Mitigating The Effects Of Global Recession

Fri, 20 April 2012

President James Michel chaired the third meeting of the National Economic Council at State House this morning.
The Council discussed a range of issues, proposed by Council members, on measures related to economic development. 

These included:

• Government will consider several options to mitigate the effects of the global economic recession and rising prices of fuel and commodities.   The measures include stricter budget and personnel management, and tightening tax collection to eliminate any leakages of revenue. Members expressed concern on the potential impact on the economy of the recent rises in the price of fuel and agreed that Government should consider legislating the Consumer Price Index (CPI) as the official benchmark to monitor and regulate unfair price increases as a policy instrument to contain  uncontrolled inflation, as well as the need for an aggressive communications drive to develop an energy saving culture, starting from within Government and public entities themselves, as an example.
  The Council noted the revised growth forecast for 2012 from 4 to 2.8  per cent, and discussed strategies to boost the productive sectors of the economy in areas like tourism, construction, fisheries, manufacturing and how to capitalize on the imminent connection to the fibre optic submarine cable.
• The private sector requested the deferral, to a more appropriate time, of the proposed introduction of the Value Added Tax system in July.  Government would give early consideration to this proposal.
• It was agreed that the tourism sectors need to provide appropriate diverse local services for new tourism markets such as China, in order to attract visitors from these areas when the European market is weak. Members noted the significant increase in visitor arrivals, despite the decline in some traditional markets, and proposed various ways to increase tourism yield. STB and the SHTA were called upon to propose strategies for the consolidation and adaptation of the tourism industry given the changes in global tourism, recession in the traditional markets and the withdrawal of direct flights from these areas. Air Seychelles has a key role to play in attracting tourists from new and diversified markets to holiday in Seychelles. Government would provide complementary assistance for capacity-building, as well as and incentives for tourism operators who wished to take advantage of the new drive for diversification.
• The private sector expressed concern over the high cost of rental of business premises and the unavailability of commercial space/offices in and around the Victoria area. Government would consider making land available to the private sector for real estate development, that would enable new commercial offices to be built in suitable locations the near future.
• The Government and private sector agreed that more needed to be done to encourage the growth of Small and Medium Enterprises (SMEs) through the new structure that was recently announced. Government would also consider providing bank guarantees for SME loans, subject to sound business plans, and become an active partner in this sector. Banks would be encouraged to provide development loans for productive purposes.
• The private sector expressed concern about the high cost of domestic air services between Mahé and Praslin and the related effects on tourism. The need for Air Seychelles to remain commercially viable was emphasized and that costs would need to reflect the free market variability.  Government said that it would consider applications for licenses from new domestic airline operators subject to their ability to meet safety and civil aviation regulations in force.

The Chairman said that the proposals of the Council would be submitted to the Cabinet of Ministers, and action in respect of approved measures should be implemented promptly.

 Editor's Note

• The Council has the function of advising Government on the best economic policy for sustainable national growth and development.
• The Council will meet monthly to discuss matters raised by its Members, or referred to it by the Government. 
• The Council may commission and analyse such data and information as may be required to enable it to advise Government on suitable economic strategies, and to determine the extent to which existing national programmes meet strategic economic objectives.

Members of the NEC
President James Michel ( Chair)
Vice-President  Danny Faure (Vice-Chair)
Minister Joel Morgan
Minister Pierre Laporte
Minister Alain St Ange
Minister Peter Sinon
Minister Idith Alexander
Mr Barry Faure
Ms Caroline Abel
Mr Eddie Belle
Mr Glenny Savy
Mr Steve Fanny
Mr Louis D'Offay
Dr V Ramadoss
Mr Brijesh Jivan
Mr Conrad Benoiton
Mr Walter Labrosse
Mr Michael Benstrong
Mr Michel Mellie
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Absent at today's meeting were a number of Members who were overseas on official missions or on sick leave:

Minister Pierre Laporte
Minister Alain St Ange
Ms Caroline Abel
Mr Conrad Benoiton
Mr Michel Mellie
Mr Eddy Belle

 

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