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ABSTRACT
Seychelles has a stable economy, which has a basis for solid growth. Its tourism sector is robust and competitive. The government is boosting Seychelles’ future as an offshore financial centre, although its domestic oversight is weak, and headwinds are developing. More concerning, argues this article, is the fishing sector where overfishing threatens the tuna stock. Future success in these three sectors will heavily depend on the direction and strengthening of governance, which will be conditioned by international competitive pressure. Perhaps Seychelles’ biggest challenge is finding sufficient skilled personnel to build governance. Meanwhile, the country is battling transnational concerns, including money laundering, international tax evasion, profit shifting, transfer pricing and illegal fishing. Seychelles’ governance, under staff shortage pressures, will be stretched to step-up quickly to any heightening of these hazards. A Seychelles’ strength is its political focus on economic strategy. It is a multi-party democracy with solid institutions. But politics risks greater volatility. Former ruler René remains an active godfather in politics. His interests are under pressure from an assertive opposition. How he reacts will determine future stability.
Acknowledgments
I am grateful to Cathy Robertson for ideas and comments on this paper.
Notes
1. World Bank, The World Bank in Seychelles – Overview, April 2018. Available at http://www.worldbank.org/en/country/seychelles/overview Accessed 8 January 2019.
2. East and Southern Africa Anti-Money Laundering Group (ESAAMLG), Anti-money laundering and counter-terrorist financing measures – Seychelles, Second Round Mutual Evaluation Report, ESAAMLG, Dar es Salaam, September 2018, p.6. Available at http://www.esaamlg.org/reports/me.php Accessed 7 January 2019. ESAAMLG functions as a regional expression of FATF.
3. For example, World Bank, The Republic of Seychelles, Systematic Country Diagnostic, 2017. Available at documents.worldbank.org/curated/en/191181499447495374/pdf/Seychelles-SCD-FINAL-23Jun17-06282017.pdf.
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12. Sharman J. C., The Money Laundry, Cornell UP., 2011.
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14. S.K. Kundur, Development of Tourism in Maldives, in International Journal of Scientific and Research Publications, Volume 2, Issue 4, 2012, p.3.
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21. M. Andriamahefazafy, C.A. Kull and L. Campling (2019), Connected by sea, disconnected by tuna? Challenges to regionalism in the Southwest Indian Ocean, Journal of the Indian Ocean Region, DOI, 10.1080/19480881.2018. 1561240.
22. L. Campling, The Tuna Commodity Frontier: Business Strategies and Environment in the Industrial Tuna Fisheries of the Western Indian Ocean, Journal of Agrarian Change, Vol. 12, Nos 2 and 3, 2012, pp.252–278.
23. See M. Rizzi, Reflections on Consumer Law and Policy in Seychelles, University of Western Australia Law School, 2017.
24. M.Twomey, Legal Metissage in a Micro-Jurisdiction: The Mixing of Common Law and Civil Law in Seychelles, Victoria University, Wellington, New Zealand, 2017, pp.139–141. Mathilda Twomey is Chief Justice of Seychelles.
25. See for example seychellesrealitytoday.blogspot.com, Accessed 21 January 2019.
26. World Bank, op.cit. This problem is not new and in common with other small island states has vexed Seychelles since independence. See Colin H. Allan, Bureaucratic organization for development in small island states, in R.T.Shand (Ed.) The Island States of the Pacific and Indian Oceans: anatomy of development, Australian National University Development Studies Centre Monograph No. 23, Canberra, 1980, pp.388-391. Sir Colin Allan was formerly Governor of Seychelles at the time of independence.
27. World Bank, op.cit.
28. National Bureau of Statistics Seychelles, Seychelles in Figures, 2017, p24. Currency conversion as at 24 January 2019.
29. National Bureau of Statistics Seychelles, 2017, comparing Q1 2017 with Q2 2016
30. Transparency International, A Redefining Moment for Africa, 2018, at https://www.transparency.org/news/feature/a_redefining_moment_for_africa, Accessed 11 January 2019.
31. African currency controls is a complex issue. Many African countries have no restrictions on casual travellers, for example, converting currency. But controls commonly are encountered with high volume amounts or where subsequent conversions to third countries in Africa are involved. Seychelles seeks to avoid controls as it engages both the low exchanges involved in individual tourist operations and the more complex high-speed flows associated with its offshore financial centre activities.
32. The Seychelles rupee was at ten to the Australian dollar in January 2019. It has moved in a band of eight to ten to the dollar over the previous five years.
33. These include large international banks such as Barclays. However, there is a contrast with a jurisdiction such as the Cayman Islands which has 40 of the world’s 50 biggest banks on shore, though often only licensed for international operations.
34. A distinction outlined in Palan, op.cit. and Buckley and others, op.cit.
35. Cayman Islands Economics and Statistics Office, Cayman Islands Annual Economic Report 2017, p. 14. Accessed 10 January 2019.
36. Author observations and discussions in Seychelles, May 2017.
37. UN Statistics division, World Statistics Pocketbook, 2015.
38. World Bank, op.cit.
39. African Development Bank (2016). Republic of Seychelles: Country Strategy Paper 2016–2020, available at http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/SEYCHELLES – CSP 2016-2020 – FINAL.pdf, Accessed 19 January 2019.
40. Anonymous, personal interviews, Seychelles, May 2017.
41. World Bank, op.cit.
42. World Bank Diagnostic, op. cit., pp. vi-vii.
43. Professor Denis Hardy, Vice Chancellor, University of Seychelles to author, Anse Royale, 18 May 2017.
44. Fichtner, op.cit.
45. Hardy, op.cit.
46. In the 2015 presidential election, for example, President Michel was reelected in the second round by a margin of 193 votes from 63893 cast.
47. Anonymous interviews, Canberra, April 2017.
48. Adam, op.cit. Also Kenny Roberts, CEO Seychelles Financial Authority, to author, Victoria, 11 July 2017. Roberts thought ‘human resources were the problem’. Patrick Joseph, CEO Petroseychelles, speaking to author, Victoria, June 2017, thought the country suffered a ‘brain drain’.
49. World Bank, op.cit.
50. Campling and Rosalie, op.cit., p. 118.
51. Fleur Muldowney, Cayman Islands a Rich Source of Employment in the Caribbean, at https://www.caribbeanjobs.com Accessed 11 January 2019.
52. ESAAMLG, op.cit., p.25.
53. Offshore Company, Cayman Islands Offshore Financial Services, 2018 at https://www.offshorecompany.com, Accessed 13 January 2019.
54. D. Korner, Seychelles Sustainable tourism Foundation, 2015. Interview at https://www.travindy.com/…/interview-with-diana-korner-from-seychelles-sustainable/, Accessed 11 January 2019.
55. Kundur, op.cit, p.3. Also, T. Pile, The Good, Bad and Ugly Sides of Maldives, South China Morning Post Magazine, updated 2017.
56. Seychelles Investment Board officials in discussion with author, Victoria, Seychelles, 11 July 2017.
57. ESAAMLG, op.cit., p. 24.
58. According to Offshore Company, op.cit. See also Cayman Islands Government, Cayman Islands Annual Economic Report 2017, Economics and Statistics Office, June 2018, p.15.
59. Peter Larose, Minister of Finance, to author, Victoria, 18 May 2017.
60. Sikka op.cit., p.368.
61. Roberts, op. cit.
62. Arab investment dominates the high-end tourism sector. Major resorts in Seychelles such as those of Savoy of London, Four Seasons and Kempinski, as well as the Eden Island canal complex are all Arab-owned.
63. Larose, op.cit.
64. Economic Development Act 1995, Official Gazette, Supplement, 4 December 1995, Victoria, Seychelles, pp.275–82. Summary available at ILO NATLEX website. Accessed 7 January 2019.
65. Sharman, op.cit., p.126.
66. Economic Development (Repeal) Act 2000.
67. Available at https://greybook.seylii.org/w/se/CAP9A Accessed 8 January 2019.
68. Available at https://greybook.seylii.org/w/se/2008-19 Accessed 8 January 2019.
69. Fischer, D. interviewed by Kennedy, C.S and Pastorino, R.S. (1998). Moments in U.S. Diplomatic History. The Seychelles – Gangsta’s Paradise, Association for Diplomatic Studies and Training, Washington, DC. Fischer was a former US Ambassador to Seychelles.
70. Ibid.
71. ESAAMLG, op.cit.
72. Ibid., p.16.
73. ibid., 185.
74. ibid., p.135.
75. ibid., p.5. Coordination across government was found to be lacking.
76. See Ashton Robinson, Finint and the case for structural and legislative reform: A priority for the twenty-first century, in D. Baldino & Rhys Crawley, Intelligence and the Function of Government, MUP, Carlton, 2018.
77. Nesvetailova, op.cit., p.51.
78. Anonymous interviews, Canberra, April 2017.
79. Twomey, op.cit., p. 140. The Seychelles Proceeds of Crime (Civil Confiscation) Act is a close copy, apart from some numbering, of the Irish statute of the same name.
80. This has long been so. See Allan, op.cit., p. 390.
81. World Bank, op.cit.
82. Anonymous interviews, Canberra, April 2017.
83. Seychelles International Business company (IBC), Fidelity Corporate Services, at www,seychellesoffshore.com/seychelles-ibc-company.php, Accessed 14 January 2019.
84. See International Business Companies Act 2016.
85. Fidelity Corporate Services, op.cit.
86. Sharman, op. cit., p.126.
87. Rigon G., The world of Offshore Financial Centers and the role of the EU in it, Arcada, 2017.p.12.
88. Philippe Moustache, CEO FIU to author, Victoria, 17 May 2017.
89. ESAAMLG, op.cit., p.5.
90. Guidance notes, Free Zones in Seychelles, Healy Consultants Group PLC, at www.healyconsultants.com, Accessed 14 January 2019.
91. Anonymous, personal interview, Melbourne, April 2017.
92. Anonymous, personal interviews, Seychelles, 19 May 2017.
93. Cayman Islands Economics and Statistics Office, Cayman Islands Annual Economic Report 2017, p. 32. Accessed 10 January 2019.
94. ibid., p.26.
95. Seychelles and China sign agreements as president of island nation continues visit, Seychelles News Agency, 3 September 2018.
96. World Bank, op.cit.
97. Loustau-Lalanne quoted in, A Critical Task in an Island Nation, Seychelles Gets New Tourism Minister, in Seychelles News Agency, 30 December 2016.
98. OECD, Seychelles Transfer Pricing Profile, August 2018.
99. World Bank Diagnostic, op.cit., p. 107. Also author observation, 2017.
100. Author field-work, May 2017.
101. Seychelles-flagged vessels have been attacked as recently as November 2017. See D. Lawrence and B. Bonnelame, EU naval official offers appreciation for Seychelles’ role in piracy fight, Seychelles News Agency, 25 November 2017.
102. Lecomte and others, op.cit., p.24.
103. ibid., p. 25.
104. See Ashton Robinson, Seychelles: at sea managing intelligence, in Journal of the Indian Ocean Region, November 2018.
105. ibid., p.23.
106. Calvin Gerry, DCEO, Seychelles Fisheries Authority, to author, New Port, Seychelles, 19 May 2017.
107. Lecomte and others, op.cit., p.34.
108. Gerry, op.cit., .
109. Campling, op.cit., p. 273.
110. WCPFC official to author July 2017.
111. Author’s observations of activity at New Port docks, Seychelles, 16 May 2017.
112. Anonymous, personal interview, Melbourne, April 2017.
113. UNODC, Stretching the Fishnet: Identifying Opportunities to Address Fisheries Crime, 2017, pp.12–6.
114. Interpol, Study on Fisheries Crime in the West African Coastal Region, 2014, p.21.
115. UNODC, op.cit., p.19.
116. World Bank, op.cit.
117. D. Laurence, Seychelles approves first Committee on Truth, Reconciliation and National Unity, Seychelles New Agency, 2 August 2018.
118. Larose, op.cit.
119. J. P. Adam, Minister of Health, to author, Victoria, 12 May 2017.
120. Campling, op.cit., p. 272. Also Anonymous, personal interviews, Melbourne and Seychelles, April and May 2017.