Country Information - Seychelles

ECONOMIC BACKGROUND Since independence in 1976, per capita output in this Indian Ocean archipelago has expanded to roughly seven times the old near-subsistence level. Growth has been led by the tourist sector, which employs about 30% of the labour force and provides more than 70% of hard currency earnings, and by tuna fishing. In recent years the government has encouraged foreign investment in order to upgrade hotels and other services. At the same time, the government has moved to reduce the dependence on tourism by promoting the development of farming, fishing, and small-scale manufacturing. The vulnerability of the tourist sector was illustrated by the sharp drop in 1991-92 due largely to the Gulf war and once again following the 11 September 2001 terrorist attacks on the US. Other issues facing the government are the curbing of the budget deficit, including the containment of social welfare costs, and further privatisation of public enterprises. Growth slowed in 1998-2001, due to sluggish tourist and tuna sectors. Also, tight controls on exchange rates and the scarcity of foreign exchange have impaired short-term economic prospects. The black market value of the Seychelles rupee is half the official exchange rate; without a devaluation of the currency the tourist sector should remain sluggish as vacationers seek cheaper destinations such as Comoros, Mauritius, and Madagascar. Click here for Country Map [23kB]

BI-LATERAL TRADE OVERVIEW While trade between Seychelles and the United States remained fairly minor until 2000, there was a major surge in Seychelles' imports from the U.S. in 2001. This resulted in a trade deficit of over $ 150 million in 2001. Exports from the Seychelles also increased considerably in 2001. Provisional 2002 data suggests that the significant trade deficit of 2001 will be reversed in 2002, and may even result in a slight trade surplus. The Seychelles' exports to the U.S. consist mostly of 'agricultural products', followed by 'electronic products'. These together accounted for over 80% of exports in 2001.However, by mid-2002 no exports from the Seychelles to the U.S. benefited from AGOA, as their nature fell outside the AGOA-eligible product categories. Imports from the U.S., which had been relatively minor until 2001, were dominated by 'transportation equipment', accounting for most of Seychelles' imports from the U.S. To date Seychelles has not qualified for the 'Wearing Apparel' provisions of AGOA, and due to its relatively high per capita GDP, is not deemed to be a 'Lesser Developed Country' for AGOA purposes. This status is only of consequence where countries have qualified for the apparel provisions, and would mean that the Seychelles is precluded from utilising third country textile inputs (i.e. from countries other than AGOA wearing apparel qualified countries). Click here for Detailed Trade Profile