Bringing the Singapore miracle to Seychelles

The challenge to Add Value - By Kevin Bresson MBA, M.Eng

The challenge to Add Value - By Kevin Bresson MBA, M.Eng



My home-coming in 2012 was an eye-opener.  It had been over 7 years since I had last made the trek from North America, so I was overjoyed to see family and friends.  I was surprised - correction, "blown away" - by the difference between the Seychelles I knew from 2005 and the one that blew me away just 7 years later!

From a distance, I had heard of some "change".  I occasionally glanced at the Seychelles Nation and other online publications.  I heard positive reports from friends who had worked overseas and returned home with new skills.  I was also aware of effects of a short-term boom, as a result of the surge in foreign-funded hotel constructions had not been totally lost, given well-executed, IMF-induced reforms during the worldwide recession.  I knew, at least, that "napa" land was history, and the shops were reportedly well stocked.

The return of choice and competition

Many people judge progress on a small island state like Seychelles solely through the variety of products on well-stocked shop shelves. I don't.

Retail is but one facet of an economy.  In fact, if allowed to grow unchecked, the retail sector can cause the most harm to an economy (witness the virus of 'big box' retailers spreading across Western economies, slowly choking local manufacturing and jobs). 

What surprised me and confirmed that real progress had been charging forward was seeing more widespread choice and competition, like a fresh dawn breaking across numerous sectors of Seychelles’ small economy. 

Yes, the shops offered more choice, but there had also emerged more store chains, competing with each other.  I saw more publications in the newsstands, and each of these had more ads than I had previously seen on our islands, vying for eyes and people’s Rupees.  I saw  more industry, more health clinics, a greater variety of night-clubs and bars, more money changers, more mobile eating places at four a.m. (yes, I’m a night-owl) - in short, I found myself bathing in the glow of a way better economy than I had expected. 

What finally hit home for me was my visit to bazar Victoria for a much-anticipated mang and fisiter binge.  The bazar was packed with vendors, filling even the extension to the market and the roads leading to the market.  Variety was everywhere. The eagerness to compete and get you to buy another ta (creole for “bunch/pack”) from them was palpable.  I suspect that this level of competition is why the prices for these ta had not changed much from when I left in the early 2000s - this is what great choice and competition can do!

The boom will be followed by bust - or will it?

Observers of economic cycles know that a "bust" usually follows a boom.  The duration of these cycles may vary, but countries who can evade the bust are rarer than a Dugong racing across a beach.  Singapore is a notable exception. I mention it as an example not only because of its size, but also because of the clever steps they took to build a more resilient economy. 

Singapore had but one advantage when they became an independent nation - location!  First, they were close to southern China, and like Hong Kong, were a key trading post for goods in and out of China back when that country was trade-shy.  Located at the perfect edge of the Malacca strait, they could benefit from the steady traffic of ocean cargo between Europe, Africa and the Middle East, and the Far East.  They had no natural resources, and that might be why they got very creative with building their comparative advantage, from that single advantage. 

Today Singapore has squeezed every drop of benefit from their location advantage, being one of the biggest ports and ship servicing stops in the world.  They have gone beyond to become a respectable Asian financial trading centre and a high-tech manufacturing base.  Their economy is nicely balanced between production sectors and service sectors.  Not only has this meant a more resilient economy (i.e. more sustained 'boom' years) but also one of the highest national reserves of any country in the world.  They can fall back on these reserves, even if they face economic surprises such as the recent global recession.

What is particularly amazing is that Singapore is better off than its neighbours, despite their larger domestic markets, a bigger pool of cheap labour and ample natural resources!

Replicating Singapore by adding value

Economics-savvy readers might dispute my simple treatise, and might feel that the Singapore's success is a little more complex.  There is no denying however, that Singapore has a clear, well-balanced comparative advantage.  If Seychelles could somehow find its own well-balanced, comparative advantage, its new-found financial success could become much more stable.

Rather than propose fancy strategies and policies with bar charts and Venn diagrams, I would like to simply recommend a mindset: the approach of adding value.  This is a fundamental way of thinking; once understood, it can improve products or services in both companies and public organizations!

Adding value requires a business to ask: "How can I add value to my product or service offerings, at the same/similar price to my customers (or potentially new customers), and thus generate further/new long-term income?”. 

A government or non-profit organization should likewise ask: "How can I add value to the life of the public I serve, without any increase in inconvenience to them, and thus increase the effectiveness of this public organization in meeting its role in society?”.

Note that the aim is to provide more for the same price - this is like Superman's telephone booth.  Once a company embraces the concept and applies extra creativity, it goes from "good" to "great".  Note also that there was no mention of budgetary constraints.  While this needs to be kept in mind, any creative person will tell you that constraints hinder creativity!  Start the process with learning what your customers want or need, then come up with as many value-adding ideas as possible.  Only after this is done, should these ideas be evaluated based on constraints, future market realities, your organization’s capabilities and such.  The trusted Cost-Benefit analysis can be used in this age of competition.  However, several cost-benefit scenarios will be needed for each idea, as your competition, or even government policies may change over time.

The beauty of this mindset is that any player can add value without relying on others.  If done right, they reap their own benefits.  I really like this approach in that it encourages individual entrepreneurship, without the need for any government plan or program.  Likewise, government or public departments can use this approach to significantly improve their own effectiveness.  If all players in an economy focus on adding value, the comparative advantage that Seychelles needs will emerge!

In a market where there is choice and competition, the most innovative players win.  In fact, some of these winners will outgrow their local market and be good enough to add value in a foreign market.  That is how successful exporters break through, and that is likely how Singapore became good at exporting!

Here are a few local players I saw adding value when I worked in Seychelles in the early 2000s:
  • Sharks Ice Cream, who noticed that beautiful, sunny islands need really great quality ice-cream
  • Zikann, who bottled one of our traditional drinks. The bottles did not look very appealing, but it filled a market need and ushered in many players we see today in this alcohol segment (note: though Coco D'Amour was also a player, it was not a traditionally Seychelles drink)
  • The Ernestines, who replaced imported and pre-rolled roofing sheets with locally rolled ones.  The 'local' product was of higher quality and also made  roofs more durable  with fewer seams
  • Nouvobanq, who challenged global players with telephone banking and cash machines - and they gained market share because of this
The concept of adding value was popularized by Harvard Business School's Michael Porter, and is one of the most pivotal strategies of many world-class companies.  There plenty of books and articles if you wish to explore this further, with well-proven and practical tools such as value analysis and value chains.

Seychelles' Value Adding challenge - Final Thoughts

I hope we've gone past thinking that Seychelles has a physical location advantage.  Unlike Singapore, free-ports never made sense here.  We have natural resources in the form of our beauty and fish.  In both cases however, we have failed to retain the major share of their benefits (e.g. not much Seychellois ownership in major hotels or industrial fishing, few vendors involved in their supply chains, etc).  The prospect of us finding another natural resource, such as oil, is always looming.  But, like Singapore's neighbours, that will not necessarily make our national piggy banks overflow. 

So, we are really left with trying, failing and trying again to find our comparative advantage.  Be visionary and look beyond the obvious, evaluate ideas holistically, don't be afraid to take calculated capital expenditure risks and our individual actions may result in a creatively entrepreneurial country that remains prosperous for the long run.

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  1. Singapore also benefits from a transparent & ethical legal and regulatory frameworks, highly educated workforce (roughly a third are migrants), strong adherence to the concepts of social cohesion and equality. It's also a model country in terms of respect for rule of law and low taxes to attract investment. These fundamental building blocks are often very difficult to emulate in their entirety.

    What would be interesting though is to hear your thoughts on how could Seychelles add value to the tourism industry for instance; where it competes with the likes of Mauritius, the Maldives and the Caribbean?

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    1. Thank you for the comment. I'm sure Singapore stumbled many times in putting your said building blocks together and my article kinda telling everyone to start somewhere (and risk stumbling a few times) and not to wait for the country's 'enabling environment', though that certainly helps. I love suggestions for future articles & discussion points - I will certainly share some thoughts on adding value in the competitive tourism industry in the near future.

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  2. Hi Kevin,
    Having lived in Singapore for the best part of 10 years now, I can vouch for its uncanny ability to keep reinventing itself. Success is part of the DNA of its people and the leaders are visionary. I agree with you that Seychelles is on the move and certainly Singapore is a beacon of excellence that we can aspire to become, not only on the economics front but also in other areas such as housing , heathcare and water security.

    Patrick G. Denousse

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    1. Thank you for your comment. Great to have thoughts from someone who observed Singapore 'from the ground'. I'm advocating not only TRYING to add value but also getting the right FORMULA for trying such changes (aka. "calculated risks"). A good example just occurred to me: If I recall correctly, despite Cable & Wireless' grasp on the Seychelles telecoms market back in the day, this multi-national was very slow in bringing the internet to Seychelles. It was fortunately a small group of visionary, local businessmen that took the initiative to start the first Internet Service Provide (ISP), Atlas - we need get good at taking such bold risks!

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