[{"bbox": [147, 166, 1164, 243], "category": "Text", "text": "The action will contribute to the achievement of SDG 16 (Peace, Justice, and Strong Institutions), as well as SDG 5 (Gender Equality), 8 (Decent Work and Economic Growth), SDG 13 (Climate Action), SGD 14 (Life Below Water), SDG 15 (Life On Land) and 17 (Partnerships for the Goals)."}, {"bbox": [136, 292, 364, 324], "category": "Section-header", "text": "# 2 RATIONALE"}, {"bbox": [136, 355, 280, 382], "category": "Section-header", "text": "## 2.1 Context"}, {"bbox": [147, 397, 1166, 573], "category": "Text", "text": "The Republic of Seychelles (hereafter known as Seychelles) - with a population of around 98 000 inhabitants - comprises 115 tropical islands spread over 1 374 million square km in the western Indian Ocean, covering 455.3 square km in land area. The country acceded to the World Bank classification of high income countries in 2015 on the basis of its Gross National Income (above USD 13 000). The basis for programming is the National Development Strategy (NDS) 2019-2023 – the first of three five-year successive strategies to implement Government's Vision 2033 - *Towards a sustainable and inclusive future*. These strategies have been elaborated by Government on the basis of extensive consultations with all stakeholders, notably the private sector, civil society and the youth."}, {"bbox": [147, 573, 1165, 746], "category": "Text", "text": "The documents are in line with many EU policy priorities, strategies and general principles supported, namely: the Green Deal, Good Governance, Human Development, sustainable growth and jobs and gender equality. As the NDS was developed before the socio-economic crisis caused by the COVID-19 pandemic and before the 2020 presidential elections, the government needs a flexible tool, adapted to these contextual changes and to respond to new challenges with a view to further diversify its economy. The proposed MIP 2021-2027 does so by proposing a Cooperation Facility that will accompany the authorities in this journey and allow for a case by case decision on which support shall be privileged according to the on-going context."}, {"bbox": [147, 746, 1165, 1019], "category": "Text", "text": "As Seychelles is heavily dependent both on exports and imports, the impact of the COVID-19 pandemic since 2020 has been dire. Twelve years of laborious recovery - based on strict macroeconomic and fiscal discipline since the 2008 crisis - have been lost. Tourism, one of the pillars of the economy, plunged by 84% during 2020-2021, and government's main source of revenue in foreign exchange collapsed with it. Revenue from tourism industry fell by more than 61% compared to 2019 figures. Related economic activities such as accommodation, transport and retailing were automatically not spared. By end 2020, the debt-to-GDP ratio soared to 99.4%. Economic growth plummeted to a record low -13.9% in 2020 (compared to an average +4.2% between 2009-2019), with a widening budget deficit of 14.4%, soaring inflation of 3.9%, increasing unemployment and a devaluation of the Seychelles Rupee against both the euro and the US dollar. Poverty is intensifying as the poorer households - normally working in the tourism industry - are losing their unique sources of income. By end 2020, more than 46% of the population was living under the national poverty line. Economic recovery has only begun cautiously in 2022."}, {"bbox": [147, 1019, 1165, 1094], "category": "Text", "text": "The 2022 Budget Speech emphasised the need to re-build the nation and to increase resilience. This implies expanding the economic base by exploring diversification opportunities in the blue economy and agricultural sectors, while at the same time, transforming and re-dynamising existing pillars (tourism and fisheries) with higher value addition."}, {"bbox": [147, 1094, 1165, 1341], "category": "Text", "text": "As a small island state Seychelles also faces acute vulnerability in the face of natural phenomena. Seychelles remains particularly vulnerable to natural hazards such as super-strong cyclones (as in 2016), floods (recurrent), sea level rise and ocean acidification (existential). The international recognition of Seychelles’ stewardship in environmental conservation efforts represents an opportunity that Government is exploiting as it rebuilds its economy and targets green tourism. Leading the way internationally on climate change and biodiversity issues through pioneering work, Government is committed to a cleaner, greener, sustainable, low emission and climate-resilient transformation of the economy, in line with the Climate Change Strategy 2009, the Sustainable Development Strategy (2011) and the more recent EU funded Climate Change Policy. Seychelles was also among the first countries to submit its Revised Nationally Determined Contributions ahead of Conference of Parties (COP) 26. Seychelles is therefore an important ally for the EU in multilateral climate action."}, {"bbox": [147, 1341, 1166, 1516], "category": "Text", "text": "The Government recognises the importance of good governance, transparency and accountability - in particular given the risks generated by the growing financial sector (notably its offshore corporate side). Credible commitments on anti-corruption and AML (Anti Money Laundering) regulation and enforcement are in place and are paramount to safeguard the new government's credibility, investor confidence and the country's image. A new government has indeed been in place since the 2020 Presidential elections, with the ex-Leader of Opposition elected to the post of President and hence ending the single-party regime since independence in the 1970s. The smooth transition sends a vibrant signal of consolidation of democratic values in Seychelles."}, {"bbox": [1047, 1573, 1149, 1597], "category": "Page-footer", "text": "Page 4 of 13"}]