The National Assembly has given its stamp of approval to the economic reforms announced at the weekend.

This was done after Vice-President James Michel had made a declaration on the new Macro-Economic Reform Programme (MERP) and the technical team who had prepared the package had presented it to the National Assembly members during the morning session of Tuesday's (June 24) sitting.

The MERP was officially announced by President France Albert Rene and explained in detail by Vice-President James Michel during the Seychelles People's Progressive Front's (SPPF) Extraordinary Congress on Saturday June 21.

All the explanations were broadcast on television and radio, and published in Seychelles Nation.

Tuesday's endorsement by the parliamentarians was done in the absence of members of the Opposition party, SNP (Seychelles National Party), who did not turn up for debates on a motion presented in the afternoon by the Leader of Government Business, Honourable Patrick Herminie, calling on the National Assembly to support the economic programme.

The motion received full support of all members from the ruling party.

The Opposition party withdrew from the afternoon debate, after complaining they did not have enough time to gather as much information as they desired from the technical team during the committee stage that morning.

Describing the Opposition's move as regrettable and uncalled for, Honourable Herminie pointed out that the Opposition had been consulted prior to the making of MERP and prior to its official presentation last Saturday.

"The move could well be an attempt to confuse people, at a time when the country is taking important and serious decisions for the future of its economy," he said.

The decision taken to redress the economy, he said, was one difficult but courageous and which would take Seychelles into the next stage of its development and bring more prosperity for all Seychellois.

The programme's main aims, he said, were to re-adjust the country's economic situation, make it more sustainable, bringing it on par with global economies.

He admitted that the next two years were going to be difficult as all Seychellois would feel the impact of some of the measures to be implemented, but come 2005, he added, the economy would have stabilised and everyone would be reaping the fruits of MERP. MERP, he said, was an opportunity for Seychellois to become more economically and socially independent and responsible, develop their entrepreneurship and become more competitive.

In the committee stage that morning members of the technical team who had prepared the plan gave a more detailed presentation of the programme and the MNAs were then able to ask questions. The powerpoint presentation was done by Mr Mukesh Valabhji with the assistance of Caroline Abel.

Most queries were related to privatisation, the effects of the measures on education, health, employment in the public sector, raise of salaries, inflation, government spending, tax in the agricultural and fishing sectors, the application of the 12% GST (Goods and Services Tax) and the social housing programme.

Answering these questions, Mr Valabhji pointed out that health and education were not included in MERP and that scholarships, overseas students, IT programmes in schools and investment in sportsmen and major sports events would not be affected by the programme.

With regard to the surplus anticipated by the end of this year, Mr Valabhji said he was confident that revenue would be generated by the measures taken to cut down on government spending, through the GST and through the issuing of Treasury bonds.

Noting that initially there would be a rise in the rate of inflation by 7% with the introduction of GST, Mr Valabhji said the Price Control Unit would be reinforced to protect consumers against excess overpricing. A price control team from the Trades Tax Division would also be sent on Praslin and La Digue to monitor the situation closely.

With regard to suggestions that there should be a raise in the salary of workers to enable them to cope with inflation, Mr Valabhji said this could not be done since the measures were being introduced to eliminate excess liquidity, and increases in salaries would defeat that purpose.

On the issue of privatisation, he said a timetable had not been defined yet, but this would be done in accordance with certain economic indicators.

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