And then came the pandemic

Addressing vulnerability in the time of COVID-19 and beyond in the Seychelles

May 13, 2020

Baie Ste Anne Farmers Association, Seychelles, Oct 2019. Photo UNDP Seychelles/ Ramatoulaye Moussa Mazou

Clear skies ahead

A little over four months ago, Seychelles, a country of about 97,000 people and 115 islands, was celebrating. According to the 2019 UNDP Human Development Report, the country had become the first in sub-Saharan Africa to attain very high human development status, with an increase of its Gross National Income per capita by about 82.9 % between 1990 and 2018.

Seychelles was also lauded for adopting innovative financing to address a high level of debt and to support the blue economy. Developed in partnership with The Nature Conservancy, World Bank and private capital, the Blue Bond offered a means to restructure Seychelles debt while also investing in sustainable fisheries and protecting livelihoods.

Seychelles also continued to lead on conservation by designating one third of its ocean territory – an area larger than Germany -  as a Marine Protected Area, and developing the first comprehensive, large-scale Marine Spatial Plan in the Western Indian Ocean, one of the first for a Small Island Developing State (SIDS).

No doubt, the country was on an overall positive trajectory to achieving the Sustainable Development Goals; and, despite lingering challenges, there were clear skies ahead.

A gathering storm

On 30 January 2020, as the disease spread across the globe, the Public Health Authority of Seychelles issued a travel advisory and initiated a COVID-19 contingency plan. The first two cases were reported on March 14 and the country increasingly restricted international travel to protect her people, industry and livelihoods including the tourism industry, which contributes 25% of GDP.

A full travel ban took effect on 9 April 2020, with subsequent restrictions including a national curfew and restriction of commerce and industry to essential services. Within 6 weeks, except for cargo and repatriation flights, Seychelles was cut off from the world, including from its nearest neighbour ~1,500km away.

With 11 cases to date, this robust response to the pandemic has been saving lives but it will also have far-reaching socio-economic consequences. According to the amended Budget of Seychelles, “New priorities in a new reality”, the economy is expected to go into recession, with “economic growth to go down to negative 10.8%, compared to the original projection of 3.5% growth rate in the [original] budget presentation”. Much of this slowdown is attributable to the accommodation and food and beverage sectors linked to the tourist sector.

While the response to the pandemic includes a wide array of fiscal, monetary and macro-financial  and social protection measures such as guarantees for salaries in the private sector for 3 months, an increase in the budgetary allocation for the Agency for Social protection and Unemployment Relief Scheme, 6 month temporary reduction in loan interest rates, and support to the agricultural sector to promote food security and livelihoods, it will also be expensive. In all, the Ministry of Finance projected debt-to-GDP (Gross Domestic Product) ratio at the end of 2020 is estimated at 85.1%, instead of the 52% projected in the pre-COVID-19 2020 budget.

A question of vulnerability and resilience

On May 1st, 2020, UN/DESA Policy Brief #64 underscored why SIDS—as countries with inherent vulnerability to environmental shock—deserved “special attention as the world faces an unprecedented health and economic crisis.

This was highlighted in 2014, when the Third UN International Conference on Small Island Developing States (SIDS) called for an Accelerated Modalities of Action (SAMOA) Pathway.  Focused on climate change mitigation and adaptation, the SAMOA Pathway informed the Sustainable Development Goals adopted in September, 2015; with a focus on financing, partnerships, trade, capacity, building, data and statistics, technology, monitoring and accountability across the 17 Goals. These arguments have been put forward at various global events since then,  and highlighted  in the OECD Making Development Co-operation Work for Small Island Developing States report.    

The COVID-19 pandemic illustrates once again that SIDS are not only vulnerable to climate related shocks, but also to economic, health and other shocks.

Now is the time…

UNCTAD notes that “’while some of the SIDS are not among the poorest countries, they are all vulnerable”, but most of the funds mobilized by the international community to combat the pandemic and counteract the resulting economic crises are earmarked for low income and emerging market countries. High income and good progress in the human development indices may not be enough to help the Seychelles withstand that from which even larger countries are reeling.

Now is the time to put paid to the question of the composite Vulnerability Index and its application to SIDS economies; and to consider - as proposed in the SAMOA Pathway - to intentionally transform the development discourse about SIDS and ensure their access to the resources needed to withstand future shocks.