Paper drafted for International Business class
|The Republic of Seychelles (Seychelles) is a country comprised of 115 archipelago islands in the Indian Ocean. Located 1,500 kilometres east of the African mainland, with a population of 84,000, Seychelles has become a tourism-dominated country since the opening of the international airport in 1971 and its interdependence from the United Kingdom in 1976.|
The islands also produce revenue through its agriculture and fishing, which has been slowly dwindling. Plantations were the main industry until the opening of the international airport, at this point the economy divided into two industries. The agriculture industry (in the 1960’s) used to employ over 30% of the labour force, but has reduced to only about 3%. The tourism and service industries now employ 70% of the labour force. In 1991-92 the impact of the Gulf War affected Seychelles tourism industry, and created a large drop in island visits. With this lesson, the Seychelles government is actively promoting the development of farming, fishing and small scale manufacturing as relying on tourism can be unpredictable.
With a minimal population, compared to the rest of the African countries, Seychelles relies on imports more than exports. In 2009 the country imported 811 million and exported 431 million in merchandise; it exported 403 million in commercial services and imported 303 million. Seychelles main exports are canned tuna, frozen fish, cinnamon bark, copra, vanilla and they re-export petroleum products.
Seychelles has exporting
United Kingdom: 24.84%
Seychelles has importing
Saudi Arabia: 16.44%
South Africa: 6.72%
2009- Source: https://www.cia.gov/library/publications/the-world-factbook/geos/se.html
Though tourism is the leading earner for the country, in 2000 the most important foreign exchange earner was the industrial fishing industry- for tuna. In 1995, the Seychelles Tuna Canning Factory was privatized and 60% of it was purchased by the American company, Heinz. This has created recovery in the port services in Seychelles.
At the present time, Seychelles in involved in four major trade agreements:
• the Common Market for Eastern and Southern Africa (COMESA); type: trade bloc agreement;
• the Africa Free Trade Zone; type: free trade zone;
• the Southern African Development Community; type: free trade agreement;
• the Double Taxation Avoidance Agreement.
The government has been encouraging foreign investment in recent years. The benefit is usually received by the tourism industry to upgrade hotels and other amenities in the service industry. There is a large amount of investment in real estate projects and resort projects in Seychelles.
In 2009, Seychelles had 248 million in Foreign Dierct Investments (FDI), which is 39% of the countries Gross Domestic Procduct . The country had 7% outflows. Since tourism is the main economic producer, it is the main beneficiary of FDI at 97%.
Seychelles has become an upper middle class economy in recent years. In 2009, Seychelles GDP (PPP) =1.829million(USD); GDP(official exchahge rate) =767million;
GDP (by sector)= agriculture: 2.9%, industry: 23%, services: 66.2%.
Seychelles is a country with a vast amount of power and a strong economy for the population. With the country seeing more international investments and ease of investments because of off shore accounts, and newer investments rules. In the 1700’s Seychelles was a main trade port for Africa and China trade, it is now a tourism dominated country trying to enrourage fishing, farming and off shore investments to stabilize the ecomony in the future.