Seychelles - Economy

Seychelles possesses a thriving economy, but external debt holds back real economic development. Agriculture, fishing, and forestry accounted for about 4% of GDP in 1999. Crop production is limited by mountainous terrain and low soil fertility leaving the Seychelles dependent on imports for beef, rice, potatoes, and some fresh produce. The manufacturing sector accounts for 26% of GDP. Since the opening of the international airport in 1971, the Seychelles economy became dependent on tourism. In 1999, tourism employed 30% of the labor force, and provided the majority of foreign exchange earnings, but in 2000, industrial fishing surpassed tourism as the most important source of foreign exchange. Stiff international competition for tourist dollars caused the government to take steps to broaden the economic base by promoting the development of fishing and light manufacturing. The tourism industry was adversely affected by the 11 September 2001 terrorist attacks on the United States and the subsequent decline in air travel. Tuna fishing and canning accounted for 70% of GDP in 2003.

Although private enterprise and private property are permitted, the public sector drives the economy and accounts for more than 40% of GDP. The government controls the importation, licensing, and distribution of virtually all goods and services, and exercises significant control over all phases of the economy. Since 1990, a program to privatize the economy has resulted in progress in several sectors including tourism, fish processing, and agriculture. In 1995, the American food company Heinz and Co. purchased 60% of the previously state-owned Seychelles Tuna Canning Factory, and the joint venture between the government and Heinz is now the single largest employer in the Seychelles. In addition, most state-owned agricultural land has been turned over to private control. The government is attempting to develop an offshore and free trade zone to further develop the economy and move it away from its dependence upon tourism and fishing.