Seychelles - Maritime Successes & Challenges

Facing Tanzania to its west, the island state of Madagascar to its south, and the British Indian Ocean Territories and the Maldives to its east, the archipelago of Seychelles lies somewhat westerly in the wider Indian Ocean. Lying away from the usual maritime pathways, over 1800 km from the nearest landmass Madagascar, Seychelles has remained nascent to the wider world, therefore retained its unique biodiversity and a scenic beauty hitherto unobliterated by much human footprint. Colonized only in the 1700s, this isolation makes the archipelago completely dependent on the ocean for its economic survival and on its scenic beaches to attract travelers towards it. Yet the tiny state has set an exemplary maritime culture and economic model that has recently moved Seychelles into the ‘high-income group’ states list of the World Bank – this essay will be a study of the reasons behind Seychelles’ success story as well as the issues faced therein.

With a population estimated at 95,235 in 2018, Seychelles has an approximate 200/mile² population density, that too concentrated in colonies along the coast. The Seychelles archipelago is one of Earth’s biodiversity hotspots with over 850 plants and 2,426 insect species recorded, and a home of two UNESCO world heritage sites, the palm forest Vallee de Mai and the atoll Aldabra characterized by giant tortoises.

Since 2008, the small island-state has grown from a mediocre status – to an ‘upper middle income’ state with a yearly $12,180 GNI per capita in 2012 – and later to a bold $13,990 GNI per capita in 2014, making its entry in the World Bank’s ‘high income’ list. Within a year Seychelles also gained accession into the WTO. At that point, the Seychelles Minister for Finance, Trade and the Blue Economy, Jean Paul Adam said “since 2008 our approach in trade is to take into consideration the specificities of our economy, leaving space for our local sectors such as agriculture, tourism and other local productions to flourish”, highlighting Seychelles’ policy of creating a economic plan unique to the island state’s needs.

According to CIA factbook, fishing, tourism and beverages are the major industries that provides for 13.8% of the GDP, while the services industry makes for 83.7% of the GDP.

Indeed, tourism and fisheries have been the major part of Seychelles’ economy. The country catches, processes, and transports the largest quantity of Tuna from the Indian Ocean, and is the largest importer of Tuna and Shrimps to Europe. To enhance the fishing trade the government has allowed modalities of trade-pacts with foreign fishing companies that are deemed mutually beneficial.

Recently addressing a conference in London, the President of Seychelles Danny Faure said, ‘As a high-income country since 2015, we have turned to innovative finance to fund our blue economy initiatives. For us, green finance is blue finance and it is all about sustainability. We have piloted, with some success, some ‘blue’ finance projects, including the Debt Swap for Conservation and Climate Adaptation, with the support of the Paris Club of Creditors and The Nature Conservancy at a value of US$ 21.6 million”.

Though Seychelles is being deem as a success story, yet there are several issues that endanger the country economic growth in the near future. For instance, inviting foreign fishing companies that would evidently be having modern techniques and more effective machines, can and has led to over-fishing, and several species like Red Snapper, Sea Cucumbers and Yellow Fin Tuna have been reported to have decreased. Depletion of fish reserves also effects the tourism industry, that is heavily dependent on a variety of sea catch.

According to a World Bank Report, ‘Declining catch rates of the main species of fish are worrying indicators of the health of the ecosystems. Most of these pressures come from over fishing in the artisanal, recreational, and sport fishing sub sectors and from an increasing environmental footprint of the tourism industry’. Increasing tourism is damaging the Seychelles’ coral reef too, because with it there is increase in sewage runoff that makes algae grow in the reef, and more boats for tourist need more anchors and more dredging.

Though Seychelles faces all these challenges, nevertheless it remains the richest country in Africa in terms of GDP per capita, which has been as high as US$13997.08 in recent years – and the has opted for a progressive stance that will move the country towards a sustainable future. The country has opted for a Blue Economy Vision in consistency with the UN’s Sustainable Development Agenda 2030 (SDG’s), the Aichi Target 11 of the Convention on Biological Diversity (CBD) and the Paris Agreement on Climate Change (2015) – in order to achieve a progressive economy keeping its unique natural assets intact.

Some of the steps taken under this vision are; making a survey of the entire 200 nautical mile Exclusive Economic Zone under a marine spatial planning process and designating phase-wise a 30% of the coastal zone as marine protected areas by 2020; and initiating the idea of a ‘debt-for-adaptation-swap’ that will redirect a portion of their current debt payments to fund nature-based solutions to climate change through the newly established Seychelles Conservation and Climate Adaptation Trust (SeyCCAT), a fund that will give approximately US$ 750,000 per annum. The country is also issuing World Bank-guaranteed Blue Bonds that will feed a Blue Grant for different sustainability projects.

A few other small but effective steps include the Seychelles Sustainable Tourism Plan 2012-2020 which will ensure a balance between economic development and cultural, environment conservation and protection. The Seychelles Sustainable Tourism Label, launched in 2012, is a certification program designed to induct sustainability practices in hotels in Seychelles and popularize steps that safeguard the biodiversity and culture of Seychelles.

One of the aims of the Seychelles Blue Vision is to build a strategic partnership between Seychelles and its partners, which may include other states, development agencies, private sector organizations etc. This new angle of Seychelles that may have been adopted with economic progress in mind, does mark the country as another geopolitical player in the region. Being an active client of Western-dominated institutions and lately embracing India’s friendship has tilted the country away from a neutral political stature. In 2018 PM Modi has signed MoUs for building airfields and port facilities in the Assumption Islands of Seychelles, which means the country has committed to be a blossom in the Indian ‘String of Flowers’ dream.

There is another faulty policy of the government of Seychelles that needs to be discouraged – of allowing the country to become an offshore magnet for money launderers and tax-evaders. An ICIJ investigation quoted several instances of such foul play, like ‘in 2011, a subsidiary of the Reserve Bank of Australia admitted it had channeled millions of dollars in bribes intended for Nigerian officials through a Seychellois shell company linked to a convicted white-collar criminal’, and ‘in 2012, two entrepreneurs based in Israel pleaded guilty in a US court to operating an illegal Internet pharmacy that laundered much of its profits through Seychelles’. Such practices may have helped boost the country’s services sector, which according to the CIA fact book makes 83.7% of the GDP, but they are certainly a moral sin. Imagine, the corrupt politicians and big tax-evaders of your country dumping your money in another country that will be using it for its economic development.

Previously Published at Maritime Study forum