December 18, 2006. Nowadays, the Seychelles has a good reputation in the world - it is not in arrears regarding any debts with multi-lateral organization, it has a good rating and its economy is improving. At announcing the Appropriation Bill 2007, the principal secretary for Finance, Lekha Nair, confirmed the fact that the Seychelles had cleared all its debts to multi-lateral organizations, which improved its international profile.
As a result of clearing its debts, the Seychelles caused more interest from financial organizations that willingly studying areas to finance projects there. One of these organizations is African Development Bank (ADB) that has already dispatched a delegation here.
The Seychelles does not owe ADB, as well as to the International Monetary Fund (IMF) anything now.
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December 1, 2006. After quite a hard year 2005, the Seychelles has been experiencing an impressive economic growth of 4.5% in 2006. The economic outlook of the Seychelles' situation was presented by the International Monetary Fund mission after its visit in November in the form of concluding statements.
The IMF concluded that "the economic situation is improving, with strong tourism arrivals and construction activity driving the recovery".
Also, economic reforms are very significant for the Seychelles. According to Policy reforms implemented by the authorities since July 2006 are aimed at addressing Seychelles' key macroeconomic imbalances. These are mainly new currency exchange guidelines, repayment of external debt and banking reforms.
However, the IMF does not consider the abov-mentioned reforms to be enough for securing long-term growth. So, it suggests implementing further structural reforms related toinfrastructure, employment, further privatisation and price controls.
The IMF sees record inflows of FDI in the country as the indicator of renewed confidence in the Seychelles' economy, which is one of the strongest economies in Africa.
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November 17, 2006. A bilateral Double Taxation Avoidance Agreement between the Seychelles and the United Arabs Emirates signed on September 19 and announced in October was approved by the United Arabs Emirates' cabinet on November 12. This agreement is to strengthen the existing good economic relationship between the Seychelles and UAE.
The UAE cabinet approved an agreement on avoidance of double taxation signed with the Seychelles as well as bilateral agreements signed with France, the UK and Northern Ireland.
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November 10, 2006. According to United Nations Development Programme's (UNDP) 2006 Human Development Report, the Seychelles takes the 47th position in the rating of countries with high human development. It has been ranked 47th among 63 countries with high human development. As to last year's results, the Seychelles was ranked 51st in 2005.
This result from the above-mentioned report was released on November 9, 2006.
It is worth mentioning that out of all the countries in the African and Indian Ocean region, just the Seychelles and Mauritius (63rd) were ranked in this Report.
The Seychelles rating among the countries with high levels of human development shows that the the Government of Seychelles made successful efforts towards achieving sustainable and equitable development within the past 30 years.
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October 13, 2006. The Seychelles cleared all its overdue payments to the International Bank for Reconstruction and Development, known as the World Bank, as of October 6, 2006. So, all the bank's loans to the Seychelles or the loans guaranteed by the Seychelles have been restored to accrual status. Consequently, the Seychelles' eligibility for new operations as well as project preparation facility advances, disbursements under existing loans, Institutional Development Fund and other grants has been reinstated.
The country's arrears to the International Bank for Reconstruction and Development amounted to approximately USD 770 thousand. Around USD 631 thousand of this sum was overdue principal payments. As the Republic of Seychelles is does not have large exposure to the International Bank for Reconstruction and Development, clearance of these arrears will increase net income of the World Bank by less than USD 1 million in fiscal 2007.
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October 2, 2006. Standard & Poor's Ratings Services, a reputed international organisation, assigned its 'B' credit rating to the Seychelles - 'B' long-term and 'B' short-term foreign currency sovereign ratings, and its 'B+' long-term and 'B' short-term local currency sovereign ratings - as well as characterized its outlook as stable.
Over last 10 years, Seychelles' economic and social performances have been observed by Standard & Poor's.
The ratings on the country are supported by a turnaround in its fiscal management, which evidenced robust surpluses delivered in recent years. The ratings are also conditioned by social and political stability in a combination with high levels of human development including per capita income, education, health and literacy standards.
As to the constraining factors for the ratings on the Seychelles, the main of them is its high public sector debt level and the associated impairment of fiscal and external flexibility. Also, the constraining factor is the Seychelles' fixed, administratively set exchange rate, estimated to be at more than 50% above its market rate.
The ratings on the Seychelles could be improved by exchange rate liberalization enabling adjustment of the Seychelles Rupee toward its equilibrium level without a major shock to the economy. It goes without saying that the ratings would also benefit from the complete resolution of the arrears to preserve good creditor relations.
But, to conclude, the ratings by Standard & Poor's as they are can be considered to be a great achievement of the Seychelles government.
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September 19, 2006. The Seychelles signed a bilateral Double Taxation Avoidance Agreement with the United Arab Emirates expanding its growing network of bilateral double taxation avoidance treaties.
It already has Double Taxation Avoidance Agreements in force with China, South Africa, Belgium, Indonesia, Malaysia, Thailand, Oman, Zimbabwe and Namibia. Just recently the Seychelles concluded double tax agreements with Qatar and Cyprus. Also, the Seychelles is holding talks on treaties with a number of its trading partners.
The agreement was signed by the Minister for Finance of the Seychelles, Danny Faure, and the UAE's Minister for State Finance and Industry, Dr Mohammed Khalfan Bin Khirbash.
The new agreement will strengthen the existing economic relationship between the two countries and will provide an inducement to people of both countries to draw their attention to increasing investment, trade and employment opportunities.
