Financial Crisis Hits Seychelles Job Seekers

With external debt topping $800 million, Michel has said he hopes more than half of it will be cancelled.

The number of people in the Seychelles seeking work has more than tripled in three months to 3.6 percent as the global economic crisis hits the archipelago's key tourism sector, the president said on Thursday.

President James Michel said the tourism sector, a major source of much needed foreign exchange for the cash-strapped country, had seen a 15 percent fall in visitor arrivals since the start of the year compared to the same period last year.

He said that the Indian Ocean archipelago, which is best known as a luxury retreat for celebrities, could see tourism revenues fall by 25 percent overall in 2009. The industry generated $321 million in 2008.

"The number of people seeking employment has gone up from as low as 1 percent in November 2008 to 3.6 percent at the end of last month," Michel said in a state of the nation address.

Earlier this month the IMF predicted that the Seychelles' heavily indebted economy would shrink by 9.5 percent this year compared with 3.1 percent growth in 2008.

The palm-fringed islands are in the midst of a severe economic crisis brought on by years of unsustainable borrowing and compounded by the worldwide financial crisis.

Last November, Michel implemented a raft of economic reforms to tighten fiscal spending and liberalise the monetary side, including floating the previously over-valued local unit.

Inflation leapt to 63.3 percent in December -- the highest rate in Africa after Zimbabwe.

"We now have some $55 million as reserves in the Central Bank. We now have foreign exchange that has been set aside to guarantee imports during this time of global crisis," Michel said in his speech.

With external debt topping $800 million, Michel has said he hopes more than half of it will be cancelled.