HIGH RISKS, GREAT REWARDS: RESILIENCE IN ECONOMIC PROGRESS
President James Michel has addressed the Central Bank Anniversary Lecture, held at the International Conference Centre on Friday. The lecture was also attended by Former President James Mancham, Vice-President Danny Faure and Dr Gavin Bingham, Secretary General of the Central Bank Governance Forum at the Bank of International Settlement.
The President recalled the impact of the global economic crisis of 2008 and the decision of his Government to take the bold decision to pursue a full and comprehensive macroeconomic reform program. The President noted that his decision was not without its risks.
“… the risk that such a small island, with an extremely high openness index, with hardly any reserves at the time, would be able to liberalize in the face of a crumbling world economy on which we depend so much. Some had suggested that we needed hundreds of millions of dollars to do so. But we showed in the end that smart minds and determination were as equally important, if not more so, than an inflow of capital,” said the President.
The President also noted that there was political risk involved in undertaking the move to reform the economy.
“.. but I was prepared to take it for the national interest comes first. Risks, as we know too well, come with reward. The higher the risk, the greater the reward, and today we, the Seychellois people, are reaping the rewards of the reform programme.”
The President described the Seychelles economy as ‘buoyant’, with real GDP growth for 2010 projected to outpace the original growth forecast of 4%, and exceed 6 %.
“The Government budget continues to perform impressively, so much so that we have already surpassed the primary fiscal surplus target for this year, at 10 percent of GDP. This will provide us with more fiscal space for the benefit of our people,” said the President.
The President noted that the inflation rate continues to hover around zero percent, while the exchange rate remains stable in the face of volatility in the world’s leading currencies.
“Official foreign exchange reserves continue to grow at an impressive pace, having already surpassed the 2-month import threshold. Our debt level continues to decline as our debt-to-GDP ratio moves towards the path of sustainability. These impressive indicators point to the overwhelming success of our economic reform program,” said President Michel.
The President praised the work of the Central Bank and the steps that were taken to reform the governance of the bank, in terms of its independence, the governance structure and the modernization of banking supervision.
“Since assuming office, I have accorded the greatest importance to governance in my Government’s efforts to improve transparency and accountability. I am pleased to note that our Central Bank has also made important strides in that regard, “said President Michel.