Competitiveness, Employment, and Public Sector Management Key Focus;
Dynamic package of knowledge and financing of $21 million will be provided
The World Bank’s Board of Executive Directors today discussed a new US$21 million Country Partnership Strategy (CPS) with Seychelles, the country’s first comprehensive development strategy with the international financial institution in nearly two decades.
The new three year strategy focuses on reducing vulnerability to economic shocks and providing the basis for long term sustainable development, as outlined in the Seychelles Medium-Term National Development Strategy 2013-2017 (MTNDS). The strategy will focus on competitiveness, job creation, and protecting the poor from external shocks. It will also help strengthening public sector management.
Seychelles’ Minister of Finance, Trade and Investment, Pierre Laporte, welcomed the new strategy indicating that it is a key tool that will help the country to achieve its medium- and long-term development goals.
“Whilst the fundamentals of the Seychelles economy are strong, the country remains vulnerable to the external economic uncertainties. Innovative financial instruments provided by the World Bank Group will help the Ministry of Finance to address longer term development challenges,” says Laporte.
The Bank lauded the Government for making commendable progress towards achieving macro-economic stability, and successfully weathering the shocks of the 2008-09 global financial crises. The economy rebounded remarkably well and grew at 6.7 percent in 2010 and 5 percent in 2011. The Bank’s economic outlook is broadly positive but Seychelles remains vulnerable to external shocks, particularly in the tourism sector which is tied closely to the health and stability of the global economy.
In light of the uncertainties in the global economic environment, the Government of Seychelles requested the Bank’s support to help accelerate reforms designed to improve public sector effectiveness, enhance competitiveness and restructure its extensive social protection programs to better cushion the poor and vulnerable.
“The Seychelles has managed a remarkable turnaround since 2008. The challenge now is to build on this success by strengthening the foundations for sustained growth” explains Haleh Bridi, the World Bank Country Director for Seychelles.
Specifically, the new CPS will:
- Build partnerships with key stakeholders to assist in the implementation of the new strategy. It will also support the Seychelles to prepare in case oil extraction is found to be commercially viable.
- Produce a series of economic analysis that will underpin the Government’s reform program, as well as to help identify areas of weaknesses and binding constraints to sustainability beyond the medium term agenda.
- Finance a three-year programmatic series of Development Policy Operations (DPO), with an indicative amount of US$7 million for each operation.
For its part, The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will play an integral role in coordinating the implementation of the new strategy. The IFC will complement the WBG’s engagement with Seychelles by continuing to explore demand and expand their investment primarily focused on financial sector (SMEs), capital market development, tourism and fisheries related projects and infrastructure development that will create employment opportunities.
Building upon a successful two year Interim Strategy Note (ISN), the new CPS was prepared in close consultation with a diverse group of stakeholders in Seychelles, including the Government, private sector, and the civil society. The Government of Seychelles and the World Bank have agreed that a CPS mid-term review will be conducted in the first quarter of FY14.