Reforms win EU trust and €5.9m support grant
21.05.2009
The European Union (EU) has changed its approach to support for Seychelles and has decided to give us a €5.9 million budgetary support grant.
This new approach comes “because we have a very strong reform in place” and the EU is also happy that the programme is led by the International Monetary Fund (IMF).
The IMF’s evaluation of Seychelles’ economic recovery is respected by the EU, which will not have to carry out its own appraisal.
Head of delegation of the EU commission in the Indian Ocean, Claudia Wiedey, announced the change of policy during an interview with the local media yesterday.
“Seychelles has changed quite dramatically, and we have therefore changed our approach to the country,” she said.
“President James Michel asked us to consider this, and following our internal discussions we have launched our negotiations for the future programme, which means we will no longer do projects as we did them in the past.”
The EU will support this country’s programmes rather than proposing what we should do, she added.
“It doesn’t mean there are no final conditions, but it’s a totally different approach which means we will provide money directly to the government through the budget and help it to meet a certain objective,” said Mrs Wiedey.
“We don’t have to (first) discuss with the government which kind of sector we should use the money in, although that does not mean we will just sign a blank cheque, because we are administering taxpayers’ money.”
She said the EU and the government will look together at the suggested sectors for support and will reach an agreement.
“This is a totally new approach. We’ve never done that before, we’ve changed and it is our response to the reforms,” she added.
Mrs Wiedey said that previously the EU would have designed technical projects, for example in the area of water supply, which would have already been discussed.
“For example, we would choose to support a project to reduce water losses and we would have decided which pipes to change, put out a tender and gone through many procedures,” she said.
“Now if the government wants to reduce water losses, we will provide the money through the budget and the Seychelles government will carry out its own procedures, so we will no longer be involved in the tenders and other procedures.
“And if the Ministry of Finance decides tomorrow it needs more money for some kind of intervention, we will listen as long as the result remains the same.”
Mrs Wiedey said carrying out its economic reforms and the “100% turnaround” was the only choice Seychelles had, and making the local currency convertible was very important to the EU.
She said it did not make sense to provide euros which were converted into rupees, but things are now moving in the right direction.
Mrs Wiedey was here to attend the Seychelles Forum and was paying her farewell visit as she will shortly leave the region after being EU ambassador to Mauritius, Comoros and Seychelles.
She said the EU and Seychelles have had a very long relationship during which the union has always given its support.