Economic Transformation Strategy

66 CHAPTER 2 / BROAD STRATEGY FOR DEVELOPMENT Growth has been factor-driven through high investment and, increasingly, imported labour, with only moderate increases in overall productivity. If this continues, maintaining current growth rates will require ever-increasing resources. There- fore, there is a need to shift to a more productivity-led growth model. Seychelles is now a high-income economy, and for these economies, long-run growth is based on productivity gains and increased diversification. Moreover, Seychelles exports few products - mainly canned tuna - and its service exports are relatively large for a small island state due to the economy's dependence on tourism. The main area for prioritisation for this first NDS will be to ramp up our import substitution strategy. Over the past few years, tourism numbers have boomed, due mainly to Seychelles tapping into new markets and rising airline connectivity. The figure below illustrates the status of Seychelles on the global export market. SEYCHELLES HAS ONE OF THE MOST CONCENTRATED GOODS EXPORT BASKETS... Source: UN COMTRADE data Square root of HHI 0.8 0.6 0.4 0.2 0 18 23 28 33 In GDP (current US$) Non-small states Small states Seychelles

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