Swedish Ambassador accredited to the Maldives, Lars-Olof Lindgren, has acknowledged that the Maldives’ 2011 graduation to the UN’s definition of a middle income country will affect its ability to seek financial development assistance.
Lindgren, who is based at Sweden’s embassy in New Delhi, observed during a brief meeting with local media yesterday that his own government “has very strict of GDP per-capita criteria and has decided to focus its aid elsewhere on least developed countries, particularly in Africa.”
The Maldives this year became one of only three countries to graduate from the UN’s definition of ‘Least Development’, since the introduction of the term. As a consequence, the Maldives loses access to both concessional credit, certain trade concessions, and some of the foreign aid upon which aspects of the country – such as civil society – have historically depended on for both skills and financial support.
A World Bank Economic Update Report released in November 2010 showed a per capita Gross Net Income (GNI) for the country of US$4090 for 2010, up from US$3690 in 2009.
“In one sense this graduation not been positive in this respect,” Lindgren said. “At the same time, certainly I think we have to look at other aspects of the Maldives – the fact the country taking first steps as a democratic country, steps towards getting the party system to work – that is one reason why the international community should support this – support not only government, but the whole society.”
There was also potential for countries such as Sweden with experience in high-tech renewable technology to work together with the Maldives on tackling climate change, Lindgren added.
Swedish involvement in the Maldives so far had been “not very impressive”, he admitted, “although Swedish companies do have investments in the country in things like logistics and domestic transport.”
“But I think we could do a lot more together on the environment, particularly with regards to renewable energy and energy efficiency. We have a lot of experience high technology, and a long tradition of doing these things with results. For example, we have done a lot to keep our homes warm using insulation – in the Maldives it is a matter of keeping the cold inside. There’s a lot to be gained by doing it efficiently.”
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I hope that we are able to translate this offer of assistance into tangible differences for the country and the people. Energy efficiency would significantly reduce the current burden on petrol, and green technologies for out city could revolutionize STELCO. However, we seem to be making very little head way on this front, even though it is our most prominent international issue.
Speaking of energy efficiency, what happened to the Gafaru project?
That would actually have brought a significant reduction in oil imports.
Maldives was promoted in LDC graduation because of its high GDP compared to an under developed country. This is due to the luxury tourism economy within the country. Now its another story that the ordinary maldivians do not get any benefit from this industrial earnings, which goes entirely into the pockets of its owners and politicians. Now the government is worried as the rich countries will reduce grants to Maldives becuase then they have to spend this tourism money to the people of the Maldives which they obviously wouldn't want to do. So they are thinking more ways of haunting the lives of ordinary maldivians who are living below poverty line. This introducing a whole of taxes. Yes, maldivians have to pay some amount of money from their salaries and earnings every month to the government. These taxes won't spare anyone from labourers, clerks,secretaries and to staffs at enterprenuers. Everyone has to pay. But the question is do we have to pay taxes when we are all so poor and do not already have the basic neccessities of life? The government is trying to make the people pay for the mistakes they have done and for the benefit of the pockets of corrupt politicians and greedy businessmen in this country. These taxes will destroy the lives of already crippled ordinary maldivians. The rich countries who have these taxes took decades to introduce these taxes in their countries after they had democracy. So why are we trying to walk when we cannot even crawl at the moment. Isn'tit too fast to take such a bold step in the name of economy and development. What we need to know right now is giving us basic commodities of life: Free health care service in this country, lower the cost of living, improve the value of rufiya, increase dollar floating, reduce the illegal immigrants here, imrove fair justice system, increase the security of the country, make it peaceful for our public, find out the corrupt people within the government and civil service area andmake them stand for their actions, decrease government spending on politicians nd their unnecessary trips, improve sanitation conditions for our people, imporve our social values, fight against crime and injustice etc etc... I don't think any maldivian be it youth or opposition will protest against thecurrent government if they take these points on their agenda table and work on them. But the current president seems to be more busy in trying to be the champion of the world than allaying the concerns of the ordinary maldivians.
Ziyan- In short you want the great life, just short of being in heaven drinking from the milkshake fountain, all provided for by the government.
And of course no taxation to pay for them.
@Ziyan
"Now the government is worried as the rich countries will reduce grants to Maldives becuase then they have to spend this tourism money to the people of the Maldives which they obviously wouldn’t want to do."
Let's look at this point. I am speaking from a non-partisan position. I don't think this is true of the current Maldivian government. It may have been true in the past. I see a lot of dedicated minds who genuinely want to improve our lot.
You just cannot impose hefty taxes on the tourism industry. We must remember that most of these are foreign investments and previous regimes have baited them here with very low taxes and almost no form of labour regulations to speak of.
The current government must be careful in a gradual introduction of taxation in this area such as the TGST. It cannot afford to alienate these big businesses. This is not due a lack of willingness of our government. This is true of even the richest governments of the world. Its a fine balancing act in trying to encourage investment and getting our fare share of the revenue they generate.
"Yes, maldivians have to pay some amount of money from their salaries and earnings every month to the government. These taxes won’t spare anyone from labourers, clerks,secretaries and to staffs at enterprenuers."
This is absolute rubbish. Can you give an example of a single country that does this? What evidence do you have to indicate that the present government intends to do this? They can't do it, and won't do it as it will be political suicide; aside from the fact that it doesn't make any economic sense either.
Tax systems are designed to be fair. Those who can afford to pay more will have to pay more, while those who are on the lower end of the earnings scale will pay nothing. You simply cannot charge the same rate of tax from the multi-millionaire property owners of Male and the fishermen folk in the outer islands. Don't go around scaremongering with baseless rubbish!
"What we need to know right now is giving us basic commodities of life: Free health care service in this country, lower the cost of living, improve the value of rufiya, increase dollar floating..."
How exactly do you envisage any government to fund this? Does God hand out dollars every Friday or something? Let's take free health care. We have a population of roughly 400,000. We will need to spend an absolute minimum of $1000.0 per head and that comes to $400 million! That's just on free health care alone without any of your other demands. If you know of a way to fund this, then please let everyone know. We all want these things cheaper, if not free, just like you.
@Ahmed bin addu:
UK, Italy, France, Germany, Spain, USA, Portugal, Belgium, Switzerland, Austria, Ireland, Iceland, Poland, Czech Rep, Slovakia, Croatia, Greece, Cyprus, Turkey... they all have a tax system where they don't spare anyone. But these countries took decades to achieve such a system. I think Maldives is just not ready to jump into such a big move. We don't have access to basic necessities of life while the politicians in this country are living lives of kings and queens. Our tourism industry is giving out government enough income, the government can provide our people with these basic necessities of life from the tourism money. But the problem here is the government doesn't want to as they want to keep that money for themselves. And not to forget the millions of foreign aid which also provides more benefit again to the government officials than the ordinary poor maldivians. Dollar has never fallen into Maldives in the form of rain, but what I know is that we have never fallen into such a poor state until Anni took over the office of presidency in the name of presidency. So you can guess by yourself why the tax issue has come on now....!!!!