"Things are going well and we have been able to progress," Michel was quoted as saying by the Seychelles Nation news service as he reflected on his first year in office since being elected last year. "The level of growth has come up to 5.3%, which shows an increase of 1.2% from the previous year, and I feel this is considerable progress since we restarted our economy, and we expect that this year our growth will be 7.5%,” he said.

He contined: “During the first six months of this year we have seen an increase of 3% in the level of foreign exchange coming into the country, together with the boom in construction and what is happening the demand for foreign exchange has increased so if the inflows have increased it is not that visible due to the high demand but all these will be resolved once we are able to bring in enough foreign exchange and I feel soon enough we will be able to do that."

Michel said that around US$100 million in foreign exchange has flowed into the Seychelles this year and the country’s reserves at the end of June were USD110 million, a 16% increase on 2006. He predicted that reserves will continue to rise as the Seychelles economy grows.

The President also observed that there has been a greater involvement of the private sector in the economy, particularly from locally-based investors.

Michel has been President since 2004 after France Albert Rene, who had ruled the Seychelles for almost 30 years, stepped down, but won his first election in July last year. In his manifesto he pledged to raise the international profile of the Seychelles to help bring in more foreign investment and increase living standards for the local populace by, among other policies, increasing the country's profile as a unique tourist destination and expanding the double taxation treaty network.

The manifesto also pledged to establish a simple tax structure which generates income for the government "in a responsible manner," protect local production "where needed," and implement a tax system that "provides an equal footing for all operators."

In March 2007, Michel said that the government would seek to expand the offshore business sector with new products, and would seek to boost foreign investment with further liberalisation of foreign exchange controls. In his State of the Nation address that month, Michel talked of introducing mutual fund legislation, special license companies, a stock exchange and new products and services in the insurance sector.

The government has also attempted to promote investment in the onshore business environment with a new law that exempts payment of business tax on the first SR250,000 (US$41,000) of profits for all companies, which became effective on January 1, 2007.

The Seychelles government has also cleared a substantial amount of its arrears with the African Development Bank, World Bank, European Investment Bank and with Paris Club Creditors with a US$200 million bond, launched last year.