Reform success matches risk we took -- President

President James Michel said launching the economic reforms in the face of the global crisis posed major economic and political risks which he nevertheless took “because the national interest comes first”.

The gains are however as big today as the challenges we faced then, he said when addressing the Central Bank Anniversary Lecture held at the International Conference Centre on Friday.

“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 lecture was 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 who made a presentation.

Mr Michel described 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 programme saying we took the risk despite being such a small island with an extremely high openness index, with hardly any reserves at the time when it was difficult to imagine how we would be able to liberalise 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,” he said.

Mr Michel said the Seychelles economy is now 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,” he said.
He 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 two-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 programme,” said Mr Michel.

He 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 modernisation 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, “he said.

Both Mr Michel and Central Bank governor Pierre Laporte outlined many of the measures taken to ensure accountability of the bank including revision of the Central Bank Act making it possible for the bank’s governor to be called before the National Assembly to explain and answer questions on monetary policies and other activities of the bank.

To ensure independence the law disqualifies all government members and employees, and all persons affiliated with a political party from being members of the Central Bank’s board of directors and no Central Bank board member may sit on other boards, “except where these have a direct implication on the work of the bank.

“The new Act also bars board members, including the governor and deputy governor, to be influenced by any person in the discharge of their duties".

Forrás: http://www.nation.sc/