Expatriate resort workers have expressed confusion over new regulations restricting monthly remittances to 100 percent of workers’ salaries, which they fear may may leave them unable to take supplementary income, such as tips and service charges, out of the country.
The government has said the decision, published in mid-May in the government gazette, was intended to reduce the amount of money sent overseas by those working in the country illegally, either without a work permit or by taking jobs ‘on the side’.
Workers exceeding the limit, and organisations providing the transfer facility, would face a fine.
However, in many of the country’s resorts, service charges and ‘unofficial’ tips can amount to up to 70 percent of a worker’s total income.
“If the transfers are limited to salaries then the tips and service charges will be considered illegal money,” one foreign worker, a guest relations officer (GRO), told Minivan News. “For me that is 75 percent of my income.”
The GRO added that due to the isolation of some resort properties, workers would be unable to reach a bank every month to send their income home.
“There is one ferry a week [to an island with a bank], but not my home branch. To go to Male’ the flight costs US$200 – I can’t transfer money every month, and I can’t spend all my money in the Maldives,” she said.
A lack of information outside local media reports in Dhivehi meant that many foreign staff were in the dark over the pending changes.
“Nobody is sure what is going on. This [lack of confidence] may encourage people to take their money out of the system altogether,” she predicted.
Several foreign workers Minivan News spoke to at a hotel near Male’ also expressed confusion and frustration over what they feared could be a financial impracticality to continuing to work in the Maldives. They noted that the hotel was to begin paying all staff in rufiya, following the Maldives Monetary Authority (MMA)’s recent announcement that it would enforce transactions in the country’s legal tender.
Minivan News contacted a range of authorities dealing with monetary policy, but was unable to get a clear indication of what the regulations would mean for foreign workers.
State Minister for Finance Ahmed Assad and Minister for Economic Development Mahmoud Razee both said they were not in a position to clarify the matter and referred Minivan News to the MMA.
Assad suggested that while the Ministry published official notices in Dhivehi, employers had a duty to keep their foreign employees informed of the implications of any changes to policy.
Assistant Manager of the MMA’s Monetary Policy and Research Division, Ibrahim Ameer, told Minivan News that he understood the regulations were currently pending with the Ministry of Human Resources and that income from resort workers would be taken into consideration, however he noted claims in media reports on the regulation that only basic salaries could be remitted.
A spokesperson for the Ministry of Human Resources meanwhile referred Minivan News to Deputy Minister Hussain Ismail, who was not responding at time of press.
Head of the Tourism Employee Association of the Maldives (TEAM) and Maldivian Democratic Party (MDP) MP Ahmed Easa told Minivan News that the organisation had met with the MMA when the regulations were being drafted and that he understood workers would be able to send their full incomes overseas on presentation of their work visa to the bank.
“The idea is to stop illegal workers from remitting money,” he said. “I think it is tied to income rather than salary, as long as the proper documents are provided. It should not be a problem so long as workers have a work permit. That’s what I have been told, and I haven’t received any complaints yet.”
However, earlier reports on the regulation have suggested it would encompass not just illegal workers, but those taking on ‘unofficial’ extra work – a common practice for many of Male’s expatriate workers, some of whom are paid as little as US$70 a month for full-time construction work. In many cases, this is despite reported promises of salaries of up to US$400 by unscrupulous employment brokers, who charge poor and illiterate people in countries such as Bangladesh fees of between US$3000-4000 to come and work in the Maldives.
The dollar crisis in the Maldives has brought to the fore the remitting of salaries by expatriate workers. In a recent report, Ameer from the MMA noted that “each expatriate worker will on average remit US$100 per month to their countries. That is US$8 million per month and US$96 million a year. This is an amount that can and should be mitigated.”
Easa told Minivan News that the Human Resources Ministry, “to be honest, has nothing to explain. The Maldives can’t afford this, and we have to have rules to stop the existing open environment.”
The Immigration Department meanwhile reported that the number of expatriates in the country would reach 100,000 by June, after increasing by 10,000 in just three months. The report came as the Ministry of Human Resources published regulation permitting the recruitment of domestic servants without a quota.
The payment of salaries to foreign workers in rufiya is also a concern raised by foreign workers, concerned at their inability to convert the local currency to dollars.
“It may be difficult at this time, but the MMA is reinforcing a law from the early 1980s,” Easa noted. “All these years the MMA has not enforced the law. Right now we have a shortage of foreign exchange, and [expatriates] might face difficultly for a couple of months. But the country doesn’t have a choice.”
TEAM’s Vice President Mauroof Zakir acknowledged receiving concerns from resort workers regarding payment in rufiya.
“We received complaints where workers wanted salary in dollars in instances where the business is earning dollars,” he said, adding that this was already the case for many executive staff who had money paid into accounts outside the Maldives.
Furthermore, Zakir noted complaints from staff who’s wages were now being paid at a rate of Rf 10.42 to the dollar – the minimum rate following the government’s float of the rufiya within a 20 percent band of a pegged Rf12.85 – despite bank rates sitting at Rf 15.42.
“They don’t know the rate at which management is getting dollars,” he said. “I think it is a big concern that the government is not doing anything to raise awareness [for expatriate workers], apart from releasing statements to local media in Dhivehi.”
During a recent interview with Finance Minister Ahmed Inaz, Minivan News questioned the enforcement of rufiya at a time when there was doubt as to whether this could be exchanged into dollars, and the impact this would have on confidence in the Maldivian economy.
“We believe the market is currently unstable because of the changes we have brought, and that these changes will take three months for the various variables to work,” Inaz acknowledged.
“There will be a lot of low confidence and instability, and that will not only be felt by the expatriates. All our imports and consumables, medicine, education – is imported. But we are confident we can get through this.”
(0)Dislikes
(0)Related Posts
No intention to transfer assets to MIAL: MACL to Axis Bank- Government cannot pay state salaries without Indian cash: Finance Minister
- Analysis: Economy at stake as political turmoil grips Maldives
- Q&A: Finance Minister Ahmed Inaz
- Comment: It’s the economy stupid!
- IMF praises managed float of rufiya, “unpredictable” and “high risk” warn local experts
What worries me the most, are the incoherent answers given by the officials the author of this article interviewed. Also interesting to note, that many of these officials were somehow unreachable for comments. (They were praying relentlessly to correct the crisis I suppose..)
But, I am not entirely surprised. Chaos is a loaded word, and yet it seems that's exactly what's happening judging by the responses of the government officials interviewed here.
The comment by Mr.Inaz, the three month time frame seems to be a bit too optimistic. And it is a bit unclear/misleading when he says 'variables to work'. Anyway, it's Good to know he at least acknowledges the gravity of the situation.
Ok, lets get to he point. If I understood correctly, the main concern of the authorities at this point is to prevent illegal immigrants from sending USD abroad. And all of a sudden it occurred to the authorities the solution lies in a law passed 1980's MMA act. Which states all transactions done within Maldives must in the legal tender MRF, with a few exceptions like imports and of course, with a clear double standard - MMA can collect taxes & fees in USD. It almost sounds miraculous.
Now, the last time I checked anywhere in the world, about the prevention of illegal immigrants into the country. The central bank of the country would be the last institution to go look for a solution. I was under the impression, it was the job of the Border control and immigration guards and the local police. Sniffer dogs doesn't help either to detect illegal immigrants. I would argue neither does the Central bank!.
So, what have to come to? Punish all expats regardless they are here legally and working hard for an honest income.
Yes, there is a trade deficit and a persistent imbalance of trade over the years and continuing. But interventions like this almost always does more harm than good. And governments are almost always very tempted to Intervene and do something, even in the midst of chaos. I guess they can't help it. I wonder if it's some sort of a psychological condition.
Is there a quick solution? Nope. Is there a solution? Yes. First, Citizens have to understand there are no quick solutions. And officials should stop giving false hope and overly optimistic answers to citizens.
Road to recovery will be tough times and it takes time. Government should set the right conditions for the market and let the free market correct itself and think long term policies. Forget quick fixes and the temptation to intervene. Move towards balance of trade.
Start by removing the peg (as long as the currency is pegged, there will be a black market) and start doing good police work to deport the illegal immigrants.
“Organisations providing the transfer facility exceeding LIMIT, would face a fine”
In recent meeting of MMA with money transfer agents, highlighted to collect valid WP card copy and Passport copy attested by employer. Nothing mentioned abt limit. What is the Limit and how transfer agents (Western Union / Xpress money) know the limit?
“The Immigration reported increased number of workers as 100,000”.
Expatriates coming into Maldives with work permit with knowledge and approval of Immigration. It would be better if Labour ministry review before approving new quotas instead to exclaim later.
“Payment of wages in MRF”
It is assumable that expats will send their wages to their country, so country will face more USD outgoing when number of expats increased. There should be a software system introduced which reports money senders who send suspectable income to punish them. Why to punish the workers who earn at their hard work by paying in MRF and indirectly disallow them to send money to their family?
“Limit to send remittance”
For the resort employees there are no such expenses budgeted, so limiting to send their total earning will demotivate staff to select Maldives as their choice to work.
I recall Mr.Inaz’s statement and stay positive. Instability not only felt by the expatriates, but also by all our importers which is basic requirement of this country.
It is appreciated if acts / enforcements are announced and well communicated.
Doesn't it worry anyone when neither the Finance Minister nor the Economic Development Minister who should be the chief architects of the recovery strategy are able to clarify the how these regulations will be implemented practically and what impacts they will have on the primary industry of this country? It sure doesn't sound like a well thought out and thoroughly debated policy decision to me...
The fact is that limiting remittances for legal employees to only their monthly salaries isn't workable. If legal workers are allowed to remit more than their monthly salary then the illegals will just get their legal friends to do the remittance for them. There would be plenty of other ways to get money out of the country, starting with bogus invoices from foreign entities for goods and services which are never delivered to people hand carrying hard currency out of the country.
The other thing that is clear is that TEAM (Easa) is not interested in the well being of the tourism employees at all but is purely using the association as a political platform to appeal to a certain Maldivian constituency. Since 50% of the tourism employees are expatriates I would have expected a different line from him.
hello, income tax... its time...
It worries me that minivan news is very concerned about foreigners and their needs, what about the needs of Maldivians (this is a Maldivian news paper, how many stories have you published about this issue of currency and almost every interview that you guys have lately done has a small segment about this, and how this will be making it difficult to the foreigners ).... many of them have even a harder time in obtaining foreign currency for their needs, such as being able to go for health care and education abroad.....
While these are legitimate concerns for foreigners living in Maldives, no where in the world including in countries like Australia, UK or USA does the needs of foreigners get more priority from the government or for that matter local news papers (i am referring to minivan here)....
The recent announcement that Maldives will legalize about 70,000 illegal migrants here from Bangladesh and facilitate more to be able to come to work in Maldives just does not make any sense, neither does the total tax-free imports of goods from Bangladesh when we actually don't import to them anything.....(so in other words less incentive for Maldives to be more productive and demise of the local garment factories as well...)
Also very few countries in the world (only the oil producing gulf Arab countries actually), have more non-citizen workers/laborers as residents in those countries, we are now going into a similar ratio here, with the only exception Maldives does not have the good fortune of expensive oil resources, so in other words more Maldivians are just going get poorer and less job opportunities for Maldives. However the gulf Arab countries are rich enough they could just give there unemployed people opportunity to study and big fat social allowances/housing. Non of which will be possible in a poor country like the Maldives.
There is a reason no country (virtually no country) in the world has free visa on arrival for people from Bangladesh, India, Pakistan, Iran, Sri Lanka, and Nepal), because people from these countries already go to other countries illegally and work there or go there for other reasons and illegally stay there.... We should seriously think about this..... Even in countries as diverse and immigrant friendly as UK, Australia, USA and Canada they have rules for this sort of thing precisely for that very reason....they don't want foreigners to come and take up jobs that locals could very well do or drive down the wages of local as foreign laborers are willing to work for much less....
Maldives should seriously think about imposing a different visa regime, because as most Maldivians (i mean the ordinary Maldivians not the big business interest types) are all to aware most people coming from countries like Bangladesh and India, and Sri Lanka do not come here on tourist visas really for the beauty of Maldives....instead they end up getting jobs and in turn taking an opportunity away from a Maldivians (yes Maldivians are lazy, but does not mean we should be freely giving / encouraging foreigners to come and take the jobs, also foreigners in general are willing to undercut the locals for the very same jobs)
I will give you a small example... Maliku (also known as Minicoy), is the only other place in the world where Maldivians have people of the same socio-cultural affinities.... the one place in India where Maldivians are pretty much barred from visiting, and contacts between locals in the near by Islands of Haa Alifu is also forbidden/illegal ... this tells you pretty much what a visa scheme is all about...its about protecting the national interest of a country...in this case Maldives should think carefully about imposing a stricter visa regime for many countries.... (in this case Maldives national interest being to protect the jobs for Maldivians)...
look at the example of security guards...I mean most of these people are foreigners and have no understanding of the Dhivehi...how useful would this be ? I wonder).... and I am sure there are many talented young people (with O levels) that might not have jobs would love it if they had a job like this....
Any ways my bottom line is Maldivians need to think hard and fast too... Currently Maldives has a population that is half non-citizen and half citizen, unlike rich gulf countries Maldives cant give hand outs for everyone to study at universities etc...there is going be a boiling point for all of these issues, citizens feeling they are victimized will react similar to what happened after Evan Naseem case......
@Dina
What you write all sounds great in theory, but is just not feasible in reality. Or do you really think you could find a Maldivian to work 12hr night shifts as a security guard, sitting in front of some office or shop, for a few MRF a night? If you find ONE, you are lucky. And if he's still coming back after the first night, it would be bordering miraculous. It's easy to only look at one side of the coin, but in most cases it has two.
Attitude and work ethics need to change first, only after that takes place can you look at ways and means to reduce the expat population. Attitude not only towards hard work, reliability, honesty, etc., but also towards all the foreigners who do the jobs no Maldivian wants to do. Right now most of them are being treated worse than animals, but I see this doesn't seem to be a concern to you. If expats (especially non-skilled laborers) can't remit their earnings home anymore or if doing so becomes too expensive for them to live here, who's going to clean our streets, build our houses, help in households as maids, look after the sick as nurses or teach our children math? You?
I have to agree though with the fact that Maldives is no oil-rich gulf country. So why do people behave as if it were? Think about it.
@Decay, I agree with points of Decay.
@Dina, You mentioned abt its such easy to enter Maldives in tourist visa and expats can search for a job and finally get the job of locals. Is that you meant?
The companies PREPLANNED and took quotas to recruit foreigners. If they find suitable local candidate its advantage for them in many ways and less hustle to maintain. Why do they apply and get quotas?
If any Indian / Srilankan / Bangladeshi approach a company, do the employer just give the job? Comparing expenses for expats accommodation? Deposits to immigration? Insurance? Monthly fee? Annual tickets and etc.?
Employers preference is local candidates, if they do not get it on time, instead of PAUSING their business, they make use of expats.
They publish news what is around in industries and politics. I hope they don't have intention to void any news abt locals. It seems others stopped talking abt it.
Minivan posted news recently abt Minimum wages which is designed with intention to meet decent living of locals. Don't you appreciate Minivan for that?
@ Jeni Lee
Oh listen,
I happen to work at the immigration and I also happen to live in a particular area of Male where every Friday I notice new foriegn people arriving, yes they enter as tourists, but lately I have seen them near consturction sites where I live and also saw one of them working in a near by shop....
So yes people coming to Maldives as tourists and then starting to work....Yes it does happen. And these people are working in the same jobs that Maldivians used to work for in the past like shops...but now owners prefer them as they are wlling to take a much smaller pay...and hence putting the prospective Maldivian at a significant disadvantage....
Recently I have also visted islands where the local (ie Maldivian) construction workers were complaining how forigners are coming to work in these industries in islands too and of course people who want to build thier houses go for the cheapest labour..in other words Maldvans are outside the equation now there as well...
But unfortunately this is not really preventable, as Maldives legislation on Visa allows people to come here from everywhere in the world.... yes they are not suposed to work on tourist visa but who has the time/manpower to check all the iilegal people livng here... (our department is small and does not have enough resources to deal with a problem as large as 100000 ppl)
so most of the USD is lost since the forign worker is sending it home??? how about the imports in a country where everything depends on imports!!!!
these are very foolish moves, many people i know are planing to leave Maldives now and also we get paid on MRF equal to 12.85 and we OFFICIALLY loose 20% on salary plus even more since the gray market USD is much much more, the Banks dont help us.. even our own banks!!! so most of the expats will leave, skilled labor / white color job quality will go down, then wil fall the service and quality of output, then will loose clients in resorts then more trouble and this ripple effect will be very interesting, whn the USD was raised to get all the black USD to the banks wht happened?
it worked the other way round and we suspected it would happen that way!!! you dont need economist to see these things.. poor average Maldivians.... your tourism will fall sharply down and YES sri lanka is picking up... LETS GO TO SRI LANK guys and use our experience
@sudath: rubbish! this country can manage its own things. remember 69? when sri lankans expelled their xpats? did sri lanka go bust? no dho?
so don't try scaring us. this country can and will survive without a bloated labour market.
not good................. Magor prifessional jobs which expatriates are recrudes are not availibeled bad luck for me soooooooooooooo saddddddddd i hate this web site ...............................................................)& not damaged bad i have took this many times for school every day what to do u web site is resbonsible with yhis OK!...........................................................................................................................$