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¡¡¡¡Seychelles: A president in paradise

¡¡¡¡BEST known as a destination for honeymooners in search of perfect white beaches and swaying palms, the Seychelles islands rarely make any sort of headlines. Few tourists would even have noticed the presidential election on July 30th, in which James Michel, leader of the Seychelles People's Progressive Front, was returned with 54% of the ballot. For Mr. Michel, it was the first time he had faced the islands-62,000-odd voters, having been promoted from vice-president two years ago by his predecessor, Albert Ren¨¦, who had ruled the islands for 27 years since taking power in a coup in 1977.

¡¡¡¡To the casual eye, Seychelles seems both fortunate and wellª²governed. The 115 islands, most of them uninhabited, cover a mere 445 square kilometers (175 square miles) of the Indian Ocean, north of Madagascar, and enjoy several advantages over most of the rest of Africa. The weather is never extreme. There is no malaria. The islanders have free education and health care. Their multiracial society is pretty harmonious. With GDP at around $8,000 a head, there is almost no discernible poverty.

¡¡¡¡But this standard of living has come at a cost: the IMF says its public debt is too high and may be unsustainable. Mr. Michel's main opposition, the Seychelles National Party, which scored 46% in the elections, claims that Seychelles, per person, is the world's most indebted country; with some $590m of external debt for just 82,000 people, it is certainly one of them. A black market in foreign currency already exists as speculation persists that the government, unable to meet its obligations, may be forced to devalue. Basic consumer goods sometimes run out. If, as the IMF predicts, GDP falls by over 1% this year, Mr. Michel may find his next five years in power more testing than he had hoped.

¡¡¡¡The country needs more ways of making money. In the cold war, it was easy. The Seychelles played each side off against the other, remaining a member of the Commonwealth as well as the Non-Aligned Movement and taking military aid from the Soviet Union while leasing a satellite tracking station to the Americans. Since those streams of revenue dried up, the main Seychellois streams of revenue have been from tourism-leasing land to foreign hoteliers-and from tuna: the government earns about $200m a year from selling tuna-fishing licenses to Spain, France and South Korea.

¡¡¡¡But conflict in the Middle East has brought Seychelles an unexpected bonus: Western warships stop off in the islands, which offer rest and recreation. The soldiers and sailors scubaª²dive, sail and drink Seybrew, the local beer-and pay for it all in hard currency.

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