Seychelles Emerging Markets in Africa, Asia and the Middle East

An independent supplement distributed in the Guardian on behalf of The Report Company, who takes sole responsibility for its content February 02.02.2012 sun, sea and sand. more to offerthan just A trilingual melting pot with A Creole experience (page 10) (page Report Seychelles emerging markets in Africa, Asia and the Middle East. is setting its sights on becoming a hub that links traditional markets, this Indian Ocean island nation theAs global economy shifts its focus away from of a new area of growth Islands at the centre (page 20)(page of possibilities. opens up a whole world A new submarine cable Links to the world The company

(page 15) (page environmental preservation. management and resource fisheriesgrowth, A balancing act between Ocean harvest S Island nation fights climate change warming, the islands convince the Facing globalthreats grave from world to take action.

(page 6 ) (page (page 7) (page in the face of a growing crisis. joined-up thinking intelligence centre, calling for Seychelles has created a piracy Anti-piracy observatory world’s investment centre. jurisdiction aims to be the This OECD whitelisted Will it succeed? to protect society. its determined oil find,Seychelles is life-changing Despite a potentially public interest The case for (page 22) (page Offshore dreams

(page 16) (page

2 _ SEYCHELLES > INTRO

A small nation stands tall Writer: Ray Spencer

S Seychelles is today held up as an example of how to do things right. Boasting one of the fastest growing economies in Africa and a world-class environmental record, it’s hard to believe that just five years ago the country was on its knees, unable to repay debts and spending money it didn’t have.

> Just three months ago, an International became a regional carrier, but other airlines 01 Monetary Fund (IMF) report declared Sey- are filling part of the gap and Gulf countries Royal endorsement chelles’ recent economic performance as “fa- provide hubs to link with Victoria. Choosing which of Seychelles’ 115 vourable.” Given that in 2008 the IMF was The second economic pillar of Seychelles is islands to visit can be hard, but not forced to set economic reforms to rescue the fishing and it supplies the world’s largest tuna for these returning royals. archipelago from near collapse, that muted canning factory at an expanding Port Victoria. statement was real praise. Seychelles itself is safe, President James With high living standards, but large fis- Michel insists, but he’s urging the UK and other cal and current account deficits, the islands large states to find lasting solutions within have moved from being a welfare state to a free Somalia to the piracy issue. market one. It’s the only country in the region Climate change is another international is- without exchange controls. sue Michel is championing, because unchecked 02 External debt has been halved after restruc- it threatens many of its 115 low-lying islands, turing and tightened monetary and fiscal policy, as with all island states. Mahe is home to 75 and the government is on track to shrink public per cent of Seychellois, while most others live debt to 50 per cent of gross domestic product on Praslin and La Digue. (GDP) by 2017. Two developments will change Seychellois There are few endorsements better than being chosen by the Duke and Real GDP grew by 6.7 per cent in 2010 and fortunes. Duchess of Cambridge as a honeymoon gained another 5 per cent to reach almost £1bn In the summer, a fibre-optic cable to Tanza- destination. last year – one of the highest among African states. nia will bring the fast internet that Seychelles’ Last year, amidst intense media Last year, global ratings agency Fitch upgraded finance centre – as the third and growing pillar interest, the royal couple stayed at North 03 Seychelles’ country ceiling to ‘B’ reflecting “outper- of the economy – needs to become a dynamic Island, north west of Victoria, which has formance, by a wide margin, of the fiscal targets set gateway to Africa for investors. To help develop been developed as a private 11 villa eco- by the IMF, for a second consecutive year.” offshore finance business a stock exchange is tourist resort. Ex-IMF economist Pierre Laporte, now being set up this year. It was a return visit to the country, heading the Central Bank, notes: “The big one This former French colony – which be- as Prince William and the then Kate for us is domestic debt. By running a surplus longed to Britain until 1976 – also has potential Middleton had previously spent a diving on the budget, we have managed every year to offshore oil reserves as large as Saudi Arabia’s, break in 2007 at Desroches Island, a 40 minute flight from Mahé. use part to pay down the debt.” which could be landed by 2015. “The couple thoroughly enjoyed Tourism accounts for a quarter of GDP Seychelles, with its low tax rates, offers at- their time together,” said a Clarence and an even greater share of employment, with tractive investment opportunities in every area House spokesperson, adding that they record arrivals attracted by pristine beaches. of the economy from a strategic Indian Ocean thanked Seychelles’ government for a 04 Direct flights from Europe, where 75 per cent location. The government is acting as a facilita- honeymoon that was “such a memorable of visitors originate, ended when Air Seychelles tor, giving the private sector space to grow. <<< and special 10 days.” 01 Ste Anne Marine National Park – one of the Indian Ocean’s prime scuba diving locations. Publishers: Jose Powell and Rafael Munoz The Report Company has an For an expanded version of this feature, please visit: 02 Seychelles is home to thousands of fairy terns, the Project Management and Sales: Jose Powell exclusive media partnership with www.guardian.co.uk/the-report/seychelles world’s only all-white tern. Writers: Eleanor Wragg, Anna Reitman, Ray Spencer Guardian News and Media for and www.the-report.net 03 The Victoria Clock Tower, modelled on the the distribution of this content. Research and Editing: Eleanor Wragg Vauxhall Clock Tower in London For suggestions on a feature 04 The Seychelles Central Bank on Independence 81 Oxford Street Creative Director: Angelica Montes The Report Company takes sole on your country or any specific Avenue, Victoria. London W1D 2EU, United Kingdom Illustrations: Daniel Jimenez, Belen Isasi, Alya Mark theme, please contact us on: responsibility for the content of 05 The world famous Anse Source D’Argent beach on Tel: +44 (0) 207 903 5079 Photography: Seychelles Tourism Board [email protected] this feature. La Digue Island. 05 4 _ SEYCHELLES > RELATIONS An independent supplement produced by The Report Company 5

ing Seychelles. Its fishing industry has gained Britain has also trained Seychellois police region, where over two-thirds of the world’s oil access to the EU by adopting high standards at and military. There’s been cooperation with the is shipped and where trade and commerce is its tuna canning factory – one of the largest in UK Crown Prosecution Service in piracy cases becoming exceedingly costly.” the world – and Seychelles licenses EU vessels and the UK’s Serious Organised Crime Agency Unfortunately, the climate change debate to operate locally. to set up a new maritime intelligence and infor- has become almost ideological. President But it is with the UK that Seychelles retains mation centre to target the pirates’ financiers. Michel points out, “small islands and many a very special relationship. Minister Adams The driving force putting believes, “it’s a relationship that has stood piracy and climate change is- the test of time and which we see will con- sues before a world audience tinue. Things like investment in education is President Michel’s key mes- “ and people-to-people contacts will keep the sage that both issues must be We have been building a model relationship going.” the concern of all nations. It is not only the Seychellois who are geared towards emerging markets Gaining British AOK threatened by trade and tour- in Asia and Africa over the last Anything British is perceived as good qual- ism disruption and disaster if ity and desirable – even something as basic as the numerous low-lying islands five years British biscuits are sought after, points out are flooded. Steve Fanny Patrick Vel, chief executive of the state-owned Suggesting that global as- CEO of Seychelles International Business Authority international Seychelles Trading Company (STC). sistance needs to be given to A diplomat's view The island nation imports 90 per cent of Somalia to resolve its internal problems, Presi- other developing states are the worst hit by its needs and suffers from price volatility, but dent Michel asserts, “We are very grateful to climate change and also have the least re- it tries “to protect the population from the Britain for the support given to us in the fight sources to tackle it. There needs to be a much recognition harsh realities of the world.” For some basic against piracy.” But he wants the UK “to in- more focused approach from all developed commodities, STC fixes its prices for a period crease its engagement as a matter of priority, nations to put resources available toward “to provide more stability.” in order to ensure security in the Indian Ocean tackling the problem.” Writer: Ray Spencer <<<

S For a small country, Seychelles packs a big punch on Jean-Paul Adam the international scene, working to better both itself and its Minister of Foreign Affairs neighbours in the region. Stepping stones to prosperity Q&A In their different ways, these top men deliver an economic Previously Secretary of State in the Office of the President for 13 years, vision for growth in practical terms. > President James Michel stated, “we have a cember announced its first overseas naval base Adam has held his current role since very active role on the international scene, where- in Seychelles. June 2010 and is passionate about his by I have been calling for the world community More positively, Seychelles is developing country’s development. to recognise the needs of small island states, strong international trade relationships. As “We’re not competing “People associate and Seychelles’ unique experiences in economic, Jean-Paul Adam, Minister of Foreign Affairs, with Jersey and the reforms directly social and environmental protection.” notes, “we are in the middle of the Indian Ocean 1. How important is Seychelles in this part of the world? Guernsey; we compete with me because I “Seychelles has to share ample experience in in terms of continental politics; we are affiliated We’re the first stop between Africa and the fields of nature protection and sustainable with Africa, but offer so much more because we Asia with financial services opportunities against ourselves came from the IMF, development.” have this view of the Indian Ocean.” that come through excellent access to for what we can be but everyone did The UK, Russia, France, India, China, and A member of the Small Island Develop- African markets. We strongly believe that Cuba have embassies in Victoria, while Sey- ing States group, Seychelles also plays a keen Seychelles is a stepping stone in terms of tomorrow.” their bit.” chelles has an ambassador to the UN and to role in the Southern African Development global geopolitics and the global economy. Peter Sinon Pierre Laporte the US and Canada, as well as embassies in Community (SADC), the Common Market Minister of Investment, Natural Resources and Industry Governor of Central Bank China, France, India, South Africa, the Vatican, for Eastern and Southern Africa (COMESA), 2. Given the global economic crisis, Belgium, UK and from November in UAE, the the Nonaligned Movement, the African Union, is tourism growing? first in the Gulf region. the Commonwealth, the Indian Ocean Com- We should not underestimate the scale of the problem. We are diversifying the way we As Patrick Pillay, Seychelles High Commis- mission and La Francophonie. “A stepping stone to Africa” is how Sinon sees his country’s stra- Often credited with spearheading the reforms which have dramati- market tourism and the product. In March sioner to the UK, observes, “you cannot have 2011 we introduced an international tegic position in the Indian Ocean, particularly with respect to cally improved Seychelles’ fortunes since 2008, Laporte’s previous economic reforms without being sure that you Pragmatic approach carnival - we even had a delegation from financial services. experience as an International Monetary Fund (IMF) economist gave are connected to this increasingly complex glo- A pragmatic approach has been taken to ex- the Notting Hill Carnival - and will have Companies could be listed on the planned stock exchange to help him a good understanding of what was needed. bal world so, in terms of diplomacy and visibil- panding international trade. The US has taken over 50 countries in the 2012 edition. Our with what he regards as “a major deficiency on this continent.” A key challenge was getting the Seychellois people on board, despite ity and connecting with different multilateral, a back seat due to the long distance and time largest market is Europe, but we’re seeing Once perfected, he believes that this approach could be exported. slashing the public sector workforce by 17 per cent and removing fuel bilateral, regional and international partners zone complications and even the eurozone, impressive growth from the Middle East “This is the best way we can contribute and play a role in the regional subsidies overnight. Removing exchange controls produced 60 per cent around the world, he [the president] has put a with its financial woes, is considered an un- and Africa, particularly South Africa, and integration process.” inflation, which fortunately fell to single figures within three months lot of emphasis on foreign relations and inter- likely market to gain new business interest. there are huge opportunities in China, He’s also keen for individual Seychellois to be able to do business rather than the nine anticipated. national partnership.” Instead “we have been building a model Korea and Australia. as easily as foreign investors, so “we are doing the utmost to make He’s introduced electronic funds transfers and automated cheque Indian Ocean piracy has prompted Sey- geared towards emerging markets in Asia and the private sector the dynamo that really drives growth,” whilst the clearing but admits, “the banks need to work harder.” How important is the Common- chelles to strengthen global links to protect Africa over the last five years,” reports Seychelles 3. government facilitates and regulates. To protect Seychelles’ reputation, he’s taken OECD advice to wealth? its borders and the core sectors of tourism International Business Authority managing The Commonwealth has done the most The challenge is to maintain Seychelles fisheries in pole position, strengthen laws, making anti-money laundering a priority with a and fishing. The government has entered into director and chief executive, Steve Fanny. work on the specificities of islands and despite the knock-on effects of piracy. With one of the deepest ports financial intelligence unit that is tough on crime. multiple agreements and memorandums of Even so, the EU has concluded an interim we would like that other development in the Indian Ocean and the largest tuna canning plant in the region, Significant funds now flow into Africa from Asia and China and understanding with such partners as the US, Economic Partnership Agreement with the organisations look to the Commonwealth a development agreement with the European Union has been signed there are many opportunities for offshore banking, where the territory France, EU, India, UK and China, which in De- Eastern and Southern African region, includ- on these issues. complete with project deadlines and allocated funds. can make a difference. 6 _ SEYCHELLES > ENVIRONMENT > SECURITY 7 Anti-piracy observatory Writer: Anna Reitman

Piracy has hurt the Seychellois economy and endangered the lives of fishermen, prompting the government to take bold action and forge international partnerships to protect its citizens. Island nation fights climate change Writer: Anna Reitman > Seychellois fishermen used to be notoriously times in the per- secretive about their favoured fishing spots, but ishable goods S Seychelles’ leaders are putting climate change at the top piracy has changed all that. Now, the govern- trade. Although ment urges every fishing boat to install a vessel there has been of the agenda both at home and abroad in order to stave off monitoring system in case of an attack. a jump in eco- the grave threat of rising sea levels facing the island nation. “The international community forgot about nomic activity Somalia for a very long time and it has been left from warships in a state of anarchy and civil disorder,” says coming in to Joel Morgan, Minister of Environment, Home make port, the Affairs, Transport and Energy. once-thriving The Coast Guard has successfully carried out cruise ship in- the dramatic rescues of some crews held by pi- dustry is now rates in open water, but two fishermen who were virtually non- recently abducted to Somalia with million-dollar existent. Piracy ransom demands were not so lucky. is estimated to > At the latest climate change summit, COP17 sumption. Meanwhile, one of SEYPEC’s refu- “Although a step in the right direction, Seychelles is particularly vulnerable, as it cost Seychelles some in Durban, South Africa, only one school elling tankers is an energy saving vessel which there remains a profound mismatch between relies heavily on the maritime domain for its 4% of GDP. project was showcased to UN Secretary-General consumes less than half the amount of fuel of the level of action demanded by our best sci- economy. In response, the government developed But it is not just a lo- Ban Ki-Moon: Seychelles’ school rainwater har- other vessels travelling the same distance. entific knowledge and the current level of action plans that attracted a number of interna- cal problem. With two-thirds of the vesting project. Nonetheless, it is a far more difficult task con- ambition of the world’s governments to re- tional partners willing to support its maritime world’s oil shipped through the Indian Ocean, Minister of Foreign Affairs Jean-Paul Adam Coordinated by the Department of Educa- vincing industrialised nations to take concrete ac- duce greenhouse gas emissions,” said Melanie security capabilities. piracy is a global challenge. also notes that judicial and penal reform is an im- tion, this project aims to raise awareness that tion on climate change. Leaders are being realistic, Heath, BirdLife’s head of policy. “We are cur- The anti-piracy flagship of the North Atlantic In November, President James Michel called portant component of the government’s strategy. harvesting rainwater is a means of adapting to said Minister of Foreign Affairs Jean-Paul Adam, rently on a path towards 3ºC to 5ºC of climate Treaty Organisation (NATO) recently completed on world leaders, including Prime Minister Dav- “Seychelles has been very successful in pros- climate change and saving on water costs. in recognising that no agreement can be reached change in this century, with likely disastrous a port visit focused on NATO’s cooperation with id Cameron, to undertake a comprehensive ap- ecuting pirates. We have revised all our legal Climate change is a high priority on Sey- by telling businesses to foot the entire bill. consequences.” the Coast Guard. Rear Admiral Gualtiero Mat- proach to solve the crisis. He proposed measures instruments in line with the UN Convention on chelles’ agenda. Officials have long been vocal At the end of COP17, the international com- BirdLife has been involved in Seychelles tesi, Commander of NATO’s counter-piracy task including increased support to peacekeeping forc- the Law of the Sea, and modernised all our anti- on the issue, with efforts underway to establish munity took one step closer to a deal and extend- for the last 35 years under the moniker Nature force, visited the Maritime Rescue Coordination es within Somalia, in particular the African Union piracy laws, having assembled a wider network an agency in the UK to represent the concerns of Seychelles and promotes sustainability, wild- Centre (MRCC) in the capital of Victoria. Mission in Somalia (AMISOM) in Mogadishu, to take action.” small island states. The archipelago is particu- life conservation and educational program- The main islands are still safe, but fishing targeted interventions against criminal and terror- Adam adds that an anti-piracy observatory larly vulnerable because coastal development is The archipelago is particularly ming. In a groundbreaking project funded by vessels can no longer go as far afield, while higher ist groups to supplant hubs of criminal activity, as will be established in collaboration with the UK just a few metres above sea level, while a large vulnerable because coastal USAID, it is growing corals in underground insurance costs on imported goods strike at the well as several other measures to strengthen the as a regional intelligence sharing centre, which number of outer islands are virtually flat. nurseries and replanting them in degraded cost of living for local residents. Another blow maritime defence capacity of coastal states and will examine pursuing criminal cases against “It all comes down to the sustainability development is just a few metres areas. BirdLife also owns the carbon neutral to product prices comes from increased transit improve patrolling and surveillance capabilities. individuals financing piracy.<<< concept and how our environmental policies above sea level, while a large Cousin Island. provide the necessary safeguards and checks,” number of outer islands are To offset 8,000 tonnes of tourism-related emis- said Joel Morgan, Minister of Home Affairs, sions, the UK-based carbon management com- PERSPECTIVES Environment, Transport and Energy, adding virtually flat pany Carbon Clear advised Nature Seychelles to that energy efficient technologies which reduce purchase carbon credits from a clean stove project carbon emissions need not hinder development. ed the Kyoto Protocol, preserving the only legally in Darfur, a geothermal energy plant project in “The constraints on the industry due to “When we started getting threatened by The new headquarters of the state-owned binding instrument with emission reduction Brazil and a clean energy project in Indonesia. piracy are number one on my agenda.” piracy in 2008, everyone woke up to the fact Seychelles Petroleum Company (SEYPEC) is targets and timetables for developed countries. “The environment has to have some that we had a serious problem on our hands.” based on the idea of energy efficiency. All light Still, these results received mixed reviews, meaning,” said Nirmal Shah, CEO of Nature Finley Racombo Joel Morgan bulbs and windows are energy saving and air notes BirdLife International, the world’s biggest Seychelles. “It’s not worth having airy fairy CEO of Seychelles Fishing Authority Minister of Home Affairs, Environment, Transport and Energy conditioning is controlled to minimise con- conservation partnership. schemes. We make it real.” <<< 8 _ SEYCHELLES > INTERVIEW > INVESTMENT

James Michel President of Seychelles Q&A World vision

Last May, former journalist and army colonel James Michel won for investment a third term as president, a position he’s held since 2004 after Writer: Ray Spencer being vice president for eight years. With extensive knowledge of the Seychellois economy, he has proposed “Strategy 2017” S Seychelles’ economy is in need of practical, physical and for sustainable development, whilst vigorously protecting the financial investment in all sectors. natural environment.

> “We have embarked on a new era in which side the remodelling of existing properties, we want to position ourselves in the region as “where investors can join local partnerships,” the centre for investment. Our ultimate vision is explains Alain St. Ange, chief executive of the to become the investment centre of the world.” Tourism Board. It’s clear that Sherin Renaud, chief executive of To increase tourism yield “we need to offer Seychelles Investment Bureau, and the Seychel- things where visitors can spend their money, 1. Halfway through your 10-year deve- Somalia. With continued support, we can take lois are not without ambition. like water parks or aquariums or aviaries,” lopment plan, what progress is being made? this a step further and build a framework that “It’s a very long term view,” but she insists he notes. Seychelles has limited natural resources and will benefit Seychelles, the region, and most of “this is the area to focus on to do business. This But as Minister Morgan points out, pre- the three sectors – tourism, fisheries and fi- all Somalia. is the place to invest money.” serving the islands’ environment and marine nancial services – remain important for the The country is looking for assistance within life is paramount. Developers must “follow development of the economy. Despite its open- 3. How are you expanding the economy? its key tourism and fishing industries, its emerg- procedures by planting endemics and helping ness, the economy has shown strong resilience The potential for oil exploration is enormous in ing financial services sector and in developing to restore the wetlands and the environment,” against the recent global financial crisis. Com- Seychelles and it is attracting investment for a new innovative technologies, particularly those he emphasises. prehensive measures to address macroeconom- resource that is becoming scarcer. We have seen associated with the environment. ic imbalances and empower the private sector rapid expansion of the fisheries sector. As fisher- Communications are set to take a leap for- Huge potential caused a contraction of only around 1 per ies is the second pillar of our economy, we are ward with the completion of a fibre-optic sub- Minister for Investment Peter Sinon sees huge cent in real GDP in 2008. In subsequent years, encouraging development of processing plants, marine cable linking Seychelles to mainland potential in the offshore financial sector. growth has been positive and above expecta- as well as international partnerships with recog- Africa, bringing the essential business tools of Alongside external investors, he plans for a tions – 6.7 per cent in 2010 and 5 per cent pro- nised brands in fish processing and exportation. enhanced telecommunications and secure high stock and securities exchange that allows the jected for 2011. In the absence of major exter- We are favouring innovation and invest- speed internet. listing of foreign companies. nal shocks, the country is on track to achieve ment in all areas of our society. What we have According to the Civil Aviation Authority, The Governor of the Central Bank, Pierre its medium to long term objective. in Seychelles is precious and what we have the 40-year old airport terminal and facilities Laporte adds, “we need good household name In nominal rupee terms, Seychelles GDP achieved as a nation is remarkable. We have are in need of an estimated £96 million in up- banks – there’s room for three or four more was R5,628 million in 2006 (approx. £267m) protected our pristine natural environment. We domestically, and others offshore with a lot of and increased to R11,621 million in 2010 (ap- have political stability, social and racial cohe- funds flowing from Asia into Africa.” prox. £551m), so it has already doubled. How- sion, access to free education and health care, Its corporate tax rate is low Even the Savings Bank, now with 40 per ever, the main factor is the more competitive and we are on the path of sustained economic - nominally 15 per cent, but cent private ownership, wants a strategic part- domestic currency between the two periods. We growth. I intend to protect these precious at- ner to increase its market share and delve into are now achieving budget surpluses to ensure tributes, so that they continue to grow as our effectively 9 per cent after credits offshore business. “In two or three years’ time debt servicing. core strengths. - and it’s on the OCDE White List the share value will double or triple,” promises for transparency chief executive Michael Benstrong. 2. Are bilateral relations with the UK still 4. Can Seychelles become a strategic hub Lawyers, accountants, insurance firms, mu- important? for international trade? tual and hedge funds and Islamic finance in- We value very much our historical relations Seychelles is very attractive as foreign investors grades. Concerning the form of investment, stitutions are being targeted given the islands’ with the UK. Three of the largest and oldest– can enjoy our oasis of safety and security. We Transport Minister Joel Morgan assures that advantageous proximity to the Middle East established investors in our country are of Brit- are a very stable country and this has been the “we are open to any proposals but it has to be Seychelles has much to offer to prospective ish origin – Cable & Wireless, Barclays Bank key to our development. Our strategic location a win-win.” investors. Its corporate tax rate is low – nomi- and Seychelles Breweries. Combined, the UK- makes us an ideal port of call between the East Another big-ticket project is the extension nally 15 per cent, but effectively 9 per cent after Eire area represents our fourth biggest source and the West. We are part of free trade areas of Victoria’s port with a 200-metre long quay to credits, with numerous double taxation agree- of tourists. and have a reputation as a multilingual and increase landing facilities for the country’s large ments – and it’s on the OECD White List for Today, bilateral relations are focused on multicultural society that is highly adaptable tuna processing plant. A new fish processing plant tax transparency. education and piracy. I believe Seychelles and to changing working environments. is also needed because new laws will require all Sound legal and regulatory frameworks, Britain can work together to garner support for We will become even more attractive as an catches to be utilised in order to add value. Here such as anti-money laundering provisions, anti-piracy engagements from key members of information gateway to Africa when we com- Morgan envisions “a combination of investors are also in place. Seychelles prides itself on its the international community, in order to im- plete a submarine cable project linking Sey- going into partnership with foreign partners.” relatively easy, fast and cost-effective process plement a lasting solution to the instability in chelles to Africa. In the long term, the discovery of offshore to open an International Business Company, oil and gas will spur the modernisation of all currently the most popular structure. An expanded version of this feature, its articles and the full transcripts of interviews with port facilities. Furthermore 96 per cent of the adult popula- government officials and leading CEOs can be viewed at: Tourism is Seychelles’ top revenue earner tion is literate, speaking French and English, which www.guardian.co.uk/the-report/seychelles and www.the-report.net and new hotel projects are popping up along- contributes to a stable political environment. <<< 10 _ SEYCHELLES > TOURISM An independent supplement produced by The Report Company 11

Stay As a nation of 115 pristine coral islands dotted across the land, the luxury marina resort of Eden Island. In addition to offering second homes to for- If you’re looking for a touch of south-west Indian Ocean, Seychelles relies heavily upon Once a Seychellois, eign investors, the resort also runs a rental barefoot luxury with an eco-friendly tourism to provide the bulk of its foreign currency inflows. pool of its apartments, maisons and villas twist, here are three of the best hotels. always a Seychellois for holidaymakers. During the worst of the Meanwhile, the country’s 1.4 million square kilometre Exclusive In a bid to ramp up the impact of its overseas economic downturn Eden Island, like many Economic Zone (EEZ) allows its fisheries to dominate visible tourism offices and penetrate new markets, the other ongoing developments, was forced to exports, leading to the emergence of the Port of Victoria as an Seychelles Tourism Board (STB) has launched make what CEO Craig Heeger calls “difficult an innovative global network of tourism am- decisions,” such as foregoing sales rather than important regional shipping centre. To shield the local economy bassadors. These volunteers come up with reducing prices. But today he cites the devel- from external shocks, the government is currently erecting a unique ways to raise awareness of what their opment’s success as a testament to the will of homeland has to offer – perhaps none more so the Government to support new opportuni- third economic pillar, namely, financial services. Through than UK-based tourism ambassador Georgia ties in the sector. this strategy, Seychelles intends to capitalise on its favourable Dunlop, who in December arranged the dona- “This has been effectively a public-private location by becoming an important hub between Africa, Europe, tion of a giant Aldabra tortoise to the Cotswold partnership,” said Heeger. “We have had no Wildlife Park in Oxfordshire to encourage UK conflict or pushback, and have a very good Asia and the Middle East. tourists to visit Seychelles. relationship with the Government.” Ephelia Resort - Mahé When Heeger, who is South African, was first Spanning 120 hectares with its own invited to Seychelles in 2002 to investigate the protected mangrove ecosystem, it offers that provides more than 70 per cent of hard possibilities of constructing a huge development, the ultimate in green luxury. currency earnings. he was initially put off by what he saw. “I was www.epheliaresort.com faced with a very confrontational and negative From the big five to the best five investment climate. The country had defaulted To buck the global trend of falling arrival num- on loans around the world, it had a very low bers, the Seychelles Tourism Board opted to level of credibility in financial markets and it was market the opportunity for visitors to combine accused of reneging on registered agreements.” their stay in the country with another destina- Today, almost a decade later, a change of gov- tion – an admittedly bold move for a small place ernment and an IMF intervention later, it’s clear which is thousands of miles away from most lo- that Seychelles has turned its fortunes around. cations – but one that has paid off in dividends. The “Vanilla Islands” concept – where the Affordable Seychelles T F FS tourism ministries of Seychelles, Madagascar, Although it will never be a mass tourism La Réunion and Mauritius position themselves destination, Seychelles has also developed a to form a single, all-encompassing, exotic yet product for tourists with a tighter budget. Banyan Tree - Mahé extremely diverse destination – is one scheme The Government’s drive to increase Seychel- Once the site of the holiday homes of already in place. Meanwhile, Seychelles is at- lois participation in the sector has led to the Peter Sellers and George Harrison, its tracting safari tourists from East Africa, who development of affordable self-catering facili- design fuses local traditions with respect A Creole experience after a trip to see the “Big Five,” can fly over ties and guesthouses. for the surrounding environment. Writer: Eleanor Wragg to Seychelles to enjoy what it calls the “Best “This is an ethical destination and a model www.banyantree.com/en/seychelles Five” – the granite and coral islands, beaches, of sustainability,” said Nirmal Shah, CEO of emerald ocean, year-round summer and the Nature Seychelles. “The Seychellois people are > Long renowned as a luxury honeymoon country recently launched the “Carnaval In- tures and this becomes an attraction in itself. ethnic diversity of its people. in charge of the businesses here at all levels. hideaway, Seychelles is the ideal destination ternational de Victoria,” a unique event bring- We are bringing together all the cultures of “I want to bring us all closer together and It’s almost as close to paradise as we can get.” for an indulgent stay in the sun. With its ening together the world’s most famous carni- the world.” to sell us as a region,” said St. Ange. However, Seychelles is far from opening the viable tropical climate, vast stretches of white vals every March. In addition to its distinctive cultural mix, The tourism board is also looking into in- floodgates to hordes of sightseers. The country sand and glittering turquoise waters, possible “In 2011, 19 countries turned up for the Seychelles’ isolated history means that much creasing its yield from the visitors it already prefers to take a sustainable approach by focus- accommodation options include Raffles, Four inaugural carnival, while 32 have signed up of its rare flora and fauna cannot be found receives by appealing for investments in new ing on quality over quantity, keeping environ- Seasons and Hilton. anywhere else on Earth. Just over half of its activities, from water parks to aquariums, as mental conservation at the forefront of all its But high-end luxury resorts and palm-lined limited land area has been declared a nature well as concentrating on the flailing cruise ship engagements. beaches only represent a fraction of the myriad of reserve, and the Vallée de Mai Nature Reserve on business, which has been damaged by the threat In the words of President Michel, “I believe experiences offered in this Indian Ocean paradise. “ Praslin and Aldabra are both UNESCO World of Somali piracy throughout the Indian Ocean. in sustainable tourism development, as tourism “We have launched the Seychelles brand The Seychelles brand of Heritage Sites. is the primary source of wealth creation for Raffles - Praslin of tourism,” said President James Michel, who tourism is not just about Seychelles’ tourism industry was born in A new island our population, but at the same time while we Tucked away on Praslin Island, it offers also holds the portfolio for tourism, under- promoting the islands as a 1971 with the opening of the country’s main One sizeable recent addition to Seychelles’ expand, we are conscious of the need to protect a world-class resort in a secluded setting. scoring the sector’s importance to the econo- airport, situated just 15 minutes’ drive away tourism offering is its 116th and newest is- our unique natural environment.” <<< www.raffles.com/praslin my. “This is not merely about the promotion holiday destination, but also from the capital Victoria. The first plane to land of Seychelles as a holiday destination, but also about preserving our natural was the British Overseas Airways Corporation about preserving our natural environment, environment and giving (BOAC) Super VC-10. That year, the country saw because this is what attracts visitors to our 1,622 tourists. In 2010, the country welcomed islands. We aim to give tourism value to our tourism value to our Creole over 170,000 visitors, mostly from Europe. Building another piece of paradise Creole way of life, which is the beauty of dif- way of life While this reliance on European markets Seychelles’ sheer granite mountains make for stunning photos, but their tiny area of inhabitable ferent cultures coexisting.” leaves the country vulnerable to the region’s land has hindered those looking to own their very own piece of paradise – until now. Built upon President James Michel financial instabilities, Seychelles is one of the reclaimed land and connected to the main island of Mahé by a short bridge, the new 56-hectare A true melting pot few countries in the world that has managed Eden Island marina development of apartments and villas has been a roaring success, already ac- The trilingual Creole nation is a melting pot for the second one,” said Alain St. Ange, CEO to maintain its pre-economic crisis tourist ar- counting for 4% of GDP.“Eden Island is to a large extent the reason Seychelles was able to change of different races, cultures and religion. To of the Seychelles Tourism Board. “For the rival figures, through a delicate balancing act its economy,” said Craig Heeger, CEO of the development. “We were a launch pad for credibility better exhibit this one of a kind heritage, the tourists it makes such a melting pot of cul- of diversification and preservation in a sector which helped to get the country onto the path it is now.” 12 _ SEYCHELLES > TOURISM An independent supplement produced by The Report Company 13

▴ ◂ Famed for its suggestively shaped nuts and catkins, the endemic Coco de Mer holds the record for the largest leaf and biggest seed in the entire plant kingdom. Isolated in the heart of Praslin, it grows in the hauntingly beautiful forest of Vallée de Mai, which was inscribed as a UNESCO World Heritage Site in 1983, and declared by 19th-century British General Gordon to be the original site of the biblical Garden of Eden.

◂ The Aldabra Atoll is home to the world’s ▴ The numerous coralline and granitic largest population of giant tortoises, while islands of Seychelles are blessed with on Bird Island lives Esmeralda, the world’s some of the world’s most stunning white oldest giant tortoise. Born in 1771 and sand beaches, lapped by the turquoise weighing almost 63 stone, she has a place waters of the Indian Ocean. ◂ The islands are an ornithologist’s in the Guinness Book of Records. paradise, with twelve endemic bird species, including the extremely rare magpie robin and the largest sea bird colonies in the world.

▾ Visitors flock to Seychelles for its pristine, uncrowded beaches and world recognised dive sites as well as its exotic endemic flora, including intensely fragrant vanilla orchids.

◂ Held over a period of three days in March, the “Carnaval des Carnavals” brings together the world’s best events in one of the world’s smallest capital cities. 14 _ SEYCHELLES > TOURISM > FISHING 15 Pioneering T F FS sustainable tourism Ocean harvest Alain St. Ange While other countries compete for tourism numbers, Seychelles Writer: Anna Reitman CEO of Seychelles Tourism Board stands out in protecting its pristine natural environment. Q&A Cousin Island Nature Reserve

When Nirmal Shah, chief executive of Nature Seychelles which manages the island, saw media reports in Germany urging Europeans not to travel to long-haul destinations S As a vocal member of the UN-compliant Indian Ocean because of the environmental implications, he decided to Tuna Commission (IOTC), Seychelles is an important regional take action. In 2010, after a rigorous accreditation process, Cousin Island was declared the world’s first carbon neutral player in promoting cooperation to maximise resources and Lauded as the saviour of the nature reserve. All emissions, including those flights tourists encourage the sustainable development of fisheries, while Seychelles tourism industry after take to reach the destination, are fully offset by a combina- building capacity in a tough economic environment. boosting visitor numbers during tion of the reserve’s forests and carbon credits purchased an economic crisis, St. Ange takes from projects in developing countries. a creative approach to marketing Seychelles. > It took just 20 minutes for a golf course proposed by cies as mackerel, sardines and anchovies and competition In the midst of the global economic 1. Peter Sinon, Minister of Investment, Natural Resources with Papua New Guinea and Mauritius. crisis, what’s the secret of your success? La Digue eco-island Diversification into new markets. We and Industry, to be shot down by the Seychelles cabinet Aside from increased competition, the fisheries sector were very concentrated on the EU, but Following a 15-minute ferry ride from Praslin Island, most because it was located in a major water catchment area. requires significant investment and incurs high operating now we have moved into South and visitors to La Digue are initially struck by the the distinct This is part of the “delicate tightrope” between obliga- costs, in relation to its limited productivity and shortage North America, China, Korea and South lack of motor vehicles and sheer number of bicycles that tions to maintain sea and land resources, preserve the of adequately trained human capital. Africa. We launched twin-hub vacations greet them. This almost completely car-free island is set to pristine environment and manage fish stocks. To solve issues of inadequate infrastructure, the with East Africa, as well as the Affordable operate solely on renewable energy by 2020, and aims to be Fishing has developed from an industry based on local construction of more landing areas is on the agenda. A Seychelles campaign to promote smaller designated the eco-capital of the world. “La Digue has all the consumption to one able to compete internationally as 200-metre long quay for tuna vessels is planned in addi- establishments. In our tourism offices, attributes to become a perfectly safe and secure eco-island, a vital pillar of the economy. When it comes to potential tion to vessel repair facilities. For environmental reasons, we have employed Seychellois who sell with no pollution whatsoever. It can be done on other islands, opportunities for UK investors, Sinon points to process- it is unlikely that dry docks will be included in future the country from the heart. but for now we want to tell the world it’s happening here,” ing ventures for export as a key area to look at. plans, as they may negatively impact the tourism sector. said Alain St. Ange. “Seychelles is regaining its status as the number one “In the industrial sector, we need foreign investment,” 2. Where do you see investment op- When Lehman broke… portunities within the Seychelles tourism fishing industry in the Indian Ocean,” says Sinon. “We said Finley Racombo, CEO of the Seychelles Fishing Author- tranship the most fish, we have the largest tuna canning ity (SFA), “but we also need to get local partnerships involved sector? In early 2006, Leh- There are opportunities to build new plant in the Indian Ocean and we are up to standards man Brothers led a and we have to put more pressure on that for it to go further. hotels, and areas where investors can Outer Islands of luxury with the EU for our exports.” Indeed, the monetary con- consortium under the We have to put in place the credit facilities so that people join local partnerships and enhance tribution of fishing-related activities to GDP and foreign banner of MWB to buy can get access to finance to be involved in these activities.” existing developments. There is also the The Outer Islands, between 230km and 1150km from Mahé, exchange exceeds that of tourism. Fishery products alone Heinz’s seafood busi- Racombo explained that marine aquaculture, which is possibility of creating niche products, are passionately protected by the Seychelles Government. account for over 90% of exports. Moreover, around 80% of ness and became an currently limited to only two production facilities, is an- such as water parks. Only the most sustainable development is allowed under the tuna catch in the southwest Indian Ocean is landed owner of Indian Ocean other activity with room for development. One producing exceptional circumstances. Little more than coralline sand or transhipped in the Port of Victoria. Tuna (IOT), giving black-lip oysters and the other producing clams are both How do you communicate Sey- 3. spits and lone rocky outcrops, they offer the true Robinson The government intends to maintain the status of its the American invest- located on Praslin, the second largest island in Seychelles. chelles’ competitive advantage as a Crusoe experience among untouched habitats. Only Al- major port, capitalising on some of its distinct advan- ment bank a big stake “We are hoping that by the end of 2012, the plan will tourism destination to the UK market? in Seychelles’ largest phonse and Desroches Island offer accommodation facilities, tages. As one of the deepest ports in the Indian Ocean be there and there will be a call for investors. We have Seychelles is unique. We tell all the private employer. British people they can actually come to while the remote raised coral atoll of Aldabra, a UNESCO lying outside the cyclone belt, Port of Victoria operates Unsurprisingly, Leh- done scoping around our granitic islands and identified Seychelles and live the dream in a safe, World Heritage Site famed for its giant tortoises, is accessible every day of the year and is the closest port of call to some man’s demise caused high-value species,” Racombo notes, adding that the SFA English-speaking7850 EIDC Guardian country. 11/29/11 6:31 PM Page 2 via yacht charter. 90% of the region’s tuna fishing. some concern among is opposed to the introduction of exotic species for farm- C M Y CM MY CY CMY K The European Union, Japan, South Korea and Tai- employees, though ing. Any cultivated species would have to occur naturally. wan have all reached agreements to fish in its Exclusive upper-level IOT man- However it’s not just about catching or breeding more Economic Zone (EEZ), focusing on the catch of highly agers were confident species for consumption. The SFA also aims to reduce migratory species such as tuna, swordfish or sailfish in of the company’s solid waste and discards at sea. The fisheries regulator will the open sea. financial position. make it mandatory that all catch is used, processed and After buying the landed as value-added products, which will also require Going further company, Thai Union additional facilities and investment. Frozen now runs one Simultaneously, exports have plummeted 30% since “We need to continue on this road of progress within of the world’s largest 2006. Piracy was the culprit for the biggest dip, when seafood companies the fishing sector, improve on the level of production and fishing vessels took a brief hiatus over safety concerns with brands such come up with the investment, either foreign or local, to in 2008. But numbers have improved since security has as John West and have more products and facilities. There is a big future been boosted aboard vessels. Further challenges for the Chicken of the Sea. for the Seychelles fishing industry, the potential is there, fisheries industry are the migration of such pelagic spe- [and] the area for exploitation vast,” said Racombo. <<<

Composite 16 _ SEYCHELLES > FINANCIAL SERVICES An independent supplement produced by The Report Company 17

S Despite its ideal location in a region booming with trade, when sophisticated investors think of a reputable and established international financial centre Seychelles rarely comes to mind. But the government is intent on overhauling the country’s legal and policy frameworks to change that.

services and in my view the banks here are not of doing business has considerably improved be- doing enough – the quality of services and level cause the country is starting to “implement what of modernisation is not enough.” is needed in terms of legislation and process.” Coming Soon

T F FS Structural shift Where there’s smoke… If there is one common complaint Despite those challenges, there is a diverse Still, there are a number of outstanding legisla- about African markets, it is the array of flexible structures available within tions which have been delayed as the country lack of liquidity and technology. the offshore sector. In a jurisdictional re- held two national elections last year and, con- Seychelles is trying to move forward view, the OECD notes that aside from the sequently, faced interruptions to the National on both. Meanwhile, as an offshore benefits of a tax free or low tax environment, Assembly. Then, when the G20 published a jurisdiction, it is quickly discovering that companies require highly Offshore some products allow for the possibility of list of suspected tax havens amongst which specialised expertise to navigate transferring a legal entity set up abroad into Seychelles was named, the small island nation the legal landscape associated with Seychelles. found itself in a heated exchange with the larg- foreign-owned holdings. The most popular offshore structure by est economies of the world. far is an International Business Company The Organisation for Economic Co-opera- dreams (IBC) but there are a number of others such tion and Development (OECD) too had some Writer: Anna Reitman as trusts, protected cell, limited partnership, observations. It highlighted “substantial weak- mutual and hedge funds, yacht and ship reg- nesses” in the legal and regulatory framework in the field of exchange of information. For 1. Capital markets > As a means of diversifying an island coun- (SADC) and Common Market for Eastern and Aside from natural markets and established example, there is no requirement to make own- In April 2011, the financial regulator in- try’s economy, financial services is a good bet. Southern Africa (COMESA). Markets in Asia players already in the region, government-backed Aside from natural markets and ership information available and in some cases vited proposals to set up a stock exchange, Seychelles is ideally situated between major trade include China, India and Indonesia, while in research shows that British investors might be established players already there are strong secrecy provisions that prevent scheduled for this year. Expectations are and manufacturing channels of Asia, Middle East the Middle East, interest is expected from the most interested in financial services, real estate the disclosure of such information. high that the Exchange will quickly at- and Africa, while its time zone puts it between UAE, Qatar, Bahrain and Oman. and offshore sectors with some officials noting in the region, government- However, the government points to recent- tract international listings while also global financial centres London and Hong Kong. The only real competition in the area is Mau- that the financial sector may surpass fisheries to backed research shows that ly negotiated Taxation Information Exchange linking with the rest of Africa and the “We can be a gateway to Africa, particularly ritius. The conventional wisdom is that for stand- become the second pillar of the economy. Agreements (TIEAs), with Guernsey being world. Seychellois companies may take British investors might be most more time to cultivate a culture of invest- in structured finance, because a lot of African ard offshore structures, Seychelles is quicker and The focus on this sector is about insulating one of the most recent jurisdictions to sign interested in financial services, ing, say regulators, but seasoned investors countries are now even investing outward and cheaper while Mauritius is better developed for the economy from potential shocks such as the on. It says those agreements are a clear sign will have the platform they need to send there’s a lot of inward investment. So Seychelles more complicated requirements, in part because European sovereign debt crisis. That means di- real estate and offshore sectors of its commitment to enforcing the OECD investment flows into the country. can position itself to let you reduce the cost of it has been a market-based economy for longer. versification is high on the government’s agenda, recommendations. financing going into Africa and provide struc- At the same time, the two island nations have as is fostering competition in order to push dig- Though clearly there is some progress and tures that will maximise shareholder value,” partnerships. Mauritius Commercial Bank, for ital innovation in the financial sector. istration and airline registration. Steve Fanny political will to tackle this issue, another recom- said Steve Fanny, CEO of the Seychelles Inter- example, has a branch in Seychelles and promotes Throwing down the gauntlet, Pierre of SIBA notes that more education is required mendation does not seem to be on the radar. national Business Authority (SIBA). the best of both worlds. Other foreign banks with Laporte, governor of the Central Bank of Sey- for service providers to feel comfortable with There is no requirement for offshore entities to 2. Fibre optics In Africa, interest is growing from fellow branches include Barclays, which was the first to chelles, said, “what we would like to see is three the full range. To move this forward, SIBA is keep account records and underlying documen- The submarine fibre-optic cable is members in regional initiatives such as the open in the 1950s and the first to be granted an or four more banks to bring digital innova- investing in training and there are also initia- tation in accordance with international stand- considered a defining development Southern African Development Community offshore banking licence in 2004. tion. Technological change is driving financial tives which link the business community with ards. “This absence of accounting requirements which will move the country’s the University of Seychelles, such as financial is an important deficiency in the Seychelles’ le- highly literate workforce towards a scholarships from the private sector. gal and regulatory framework,” said the OECD. knowledge economy. Information and There are also Seychellois repatriating after But the lack of a requirement to prepare or file Communications Technology (ICT) living and working in financial services abroad. annual audited accounts is found on promotional will open up e-commerce and business Alexander Pierre, fund manager at Delta As- materials as a key feature of the IBC business process outsourcing as well as enable set Management, set up the first hedge fund in company structure and whether there are any provision of bundled services such as 2007 after living in London for some 20 years. plans to change this is in question. Considering e-healthcare and e-learning solutions. He faced significant hurdles as a new entrant. the importance that foreign investors place on Licencing, for example, took five months when issues of transparency, criticisms of its banking other jurisdictions take about two weeks. sector can have a profound negative impact. 3. Legal eagles “Because [Seychelles] never had a hedge Michael Benstrong, CEO of Seychelles Sav- fund, we had to educate local investors…the ings Bank, known as “the people’s bank,” admits To help overcome insufficient capacity in offshore sector is something quite foreign to there is a need to ensure that the correct legisla- Seychelles for foreign law advice needed by offshore corporate and financial services, the local population…The financial sector is tion is in place to raise investors’ comfort levels. this year, the government will enact the something we need to emphasise…and we’re “What is being said about Seychelles in Legal Practitioners Act, making it possible trying to push the authorities to really develop some newspapers is not 100% true, but there is for foreign lawyers to practice. Meanwhile, it,” Pierre said. some truth there – there’s no smoke without Seychelles does have local lawyers, some of At the same time, Kenny Roberts, who joined fire…We need to continue to improve our image whom graduated in the UK, so a foreign the firm shortly after Pierre, adds that the ease to avoid smoke going up,” Benstrong said. <<< law firm will be able to set up quickly. 18 _ SEYCHELLES > FINANCIAL SERVICES > CEOs Digging its way out of debt The players: The IMF has given Seychelles high scores for its reforms and efforts to reduce debt and set the country on a sustainable path. Though risks remain, the How they see it government has shown remarkable fiscal discipline. Writer: Anna Reitman

> The lessons of the past are being used to When the dust settled, Seychelles’ arrears arrangement of $30 million, the IMF said the Regulators and industry leaders are working together to benchmark the future of the Seychellois econ- on its external debt amounted to $263 million country’s strong economic rebound was aided omy. Before 2005, it was entrenched in socialist while public debt stood at $1.3 billion, or 153% by sound macroeconomic policies and timely achieve the ambitious goal of boosting the importance of principles. But when in 2008 it was saddled with of the economy. structural reforms. financial services to the economy, both locally and globally. the unenviable status of being one of the most But that was then. “Structural reforms continue to focus on indebted countries in the world, market-led re- In its latest review preceding a $4.7 mil- improving public financial management and forms could no longer be avoided. lion loan disbursement under an extended fostering private sector-led growth. In the fi- The crisis which led the island nation to a nancial sector, efforts should focus on limiting $26 million IMF bailout is in part connected to the role of state-owned institutions, strength- Lehman Brothers. After taking a stake in the tuna ening competition, enhancing governance and canning factory, the investment bank began loan- “ transparency and improving banking inter- ing the government money – to the tune of $308 Structural reforms continue mediation,” said Min Zhu, deputy managing million at annual rates as high as 24% in the two to focus on improving public director and acting chair of the executive board years before its collapse, according to Bloomberg financial management and of the IMF. figures. The deals resemble those made in Asia and fostering private sector-led The Central Bank of Seychelles is targeting Russia a decade ago, “when too many bankers of- public debt to shrink to 50% of GDP by 2017 fered too many deals to too many governments”, growth and seems to be well on its way. After restructur- in the words of Nobel laureate Joseph Stiglitz. One ing external debt, it has been reduced by half Min Zhu would not be hard pressed to find a more recent Deputy Managing Director, IMF and domestic debt is being kept in check by example of such behaviour. paying it down with budget surpluses.

(Clockwise from top: Alexander Pierre, Michael Benstrong, Steve Fanny, Sherin Renaud, Kenny Roberts) Managing Local market Foreign interest is increasing, but is targeted at perceptions overseas clients with overseas operations. Kenny Offshore banking isn’t about tax evasion, it’s Roberts and Alexander Pierre, fund managers at about tax avoidance – an important distinc- Delta Asset Management, want to offer some- tion says Sherin Renaud, CEO of the Seychelles thing to local investors and are themselves major Investment Bureau. She explains that people investors in the Delta fund. They explain that lo- confuse secrecy with confidentiality, but there cal businesses earn some 3% annually by putting are many reasons why people would want to their money in banks but after three months of use an offshore centre for confidential transac- trading, the fund was about profit. tions. Seychelles is not averse to any exchange of information as long as it comes with strict conditions, she adds. International Local competition competition The “big boys” in the banking sector are worried The markets to capture, says Steve Fanny, CEO at about the rapid rise of Seychelles Savings Bank, SIBA, are the UK, Asia and Africa. The American says Michael Benstrong, CEO. It has partner- market is mostly locked up in the Caribbean and ships in the UK and Europe with major tier one is in the wrong time zone while Europe contin- banks and has accounts in major financial cen- ues to struggle with a liquidity crunch. So SIBA tres across the US, Europe and Asia. The bank has been building a model geared towards emerg- has spent five years building a model geared ing markets in Asia and Africa. And with Islamic towards emerging markets in Asia and Africa and Finance growing fast, the island’s proximity to Islamic finance is also a strategic focus. the Middle East gives it an advantage, he adds. 20 _ SEYCHELLES > INFRASTRUCTURE An independent supplement produced by The Report Company 21

Industry voices

Q&A Q&A Gilbert Faure Patrick Vel CEO of Civil Aviation Authority Air links Ports Telecommunications CEO of Seychelles Trading Company Last summer marked the 40th anniversary The Port of Victoria, on the north-eastern Seychelles’ world telecommunications net- 1. After 40 years of jet aircraft connec- 1. What can you do about pricing of the arrival of the first aircraft at Seychelles side of Mahé Island, is one of the deepest in work opened in 1893 when British-owned Cable tion, what next? volatility? Airport from London. Such air links are es- the Indian Ocean, with two deep berths, two & Wireless (C&W) built a cable link to Zanzibar We aim to become an Indian Ocean gate- Being owned by the government we have sential to expanding the islands’ tourism and smaller ones and a reputation for efficient ship capable of transmitting 15 words a minute. way and we are working with the World to support the country and protect the business sectors. handling. Unlike Mauritius, Seychelles’ port Beginning locally in 1998, Airtel offers state- Bank. We now need to implement our population from the harsh realities of the Links to However, due to reduced demand and lies outside of the cyclone belt, offering a safe of-the-art 3G services and has captured 55 per vision. Seychelles is popular and will con- world. For certain basic commodities, we try higher operating costs, Air Seychelles, the haven for passing vessels. cent of the mobile phone market. Boosting tinue to attract people. Politically we have to mitigate price fluctuations and provide state airline, terminated all direct European Essential for the country’s expanding tuna competition this year, South African firm In- no problems; we are a small nation. more stability. We fix our prices for a period flight services in January. The airline now fishing industry, the commercial port was first telvision is Seychelles’ third telecoms operator. and try to absorb price fluctuations. the world operates as a strategic regional carrier to Mau- opened in 1975. Now there are plans for it to Internet connections currently rely on the 2. How will Seychelles become a re- ritius and Johannesburg, making the islands a become the most favoured port of call for ves- slow satellite technology first introduced by gional transport hub? 2. Can British companies help? It is already developing. If we are to create We have very close UK ties, being a former Nationwide, every ambitious hub for connecting flights. Eliminating costly sels operating within the region. A 200-metre C&W in 1996. Today, the country is on the a hub you will not only have airlines, colony, and the market is very sympathetic and business-conscious routes, such as Singapore, allowed the carrier long quay built on reclaimed land will increase brink of a communications revolution in the you will have fly cruises. You can have to anything British, as it comes with the tag Seychellois is enthusiastic to consolidate its finances, but it was still a berthing capacity and turnaround times, while shape of a new submarine cable to Tanzania twin centres with La Reunion, Mauritius, of quality. We work with UK companies, difficult blow. “Air Seychelles is not a dooms- providing modern onshore cargo handling. which is set to provide huge bandwidth at hith- even Kenya to do the safari and the sea, such as Diageo, but we do not have any about the new submarine day scenario, although there may be a slump New repair facilities are also envisaged, al- erto unseen speeds. Airtel is extending its net- and why not Abu Dhabi, to have sea and fixed structured businesses. We’d very much cable, which presents a initially,” says CAA chief, Gilbert Faure. though they most likely won’t feature drydock work into Seychelles’ most remote areas, where desert. We talk about strategies for the like to work with the UK. Now other airlines are slowly filling the capabilities. signal quality is a challenge. With technology future, not only in airport facilities, but pivotal turning point for the void. In mid February, Blue Panorama will of- Traditionally, cruise ships and private from IBM and Ericsson, it is also expanding its also capacity building. 3. Where can you get growth? country’s future growth and fer direct flights from Rome and Air Austral’s yachts would contribute towards the total of fibre-optic network to benefit from the subma- The market overall is not growing but there Paris connection starts at the end of March. around 1,000 port calls each year. However, few rine cable. 3. What is your competitive advantage? will be a shift in the basket of commodities, is considered as important The location; we are blessed because as people become more affluent. There are In addition, Emirates, Etihad and Qatar are are now doing so given concerns over Indian Tsiresy Randriamampionona, Airtel Sey- as the airport’s debut 40 we don’t get cyclones unlike our still opportunities we are not exploiting. providing feeder routes via Gulf hubs, but the Ocean piracy, which has adversely affected port chelles managing director, says 25 per cent of neighbours down south. The equipment The inner islands have a huge potential years ago. Air links and the UK remains an underserved market. income from dues, berthing and handling. In his 60,000 subscribers are post-paid, half of infrastructure that we have is up to to produce fresh products. We want to port are also evolving and There are plans to upgrade the 24-hour contrast, navy vessel and cargo container activ- which are corporate accounts “which is very standards, but we have plans for a new get more involved in the tourism sector, Seychelles Airport Terminal and later, to ity has increased – 90 percent of the islands’ high compared to Africa.” terminal to keep up with the trends. We supplying hotels increasingly adding value. build a new runway on reclaimed land, help- needs are imported, mostly by sea. The port Airtel supplies secure data centres and its have nice weather and the people are very and the industry ing to generate income from Seychelles’ air- also handles almost all Seychellois exports, wire line core network offers ISDN/DSL and friendly. generally. space. The handling of private aircraft is also from vanilla and coconuts to tortoise shells other services to provide end-to-end data and seeing ever better returns. and soap. enterprise services for corporates.

The SEAS The SEAS (Seychelles East Africa System) The Investment The Players The Advantages is the first fibre-optic telecommunication cable linking Seychelles with the rest of the The African Development Bank Seychelles Cable Systems, the government, C&W and Promising a fast and reliable internet service at world. Landing in Tanzania, the cable will be and the European Investment Airtel are overseeing the project. Alcatel-Lucent is one-seventh of the current cost, the cable will launched by next summer, with a capacity of Bank with a 40 per cent equity installing the Seychelles East Africa System (SEAS). transform the ICT sector resulting in enhanced up to 320 Gigabits per second. finance split between C&W, Airtel job opportunities and benefits for the banking, and the government tourism and education sectors 22 _ SEYCHELLES > ENERGY An independent supplement produced by The Report Company 23

one find over the next 30 years. As returns from any project the oil reserves are exhausted,” explains Captain Guy increase, the government is able to levy additional taxes. Adam, Chairman of Seychelles Petroleum Company “But there are no guarantees – this is a high cost, (SEYPEC), the oil and gas industry regulator, stressing high risk business, where there is an average one-in-five “we must develop the oil sector in a safe way.” chance of the first wells being successful,” cautions WHL Two-thirds of the world’s oil already passes through managing director Steve Noske. the Indian Ocean region. SEYPEC owns, manages and He expects Seychelles “to share in the early benefits of operates a fleet of six tankers, five of which ply petroleum developing and building the oil facilities through employ- products around the world. It also has oil storage facilities ment and procurement of materials and services, but the “We’re not having a for domestic supplies and re-exports, as well as bunkering. real material revenues begin to flow to the government party yet - we have “As the president said, when we do discover oil, we once production commences.” to prepare because have to think of the next generation, we have to think of The case for UK-based Afren and Isle of Man-registered partner it as an insurance policy for us; we cannot allow it to be Avana Petroleum report “numerous large leads” that we don’t want to a curse,” observes Peter Sinon, Minister for Investment, may produce 240m barrels. Their first exploratory drill- be like continental Natural Resources and Industry. ing will take place before the summer and at two WHL Africa where oil Along the same lines, Jean-Paul Adam, Foreign Affairs sites in mid-2013. becomes a curse.” Minister, stresses that the government is not factoring any public interest So far, oil exploration has been minimal, but this year Pierre Laporte potential revenue into future economic models. Governor of the Central Bank the government will auction further sectors. SEYPEC’s Captain Adam insists, “We must use the Writer: Ray Spencer oil money in a very responsible fashion, so that we don’t Over the horizon destroy our culture and our life. If you have too much If drilling produces promising results, the Perth-based money all of a sudden it can be destructive. The way we’re Black gold has been detected in Seychelles’ EEZ, company will move to an offshore development phase “We must use the planning our economy is that oil is the bonus card.” with undersea piping and equipment and surface facilities oil money in a Indeed, government officials seem determined to use raising concerns about the potential effects on its being “well over the horizon; we don’t see the need to bring any extra funds for promoting education, health, deliver- environment and society. production to the coastline at this stage,” Noske says. very responsible ing housing and empowering people to take advantage of “We are very environmentally conscious and we would fashion, so that we opportunities at the higher end of the economy. like to preserve the pristine environment of our country,” don’t destroy our While all stakeholders appear to be saying the right highlights President Michel. culture and our life.” things about the anticipated black gold, only time will > President James Michel says the potential is “estimated “We will know exactly which money belongs to the The government “insists that every underwater pipe Captain Guy Adam tell if good intentions translate into positive results for Chairman of SEYPEC to be as large as the Saudi Arabian oil fields,” with oil people. A certain amount will be allocated to development must be capped and removed, as must every oil rig once the public interest. <<< flowing as early as 2015. A blueprint projects and the bulk of the money will go into the sove- Studies of new oil-producing nations conclude that for oil reign fund, which should be used for future generations there’s often a negative correlation between oil and democ- Norway’s oil income and ensure continued sustainability,” he said. racy. As income rises, politics can turn ugly, to the detri- framework is admired Central Bank Governor Pierre Laporte points out that ment of social programmes and environmental protection. worldwide. It has estab- oil revenue may also help cushion shocks from external Last year, in its second African Governance Report lished economic and inflationary effects on the country and “set up a fund to (AGR), the UN Economic Commission for Africa (ECA) ethical principles for keep the economy going.” His staff are taking courses in declared that Seychelles leads the way in superior in- the use of oil revenues Norway on how to manage the possible financial inflow frastructure, tax system, political competitiveness and to benefit current and and operational best practices. fairness of elections, in addition to achievements in edu- future generations. cation, health and care for the elderly. Crucially, there’s Few so large universal political Michel has already consulted Norway, which has ap- Australian exploration company WHL Energy has inde- understanding that, to plied the benefits of North Sea petroleum to earn the avoid overheating the pendent confirmation of the potential to produce 3.5bn highest place on the United Nations Development Pro- economy and waste, barrels of oil from its licenced area. The largest prospect gramme’s list of best social development performance. the national economy has the potential for over 1bn barrels, surpassing the pro- “They have a very good system, via their sovereign should be ‘shielded’ duction capacity of most oil fields worldwide. fund, which ensures no one can pocket the oil revenues,” from the exceptional The government stands to receive a total royalty and said President Michel, who is drafting similar legislation. inflow of oil profits. corporate tax income of approximately £18bn from that 24 _ SEYCHELLES > EDUCATION Reaching out with success “Seychelles needs a quality education system. Without it, tomorrow’s generation will not be able to compete in an increasingly globalised world,” says Dr. Rolph Payet, president of Seychelles University.

> It may be just three years old, but the Uni- they expect in the UK will be delivered here,” versity of Seychelles is centre stage in the drive insists Payet. to ensure the island nation’s economic stabi- In the past, Seychelles was forced to send its lity, by successfully associating and collabora most talented students abroad to study, where ting with UK universities, industry leaders and they were often poached. Today, the Seychellois overseas sponsors. people living abroad send their children back to Seychellois education closely resembles the their homeland to receive a UK-standard educa- UK’s GCSE and ‘A’ Level examinations and for tion at SU, with courses costing approximately a decade, Seychelles University (SU) was linked 20 per cent less than in the UK. with Manchester University (MU). Now it is Subjects in demand include law, economics affiliated with the University of London (UoL), and finance. The first class of 20 students is which is “already singling us out as showing a expected to graduate in Business Administra- lot of progress and doing very well,” says Dr. tion this year, while an Environmental Sciences Payet, who is also SU’s Vice Chancellor. degree will also be launched. “We are using their [LSE and UoL’s] brands Private businesses in banking and tourism to really pull our name up by being associated are financing scholarships, while the Indian with a very strong national brand. When stu- Government is also sponsoring an IT Centre dents come to this university, the same quality of Excellence.