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Seychelles : Public Sector Debt and Prospects for Successful Economic Reform

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dc.contributor.authorKojo, Naoko C.
dc.date.accessioned2012-06-18T14:34:54Z
dc.date.available2012-06-18T14:34:54Z
dc.date.issued2005-10
dc.description.abstractSeychelles is at a development crossroads. With public sector debt at over 200 percent of Gross Domestic Product (GDP), manifested by years of poor macroeconomic management and rigid economic structure, the economy has been experiencing a serious downturn since the beginning of the 2000s. While real GDP contracted by cumulative nine percent for the past four years, the significantly overvalued rupee has led to a loss of export competitiveness, leading to persistent balance of payments difficulties. Following independence in 1976, Seychelles adopted a state-led development model, in which the Government plays a dominant role in every segment of the economy through extensive controls and regulations. It intervened directly in manufacturing, distribution, trade and other economic activities through its parastatals, often at the expense of private sector development. Provision of education and health services was predominantly the responsibility of the Government. Seychelles is faced with formidable challenges in the years ahead. With public sector debt at some 200 percent of GDP, manifested by decades of poor policy management, there is no painless solution to Seychelles debt predicament. For Seychelles the primary tool to reduce the debt burden, and turn the economy back to a sustained growth path is the implementation of a comprehensive macroeconomic reform program, with a strong emphasis on fiscal adjustments, privatization, exchange rate realignments and structural reforms. Without a significant change in policy direction, Seychelles medium-term prospects are bleak. Continuation of the present policies will neither mitigate the acute foreign exchange shortages nor further build-up of debt, which will be even more damaging in the future. This paper is structured as follows. Section 2 presents the basic facts about Seychelles public sector debt and analyzes its burden and sustainability. Section 3 then discusses the medium-term economic outlook, assuming that no significant economic adjustments are made. Section 4 then seeks ways to reduce Seychelles public sector debt to a more sustainable level, and discusses a comprehensive macroeconomic reform package that is needed to achieve this goal. Section 5 concludes the paper.en
dc.identifierhttp://documents.worldbank.org/curated/en/2005/10/16286576/seychelles-public-sector-debt-reduction-strategy
dc.identifier.urihttps://hdl.handle.net/10986/8245
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCUMULATION OF ARREARS
dc.subjectACCUMULATION OF DEBT
dc.subjectALLOCATION
dc.subjectANNUAL RATE
dc.subjectANNUAL REPORTS
dc.subjectAPPROPRIATION
dc.subjectARREARS
dc.subjectBALANCE OF PAYMENT
dc.subjectBALANCE OF PAYMENTS
dc.subjectBLACK MARKET
dc.subjectBOND
dc.subjectBOND ISSUE
dc.subjectBORROWER
dc.subjectBORROWING COSTS
dc.subjectBROAD MONEY
dc.subjectBUDGET CONSTRAINT
dc.subjectBUDGET DEFICIT
dc.subjectBUDGETARY IMPLICATIONS
dc.subjectBUSINESS TAX
dc.subjectCAPITAL EXPENDITURE
dc.subjectCAPITAL OUTLAYS
dc.subjectCENTRAL BANK
dc.subjectCENTRAL GOVERNMENT
dc.subjectCOLLATERALIZATION
dc.subjectCOMMERCIAL BANK
dc.subjectCOMMERCIAL BANKS
dc.subjectCOMMERCIAL CREDITORS
dc.subjectCOMMERCIAL DEBT
dc.subjectCOMMERCIAL LOANS
dc.subjectCONTINGENT LIABILITIES
dc.subjectCONTRACTUAL OBLIGATIONS
dc.subjectCREDIBILITY
dc.subjectCREDITORS
dc.subjectCREDITORS INTEREST
dc.subjectCURRENT ACCOUNT DEFICIT
dc.subjectDEBT BURDEN
dc.subjectDEBT DATA
dc.subjectDEBT DYNAMICS
dc.subjectDEBT EXCHANGE
dc.subjectDEBT INSTRUMENTS
dc.subjectDEBT INTEREST
dc.subjectDEBT LEVEL
dc.subjectDEBT PAYMENTS
dc.subjectDEBT REDUCTION
dc.subjectDEBT RESTRUCTURING
dc.subjectDEBT RESTRUCTURING OPERATION
dc.subjectDEBT SERVICE
dc.subjectDEBT SERVICE BURDEN
dc.subjectDEBT SERVICE PAYMENTS
dc.subjectDEBT SOURCES
dc.subjectDEBT STOCK
dc.subjectDEBT SUSTAINABILITY
dc.subjectDEBTOR
dc.subjectDEBTOR COUNTRY
dc.subjectDEVALUATION
dc.subjectDEVELOPMENT BANK
dc.subjectDOMESTIC BORROWING
dc.subjectDOMESTIC DEBT
dc.subjectDOMESTIC DEBTS
dc.subjectDOMESTIC DEMAND
dc.subjectDOMESTIC FINANCIAL SYSTEM
dc.subjectECONOMIC CONDITIONS
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC PROBLEMS
dc.subjectECONOMIC RECOVERY
dc.subjectECONOMIC REFORM
dc.subjectEXCHANGE CONTROLS
dc.subjectEXCHANGE RATE
dc.subjectEXCHANGE RATE ADJUSTMENTS
dc.subjectEXCHANGE RATES
dc.subjectEXOGENOUS SHOCKS
dc.subjectEXPENDITURE
dc.subjectEXPORT COMPETITIVENESS
dc.subjectEXTERNAL ARREARS
dc.subjectEXTERNAL BALANCE
dc.subjectEXTERNAL BORROWING
dc.subjectEXTERNAL COMMERCIAL BORROWING
dc.subjectEXTERNAL DEBT
dc.subjectEXTERNAL DEBTS
dc.subjectEXTERNAL LOANS
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL SUPPORT
dc.subjectFINANCIAL SYSTEM
dc.subjectFISCAL ADJUSTMENT
dc.subjectFISCAL ADJUSTMENTS
dc.subjectFISCAL AUSTERITY
dc.subjectFISCAL BALANCE
dc.subjectFISCAL BURDEN
dc.subjectFISCAL CONSOLIDATION
dc.subjectFISCAL DEFICIT
dc.subjectFISCAL DEFICITS
dc.subjectFISCAL DISCIPLINE
dc.subjectFISCAL MANAGEMENT
dc.subjectFISCAL MISMANAGEMENT
dc.subjectFISCAL OUTTURN
dc.subjectFISCAL PERFORMANCE
dc.subjectFISCAL POLICY
dc.subjectFISCAL POSITION
dc.subjectFISCAL RESULTS
dc.subjectFISCAL SCENARIOS
dc.subjectFISCAL STANCE
dc.subjectFISCAL SUSTAINABILITY
dc.subjectFOREIGN CURRENCIES
dc.subjectFOREIGN EXCHANGE
dc.subjectFOREIGN EXCHANGES
dc.subjectFOREIGN INTEREST
dc.subjectFOREIGN INVESTMENT
dc.subjectFOREIGN INVESTORS
dc.subjectFOREIGN RESERVES
dc.subjectGLOBAL DEVELOPMENT FINANCE
dc.subjectGOVERNMENT ASSETS
dc.subjectGOVERNMENT BORROWING
dc.subjectGOVERNMENT BUDGET
dc.subjectGOVERNMENT DEBT
dc.subjectGOVERNMENT DEBTS
dc.subjectGOVERNMENT EXPENDITURE
dc.subjectGOVERNMENT FINANCING
dc.subjectGOVERNMENT SPENDING
dc.subjectGROWTH RATE
dc.subjectHEALTH SERVICES
dc.subjectHIGHER INFLATION
dc.subjectHOLDING
dc.subjectHUMAN DEVELOPMENT
dc.subjectIMPLICIT INTEREST
dc.subjectINDEBTEDNESS
dc.subjectINDIVIDUAL INVESTORS
dc.subjectINFLATION
dc.subjectINFRASTRUCTURE PROJECTS
dc.subjectINSTRUMENT
dc.subjectINTEREST ARREARS
dc.subjectINTEREST BURDEN
dc.subjectINTEREST PAYMENTS
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectINVESTMENT CLIMATE
dc.subjectINVESTOR CONFIDENCE
dc.subjectLABOR MARKET
dc.subjectLENDERS
dc.subjectLEVEL OF DEBT
dc.subjectLEVEL PLAYING FIELD
dc.subjectLOAN
dc.subjectLOAN AGREEMENTS
dc.subjectLOAN CONTRACTS
dc.subjectLOAN DEFAULTS
dc.subjectLONG-TERM DEBT
dc.subjectLONG-TERM EXTERNAL DEBT
dc.subjectLONG-TERM INSTRUMENTS
dc.subjectMACROECONOMIC MANAGEMENT
dc.subjectMARKET FORCES
dc.subjectMARKET REFORM
dc.subjectMARKET VALUE
dc.subjectMATURITY
dc.subjectMEDIUM-TERM PROJECTION
dc.subjectNATIONAL INCOME
dc.subjectNEGATIVE PLEDGE CLAUSE
dc.subjectNET EXTERNAL BORROWING
dc.subjectNET LENDING
dc.subjectOIL PRICES
dc.subjectPENSION
dc.subjectPENSION SCHEME
dc.subjectPOVERTY REDUCTION
dc.subjectPREPAYMENT
dc.subjectPRICE INDEX
dc.subjectPRIVATE PLACEMENT
dc.subjectPRIVATE SECTOR
dc.subjectPRIVATIZATION
dc.subjectPROFIT MARGINS
dc.subjectPROGRAMS
dc.subjectPUBLIC DEBT
dc.subjectPUBLIC EXPENDITURE
dc.subjectPUBLIC EXPENDITURE REVIEW
dc.subjectPUBLIC FINANCES
dc.subjectPUBLIC INVESTMENT
dc.subjectPUBLIC SECTOR
dc.subjectPUBLIC SECTOR DEBT
dc.subjectPUBLIC SECTOR EMPLOYEES
dc.subjectPUBLIC UTILITIES
dc.subjectRATES OF INTEREST
dc.subjectREAL GROWTH
dc.subjectREAL GROWTH RATE
dc.subjectREFORM PLAN
dc.subjectREFORM PROGRAM
dc.subjectREGULATORY STRUCTURE
dc.subjectRESERVES
dc.subjectRETURN
dc.subjectSALES TAX
dc.subjectSHORT-TERM DEBT
dc.subjectSHORT-TERM INSTRUMENTS
dc.subjectSOCIAL GAINS
dc.subjectSOCIAL INDICATORS
dc.subjectSOCIAL SECURITY
dc.subjectSOCIAL SECURITY FUNDS
dc.subjectSOCIAL SERVICES
dc.subjectSOVEREIGN DEBT
dc.subjectSTATE ENTERPRISES
dc.subjectSTOCKS
dc.subjectSTRUCTURAL ADJUSTMENT
dc.subjectSTRUCTURAL REFORM
dc.subjectSTRUCTURAL REFORMS
dc.subjectSUSTAINABLE DEBT LEVEL
dc.subjectTAX
dc.subjectTAX COLLECTION
dc.subjectTAX EXEMPTIONS
dc.subjectTAX RATES
dc.subjectTAX REVENUE
dc.subjectTOTAL DEBT
dc.subjectTOTAL EXPENDITURE
dc.subjectTOTAL PUBLIC EXPENDITURE
dc.subjectTOTAL PUBLIC SECTOR
dc.subjectTRADE LIBERALIZATION
dc.subjectTRANSACTION
dc.subjectTREASURY
dc.subjectTREASURY BILL
dc.subjectTREASURY BILLS
dc.subjectTREASURY BOND
dc.subjectTREASURY BONDS
dc.subjectWELFARE LOSS
dc.titleSeychelles : Public Sector Debt and Prospects for Successful Economic Reformen
dspace.entity.typePublication
okr.date.disclosure2012-05-25
okr.doctypeEconomic & Sector Work::Debt and Creditworthiness Study
okr.doctypeEconomic & Sector Work
okr.docurlhttp://documents.worldbank.org/curated/en/2005/10/16286576/seychelles-public-sector-debt-reduction-strategy
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.globalpracticeGovernance
okr.guid183311468305933029
okr.identifier.externaldocumentum000386194_20120528021030
okr.identifier.internaldocumentum16286576
okr.identifier.report68959
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/05/28/000386194_20120528021030/Rendered/PDF/689590ESW0whit0isclosed050250201200.pdfen
okr.region.administrativeAfrica
okr.region.countrySeychelles
okr.sectorFinance
okr.sectorPublic Administration, Law, and Justice
okr.themePublic expenditure, financial management and procurement
okr.themeEconomic management
okr.themeMacroeconomic management
okr.themeDebt management and fiscal sustainability
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicPublic Sector Expenditure Policy
okr.topicEconomic Theory and Research
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicFinance and Financial Sector Development::Bankruptcy and Resolution of Financial Distress
okr.topicMacroeconomics and Economic Growth
okr.topicPublic Sector Development
okr.unitAFT: PREM 1 (AFTP1)
okr.volume1 of 1
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