Month: July 2011

Out on a wing: Mega bets on Chinese market

The shifting demographics of the Maldives tourism industry presents new challenges – and a great many opportunities – for the country to grow as a destination, says CEO of new Maldivian flag carrier Mega Maldives, George Weinmann, during a ceremony in Male’ this week to mark the airline’s launch of direct flights to Shanghai and Beijing.

Since its maiden flight between Gan and Hong Kong early this year, Mega has focused on the country’s booming Chinese market. Chinese visitors last year showed the highest number of arrivals over more established markets, and were widely credited with insulating the Maldives from the effects of the economic recession afflicting the UK and Europe.

Weinmann emphasises that “while the Chinese market is now the number one market for the Maldives, is still not a mature market.”

“The agents in China don’t know the Maldives as well as the European agents who have been coming here for 30 years,” he explains. “The new agents are often asking us for help finding hotel rooms, and negotiate with the hotels – it’s not really our job, we’re an airline and there’s plenty of travel agencies on both sides – but oftentimes they aren’t connected. There have been incidents in the past where certain agents get very excited and think they can just fly their guests here, only to find there are no hotel rooms for their guests.”

Without intending to become a travel agency, the airline had found itself becoming an intermediary between the Chinese tour operators and resorts, he says, many of which are still getting to grips with the unique demands of the new market.

“We talk to resorts that are suffering with occupancy, perhaps 30-40 percent,” says Mega’s Marketing Director Ali Faiz, “and see how we can help each other. We also meet with resorts that are popular with the Chinese market and offer our jet to help them sell the Maldives.”

Whereas European guests tend to stay up to two weeks at resorts, the current trip pattern for Chinese visitors is very short – “four nights, five days,” says Weinmann.

“They are much more activity focused – a little less sun and sea, a little more doing things on a boat,” he says. “Like every other market they are very food conscious – but the type of food they are looking for is different, which for instance affects how we cater for inflight meals –  although everyone likes ice-cream,” he adds.

Moreover, “as someone who has lived in China for seven years – they are huge spenders. The Chinese love to buy things. One complaint they may have with the Maldives is that there is not enough stuff to buy – they come here often with large wads of money and then go home with it. That’s an opportunity for local businessmen.”

The market is also rather risk adverse, which the fledgling airline found to its detriment in May when Hong Kong authorities issued a travel warning for the Maldives, triggered by excitable global media coverage of opposition-led protests in Male’.

“That was a near tragedy for us. We almost didn’t survive that period,” Weinmann acknowledges. “It came at the same time as changes on our side with pricing, and we almost lost the entire month of May because people who had been intending to go to the Maldives but hadn’t yet bought their tickets decided not to go.

“There was very low additional sales in May. Those people who had already bought their tickets – who had spent hundreds of dollars on rooms – couldn’t get that money back so they came anyway, and of course there were no problems. But when a warning like that goes out, anybody who has the discretion to choose not to buy, to choose somewhere else or postpone their trip, will do so. It doesn’t matter if it’s a yellow, red or black warning – it’s a huge hit. Just ask people in Thailand about what they experienced during their local turmoil. It is a roller-coaster ride in terms of bookings.”

Mega worked with resorts and the government to try and reassure visitors that the protests were limited to a few streets of the capital city – which few visitors to the country even set foot on.

“Recovery takes time,” Weinmann says. “When the incidents are over, then you have to go out and educate the market and tell all the travel agents what is going on. For a market like China that is growing as fast as it is, they do have other choices, and they are not as comfortable with the Maldives as the European market, which sees such incidents as a small bump in road.”

“We did obviously recover,” he adds, “because we launched Beijing-Shanghai a couple of months later, and that’s been very successful.”

Mega subsequently decided to introduce free cancellation insurance for every ticket, covering the first night of accommodation in the event of a delayed flight, which Weinmann explains was a way of offsetting the non-negotiable cancellation policies of many resorts in the Maldives.

“It’s one of the biggest issues in the Asian market right now,” he said. “We are competing against other Asian markets such as Bali and Thailand, and other island destinations such as Guam that are developing very fast, and in many of these countries hotels don’t have the kind of cancellation policies that exist in the Maldives. It makes it more risky for tour operators to sell the Maldives – we’re trying to eliminate that risk.”

Weinmann believes the Maldives also has room to grow existing markets, and said Mega hoped to launch flights to so-called ‘tier 2’ cities and stimulate growth in places such as Eastern Europe.

Korea also has more potential, he explained, noting that Mega would introduce a flight to Seoul in September.

“There are current five wide-body aircraft flying between Korea and Hawaii every day. That’s a nine hour flight, and the Maldives is probably a little cheaper.”

India, on the Maldives’ doorstep, was exactly two years behind China he predicts.

“But it’s a challenge that regulations prevent a Maldivian carrier flying more than 200 seats to Mumbai or Delhi. We have 250 seats, and we’d like to change that.”

Cargo imports are another growth opportunity, Weinmann says, announcing 15 discounted tickets to kickstart a trade delegation of Maldivian traders and businessmen to find opportunities in China.

“Right now all the cargo coming into the Maldives goes through Sri Lanka, Singapore or Dubai,” he explains. “Not much is produced in these locations, it’s all coming from somewhere else – a lot of it from China. We want to increase direct imports from China which should mean less cost and cheaper prices, as there will be less middlemen involved.”

Meanwhile, the airline has begun recruiting more Maldivian cabin crew, in addition to the two classes already through, and is currently training six Maldivian pilots and soon, engineering cadets. Weinmann predicts the company will employ over 100 Maldivian staff by the end of the year.

“We not doing this just because we want to, but because it’s the right thing for the airline. We think Maldives aviation can grow a lot further,” he says.

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President unveils Rf360m programme to guide 8,500 Maldivians into skilled employment

President Mohamed Nasheed unveiled a massive Rf360 million (US$23 million) national programme today with an ambitious target of training 8,500 Maldivians for skilled employment.

In his address to the nation on Independence Day, President Nasheed explained that the programme would involve the creation of a training framework, raising awareness of job opportunities, offering assistance for job seekers and strengthening capacity for enforcing the Employment Act.

“Under the national programme devised by the government to lead skilled Maldivian workers to the job market, Maldivians who are urgently needed for the domestic labour market will be trained,” he said. “God willing, 6,977 Maldivians trained for the construction industry as welders, masons, electricians and other [specialities] will enter the job market.”

Meanwhile 3,800 people are to be trained as “chefs, waiters, housekeepers, diving instructors” and for other specialised jobs in the tourism industry.

“In addition, God willing we will create 450 entirely new jobs for Maldivians in the social sector as nurses, pharmacists, seamstresses and sport instructors,” he said. “860 Maldivians in fisheries and agriculture and 400 for other fields such as accounting will be put to work.”

Of the 8,500 new workers the government hopes to guide to skilled employment, 3,940 will be trained directly by their would be employers, 3,795 by government training centres, and 760 in overseas training programmes.

“The purpose of this is to familiarise youth with the work environment and create interest among them,” he said. “Also to connect the youth in training with employers and provide training in the fullest sense in as short a period as possible.”

President Nasheed revealed that 27 percent of the Maldivian workforce – composed of 205,000 working age adults – was unemployed.

“As things stand, 1,600 local companies and 2,000 individuals employ and cover expenses for over 70,000 expatriates,” he said. “Half of these expatriates are trained and skilled in some field or other.”

In the past ten years, said Nasheed, employment of foreign workers by Maldivians has increased threefold. Imported workers now constitute a third of the country’s 350,000 population, while trafficking labourers is estimated to be a US$123 million industry.

Wayward youth

With the prevailing high unemployment rate among youth, Nasheed continued, large numbers of young Maldivians who were neither seeking higher education nor acquiring new skills were financially dependent on their families or parents.

In 2010, the O’ Level examinations pass rate in the Maldives was 35 percent, up from 27 percent in 2008, which leaves 65 percent of school leavers aged 16 to 18 with limited opportunities for either higher education or employment.

Nasheed meanwhile went on to say that leaving a large number of the country’s youth “in the darkness of the jail cell with their lives destroyed” was an obstacle to national development.

President Nasheed also announced that close to 400 youth currently serving sentences would be given “a second chance” and released from prison.

He explained that in classifying the 400 convicts to be freed, priority was given to inmates with serious illnesses and those who could pursue higher education or be trained to acquire new skills.

400 inmates represent almost half the Maafushi prison population in 2009.

“For those who meet the conditions, a rehabilitation programme will be established for those who will be rejoining society under the second chance,” Nasheed said. “The basic purpose of this programme is to train them, find job opportunities for them and to ensure that they become people who are beneficial to their families.”

Nasheed said that the government had considered the possible danger to society of releasing people convicted of offences ranging from drug abuse, theft and assault: “We have learned a lot from past experiences,” he said.

Convicts released through the programme will immediately be returned to jail if they are arrested for any offence in a three-year period, Nasheed added, after which their chances of parole or eligibility for clemency would be “narrowed.”

“Our vision for national development has been drawn after crunching all the numbers, after formulating policies and determining its parameters,” he said.

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Human trafficking worth US$123 million, authorities estimate

An ongoing police investigation into labour trafficking in the Maldives has uncovered an industry worth an estimated US$123 million, eclipsing fishing (US$46 million in 2007) as the second greatest contributor of foreign currency to the Maldivian economy after tourism.

The authorities’ findings echo those first raised by former Bangladeshi High Commissioner Dr Selina Mohsin, reported by Minivan News in August last year, and which saw the country placed on the US State Department’s Tier 2 watchlist for human trafficking.

However prior to the current investigation, ordered by President Mohamed Nasheed and which involved the military taking over immigration and human resources duties for a two week period, few facts were known about the Maldivian side of the operation.

“People have been creating fraudulent companies and using them to apply for fraudulent work permit quotas, and then diverting these quotas to keep bringing in illegal workers,” said President Nasheed’s Spokesperson, Mohamed Zuhair.

“A would-be worker [overseas] pays money and ends up here on fraudulent papers obtained by a bogus agent, from quotas at a non-existent company,” Zuhair said. “Sometimes they are expected to work for 3-4 years to make the payment – workers have told police that this is often as much as US$2000.”

Authorities currently estimated the industry to be worth US$123 million a year, he said.

Police Sub-Inspector Ahmed Shiyam told Minivan News that many illegal workers identified by police through the investigation – the majority from Bangladesh – had sold their land, their property and moved their families to pay the fees demanded by the bogus recruiters.

When they arrive they find the job a totally different prospect from what they were led to expect, he said.

“Sometimes there is no job and they are released straight onto the street. We found some people who had paid before coming – they arrived at the airport and nobody came to pick them up,” said Shiyam. ”The case is very serious – this is not the way things should be, and it has been going on for a long time.”

Zuhair said that in some cases workers brought to the Maldives were themselves recruited to help enlist others from their country – in addition to seven Maldivians, 12 expatriates have been arrested during the case so far.

Paper companies and ministerial corruption

The expansive investigation has seen 18 ‘paper companies’ raided by the police commercial crime unit, headed by Inspector Mohamed Riyaz, who revealed to the media last week that police had seized 4000 passports confiscated from trafficked workers.

Two of the seven bogus companies identified as trafficking workers, Ozone Investments Pvt Ltd and Arisco Maldives Pvt Ltd, had brought in 3000 workers between them.

Using the fake companies, the traffickers fraudulently obtained work permit quotas for non-existent projects from the Human Resources Ministry by stealing the identities of unwitting Maldivians, or even the deceased. Police had received many complaints about such forgeries from the confused third party, Riyaz told the media.

Moreover, many of the quotas requested from the Human Resources Ministry had been approved despite obvious warning signs such as the importing of construction workers for specialised IT projects, Riyaz said.

Zuhair told Minivan News that while he was unable to “point fingers” as the investigation was ongoing, the current findings implicated senior officials in both the Immigration Department and the Ministry of Human Resources.

In addition, the persistent use of fraudulent companies implied further scrutiny of the Ministry of Trade was required, Zuhair said.

Trade Minister Mahmoud Razee confirmed to Minivan News that the Ministry was providing information to police as requested. Establishing a company in the Maldives carried few requirements under existing laws, he explained, “and even before this we have been proposing amendments to company law to require additional clearances for directors, based on their records.”

Even for those individuals found guilty of the crime labour trafficking presently represents a violation of the Employment Act, and only carries a small fine.

Zuhair said punishment was a matter for the judiciary “and I’m confident justice will be done”. However he acknowledged that the greatest impact would come from exposing those involved: “The people involved will be named and shamed,” he pledged, which would limit their capacity for further fraud or criminal enterprise and hopefully ward off further victims.

The investigation was ordered by the President, he noted, as the Immigration Department and the Human Resources Ministry “were each accusing the other for the problem. The government has stepped in as a neutral party to conduct a holistic investigation, without incrimination.”

He said the government would need to “seek assistance” to deport the large numbers of illegal workers the investigation was likely to uncover.

“The origin countries also have a responsibility to repatriate their nationals,” he said.

Minivan News asked Zuhair why the government had only acted after several years of accusations that labor trafficking was prolific in the country – the US State Department recently renewed the Maldives’ position on the trafficking watch list for the second year running.

“The accusations have been apparent for the last few years, but the extent to which the situation has developed, and the lines between system error, human error and intentional fraud have been unclear. It has now become clearer,” he said.

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Cabinet to discuss request to rename Thinadhoo next week

The cabinet will discuss a request by the council of Thinadhoo in Gaaf Dhaal Atoll to rename the island ‘Havaru Thinadhoo’ at its meeting next week, Press Secretary Mohamed Zuhair confirmed today.

Zuhair said that legal advice has been sought following the request and that the cabinet will make a decision at its next meeting on Tuesday, August 3.

Speaking to Minivan News today, Thinadhoo Council Chair Ahmed Naseer said that the council sent a letter requesting the name change to President Mohamed Nasheed because “a lot of citizens asked it of us.”

“For hundreds of years the island was called Havaru Thinadhoo,” he explained. “And when the name was changed by former President Maumoon [Abdul Gayoom] in 1979, no reason was given for that decision and it was not requested by the people of Thinadhoo, either.”

Contrary to popular belief, said Naseer, Thinadhoo did not earn the title ‘Havaru’ for its its part in the short-lived secession of three southern atolls and subsequent depopulation by Prime Minister Ibrahim Nasir on February 4, 1962.

The term ‘Havaru’ originally referred to the six divisions or companies of the public of Male’, which functioned as militia or army units. The word has since earned the connotation of ‘mob.’

In the late 16th century, Sultan Mohamed Thakurufaanu sent the six militias or the ‘Havaru’ to recapture Thinadhoo upon learning that the islanders had re-converted to Buddhism.

Following their victory, the island was endowed to the six companies, which continued to exact an annual tax from islanders until the practice was abolished by Ibrahim Nasir when he became Prime Minister.

Thinadhoo MP Mohamed Gasam of the ruling Maldivian Democratic Party (MDP) meanwhile suggested that the “best way to decide the name change” would be through a public referendum.

“Some people in Thinadhoo want the name to be changed but others want it to stay the same,” he said. “There is some disagreement about this. We should find out what the people want.”

Councillor Naseer said that he had “no problem” with a referendum, but suggested that an election would be a costly affair.

“I think that even if there is an election [the name change proposition] is very likely to get passed,” said Naseer, who is also a member of the ruling party.

In the local council elections in February, the MDP made a clean sweep of the seven-seat Thinadhoo council.

Ibrahim Nasir International Airport

Thinadhoo Council Chair Naseer however insisted that the council’s request had “no connection whatsoever” to the announcement last week that the Male’ International Airport would be renamed ‘Ibrahim Nasir International Airport’ on Independence Day (July 26) in honour of the former President.

“We had been thinking about sending the letter [requesting the name change] for some time now, long before that announcement” he said, adding that the timing of the council’s letter was a “coincidence.”

MP Gasam meanwhile suggested that the council might have made the request last week as Independence Day would be an auspicious date for the change.

Naseer stressed that the letter to President Nasheed only sought legal advice as well as his opinion: “We would have no problem if the cabinet decided that changing the name would not be the right thing to do,” he said.

Asked about the renaming of the airport due to take place tomorrow, Naseer speculated that “no one who is from Thinadhoo” would support the change as the former President had ordered the “brutal destruction of the island” in 1962.

Meanwhile as the country prepares to celebrate its 46th Independence Day tomorrow – secured by Nasir on July 26, 1965 – local media reports that the former President’s eldest son, Ahmed Nasir, filed a case at the Supreme Court yesterday, appealing a High Court ruling in 1986 to confiscate the property and estates of his father.

The High Court at the time found that Nasir had misappropriated state funds and decided that his property and estates could be sold by the state to recoup the allegedly stolen money.

After resigning in 1978, Nasir moved to Singapore, where he passed away on November 22, 2008, just weeks after his successor Maumoon Abdul Gayoom was ousted in the country’s first multi-party election.

Nasir’s lawyer, “Gnaviyani” Ali Shareef Ibrahim, told Sun Online yesterday that neither the judicial system under Gayoom nor the prevailing political environment 25 years ago made such an appeal possible.

Under the old constitution, which did not feature separation of powers or independent institutions, the President was both head of state and supreme authority on justice, with the power to overrule verdicts and dismiss judges.

The Supreme Court of the Maldives was established in September 2008 following ratification of the new constitution on August 7, 2008.

Shareef explained that Nasir was sentenced in absentia while angry mobs, including school children, were protesting on the streets.

The Nasir family lawyer also alleged in comments made to newspaper Haveeru today that the new administration of Maumoon Abdul Gayoom began selling Nasir’s property before the High Court verdict on January 30, 1986.

“[Proceeds of the sales] were deposited at Nasir’s SBI [State Bank of India] account, which was frozen by the government,” he said. “When the verdict was delivered, they took all the money out.”

Shareef revealed that the appeal was lodged at the Supreme Court in May as regulations gave the highest court of appeal the discretion to hear such cases in spite of the length of time between the original verdict and the appeal.

The elderly lawyer claimed that the previous administration vilified Nasir by “spreading lies to make him out to be an enemy of the country, a mercenary, a corrupt person.”

“The state media was constantly mocking President Nasir and showing all sorts of cartoons of him,” he said. “[Nasir] did not return at the time because he feared for his life.”

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Maldives to celebrate Independence Day

The Maldives celebrates the 46th anniversary of the country’s independence from Britain tomorrow, July 26.

At 6:30am a special flag hoisting ceremony at the Republic Square is scheduled to start the events of the day.

At 10:00am a special ceremony is to be held Dharubaaruge where the President will award National Exemplary Service Medals and National Service Medals in recognition of recipients who made important contributions to the state and the people of the Maldives.

The President has decided to award the National Exemplary Service Medal to eight individuals and the National Service Medal to six people, according to the President’s Office.

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Taxing property is “haram” in Islam, claims Salaf NGO

Religious NGO Jamiyyathul Salaf has claimed that imposing taxes on a Muslim’s property without his or her consent is haram (forbidden) in Islam.

“Without doubt, using a person’s property or profiting from the property without the consent of the owner is haram in Islam,” the NGO said today in a press release. “Only the compulsory Zakat (alms for the poor) portion can be taxed from a Muslim’s property.”

Salaf cited Surah 2:188: “And do not consume one another’s wealth unjustly or send it [in bribery] to the rulers in order that [they might aid] you [to] consume a portion of the wealth of the people in sin, while you know [it is unlawful].’’

In addition, the Salaf press statement referred to Prophet Mohamed’s (pbuh) final sermon, in which he said, “O People, just as you regard this month, this day, this city as Sacred, so regard the life and property of every Muslim as a sacred trust.  Return the goods entrusted to you to their rightful owners.”

Salaf noted that Islam protected personal property “to an extent that is not found in any other religion.”

The religious NGO contended that “formulating a law and taking people’s property whatever name it is done under is for a certainty haram.”

“Jamiyyathul Salaf would remind the Speaker of Parliament and all MPs that those who formulate such laws and those who assist them will without a doubt have to bear responsibility before Almighty Allah,” the Salaf statement warned.

It adds that there is consensus in the Islamic ummah (community) that “stealing property by compulsion with laws on taxes, duties and pension imposed on a Muslim’s property is definitely haram.”

Salaf warned that those who claimed personal property “for entertainment or as a sport” would face their old age with “no one to care for them.”

If the state believed that there was no other way to manage its finances but to “take taxes and duties from the halal income of Muslim citizens,” Salaf said that it implied “corruption and a failed economic policy” and was the sign of “a philosophy of enslavement.”

Press Secretary for the President Mohamed Zuhair observed that there were many civilised Muslim nations that had introduced direct taxation as well as import duties.

“Salaf should refer to the parliament on this issue, because the parliament cannot make any law against the tenets of Islam,” Zuhair suggested. “I believe that parliamentarians will keep to the tenets of Islam in drafting any law.”

Zuhair added that as Islam was the most modern of the three monotheistic religions, he did not believe taxation could be haram.

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Alidhoo Resort sacks 12 staff members following strike over unpaid salaries

The Tourism Employees Association of Maldives (TEAM) has condemned a decision made by Alidhoo Resort to sack 12 staff members following a strike over unpaid salaries held last week.

On Thursday July 21 Maldivian staff working at the resort in Haa Alifu Atoll declared themselves on strike claiming that the management of the resort had not paid them salary for the previous month.

“It is almost the end of this month and Ramadan is coming up – we have to send money to our families back on the islands and we are really broke,” a staff member working in the resort told Minivan News at the time.

He claimed allowances of the staffs working in the resort had not been paid for the last three months, including service charge and overtime. He further claimed that expatriates working on the island had not received their salaries for three months, but feared for their jobs if they joined the strike action.

The management first told staff that the payments were delayed because the chairman of the company was not in the Maldives, he claimed.

“When he came back, they said the banks were not giving money to the resorts – how can we believe them now?” the staff member said.

The resort’s management dismissed 12 employees following the strike.

Alidhoo’s Human Resources Manager Ali Naseer told Minivan News that he did not have any information that a strike was conducted on the island.

“Many staffs have been dismissed over different issues, issues perhaps concerning their performance,” he said.

Vice President of TEAM, Mauroof Zakir, said the worker’s organisation condemned the management’s decision.

“On many occasions in many tourist resorts, staff have been dismissed after they strike for their rights,” Mauroof said.

He said he had information that police arrived on Alidhoo resort at midnight on the day of the strike, and escorted the dismissed members of staff off the island.

“We will hold a meeting very soon following this incident,” Mauroof said.

Alidhoo Resort is operated by the Maldivian company Yachttours, owned by local businessman Abdulla Jabir who is currently running as a candidate for Chairperson of the ruling Maldivian Democratic Party (MDP).

Minivan News contacted Jabir for comment but was told “don’t ever call me about this again.”

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Civil Court rules banning private vehicles for uncertified roadworthiness is illegal

The Civil Court ruled last week that only vehicles used at construction sites and for public transport could be banned from use by the Maldives Transport Authority for expired or uncertified roadworthiness.

The judgment was delivered in a case filed by lawyer Idhuham Muiz contesting the legality of the Maldives Transport Authority – under the remit of the Transport Ministry – banning privately-owned vehicles for not being certified for roadworthiness within a set period after registration or expiration.

Muiz argued that the transport authority’s actions violated the Land Vehicles Act of 2009, which specified that banning vehicles for failing to meet driving safety standards applied only to those used at construction sites and for public transport.

“As these purposes are expressed in the law, use of registered or newly registered vehicles with roadworthiness either expired or uncertified within the period set by the [transport authority] could only be banned for these two purposes,” the Civil Court judgment reads.

Judge Mariyam Nihiyath ruled that owners of vehicles banned by the authority should be compensated.

Former Attorney General Husnu Suood meanwhile told Sun Online that police could no longer fine owners for driving vehicles with uncertified roadworthiness.

Moreover, individuals on whom the now-illegal fines were imposed could sue for compensation.

Owners found to be driving vehicles with either expired or no roadworthiness certificates are fined and have their licenses withheld by police.

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Z-DRP launch blood donation drive

The opposition Dhivehi Rayyithunge Party’s (DRP) Zaeem-faction launched a blood donation drive dubbed “DRP’s blue blood for the nation” yesterday as part of celebratory activities to mark the party’s sixth anniversary.

The Z-faction’s spokesperson Mohamed “Mundhu” Hussein Shareef told newspaper Haveeru that a large number of people, including politicians and MPs, have participated in the programme.

The programme was undertaken by the party’s Youth Wing, led by Gassan Maumoon, in collaboration with the Maldives Blood Transfusion Service (MBTS) and is taking place at the NGO’s office building.

Mundhu added that over 200 people had registered to participate so far.

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