Surge in Dollar Puts Seychelles Economy At Risk

With Weak Commodity Prices, African Nations With Dollar Debt In Trouble

A surge in foreign debt issuance by African nations has left some fragile economies exposed to the risk of billions of dollars in foreign exchange related losses if the U.S. currency strengthens abruptly, a think-tank said on Wednesday.
Judith Tyson, senior researcher at the Overseas Development Institute (ODI), said the notional losses in terms of higher interest and capital repayments could total $11 billion in the event of a slump of 35 percent in African currencies against the dollar.
Ivory Coast would be most exposed, risking losses equivalent to some 11 percent of its GDP, due to its high debt and long maturities, the report said.
Seychelles could face losses equivalent to 6.5 percent of its gross domestic product (GDP), with Gabon and Senegal faces possible losses of around 4 percent, she said.
The CFA currency of Ivory Coast, Senegal and Gabon is pegged against the euro.
“We are calling for caution,” Tyson said, urging investors and governments to be responsible with debt issuance in the face of weaker commodity prices and slowing growth prospects.
“Sub-Saharan Africa has the potential to repeat the problems which occurred in the early 1990s in Asia and Latin America, when damaging financial crisis pushed millions back into poverty for a decade,” her report said.
Over the past two years, there has been a rise in sovereign bond issuance in sub-Saharan Africa as countries have exploited robust economic growth and a wave of dollar liquidity to enter financial markets at low interest rates.
Investors, meanwhile, have sought out yield in African frontier markets, due to low interest rates in developed economies.
Foreign debt issues for sub-Saharan Africa last year exceeded $6.25 billion, bringing the stock of debt to over $18 billion. That remains small relative to regional GDP measured by the World Bank at more than $1.6 trillion.
But some countries are more exposed after heavy issuance in 2014. Ghana’s overall debt to GDP rate is 65 percent of GDP, while Senegal and Mozambique both have more than 50 percent, according to the World Bank.
The normalising of Western interest rates risked sucking capital from African markets, further weakening African currencies and plunging them into an economic downturn, the report said.
Commodity exporters, such as oil-rich Gabon, have a ‘natural hedge’ against dollar appreciation because export revenues are denominated in the U.S. currency.
But a slowdown in export markets and a slump in commodities prices – particularly oil – have also placed robust economic growth rates in jeopardy, undermining countries’ ability to pay.
Tyson said that irresponsible use of debt by some countries was adding to the problem, as many raised on international markets had not been used for investment that would boost future economic growth.
She said Mozambique had borrowed $850 million for its national fishing industry but instead spent the money on military boats and equipment. Ghana had also spent heavily on hefty public sector pay increases, resulting in a wide fiscal deficit, prompting it to open talks on an IMF programme.
*Reuters

Comments

  1. The editor of the article points are real concerns and plus the gravity of money laundering purpertrated by Pl members help worsen things........Millions that should enter our coffers...with all this Pl organized money launderying pratices Seychelles economic becomes fragile and destroy National economy.It must be also be ointed out that since 2008 and though all those millions in foreign aid,Loans Seychelles because of endemic corruption at State levels,unaccountaNCY AND TRANSPARENCY COULD AGGRAVATE THE SITUTATION.

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  2. Tyson said"the irresponsible use of debts(loand,Aid)Wihhc is common pratices under Pl,,,worsen things.PL to date,can not provided a single projects supposedly paid by loan money ---where the money real went....By over pricing government projects....Pl this way robbed foregin loans what should be given directly to Seychellois.PL use loans for expensive,useless traveling of Pl members,family members..buig cars,Big villas etc......while the economy collapse.As Sey Auditor Genral each year made public ...millions of dollars desaspeared from our coffers..and though the alarm bell rings by Audit Genral ...nothing hapeens..no one investigated or ask for acccountabilty..no one ever been jailed for robbery,corruption though it is endemic and well known in Seychelles,,,,,no investment reports make public for public scrutiny...etc......

    The solution to most our problem is to first get Pl criminal gang out of power like Sri Lnakans did and jailed them so that they can never enjoyed their ill-gotten wealth....You remember how those Pl donkeys look like in 1977 after Coup Detat...they were all poor..after 5 decades in government they become richer than Seychellois bisuness persons Such as Joseph Albert and others...How you became the richest Seychellois Pl'Donot tell us the salary as minister could make you richer than Joseph Albert..?You will be investigated and punished Pl.


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  3. This does not only reduced Foreign exchange but will to changes in market perception about the sustainability of debts:Such changes would affect the affect Cnetral Bank reserve of a country,adequacy targets,, and can transient problems in liquidity managememnt.

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  4. Surge in Dollar ,plus massive money laundering practices by Sate perosnals put economy at high risk.

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  5. USA dollar surege as Capital flows to emerging markets.BRICS should be an alternative at low interest rates,and can make cloans outside the DOLLAR SYSTEM(it shows how risky,dangerous to put one's eggs in one basket).

    Dollars in Seychelles under Michel has become literally a Black Market De facto currency in countries (like Seychelles),where the National currency does not means nothing.

    Yes ,there is areal risk that we heading for another round or second Global crisisspurs this time around by emerging markets---Agentina,^tURKEY,iNDIA ETC...

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  6. Do we know why Minister Laporte stepped down? May be there is something brewing and about too explode in the Seychelles financial domain that the public is not aware yet and Laporte is abandoning ship before it sinks.
    Or did Laporte poke his nose in financial matters that did not concern him, and discovered the billions stacked away in secret accounts and he was sacked for being too nosy. Time will tell.

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  7. These are legitimate points that really raise concern.Could it be that Laporte,seeing the second round od crisis coming and wanted to to after the 2,39 billions of stolen tax payers money in Swiss Banks,which would not only help the country survive the probable coming tsunami,but also unveil the pl thieves behind the theft?Michel ,who seems to be one of account holder,decided to sacked Laporte,not only to save his ass but to continue their crimes to which they have become addicted.?laporte,who is now back to normal civilian life should come public as a patriot,and simply speaks the truth to pl.would he has the guts to do so?not sure,too coward,has amassed too much money for himself by servering himself from our coffers,that he would not dare coming forward.

    Snce the 2008 financial crise combined with mass embezzlement of our teasur, by Michel government,and a stagnated economy,Seychelles government has become a Global Leader,not a global Climate leader as Michel wants to make us swallow,but in debt,currency devaluation,bondaid begger,which put Seychelles that the same dire risk as Ivory Coast.Wizh our currency near multiyear lows,~..if pl does not reaxt now,by for instance,encouraging some companies to start shielding themselves bypurchasing bon d in local currency,and take action to avoid or keep the depreciating currency from pushing the economy in tovfunk,then we must be prepare for the worst.


    If since the 2008,pl would have conducted genuine economic reforms,deal with corruption,and money laundering ,which poison national revenues....today Seychelles would have had enough Reserves,which would help wizhstand the coming risks,but pl addicted to communist economic principles,which has provrn not tovwork,with staggering corruption and money laundering,would instead make seychrllois feel the worse pain to come.

    To many Economists,the mounting pressue evokes memories of currency crisis in Asia and Latin America,during the 80s and 90s,when the strong Dollar helped trigger slides in Economic Growth and commodizies price and ozher Assets.

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  8. With the recent oil pummeling,stagnated economy,endemic corruption,money laundering,massive debts Pl should be by now on high alert...for i am sure,if the crisi hit seychellois once again after all their sacrifices and withouz pl providing solutions and already failed several zomes...thenvzhis would be the silver bullet that would inevitably kill pl once and for all.I am sure this time around ,seychellois will not stay quiet and swallow the burden anymore..

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  9. Seychellois stop being stupid, James Michel is the most mean and criminal as his boss Albert Rene. Albert Rene has never stepped down as President, he still tells James Michel what to do and the latter obeys blindly. Rene knows all about Michel's culpabilities of ....... and therefore he got Michel by the balls, do this and do that or else you are out!
    All appointments are decided by Albert and they all have connections to his old friends and cronies - Adam, Sinon, St.Ange etc.

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  10. May be he saw his working with bags of loser with out knowloge and he dont want to be part any more of this corrupt system that still continue to make poor Seselwa poorer and suffer.The world will never get better and i feel so sad for next generation why?rich ha dem get richer poor ha dem get poorer..

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  11. Each year Pl decdies to make big articles on HINDU celbrations ......How many hindu Seychellois is there is our land?Not much...a dozens .....What Pl does is allow Expats to do what ever they want in our soveiregn Land....Hindu Temple...Hindu religious procession,Hindu this hindu that-----Hindu is an Indian Relgion not Seychellois ...Expat Indian Workers should not be allow to march our streets in procession,,,build Temple of a sovereign land of someone else and do literally what they want......

    HIndu expat religious celblration on our soveiregn christain streets are illegal and should stop..

    They can fly< to india to celebrate their Hindu religion not in our sovereign land.


    Who the hell Pl thinks there are to allow Expat Indain Hindus to march our soveiregn Christina streets?Have you seen Hindi in Indian letting foreigner holding Religious marcheson their streets Pl.?

    This illegal Hindu marhc each year as well as as the hindu temple should stop and temple demolish.


    Pl is promoting neo colonialism in our land...and promoteIndian hindu vcelebration in our land as is Seychellois Nationals are hindu when Real Hindu Seychellois arw a handfup of heads who never asked to build >TEmple or what so ever..All is Pl astheists selling our land to foreigners..

    STOp this illegal Hindu celebration and any Hindu shit in our sovereign land Pl.

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  12. Usually,and traditionally ,,MICHEL should hsd since last year janded over the office to pl communist designated minister that Faure.......for reasons known to Michel only this has not taken place......hence,what Michel is doing is sinply what Faure would have done if would have benn handed power by Michel last year.......Michel is simply make change in government that Faure initially has planned to do.....so that when Michel go the restructure would already be in place..with apparently some minor changes...e.g Mitdy under qualified and who was just made minister by Michel becuase her slavishness zo pl and being a concubine of michel.but at the end of day whether michel ot Faure who does zhr govt restructuring....the method is zhe same...it is always just a recycle process...whereby u take the same,give them another minitry and off we go with the same monkeys.

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  13. 04:29
    Laporte has been sacked because of Lise Bastienne. Did you not hear about the story of Monica Lewinsky? Well ask your friends to tell you what they know or heard, and Laporte has one thing to do now, relate to the Seychelles media the whole true story and where the stolen billions are.

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  14. He deserved to be sacked.this has done nothing since 2008,zhough all the millions in foreicn aid and zhe painful sacrifices by Seychellois to get zhe economy back on track.laporte acted as a diczator,opposing his own policy often wizhout real consultation,and lack of relalistic economic objeczives.......he failed to redicate corrupzion,failed to get our 2,39 billions back,failed to zo balance zhe budget in a word,he failed on everyzhing.
    Laporze,was acting more like an IMF agent zhan sey finance minister.....he failed zhen iz is normal thaz he goes.Zhe problem of incompezency is not limited to Laporte only...many public officials to the likes of Morgan,Govinden,Chief police Quatre,military money robber Roseline recently promoted Adviser to zhe President ,including Michel zhe half brained monkey,should also go and start preparing their defence for crimes ,robbery,theft,embezzlement of tax payers money.


    In addition.....oil remains going from polution create by a boat recently has invaded beaches.....pl failed to apprhend culpriz,though its seems the source of polution is known,failed zo removed oil spilled on zime which has causes the beach polution,...other sources of polution if not zhe boat in question.....is that cargo ships ezc... are illegally discharging zheir used oil in our EEZ...which means pl must ask our coast gaurd to be.more pro~active in dealing with thid illegal activities which would have.much diggest environmental impact on our land zherby affrcting our tourism industry and eco~systrm.

    Sey coast guard caught two illegal indian fishing boazs in oue EEZ.....there is no doubt that the two indian fishing boats were illegally fidhing in our EEZ...why?zhey were in our waters an*d should not be zhere....but pl mouth piece NATION...instead of telling us that is an illegal fishing case,NATION writes“suspect of fishing illegally in our EEZ....zhere is nothing to do with suspection here,,they were fishing illegally in our EEZ for zhr fact that zhey should be where they were,and these illegals should be punished accordingly......of course because they indians,pl tries to minimize the issue tonplease india......there are many other countries fishing illegally in our EEZ...ZHAIS,SRI LANKANS,IRANIANS,PHILIPINIANS,S KOREAN,MALDIVIANS,..ETC. ESPRCIALLY ASIAN COUNTRIES . that means pl should do.much more to deal with this illegal activity that has been going on for decades.

    Hey ,did pl sees thr Mauritian new patrol boat...hogh tech,carrying helicopter,multi mission purposesses.......a Canadia made OPV....costnig us 40 million piece,but robust,long life,high tech, well appropriate toanswer to marine zhreat of today and in the future....Seychelles should has long posses an OPV when considering the immensity of our EEZ..i personally will opt for the OPV 1400 USA made OPV...REASONS WHY?it is shorter,need a crew of 35 men,while the Opv Maurituis just buoght has a crew of 67 men,,,the USa made OPV...is even better equiped with new tech...engines consume less fuel,...designed for multi~purpose operations,....long life.built to last over 30 yrars plus..without the need for major upgrading,technical problems,repaires....etc...etc.....Not us 40 millions is literally the cost for most OPV regardless which country build it.....they differences are in the technology,,longevity of ship and the different opeartions they can deliver..

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  15. The country stagnanted in economic recessio.,high inflation,astronomic debt,corruption,money laundering killi.g the economy, seychelles has all it takes to be hit by another painful recession.
    THE INFERIOR management of our economy ,Seychelles is not even in control of its economy,Seychelles is captive of EU,IMF,India etc....
    The primary channels are trade,especially commodities exports,currency values,interest rates,and the need for foreign exchange.
    One may hope that weak commodity prices may drive down production costs,and consumer prices,and boost economic activities that way~~they may indeed do that,but they will also affect commodity producers,~~weaker revenues will affect ability for our indebted country commodity producers to continue to serve the debt.
    COMPOUNDING the problem is low inflation and even concern about Deflation of falling prices,.Low growth and a lack of inflation is not generally a problem,but when combined with high debt,it can be.Stagnant or falling Incomes,made it even harder to meet Debt repayments.The shrinking size of economies under deflation,also exaggerate the level of Debt,which remain unchanged.

    With a surging Dollar,reduce foreign exchange earnings because of failed economic stragety,drcrease in Tourist arrivals duevto lack of connectivity,endemic corruption and massive money laundering,in a race to the bottom,Seychelles might be forced to out Interest Rates and increase money supply..the appreciation of our currency.
    With growth conti.ued downfall and rising Disinflation or Deflation concerns,the risk of facing an acute financial crisis is very high indeed.


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  16. Seychelles cannot acquire a high tech patrol boat equipped with helicopter etc., because Seychelles has a pauper Government. You all know the saying 'Beggar cannot be chooser', so be contended with handouts from Indian and China, all thrown away boats are received with great fanfare and launched by first Lady Lise Bastienne, smashing a bottle of champagne on the bow.
    It is time for Seychellois to demonstrate like Greece and Spain and elect a left wing political party that will renegotiate all loan agreements, ask for debt write-offs and if need be - default on repayments. Allez Seychelles!, booting out IMF your destiny will be in your hands.

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  17. U completely right, we need to do like Greece and Spain....what isvneeded to get pl out is no muchNamely get the opposition take their responsibility......just opposition in Greece did and is doing in Spain..pl us stillvaround becuase of the failure of the Opposition nothing more..

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  18. Too corupt...and too many thieves in charge of the army to the likes og Colonel Roseline who embezzled SR 6million rupees from military coffer in 2008...recently been promoted by Chief thief Michel for theft..

    The OPV 75 VIGILANT ship is quit big....29/90meters wizh a crewcof over 60 men crew....too big for Seychelles.....but zhe Germa build high tech 55 meters OPV (FRASSMER OPV/Opc) for 35 men crew, ideal for a small navy like Seychelles..because of seize,amount of crew etc......
    The thing pl can find money to buy Guy Adam 5 tankers of which revenue never reach our coffer ,but not a good quality OPV..which seychelles needs because of its immense EEZ but also for future unpredicted threat and the increase in organized marine crimes.....

    These Tankers,pl should sell out.....and could instead build e.g a small cargo fleet more rentable brcuase of the seize of the market ,but also because Seychelles import literally everything which was transported by sea...then pl could enough money to also buy our coast a good performance OPV like those German build.

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  19. Well....too many chiefs...not enough Indians..errrrr.... I mean not enough creol LEO.

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  20. 6.08
    One can even have not only 55 meters but 40 meters OPV(call Offsohre Patrol Cutter(fassmer OPV German product) .

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  21. MIchel says we will win elelction because Oppostion in inexistent....He is partly right..but we all know Michel however win eelelctions because of fraud,manipulation.......RAM;GILL and tohers should feel ashame that even Michel make a fool of them though he is less educated then them.....If I was RAm I would either act and show Michel that he is a a donkey..or confirm Michel's statememnt by showing they are less educated them him and simply just stooges of Pl as has been the case so far.

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  22. By saying that,Michel recognized also that Seychellois does not like Pl,and that if the Oppostion would Unite ,his defeat is programmed in advantage,In other words,Michel is begging Oppostion not to Unite else he is bound for befeat.
    CAN raM PROVES THAT HE IS MUCH MORE INTELLLIGENT THAN mICHEL ,AND GIVE MICHEL A LESSON?dIFFICULT TO SEE raM THE THE DECADES pL STOOGE TO uNITE oPPOSTION...HE IS A MADE OF pL AND DEPEND OF pl FOR A SALRY SO THAT HE DOES NOT MAKE A PROPER JOB.

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  23. 22,45
    Dont expect pl tp provide our coast gaurd with a hightech OPV...pl canot even provide TAZAR with a sprcial force HEADSETS for their walkie talkie......though one can have it for less than US 80/100 dollars piece.

    In the recent join exercise we saw one of out soldier with a yellowcradio (not the right color for special forces whose men must well camouflage and discret) and the soldier was holding it in his one hand while boarding a suspicious ship when in fact he should have both his hands on his machinrgun to act rapidly in case of many threat ......that means one soldier in zhe team was literally out of duty when it come of being to counter react in case of threat..

    This soldier should instead has a headset plugged wizh Radio therby allowing him to has his hands on his arms to act.Even this old spcial force UZI MACHINE used by sprcial forces like Israel,etc.....in the 70s should be replaced and give to Djibouti specials...in thevon going CUTLASS EXERCISE 2015. I saw pictures on them in a kid of blur raincoast and a plastic riffle.

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  24. 22,45
    eg lifevest for special forces MUSTANGLIFEVEST
    a modern submachinegun would be an HK MP7A1--with integrated torch,collimating sight,even laserpointer.

    Michel cannot provide this?Roseline has robbed Sr 6 millions which could be used to buy TAZAR the right lifevest,headets,etc..etc..etc.U Know Michel just like his AK 47,it is something nostaligic for him..just like the UZI machinegun developed in 1954 by Israel and literally out of service in modern special forces unit except Seychelles,Djibouti,Somali,North Korea,Pakistan,Yemen..Zimbabwe.

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  25. PL celebrates its illegal immigrants and refugees day in Seychelles...Seychellois has never tell Pl to signed refuges and immigrants laws that would allow our country to be invaded by foreigners as we see in Italy.

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  26. Just like the illegal Indian hindu processions..in our chrisitan streets.....While in Inida Indain Muslims and Hindus massacred each other....in Seychelles a soveiregn country with the majority of tis citizens being Christians...the illegal dictatorial government of Pl allow hindu wrokers to rape our soveiregnty by allow thm to daNCE IN OUR STREETS INSTEAD OF MAKING THEM REPEPCT SEYCHELLOIS IN THEIR COUNTRY...

    pL WANTS TO MAKE iNDIANS FEEL THAT THEIR ILLEGAL RELIGIOUS PROCCESSION IS OKAY AND LELGAL AND IN THE FUTURE YOU CAN EVEN CLAIM IT A nATIONAL RELIGION .

    tHIS PRAE OF OUR sOVERIEGNTY MUST STOP.tHERE IS NO COUNTRY IN THE WORLD WHO WOULD ALLOW FOREIGNERS TO MARCH THE STREETS OF THEIR SOVEREIGN COUNTRY BY ILLEGAL FOREIGN RELIGOUS PROCCESSION.......NO NATIONS WOULD ALLOW THAT EXCEPT THE DONEKYS ATHEIST IN Seychelles SO THAT THEN THEY CAN BE GIFTED A SECOND HAND OLD PATROL BAOT FROM India..


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  27. fOR TWO ,THREE YEARS PRIOR ,WE FOTEN HEARD jUORNALISTS,NEWSPAERS OWNERS COMPLAINING ABOUT FREEDOM OF THE PRESS
    BUT LOOKING CLOSELY TO PRESS IN SEYCHELLES ,ONE CANNOT SAY THAT THEY DO THEIR JOBS TO FULLY INFORM SEYCHELLOIS AND PROMOTE FREEDOM OF SPEECH.

    wHY?

    HAVE YOU EVEN SEEN A SINGLE NEWSPAERS OR RADIOS GO AROUND THE COUNTRY ASKING SEYCHELLOIS QUESTIONS ON --WHAT THEY THINK ON pL GOVERNEMNT
    WHAT THEY WOULD LIKE
    WAHT FUTURE THE WOULD LIKE
    AN

    OR SIMPLY WHAT THEY THINK ON PL CORRUPTION,POLICIES S,SELL OUT ETC... NO NEVER........AND THEN THEY WANT TO TELL US THEY PALY A BIG ROLE TO PROMOTE DEMOCRACY AND FREEDOM----

    MAYBE THEY SHOULD CONCETRATE MORE ON ORDINARY SEYCHELLOIS ,,REGUALRLY INTERVIEWING THEM

    GIVE THEM THE CHANGE TO EXPRESS THEIR OPINIONS OF PL POLCIES AND CROOKS

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  28. Time will tell when Hindus will ovethrow them and take this island and put temples all over the island f**k religion and politic just bring voilence all over the world human can not live in peace seen exitend of mankind who call themself politi-chiens.

    BE LEAVE IN GOD BUT NOT BY DISCRIPTION WROTE BY MANKIND.

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  29. Nations fight dor their dependency and do all to protect it...pl import it and afvertisevit and even rape our constitution and ballows it to promulgate,florish,take root..proliferate in order to have indian govt protection in order that it can grab to power for eternity.....

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  30. Totof is quiet,st Ange forced a thummy in his mouth ,he can not cry out.

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  31. Michel says ,he will be candidate in 2016...becuase he feels the people appraciate what he has done..
    This is the wordd of a guy disconnrcted to the people,who electrd himself by fraud,rapr constitution and rule of law,the mastrrmond of illegal sell out of our patrimony to foreign,the crook who illegally imported over 40 thousand of indians to colonize our land,bankrupt zhe country,create an astronomic debt,drszroyed rnvironment,selling seychellois economy zo foreignerd zhat seychellois can not benefit zheir own economy,involve,in illicit praczices...money laundering,financial leakage,etc...
    He zold be responsible the people......how u do that in a police state,whereby none of the.ministers as well as zhe prople electrd zhem...
    He, Donkey michel...in our constizution zhe is a mechanism to consult zhe people,which the people madr available when zhe constizution was written...it is call REFERENDUM......

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