World Bank to support Seychelles efforts to mitigate economic impact of Russia-Ukraine conflict
Seychelles has started discussions with the World Bank on measures to put in place to assist lower-income earners in anticipation of an economic crisis that the Ukraine-Russian war will bring, said a top official.
The Minister of Finance, Naadir Hassan, told reporters on Tuesday that the conflict will have an impact on the supplies and prices of products in Seychelles, and this will affect the most financially vulnerable group in the country.
The government is looking at targeted measures to assist people with incomes lower than SCR8,500.
Hassan said there will be a need to relook at the minimum wage in the country and more globally to relook at macroeconomic measures needed to further relieve this group of the population.
The minister’s statement followed his participation in a discussion between Seychelles’ President, Wavel Ramkalawan, and the country director of the World Bank, Idah Pswarayi-Riddihough, at State House.
Pswarayi-Riddihough also held discussions with President Wavel Ramkalawan. (Seychelles Nation) Photo License: CC-BY
“We had started the recovery process from the COVID-19 pandemic. Now with the conflict in Ukraine, there will be different impacts on the country in terms of tourism arrival, revenue that the country generates, as well as an increase in commodity prices. This is because Ukraine and Russia are significant suppliers of different products supplied to the world,” said Hassan.
Ukraine and Russia are world leaders in the production of wheat and sunflower oil, and because of the war, fuel prices have reached over $100 a barrel. With the Seychelles’ economy relying heavily on tourism, the war will have an impact on the number of tourists arriving in the country.
In 2021, Russia was the top tourism market for Seychelles, an archipelago in the western Indian Ocean.
Hassan said that the government also wants to educate the population on budgeting so that they can prioritise their expenditure.
“The government is working on a welfare reform programme so as to modernise our welfare system and make it a targeted and coordinated one. This project is similar to what we call budget support for each milestone that we meet in terms of achieving certain objectives to improve the welfare system through money disbursed by the World Bank,” he added.
On her side, Pswarayi-Riddihough said that the livelihood of the people is of great concern to the World Bank.
“The key is how do we actually support Seychelles through the next level of building their own resilience to be able to weather whatever the issues that could come out of the interaction between Russia and Ukraine, making sure people do not fall into poverty,” she said.
Pswarayi-Riddihough said that working with the ministry of employment and social protection is key and that there is also a need for Seychelles to diversify its economy, decreasing the shock the country faces when the tourism industry does not perform at its highest.
“We can look at how much can we support the tuna industry, how much can we open new areas of development for Seychelles, and how we can support them. Seychelles needs to look at other countries and economies that are similar to their own. There is a lot still being developed but the idea is to give as much support as possible and move forward,” she said.