Vice-President James Michel

advocated by the Opposition.

For the Government, liberalisation is a process that has to be applied step by step and is not something that takes place overnight regardless of what impact it will have on smaller businesses, the welfare of the population and the country as a whole.

This point was made by Vice-President James Michel in the National Assembly Tuesday December 9 in his summary of debates on the principles and merits of the budget for 2004 after all MNAs had delivered their comments over a period of three days.

Vice-President Michel, who had presented the Budget for 2004 in his capacity as Minister for Finance, spoke before the approval of the budget (see article on approval of budget on page 1). 

However, Vice-President Michel's summary was delivered in the absence of MNAs from the Opposition Seychelles National Party (SNP) after one of their members, Colin Dyer, had got into trouble with Speaker Francis MacGregor earlier in the day.

MNA Dyer had accused the Speaker of contributing to lower the standard of debate in the Assembly after he was asked by the Speaker several times to conclude his speech as his time had ran out.

Speaker MacGregor ordered him to retract the statement or face expulsion and he opted for the latter.

As if waiting for an excuse to leave the House after they had all delivered their speeches, all the Opposition MNAs, upon signal given by the party's leader Wavel Ramkalawan, walked out and did not return.

In his summary Vice-President Michel described the walk out as regrettable specially as his summing up address contained clarification to many comments made by the Opposition particularly concerning privatisation and trade liberalisation, Goods and Services Tax (GST) and the 10 percent budget reduction for 2004 which will affect all ministries including Health and Education.

Vice-President Michel said that in line with Merp and following the trend worldwide Seychelles was implementing a privatisation and liberalisation programme that would be stepped up in 2004 and the following years, but this would be done step by step because the Government felt that the welfare of the ordinary citizen was more important than anything else.

He said that contrary to the Opposition's request that all Government assets be privatised in one go, his Government was making the changes gradually without affecting the ordinary citizens.

He said he did not feel that the people of Seychelles wanted privatisation in one go where essential services like water and electricity would overnight be placed into the hands of big private companies.

"We all know that a private monopoly is more dangerous than state monopoly," the Vice-President remarked. "After all the state is the people and what belongs to the state belongs to the people."

He said that the Government must go slowly and carefully measure the effect of everything that was liberalised or privatised.

Vice-President Michel said there was no other choice but to modernise the economy as had been started in July this year with the introduction of Merp but everything had to be done with care and transparency.

The introduction of Merp brought about a 12 percent GST on all imported goods and most locally manufactured products which the Opposition says has to be abolished.

Vice-President Michel once again explained that the GST, which some countries called VAT (Value Added Tax) was introduced to enable Seychelles to meet its international obligations to organisations such as Comesa (Common Market for Eastern and Southern Africa) and the World Trade Organisation (WTO).

He said that while the GST would stay, trades tax was being gradually reduced so that come 2006 this would have been completely abolished or would be minimal.

Already the trades tax on all essential commodities has been absorbed by the Seychelles Marketing Board (SMB) and trades tax on other items such as baby food, baby products and vitamins is zero.

This programme of trades tax reduction, the Vice-President explained, would continue on another 3,500 items as published in the Official Gazette shortly after the introduction of GST.

On comments by Opposition MNAs that the cut in the budget would affect the services provided by the ministries of Health and Education, Vice-President Michel said that for those two ministries the reduction came down to 4 percent and was mainly as a result of payment of most of the arrears in 2003.

He said the ministries would not be affected as there had been a comprehensive exercise to cut down on wastage and operate with more efficiency, adding that it was not sufficient to just spend in order to have a good service.

"The way the service is delivered and planned is also important," he said, adding that on the other hand one can give as much money as one wants and still the service might not improve.

What were also needed, he said, were workers dedicated to their jobs as is currently the case with most current health workers and those in the education profession.

Vice-President Michel said that as he mentioned in his Budget Address on December 2, government was already starting to reap the fiscal benefits of Merp, overturning a deficit into a surplus for the second half of this year.

The budget for 2004 is realistic, he said, and it is aimed at continuing this trend and establishing a stronger base for future growth.

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