(U) IMPACT OF GLOBAL ECONOMIC SLOWDOWN ON

S E C R E T STATE 029727


NOFORN

E.O. 12958: DECL: 03/27/2034
TAGS: PINR ECON EFIN EINV EMIN SE
SUBJECT: (U) IMPACT OF GLOBAL ECONOMIC SLOWDOWN ON
SEYCHELLES (C-AL9-00286)

Classified By: SUZANNE MCCORMICK, DIR., INR/OPS. REASON: 1.4(C).


1. (S/NF) WASHINGTON ECONOMIC ANALYSTS ARE CLOSELY
MONITORING THE IMPACT OF THE GLOBAL ECONOMIC SLOWDOWN ON
SUB-SAHARAN AFRICAN ECONOMIES AND THE REACTION OF REGIONAL
GOVERNMENTS, PRIVATE SECTORS, AND GENERAL POPULATIONS TO
NEGATIVE IMPACTS DOMESTICALLY. SENIOR US POLICY MAKERS HAVE
EXPRESSED INTEREST IN THE RESILIENCY OF AFRICA'S RECENTLY
STRONG ECONOMIC GROWTH IN THE FACE OF A GLOBAL FINANCIAL AND
ECONOMIC CRISIS. AFRICA ANALYSTS HAVE WARNED THAT, WHILE THE
REGION IS LARGELY INSULATED FROM DEVELOPED COUNTRY FINANCIAL
SECTOR MELTDOWNS, THE REGION IS VULNERABLE TO AN INCREASINGLY
APPARENT GLOBAL ECONOMIC SLOWDOWN THROUGH FALLING COMMODITY
PRICES AND DEPENDENCE ON DEVELOPED COUNTRY ECONOMIES FOR
EXPORT MARKETS, AID, AND SOURCES OF REMITTANCES. A
STAGNATING GLOBAL ECONOMY WILL TRIGGER A SLOWDOWN IN REGIONAL
ECONOMIC GROWTH RATES THAT ANALYSTS FEAR WILL PUSH INCREASED
NUMBERS INTO POVERTY, STRAIN GOVERNMENT COFFERS AND ABILITY
TO RESPOND TO AN ECONOMIC CRISIS, AND POSSIBLY LEAD TO
GREATER SOCIETAL AND POLITICAL INSTABILITY.

AS TIME AND RESOURCES ALLOW, ANALYSTS WOULD GREATLY
APPRECIATE RESPONSES TO THE FOLLOWING QUESTIONS REGARDING
SEYCHELLES:


A. (U) SEYCHELLES RECEIVED A 2-YEAR IMF PACKAGE WITH THE
FIRST TRANCHE BEING $9.1 MILLION.

1) (U) HOW WILL SEYCHELLES SPEND THESE FUNDS?

2) (U) TO WHAT EXTENT WILL THIS HELP SEYCHELLES?

3) (U) CAN REAL ECONOMIC GAINS BE MADE WITHOUT POLITICAL
CHANGES (OR IS THE IMF EXPECTING ANY POLITICAL CHANGES)?


2. (U) PLEASE CITE C-AL9-00286 IN THE SUBJECT LINE OF
REPORTING IN RESPONSE TO THE ABOVE QUESTIONS.
CLINTON