MAHE, Seychelles: Longevity is usually associated with wisdom. But looking around the world there is a curious correlation between regime longevity and black markets - and worse. Think of Cuba, Burma, North Korea, Libya … And yes, after its own languid fashion this creole paradise of islands in the Indian Ocean, the Seychelles.

Its president, France Albert René, has been in power since 1977, a durability surpassed only by Fidel Castro and Muammar el-Qaddafi (and Lee Kuan Yew for those who believe he remains the real power in Singapore). Back in the bad of old days of the 60's and 70's, contending with currency controls and exchange black market was the norm for travelers in much of the world. But liberalism has since flourished and so I had become forgetful of the black exchange arts when I landed here for the first time in 21 years. Barely had I swapped my dollars and Seychelles rupees at the airport bank than I was being approached by entrepreneurs offering almost double the official rate.

René's regime has changed many of its spots (and its flag, twice) since 1977 when, a year after the nation gained independence, this Paris-educated Marxist overthrew his elected predecessor and nationalized and socialized almost everything in sight. Over the years, René has learned some lessons and now encourages, up to a point, private investment. A 20-year boom in upmarket tourism, and fish from the nation's vast waters, paid for socialist welfare, education and health. There have also been commendable efforts to protect the Seychelles' natural wonders from depredation and pollution. His former one-party rule has given way to a democratic system, albeit an imperfect one.

But democracy and that sign of economic decay, the black market currency, could well put an end to René's rule in 2006 when the voters next get a chance to oust their dear leader, now 68. Last time, and despite obstacles, the opposition got 45 percent of the vote. Even without the big devaluation that most now regard as inevitable, prices, long steady, are rising and the economy is likely to contract by 5 percent this year. The current account deficit is around 18 percent of the gross domestic product and investment in hotels is unlikely while occupancy hovers around 50 percent.

In the short term, the problem has been caused by the same afflictions felt by tourism worldwide: SARS, war and recession. But tourism in the Seychelles, source of 70 percent of its foreign exchange, faces more fundamental problems. Beautiful and unique its islands may be, but it looks as though it has been pricing itself even out of the higher end of the tropical travel market. At the same time, it cannot aim for the lower levels and mass tourism without putting its diverse but fragile attractions at risk. No other country with such a small land area has so many natural wonders. But they are also costly to police and maintain for a population of just 80,000.

Income from fishing and fishing rights is static and the end of the cold war has meant there is little leverage for extracting aid and facility payments from big powers. The Seychelles might be able to diversify its business as its larger neighbor, Mauritius, has done. In theory there are lots of incentives. But this is still an economy which bears marks of René's Marxist past. The state sector accounts for half of employment, all businesses need a multitude of permits, non-Seychellois investment is limited and protection is high - including a self-defeating protection of the traffic rights of state-owned Air Seychelles. Agriculture, once the staple, barely exists any longer thanks to high costs and lack of encouragement.

This paradise has not exactly fallen on hard times. Per capita gross domestic product is a well distributed $7,500 a head (at the official exchange rate). Population pressure is a thing of the past as the birth rate has fallen to replacement levels. But that black market may be sign of a need for change, and a bell tolling for René.