By CultureBanx Team
- 10% of the working population in Seychelles are addicted to heroin
- Seychelles created the world’s first blue bond for ocean projects
There is a drug problem unfolding on the tiny African island nation of Seychelles, putting its ability to pay back the money raised from their unique blue bond into question. Even though they were the first country to sell debt earmarked specifically for ocean projects, nearly 10% of the working population is addicted to heroin, meaning per capita, Seychelles suffers from the highest rate of heroin abuse in the world. If debt instruments curated for small islands are vital to their economic success, can Seychelles reign in its heroin epidemic to payback the discounted borrowed money?
Why This Matters: Unfortunately, with 5,000 to 6,000 people out of the country’s total population of 94,000 on drugs and not working, according to the government, and this is why their “Blue Economy” has a major problem. Heroin is being smuggled into the country through East Africa and since there are 115 islands, it makes the borders hard to monitor and easy for drugs to come into the country. Proceeds from the blue bond were to be used to expand its protected marine areas, invest in fisheries and offer grants and loans to ocean-related industries, all of those things may have to be put on hold until the drug crisis is fixed.
With 5K to 6K people out of the country’s total population of 94K on drugs and not working, this is why their “Blue Economy” has a major problem
Here’s a little background on how Seychelles blue bond works: It’s backed by a $5 million guarantee from the World Bank, along with a $5 million concessionary loan from the Global Environment Facility and investors will receive a 6.5% annual interest rate. This blue bond is modeled on the green- labelled debt which was pioneered by the World Bank and first emerged a decade ago and has since grown into a $150 billion a year market.
Unlike the U.S. during the crack epidemic in the 80s, government officials in Seychelles are not attempting a “war on drugs” that would turn many citizens into criminals. The imprisonment rate of African Americans for drug charges is almost 6 times that of whites, and they represent 33% of those incarcerated in state facilities for drug offenses, according to the NAACP. Instead, Seychelles introduced a drug policy similar to one found in Portugal that categorizes drug addiction as a chronic disease in need of treatment.
Situational Awareness: Due to the rollout of the two rehabilitation programs, the price of heroin in Seychelles has recently fallen. A line of the drug used to cost around $73 but now it can be bought for around $2.20, according to government officials. For now, Seychelles seems to be tackling the problem head on, and it needs to in order to fulfill their economic goals and meet the country’s debt obligations. These efforts have the ability to spur their “Blue Economy” and will be vital for Seychelles to remain on its economic trajectory.
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