Seychelles is located on the east coast of Africa and is an archipelago comprised of 115 islands. Seychelles established its independence in 1976 and since has utilized its beautiful country to its advantage flourishing in tourism and fishing industries. Post-independence sprang Seychelles into a stable and prosperous country having an HDI of .845 in 2007. Even with its great success there are several key areas that are of concern and need to be addressed to prevent future economic downfall. A major problem facing Seychelles is their dependence on Tourism. They need to improve the countries business environment in order to facilitate entrepreneurship in small businesses. Tourism has been the driving force for Seychelles and its success as a country. Nearly 30% of the workforce and GDP are from tourism. This tremendous dependence has given way to several economic crises in Seychelles. The first was seen during the Gulf war in the early 90’s which provided a sharp decline in global tourism. Again this happened after 9/11 and by 2003 Seychelles economy had shrunk by 10%. The economy slowly recovered only to plummet into more disarray in 2008 from global economic turmoil. This dependence on one industry will continue to cripple Seychelles until reform is undertaken to create a more stable and diversified economy.
A major problem facing Seychelles is competition in the global market. China has been flooding Seychelles with cheap products, making it very difficult for small businesses to compete. The government needs to take action by encouraging the small business sector and provide essential policies to promote growth. Competition can be countered by import restrictions on China’s goods or implementing higher taxes on imports.
Seychelles entrepreneurial environment remains to be characterized by an inefficient regulatory framework and financing. Another major problem has been the lack of investment, both private and foreign, for small businesses. In 2009...
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