Seychelles: Multi-party democracy (1993-2004)

Updated March 2011

The Seychelles People's Progressive Front (SPPF) government led by President René that came to power after the July 1993 elections faced a number of social and economic challenges. Despite the huge achievements in extending social services and in the economic and social upliftment of the poor, one fifth of the population was living in poverty and 6% in absolute poverty while over 10% of the economically active population was unemployed. Moreover, the expansion of the welfare state had swollen government to levels unsustainable over the long run. In 1976 already 35% of the population had been employed by government or parastatal corporations, but by 1991 this had reached 64% (Campling et al 2009, 73). Even prior to the elections the government had begun in the early 1990s to scale down government spending in an attempt to reduce pressure on rapidly shrinking foreign reserves and adopt a more market orientated approach to socio-economic development (Campling et al 2009, 44; Houbert 1992, 482). Commitment to liberalisation of the economy led to the adoption of a programme of gradual privatisation of state owned enterprises including harbour facilities and hotels and some agricultural enterprises, but the transition from socialist to free-market policies was slow (Campling et al 2009, 44; Murison 2008, 1019). In 1994 the government announced plans for the creation of an international trade zone and in 1995, in a bid to lure additional foreign investment, the Economic Development Act was passed, which gave foreign investors of more than US$100 million immunity from asset seizure and extradition (Murison 2008, 1019). The act was criticised by international financiers as establishing a haven for money laundering by criminals and in 1998 the policy was abandoned (Murison 2008, 1019).

The measures undertaken by the government provided some relief of pressure on state spending and the share of the workforce in government employ fell to 50.5% in 1996 and then more slowly to 47.4% in 2001 (Campling et al 2009, 73). Nevertheless the deficit before borrowing remained an unsustainable 11.5% on average annually between 1995 and 1999 (IMF 2008b, 17). The shortages of foreign exchange that had emerged in the mid 1980s persisted despite the reforms and high levels of indebtedness remained and, indeed, increased four-fold between 1993 and 2002 by which time public foreign debt had risen to 200% of GDP from 90% in 1993 (Campling et al 2009, 48-50). Shortages of foreign exchange were the result of maintaining the official exchange rate of the Seychelles rupee at unsustainably high levels, indicated by the development of a forex black market where deals were made at half the official value, affected not only the government's ability to repay debt but also made profit repatriation by investors difficult, thereby discouraging investment, and hampered the activities of local entrepreneurs; attempts in 1999 to ration foreign merely exacerbated the situation (Campling et al 2009, 50).

The government's reforms combined with the robust contributions of tourism and tuna canning enabled the economy to continue to grow initially. Between 1993 and 1998 growth rates fluctuated between a low of -2.4% in 1994 and a high of 12.2% in 1997, but averaged 5% per year in that period compared with 4.5% between 1983 and 1992 (IMF 2008a). As a result of the mounting difficulties caused by exchange rate shortages economic growth began to falter and between 1999 and 2004 the economy shrank by a average of -0.6% per year (IMF 2008a). Fertility rates fell steadily from 3.1 child per woman in 1987 to 2.6 in 1994 and then to 2 in 2001, below population replacement levels; consequently, population growth rates fell from 1.2% in 1994 to 0.5% in 2001 (Campling et al 2009, 12). Per capita income thus rose annually on average by 3.1% between 1994 and 1998, but then fell by 1% each year on average between 1999 and 2004 (IMF 2008a). Though slow to respond at first, the liberalisation of the economy did lead to job creation, and the unemployment rate which had remained above 10% between 1994 and 1997 fell to 7.1% in 2000 and approximated full employment levels at 3.5% in 2004 (Campling et al 2009, 75). The decline in unemployment was due to government investment in schemes to skill unemployed youths and incentives to firms to increase employment through wage subsidisation as well as the liberalisation of the labour market through the Industrial Relations Act which abolished the monopoly of the SPPF aligned National Workers Union on unionisation (Campling et al 2009, 42, 71). Inflation remained very low, averaging 1% per year in 1995-1999 and rising to a modest 3.9% in 2000-2004 (IMF 2008b, 17). Fiscal reform also improved the state of government finances and the deficit before borrowing fell to 8.7% on average in 2000-2004 from 11.5% in 1995-1999 (IMF 2008b, 17).

The economy remained heavily dependent on tourism and fishing. Tourism contributed 16.9% of GDP in 1995 and 37.5% of foreign exchange earnings, while fishing, especially tuna canning, made up 9.7% of GDP and 13.2% of foreign exchange earnings (Rahemtulla 1998, 5; Campling et al 2009, 45). Employment in the tourism industry occupied about a fifth of the workforce at the end of the millennium (Mathieu et al 2000, 3). The government maintained its location of the tourism at the high end of the market, but even so the relatively high volumes of tourists and the expansion of the industry led to ecological destruction in the late 1990s threatening to mar the natural beauty that was the industry's chief marketing asset (Rosalie 2002, 97; Rahemtulla 1998, 7, 8). In 1996 the government created the Marine Parks Authority to preserve natural resources and sustainable development (Mathieu et al 2000, 3). Targets were set for the number of tourists that allowed for a growth rate of 7% a year until 2005 and a subsequent growth rate of 2% a year thereafter and hotel sizes were restricted to prevent over use and pollution of the environment (Rosalie 2002, 97). Expansion of the fishing industry led to increased foreign exchange earnings from the sector, which amounted to 40% in 2001 of which 87% was from tuna canning in which the Seychelles government held a 40% stake from 1995 onwards (Campling et al 2009, 46). One effect of the growth of tourism and related industries, and the resulting urbanisation, was to reduce the amount of land available for agriculture, so that by 2006 the amount available declined by 75% on that in the 1980s (Campling et al 2009, 52). The government continued to encourage food production to increase food self-sufficiency and reduce food imports, but this had little impact on the trade deficit (Campling et al 2009, 52).

The necessity of reducing state spending and the deepening economic difficulties from the late 1990s onwards did not lead to a reduction of the proportion of government expenditure on healthcare and education, which fluctuated around an annual average of 20% for health between 1997 and 2004 and 21% for education between 1998 and 2004 (Campling et al 2009, 52, 61). The government was able to make improvements to basic living conditions so that access to purified water increased from 83% to 87% of the population between 1994 and 2002, while access to flush toilets rose from 78% to 94% and access to electricity from 90% to 96% in the same period (National Statistics Bureau 2008, 19). Improvements were made to the primary care orientated public health service so that, for instance the number of people per doctor declined from 1032 in 1993 to 825 in 2004 (Campling et al 2009, 67). Seychelles was not subject to the HIV/AIDS epidemic that swept through Southern Africa in the 1990s, but, though very low, prevalence rates in the population rose quickly from 0.6% in 1995 to 0.9% in 2000 and then to 1.4% in 2004 (Campling et al 2009, 67). The government, shortly after the diagnosis of the first HIV infection in 1987, adopted a series of short and medium term plans and then from 1993 annual plans with a National Strategic Plan adopted in 2001 (Republic of Seychelles 2008, 8). Healthcare and treatment was free and 100% of expectant HIV positive mothers received antiretroviral treatment to counter mother to child transmission as were 100% of HIV positive tuberculosis patients (Republic of Seychelles 2008, 19, 21, 22). As a consequence of the comprehensive health services infant mortality dropped from 18.3/1000 live births to 9.9/1000 between 1995 and 2000, but life expectancy remained fairly constant between 1994 and 2005 at around 72 years (Campling et al 2009, 65-67).

The educational system was gradually reformed and improved in the mid-1990s and the process accelerated with the abolition of the National Youth Service which was replaced by regional secondary schools and curriculum reform in 1998/1999 (Campling et al 2009, 60). Near 100% enrolments at primary level were augmented by rising secondary school enrolments which improved from 82% in 1996 to 95% in 2003 (Campling et al 2009, 62). Teacher training was improved and the range of tertiary education available expanded (Campling et al 2009, 60, 61). As a result of economic stagnation in the late 1990s and early 2000s there was a slight increase in the proportion of the population living in poverty, from 18.5% in 1993 to 19.7% in 2000, but the proportion living in absolute poverty fell from 6% to 2.5% in the same period and inequality as measured by the Gini ratio decreased from 0.47 to 0.43 (Campling et al 2009, 77, 78).

The period following the 1993 election was characterised by a realignment of opposition politics. In June 1995 the main opposition Democratic Party's (DP) sole directly elected member of the National Assembly left the party to form the New Democratic Party (NDP), protesting the lack of vigour on the part of the DP in opposing the government, and later in the year the United Opposition (UO) electoral alliance, the Parti Seselwa (PS), Seychelles Christian Democratic Party (SCDP), Seychelles National Movement and the National Alliance Party, merged to transform the UO into a single political party (Murison 2008, 1019). In July the following year constitutional amendments were passed creating an office of vice-president and altering the composition of the National Assembly from 22 to 25 constituency seats and reducing the maximum number of proportional representation seats from 11 to 10 (Murison 2008, 1019).

The opposition voters too began to shift their allegiance, as was demonstrated in the March 1998 Presidential and National Assembly elections (see 1998 elections for details). President René improved on his previous mandate, winning 66.7% of the vote as compared with 59.5% in the previous election (compare 1998 Presidential election results with 1993 Presidential results). DP leader James Mancham who had come second in the 1993 election dropped to third place with his share of the vote declining from 36.7% to 13.8%, while the UO candidate Philippe Boullé came second with 19.5% of the vote compared with 3.8% in 1993. In the National assembly election the SPPF increased its share of the vote to 61.7% from 57.5% in 1993 and won 24 of the 25 constituency seats, while the UO won the other with 26.1% of the vote, up from 9.7% in 1993 (compare 1998 National Assembly results and 1993 National Assembly election results). The DP declined from 32.8% of the vote to 12.1% and was represented by a single proportional representative (PR) member. The SFFP was allocated six PR members and the UO two. In July 1998 the UN was renamed the Seychelles National Party (SNP. Murison 2008, 1019; Campling et al 2009, 42).

As a result of the growing economic crisis due to foreign exchange shortages and increasing indebtedness René decided to call early presidential elections in July 2001 in a bid to reassure foreign investors of the Seychelles' political stability and thereby revive economic growth (Murison 2008, 1019). The SNP campaigned for widespread reforms including the liberalisation of the press, depoliticisation and professionalization of the civil service, greater government accountability and transparency to reduce corruption, an independent central bank, an end to foreign exchange controls and other measure to liberalise the economy (Campling et al 2009, 42; See Early Presidential Elections in 2001 for details). The DP failed to field a candidate, while the SNP fielded its leader Wavel Ramkalawan as its candidate and the SNP candidate fielded in 1998 and 1993, Boullé, ran as an independent (see Results). René's support fell to 54% and Ramkalawan improved on Boullé's previous performance by winning 45% of the vote. Ramkalawan alleged electoral fraud and attempted unsuccessfully to have the results overturned by the Constitutional Court (Murison 2008, 1020). The decline of the DP and the consolidation of opposition support in the SNP was confirmed by the results of the National Assembly election held on 4-6 December 2002 (see Results for details). The ruling SPPF won much the same support René had in the 2001 presidential election (54.3%), but the SNP support rose to 42.6% of the vote and that of the DP declined to 3.1%. A two-party system emerged with the SPPF winning 18 of the constituency seats and obtaining 5 PR seats, while the SNP won 7 constituency seats and 4 PR seats. René resigned as President on 14 April 2004, but remained leader of the SPPF, and Vice-President James Michel became President (Murison 2008, 1020).

References

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RAHEMTULLA, YG 1998 Environmental Quality and Tourism Development in the Seychelles: An Application of the Stated Preference Method, MSc Thesis, University of Alberta, [www] http://www.collectionscanada.gc.ca/obj/s4/f2/dsk2/ftp04/mq28979.pdf (offline 11 Mar 2010).

REPUBLIC OF SEYCHELLES 2008 Progress Report on Declaration of Commitment on HIV and AIDS 2008, [www] http://data.unaids.org/pub/Report/2008/seychelles_2008_country_progress_report_en.pdf [PDF document, opens new window] (accessed 8 Mar 2011).

ROSALIE, M 2002 "Tourism and social development in Seychelles", Development Bulletin, 60, 95-98.