Saturday, November 15, 2008

IMF supports Seychelles

  • A fundamental liberalization of the exchange regime, involving the elimination of all exchange restrictions and a float of the rupee was introduced in early November;

  • A significant and sustained tightening of fiscal policy backed by a reduction in public employment and the replacement of indirect subsidies by a targeted social safety net;

  • A reform of the monetary policy framework to focus on liquidity management based on indirect instruments; and

  • A reduction in the role of the state in the economy to boost private sector development, through further privatization, enhanced fiscal governance, and a review of the tax regime.

- IMF Executive Board Approves US$26 Million Stand-By Arrangement for Seychelles

1 comment:

Anonymous said...

lets be real here.lets take a flight and go to Seychelles,and lets start from the national airline namely 'air Seychelles' .According to the staff of the airline,the Seychelles economy is so bad that its the only explanation they can give the passengers when they run out of food to serve on the plane.To make matters worse,you only get cold meals because they don't have enough money to buy a heating system to warm up the food before serving.And all this happens on a government funded airline.

The IMF is going to give Seychelles millions to boost its economy.But where will the experts be?who will make sure the whole US$26 Million is spent and not only half of it goes to the economy while the rest of the money is buying someone an expensive boat or in a Swiss bank account?This situation reminds me of the kids we have these days and their proud uncaring mothers. The kids are uncontrollable spenders,using their allowances to buy candy and only call for mummy when they need more cash.And of course their mummy gives them more cash without wondering where the cash is being used or why the kid asks for money so often.

Giving the Seychelles US$26 Million is a good step from the IMF ,but only giving and not monitoring isn't a solution.When you have a corrupt government in power for more than 30 years like in the Seychelles,even the IMF is without is powerless in some ways because those people in power knows more ways of overturning the economic system in their country and make a profit out of every donated money the government receives.

It's time for the IMF to not just only give money but monitor how every penny is being accounted for.

Another point of concern is the speed of the changes taking place in the Seychelles economy.The economy has been in ruins for 12 years though it happened on a gradual basis.Now the current government wants to heal it in 2 years ,just in time for the presidential election.Is IMF supporting an economy? or a political agenda?It's a classic example of paradise gone wrong .