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SUSTAINING SOCIAL DEVELOPMENT IN A SMALL ISLAND DEVELOPING STATE: THE CASE OF SEYCHELLES

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Title: SUSTAINING SOCIAL DEVELOPMENT IN A SMALL ISLAND DEVELOPING STATE: THE CASE OF SEYCHELLES


1
SUSTAINING SOCIAL DEVELOPMENT IN A SMALL ISLAND
DEVELOPING STATE THE CASE OF SEYCHELLES
  • Liam Campling and Michel Rosalie

2
OVERVIEW
  • Seychelles in context population and economic
    vulnerabilities
  • Seychelles in transition the changing
    composition of the economy
  • Government policy people-centred development
  • Social development indicators, programmes and
    implementation
  • Sustaining socio-economic development past,
    present and future

3
SEYCHELLES IN CONTEXT POPULATION
4
SEYCHELLES IN CONTEXT SEYCHELLES AS A SMALL
ISLAND DEVELOPING STATE
5
SEYCHELLES IN CONTEXT SEYCHELLES AS A SMALL
ISLAND DEVELOPING STATE
  • Small domestic market Seychelles population of
    80,000 creates market inefficiencies due to small
    economies of scale that discourage competition
  • Limited and undiversified resource base a micro
    population limits labour-intensive production and
    the diversity of human capital a land mass of
    455 sq km reduces scope for agricultural
    production smallness and economic difficulties
    reduce sources of domestic finance capital
  • (Both factors severely limit economic
    diversification)

6
SEYCHELLES IN CONTEXT SEYCHELLES AS A SMALL
ISLAND DEVELOPING STATE
7
SEYCHELLES IN CONTEXT SEYCHELLES AS A SMALL
ISLAND DEVELOPING STATE
  • Structural openness to international trade
    Seychelles imports around 90 of what it
    consumes in 1992-2001 it suffered an average
    annual balance of trade deficit of SR976 million
  • High vulnerability to external shocks Seychelles
    is a price-taker and lacks capacity to
    influence international markets in its trade of
    goods and services, thus world fluctuations are
    simply absorbed

8
SEYCHELLES IN CONTEXT SEYCHELLES AS A SMALL
ISLAND DEVELOPING STATE
9
SEYCHELLES IN CONTEXT SEYCHELLES AS A SMALL
ISLAND DEVELOPING STATE
  • Locational determinants the economy is
    physically isolated from its main West European
    trading partners and 1,500 km from the nearest
    market or supply in East Africa. Remoteness leads
    to permanently high transport costs.
  • Political sovereignty Seychelles per capita
    spending on physical infrastructure,
    environmental protection and international
    relations is very high. Independence is
    expensive!

10
SEYCHELLES IN CONTEXT SEYCHELLES AS A SMALL
ISLAND DEVELOPING STATE
11
SEYCHELLES IN TRANSITION THE CHANGING
COMPOSITION OF THE ECONOMY
  • In 1974 traditional agricultural commodities
    dominated engagement with the world economy, i.e.
    copra and cinnamon were 90 of visible exports
  • Deepened integration with world economy in 1971
    with opening of the international airport, i.e.
    by 1976 tourism constituted 18 of GDP
  • In the ten-year period 1992-2001 tourism
    contributed a stable 16.1 to GDP

12
SEYCHELLES IN TRANSITION THE CHANGING
COMPOSITION OF THE ECONOMY
  • Exclusive Economic Zone (EEZ) of 1.3 million sq
    miles comparative advantage in fisheries
  • Tuna industrially exploited from early 1980s
  • In 1995 Heinz formed Indian Ocean Tuna (IOT) Ltd
    attracted by EEZ, industrial tuna fleet, SITZ,
    and preferential access to EU market
  • IOT processed tuna exports contributed US202
    million in gross foreign exchange earnings in
    2001 (35 of the national total)

13
SEYCHELLES IN TRANSITION THE CHANGING
COMPOSITION OF THE ECONOMY
  • In 1995 the offshore sector became legally
    operative and SIBA was formed
  • SIBA broke the 15,000 mark of registered
    international business companies by mid-2004
  • In 2003 the direct financial benefits of the
    offshore sector were US5-6 million
  • SIBA achieved financial autonomy by end-2003
  • Lack of offshore banking is a key limiter

14
SEYCHELLES IN TRANSITION THE CHANGING
COMPOSITION OF THE ECONOMY
15
GOVERNMENT POLICY PEOPLE-CENTRED DEVELOPMENT
  • Pre-independence substantive class divisions
  • Post-1977 emphasis on principles of social
    justice and national modernisation
  • Social development implemented through free and
    universal access to health care, education and
    social welfare
  • Modernisation implemented through national
    development plans focus on top-end tourism and
    import-substitution industrialisation

16
SOCIAL DEVELOPMENT
  • Education 10 years free compulsory
  • Health care available free at point of use in
    all clinics hospitals
  • Income security employment generation schemes
    available
  • Other means of social provisioning

17
SOCIAL DEVELOPMENT EDUCATION HEALTH
18
SOCIAL DEVELOPMENT EDUCATION HEALTH
19
SOCIAL DEVELOPMENT EDUCATION HEALTH
  • Human resource development limited availability
    of the right mix of human resources to meet
    targets in the two sectors
  • Cardio-vascular disease and cancers are todays
    main killers. Diseases of development?
  • Adolescent reproductive health a main area of
    health concern, especially related to teenage
    pregnancy and HIV/AIDS

20
SOCIAL DEVELOPMENT UNEMPLOYMENT
21
SOCIAL DEVELOPMENT SOCIAL WELFARE
  • Employment generation projects
  • Full Employment Scheme (1980)
  • Work Experience Programme (1984)
  • Unemployment Relief Scheme (1995)
  • Lack of effective implementation, systemic abuse,
    demotivation amongst users

22
SOCIAL DEVELOPMENT SOCIAL WELFARE
  • Social Security System
  • Sickness, disability and chronically ill
  • Old age, i.e. home care programme
  • Maternity, i.e. 12-week leave
  • Children, i.e. needs-based dependents allowance
  • Systemic abuse, formation of a culture of
    dependency

23
SOCIAL DEVELOPMENT PUBLIC UTILITIES
24
SOCIAL DEVELOPMENT POVERTY
  • Single women-headed households predominantly
    women who had children as teenagers and/or
    several out of wedlock
  • The hidden poor mainly the younger and older
    generations who are unaware of social welfare
    programmes
  • The seasonally employed mainly fishermen,
    stevedores and small farmers
  • Those who mismanage household income
  • Children and the disabled
  • (Questions of analysis and integration in
    national policy)

25
SUSTAINING SOCIO-ECONOMIC GAINS PAST
  • Social development partly enabled through
    export-orientated sectors of the modern economy,
    i.e. tourism and fisheries
  • Rent-seeking behaviour during the Cold War
    sustained social spending
  • Domestic and international debt subsidised
    government policy (and poor economic management
    centrality of the petty bourgeois)

26
SUSTAINING SOCIO-ECONOMIC GAINS PRESENT
  • Seychelles as a victim of its success in people-
    centred development? (Non-LDC status)

27
SUSTAINING SOCIO-ECONOMIC GAINS PRESENT
  • Decline in rent-seeking capacity, i.e. end of
    Cold War, high GDP per capita, reputation as loan
    defaulter and global decline in ODA
  • Debt at crisis-point (defaults on donor loans
    and rise in commercial borrowing) external debt
    at 200 of GDP
  • Environmental protection is now the primary
    source of donor assistance (decline in external
    social support)
  • Vulnerability to external shocks, i.e. Gulf War
    (1991), coral bleaching (1998), Iraq (2003)
  • Monetary and financial crisis constraining import
    of some social and economic inputs
  • Macroeconomic reform (austerity programme)
    increases cost of living for low-income brackets

28
SUSTAINING SOCIO-ECONOMIC GAINS PRESENT
29
SUSTAINING SOCIO-ECONOMIC GAINS FUTURE
(POLITICAL-ECONOMIC)
  • EU market for Seychelles canned tuna will be
    under threat in 2008
  • Stagnation in tourism sector likely to continue
    (poor price-quality perceptions)
  • Eastern and Southern Africa Economic Partnership
    Agreement limited benefits to Seychelles
  • Accession to the WTO negative implications for
    national sovereignty in policy orientation and
    social, economic and environmental controls
  • Environmental decline may have a negative effect
    on tourism and thus socio-economic prosperity
  • Present moves to economic diversification (i.e.
    offshore sector), improving environmental
    consciousness (i.e. eco-tourism) and recent
    domestic macroeconomic reforms may allow
    sustainability of social development gains

30
SUSTAINING SOCIO-ECONOMIC GAINS FUTURE (SOCIAL)
  • Cultural globalisation has led to a rapid rise in
    individual expectations and consumer demand, but
    a decline in community networks
  • Global decline of sympathy for the welfare
    state model
  • Culture of dependency on social services
    threatens the equitable transfer of resources
  • Family threat of disintegration
  • Land conflicts and sustaining social development

31
CONCLUSION
  • Seychelles demonstrates the centrality of
  • the social in terms of
  • analysing islands (i.e. social forces)
  • understanding SIDS vulnerabilities (i.e. the
    nexus of social development-environment-economy),
    and
  • island peoples offering creative solutions to
    developmental challenges (e.g. building
    resilience) beyond the narrow interests of
    political-business elites.
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