interm strategy 2010-2011 This strategy the first for the World Bank in 17 years aims to generate a robust policy dialogue based on 'demand-driven' and core analytic work and to prepare a focused development policy lending strategy. The World Bank lending will be informed by this analytic work while following appropriate due diligence and carefully managing future debt default risks given Seychelles' past default track record with the World Bank. The report documents the challenges of development including: (i) re storing confidence in the rupee after the exchange rate liberalization; (ii) implementing a tight fiscal and monetary policy with good governance; (iii) supporting a debt workout that would put public debt back on a sustainable path; (iv) improving public sector efficiency to sustain social outcomes; and (v) replacing universal subsidies with a well-defined transparent and targeted social safety net.