Economy
GDP (2005): $693 million.
Annual growth rate (2005): -1.5%.
Per capita income (2005): $8,682.
Average inflation rate (2005): 0.9%.
Natural resources: Fish.
Agriculture: Copra, cinnamon, vanilla, coconuts, sweet potatoes, tapioca, bananas, tuna, chicken, teas.
Industry: Tourism, re-exports, maritime services.
Trade: Exports (2005)--$355 million: canned tuna, frozen/fresh fish, frozen prawns, cinnamon bark. Imports (2005)--$620 million. Major partners--France, Italy, U.K., Singapore, South Africa, Spain, Saudi Arabia.
Official exchange rate (May 2007): 6.10 rupees=U.S.$1.
Aid per capita (2003): $110.

GEOGRAPHY
Seychelles is located in the Indian Ocean about 1,600 kilometers (1,000 miles) east of Kenya. The nation is an archipelago of 115 tropical islands with two distinct collections of islands, some comprised of granite and others of coral. The Mahe Group consists of 42 granite islands, all within a 56-kilometer (35-mi.) radius of the main island of Mahe. These islands are rocky, and most have a narrow coastal stripe and a central range of hills rising as high as 914 meters (3,000 ft.). Mahe is the largest island--9,142 sq. km (55 sq. mi.)--and is the site of Victoria, the capital. The coral islands are flat with elevated coral reefs at different stages of formation. They have no fresh water; human life can be sustained on them only with difficulty.

The climate is equable and healthy, although quite humid, as the islands are small and subject to marine influences. The temperature varies little throughout the year. Temperatures on Mahe vary from 24⁰C to 29.9⁰C (75⁰F-85⁰F), and rainfall ranges from 288 centimeters (90 in.) annually at Victoria to 355 centimeters (140 in.) on the mountain slopes. Precipitation is somewhat less on the other islands. During the coolest months, July and August, the temperature drops to as low as 70⁰F. The southeast trade winds blow regularly from May to November, and this is the most pleasant time of the year. The hot months are from December to April, with higher humidity (80). March and April are the hottest months, but the temperature seldom exceeds 88⁰F. Most of the islands lie outside the cyclone belt, so high winds are rare.

SEYCHELLES ECONOMY
Seychelles' economy rests on tourism and fishing. Employment, foreign earnings, construction, banking, and commerce are all largely dependent on these two industries.

The services sector--including transport, communications, commerce, and tourism--has accounted for close to 70% of GDP in recent years. The share of manufacturing has been between 15-20% of GDP, although it fluctuates from year to year owing to changes in output from the Indian Ocean Tuna cannery. Public investment in infrastructure has kept construction buoyant, with its share of GDP at around 10%. Given the shortage of arable land, agriculture, forestry, and fishing (excluding tuna) make a small contribution to national output.

GDP in 2005 was at $693 million and income per capita was at $8,682, by far the highest in Africa. This puts the island in the World Bank's “upper middle-income” bracket with the result that Seychelles is low on the agenda of international donors and aid flows are limited. However, given the small size of the economy, the island remains vulnerable to external shocks.

Although the average per capita income is over $8,000, residents often have difficulty obtaining even basic foodstuffs, such as rice and sugar. Government mismanagement and excessive economic regulations, including a manipulated exchange rate, have resulted in foreign exchange shortages and a parallel market currency exchange rate double the official rate.

In 2005 and 2006, the government implemented several measures toward the liberalization of the trade regime and the privatization of state-owned entities, such as the removal of import licenses and the partial sale of the public insurance company SACOS. In October 2006, the Minister of Finance announced measures to start the process of a gradual liberalization of foreign exchange transactions. These limited measures, however, are unlikely to influence an agreement with the International Monetary Fund (IMF), which continues to press for devaluation as an important step toward resolving the persistent shortage of foreign exchange.

Although Seychelles is eligible for the African Growth and Opportunity Act (AGOA), it has failed to take advantage of AGOA thus far. Seychelles is not qualified for apparel benefits under AGOA and, in any case, its apparel manufacturing capacity is negligible.

DEFENSE
In 2002, Seychelles had a defense force (Seychelles People's Defence Forces) of about 800 army personnel, including 300 in the presidential protection unit. The army has one infantry battalion and two artillery elements. Paramilitary forces include a national guard consisting of 1,000 people and a coast guard estimated at 250 and divided into two divisions, the naval wing and security or infantry division.

The Seychelles Coast Guard (SCG), which was created in 1992, assumes many of the maritime roles commonly associated with the U.S. Coast Guard. They recently acquired responsibility for search and rescue for vessel incidents as well as environmental protection from the Port and Marine Services Division. SCG has several operational vessels: the Russian-built Fortune, the Italian-built Andromache, the Scorpio, two Indian manufactured vessels, four Motor Life Boats, and the luxury yacht Gemini that also is used as the presidential yacht.

The air wing of the defense force separated from the coast guard in 1997 and does not have any dedicated aircraft, but it sometimes supplies pilots and aircrews to fly search and rescue missions. Their primary duty is to train pilots. The Island Development Corporation (IDC) maintains the pool of aircraft, using them for sources of income by chartering them out. The aircraft inventory includes one Caravan F-406, one Defender, one Cessna 150, and one Beech 1900.