and that’s why we’re dithering about the way forward.

As Seychelles continues the downward economic and social spiral this pandemic shows every sign of not going away and to the contrary, it’s gaining momentum.

This is the time of the overused phrase “when the going gets tough”, but here the tough haven’t quite got going yet.

So, with the opportunity of writing this piece for Seychelles NATION, I have taken a long hard look at our country and put together this stark reality check.

We now have to brace ourselves to face this crisis in the coming months and years. This will inevitably reduce our economic growth and our ability to spend thus affecting the population in terms of unemployment and living conditions.

If we are not careful, this scenario can create opportunities for criminality to increase, more default in repayment of loans, social unrest just to mention a few. 

The widening socio-economic divides and expected rise in unemployment, needs to be addressed by government. Losing jobs and livelihoods are not a simple matter in a time of crisis. The International Monetary Fund (IMF) anticipates the worst economic crisis facing all nations since the great depression. 

We can expect a negative per capita income in the coming months and years enhanced by mounting national debts. I believe that we have to look seriously at our fiscal and monetary policies to contain the waves of economic devastation that lie ahead. Seychelles has a developing and fragile economy.

We have limited fiscal space to support us and protect jobs. The heavy reliance on tourism has amplified our resolve to look at other ways to generate revenue and foreign exchange. At the same time, we have to create jobs and many jobs. 

Government needs to design a resilient economic response and recovery plan involving macroeconomic policy tools and to focus on the “real economy” du jour.

Loosen fiscal policy

One strategic consideration is to loosen the stringent fiscal policy rules to give more flexibility for local industries to develop and evolve rapidly. I will cite some examples in a separate paragraph.

Amid all this turmoil and turbulence, it is very unfortunate that a lot of Seychellois are still living in the “old normal” ways in terms of spending, amusement and enjoyment. They are not bracing for the coming surge of economic downfall and social disaster. I am not a merchant of doom but simply reacting to the real reality occurring worldwide.

More than ever we need to save and adjust our lives to the “new normal”.  The people of Seychelles have always been and still are a very resilient nation. So let’s do it now before it is too late! Yes, we can.

As we swim in this fallout of the pandemic current with no end in sight, it is now certain that additional actions are needed for our survival. We need to insulate ourselves from this downward economic trend and create conditions to assist the nation to adjust to the new reality.

Leaner government

This brings me to propose a government shake-up in 2021 aimed at creating a more robust, flexible, leaner and more productive government that is swift and agile in delivering services. More than ever we need to tackle the many challenges to relaunch our economy and national development.

The strategic direction for the government is to urgently review the existing structure and size of government. I propose that some ministries, departments and public organisations should be merged with a view to ease and remove the heavy bureaucracy that exists and are creating bottlenecks and frustration to the many clients. This is affecting the growth of our economic development. 

A swift, lean and agile government will no doubt help to move quickly in decision making and to deal more effectively with the ever changing business and economic environment. 

A reduction of top heavy management in some ministries and departments and public organisations would no doubt create a better working environment, reduce operating costs and ‘red tapes’ and will no doubt achieve the overall priority targets of the government, not to mention wastage and thefts that exist.

With the ‘new normal’ we have also to seriously think about applying digital platforms in all the government services in this new pandemic working environment to reduce costs and increase better communication. A leaner government could also release office space at a cheaper rate to a burgeoning private sector looking for new opportunities.

Our resolve and determination to succeed as a nation must now be greater due to the situation we are now facing. The government must be bold enough and very determined to take this new route for the sake of the Seychellois people. If as we like to say “Seychelles is bigger than us” then let us tackle this crisis with new thinking and actions.

I propose also that all parastatal companies that are productive and profitable to be strengthened and encouraged. Those that are not must be disbanded or merged with another organisation with new management structure and mandate. In this new Seychelles under COVID-19, one critical pathway is for all ministries, departments, organisations to be more accountable, transparent and inform the population at the end of each financial year of their successes and achievements.

We need to see more productivity and tangible results to justify their existence and budget allocation. Now is the time to get out of our comfort zone and walk the talk outside the box. Government must set new achievable parameters and targets.

As part of our economic response I propose some recommendations to government and the private sector:

1. Government to strengthen the social protection systems in place and support hard-hit sectors. Minimise too much bureaucracy and red tapes.
2. Amend the public procurement regulations to facilitate more local participation.
3. Decrease financial burden on households and ensure the continuity of basic services such as housing, water, electricity and basic foods. 
4. The government through its housing department will not evict tenants from any social housing for a period of 12 months. All evictions to be temporarily suspended.
5. Guarantee certain income and contributions to the informal business sectors for a period of six months.
6. Create and open opportunities for small and medium-sized enterprises (SMEs) by providing fiscal support and provide temporary debt and mortgage moratoriums. Example: state-backed loans, tax deferral and exemptions and flexible credit repayment for SMEs.

We should try to generate more foreign exchange through the following mechanisms:

1. Government and private sector should do a national inventory of all exportable local goods and products. An effective and robust national marketing driveto engage in the marketing of such local produce.
2. To use digital tools and online platforms to reach the millions of consumers worldwide.
3. In the same context banks must enable and facilitate the transactions through the provision of merchant banking facilities whereby overseas customers can pay online, small sums in foreign exchange for the goods. Acatalogue of all exportable local products should be produced and promoted online and also printed and placed in all hotel rooms. 
4. Government and private sector must support all the local industries (informal sector) by issuing directives to all departments and employees to buy only Seychelles made product for the next six months. This will decrease the need for foreign exchange. (Example – contractors supplying schools with daily students ‘meals must use the maximum local produce such as meat and vegetables. This will create a domino effect in the local economy and guarantee income and employment to the informal sector).

Seychelles is now in a survival mode and must reduce foreign exchange leakages and become resilient. A national inventory should be made to determine all the components where the consumption of foreign exchange is the highest and steps taken to mitigate such leakages. Certain selected luxury goods and food items must be temporary barred or taxed at a very high level.

I outline here other initiatives to be considered:

1. All shops and supermarkets in Seychelles should dedicate a special corner or shelves to sell only locally produce goods. The area must be clearly demarcated with appropriate approved signage. Example ‘galet’, jams, local snacks, smoked meat, salted fish, local hats, brooms, artisanal items for homes (pilon, larap), etc…

A national exhibition to showcase only local produce (not agricultural goods) should be organised each year for both the local population and visitors. This venture will create a synergy for the local industry and informal sector.

2. Motivate and coordinate local businesses with potentials to export with foreign exchange earnings. Some examples: local drinks, oils, herbal teas, boat maquettes, perfumed soaps, perfume, paintings and artworks, clothes, etc. 
3. Providing professional local consultancy services to international organisations. 
4. The offshore sector and fishing industry, two of the current main actors bringing in foreign exchange in the country must be strengthened, protected, and championed.
5. Establish a localisation programme with a timeline to reduce the number of expatriates. Effective monitoring will be required to determine the success of such project.
6. Seychellois should look or create innovative business and government should encourage with proper incentives. Example – home delivery services, 24-hour home repairs, appliance repairs, and maintenance services etc
7. Visitors must be encouraged to spend more in the local economy.  A heavy national marketing campaign utilising all the media outlets is urgently recommended to promote all locally made produce and to make the population proud in buying Seychelles made goods. The campaign’s slogan could be: ‘SAVE FOREX – BUY SEYCHELLES’ or ‘PROUDLY SEYCHELLOIS – BUY SEYCHELLES PRODUCE’
8. More emphasis should be placed on promoting among the local population such items as:agricultural produce including meat products; local rum and beverages; perfumes; clothes; snacks, condiments; soap; ice cream; tomato sauce; smoked fish and other prepared fish products; local made tuna in tins; etc…The idea is to inculcate into the minds of Seychellois to buy locally made produce thus saving on foreign exchange.

These are just a few of the ideas that come to mind to help to build resilience to protect us from the coming waves of the pandemic shocks and crisis.

More than ever, we all need to make sacrifices, to work in the ‘new normal’ environment and adjust our lives to fit in with our limited budget.

The government must now make bold, difficult and robust decisions on how to plan ahead.

The private sector for its part has also a critical role to play to assist in the implementation of programmes and to create the conditions to maximise revenue and save employment. Only in this way can we move forward with confidence.

David J. Lowseck

International marketing consultant

Analyst

Disclaimer

The views expressed in this letter do not necessarily represent the views of the Seychelles NATION newspaper.