Category: Politics

Yameen concedes that GMR is owed some compensation

With additional reporting by Ahmed Rilwan

President Abdulla Yameen has today said the government was sure it would have to pay some compensation for cancelling the agreement made with the Indian infrastructure giant GMR to lease Ibrahim Nasir International Airport (INIA).

“The truth we should accept is that a government with all its sovereignty has given permission to a foreign party under an agreement,” said the president.

“So we believe some sort of financial compensation must be paid to them. A compensation must be given for taking the airport [from them]. What we are trying to make sure this compensation is not big but average.”

Yameen was speaking to the press before leaving for Singapore to take part in the Maldives Investment Forum – an event he described as “the first step taken towards a fresh start for the Maldives in today’s world economy”.

In November 2012, President Dr Mohamed Waheed’s cabinet declared the GMR agreement void ab initio – invalid from the outset – and ordered the developer to leave, just two years into its 25 year concession agreement.

President Yameen explained to the press today that his advisors believed that, if the arbitration panel could be persuaded that the deal had been anulled due to the airport’s national importance, the compensation would be small.

GMR had initially claimed US$1.4 billion – a figure greater than the Maldives’ annual state budget.

Yameen’s Progressive Party of Maldives (PPM) formed part of the Waheed coalition government, though it’s leader – former President Maumoon Abdul Gayoom – has since accuse Waheed of going against his party’s advice by failing to reach an amicable agreement with GMR and the Indian government.

During his first official state visit to Indian in January, Prime Minister Dr Manmohan Singh requested President Yameen to “amicably” settle the GMR airport issue.

Earlier this month, Yameen had said that the out-of-court amount sought by the infrastructure company was too great, and that he would now await the outcome of proceedings, which could take up to another two months.

The US$511 million concession agreement to manage and upgrade the airport – awarded under the former government of Mohamed Nasheed – was the single largest foreign investment in the Maldives’ history.

President Yameen will tomorrow give the keynote speak at the landmark investment forum, as he seeks to generate interest from foreign investors for five ‘mega-projects’ – one of which is the further development of Ibrahim Nasir International Airport (INIA).

As part of the president’s attempts to lure foreign investors back to the country, he has promised special economic zones which hopes will be “likened to cities in Dubai or the Emirates” and “the [business] environment we have in Singapore.”

Senior management of Singapore’s Changi International Airport visited the Maldives earlier this month, with Yameen explaining the purpose of the visit to press this afternoon.

“Changi’s management will be our final consultant with the terminal [project] and other consultancies required for the airport,” he explained. “We want to seek technical expertise and information on how to do things from Singapore Changi.”

“The project has progressed far now, Changi has expressed interest. So we believe all the supervisory and consultancy work of this terminal will be carried out by Changi.”

Likes(1)Dislikes(0)

“Ideal” time to invest, says MNCCI as Maldives Investment Forum approaches

With additional reporting by Daniel Bosley

“The last 3 years there has been a lot of turmoil, but now is the ideal time to invest and talk about business,” suggests Ishmael Asif, Vice President  of the Maldives National Chamber of Commerce and Industries (MNCCI).

In light of the upcoming Maldives Investment Forum (MIF) in Singapore, Asif told Minivan News that the Maldives can offer a secure political backdrop for any potential foreign investments.

“From the chamber, we would like to give a message to foreign investors that political tension is over and there is room for investments. Maldives always welcomes foreign investments.”

The forum – set to take place on Friday (April 25) at the Marina Bay Sands hotel in Singapore – will aim to increase the interest of Asia-region investors, and will be the first forum of such a scale to be hosted by the Maldives in another country.

Investors will have the opportunity to submit proposals for five mega projects, including the following – whose details have been provided by the Ministry of Economic Development:

Ihavandhippolhu Integrated Development Project (iHavan) – This project aims to capitalise on the US$18 trillion worth of goods that pass through the channel to the north of the Maldives’ northernmost atoll each year.

The project is set to include a transshipment port facility, airport development, a cruise hub, yacht marina, bunkering services, a dock yard, real estate, and conventional tourism developments.

Citing growing east-west trade between China and India, the project also proposes to take advantage of more than 30 large cities which lie within a 4000km radius of the atoll. Moreover, the South Asian Free Trade Arrangement (SAFTA) means that export processing zones established in iHavan will enjoy duty free access to 1.7 billion people in the South Asian region.

Expansion of Ibrahim Nasir International Airport (INIA) – Following the 2012 termination of the GMR concession agreement, the government is currently devising a new master plan for developing the country’s main international airport.

Around forty percent of the tourism industry’s bed capacity is currently situated in the same atoll as the airport, with 80 percent of tourists taking less than one hour to reach their destination from INIA. Furthermore, the government plans to increase tourist arrivals to 5 million per year during its current term.

“As such, the need to expand the airport’s capacity to cater to this additional demand and to provide value added commercial and high end retail services of highest international standards, is a key priority of the Government,” explains the forum’s website.

Hulhumale’ Phase II Development – The next stage of the development in the Maldives “first fully reclaimed, pre-planned city” will involve further reclamation to the north of the island.

Potential investors are being made aware of President Abdulla Yameen’s plans to develop the island into a ‘youth city’ with a population of 50,000, which will include a “technopolis park” to facilitate light industries.

The construction of the long-awaited bridge between Malé and Hulhumalé is planned to further open up economic opportunities in the reclaimed island city.

Relocation and expansion of the existing central port – Noting that the country’s major port in Malé has reached its capacity, the MIF will hope to attract investors to assist in the relocation of the main port to the nearby industrial island of Thilafushi.

The project will include reclamation work on the island, the introduction of state-of-the-art facilities – including warehousing capacity, and marine harbour and support functions to cater to all types of vessel.

Exploration for oil and gas – With oil imports accounting for 31 percent of the Maldives’ imports in 2012, the country is seeking to reduce reliance on foreign fuel with an oil and gas exploration projects, explains the event information.

Previous attempts to locate economically viable reserves were unsuccessful, though the government wishes to find investors who can undertake more extensive surveys in the country’s territory.

The proposed projects are due to be supported by the “relatively freer regulatory environment” provided by the special economic zones promised by the Yameen administration.

Creating a future for the Economy

Asif noted that the decision to hold the conference in Singapore sends a clear message to the international community that the Maldives is keen to discuss ideas with their potential partners, and to build bridges with countries they would like to work with in the future.

“It will create a better platform for Maldives when we do work in places like Singapore – it’s an ideal place to unveil something like this so we can go forward with that area.”

The operator’s of Singapore’s Changi Airport met with President Yameen last week, sparking rumours that they would provide consulting services on the development of INIA.

“Such a forum like this is organised to give a positive vibe, that we are open for foreign investment and willing to discuss [ideas],” he added.

A host of countries have already expressed their interest and are registered for the Maldives Investment Forum, President’s Office Spokesperson Ibrahim Muaz confirmed today.

“There is a lot of co-operation from business groups from other countries, like China, the US, Japan and from this area. There are a lot of participants registered on the forum,” said Muaz,

President Yameen will be leaving tomorrow afternoon to attend the forum, where he will give the keynote speech to the more than 300 investors from 15 countries who have reportedly registered to participate.

Following a presentation detailing the five projects, Tourism Minister and head of the cabinet’s Economic Council Ahmed Adeeb will give a speech, before a question and answer session regarding the proposed projects.

President Yameen’s vision for foreign investment was spelled out recently, during the inauguration of a housing project in Hulhumalé – part of the ‘youth city’ project.

“What we would like to confirm for the foreign investors who come to the Maldives is that foreign investors should feel that Maldives is your second home here,” said Yameen.

“We are going to open up the Maldives in a huge way to foreign investors. Our thirst cannot be quenched. The opportunity to foreign investors is going to be enormous.”

Likes(4)Dislikes(0)

Nasheed criticises indirect taxation following amendments to import duties

Former President Mohamed Nasheed has criticised the recent amendments to customs duties, arguing that a strong economy cannot be built upon regressive taxes.

“We have noticed that indirect taxes such as import duty have a very bad impact on the economy,” the acting president of the Maldivian Democratic Party (MDP) told local newspaper Haveeru.

“The tax that is being derived from the poorest man’s toothpaste is equal with the tax levied on the richest man’s toothpaste. We do not believe that this is a smart way of generating state income,” he said.

Nasheed’s comments followed the approval of amendments to the Import-Export Act which increased import duties on a range of goods as part of the current administration’s revenue raising measures.

He told local media yesterday that history had shown progressive taxation, with greater contribution from higher earners, was the best technique to raise state revenue.

During this week’s final debate on the government-sponsored amendments, MPs of the opposition MDP severely criticised the indirect tax hikes, contending that the burden of increased prices of goods would be borne by ordinary citizens.

Once the amendments (Dhivehi) are ratified by the president, a 15 percent tariff will be reintroduced for construction material, articles of apparel and clothing accessories, silk, wool, woven fabrics, cotton, man-made filaments, wadding, special yarns, twine, cordage, ropes, cables, carpets and other textile floor coverings, lace, tapestries, trimmings and embroidery.

Tariffs are also set to be increased from the current zero percent to five percent for sugar confectioneries and diesel motor oil and raised from 10 to 15 percent for organic chemicals and compounds of precious metals, rare-earth metals, radioactive elements or isotopes.

Nasheed suggested that progressive taxation such as the Business Profit Tax (BPT) – introduced during his presidency alongside Goods and Services Tax (GST) and Tourist-GST – would produce a more sustainable economy.

These three taxes were shown this week to have contributed to nearly three-quarters of the state’s revenue in the first quarter of the year, amounting to over MVR2 billion. The introduction of these taxes has seen state revenue quadruple since 2010.

The economic policies pursued during the MDP administration also included sweeping changes to the Import-Export Act, which included the removal of duty on a wide range of items.

The Maldives Customs Service meanwhile revealed last week that its revenue in March increased by 12 percent – to MVR 139.7 million – compared to the same period in 2013 on the back of a 30 percent increase in imports.

Exports, however, dropped by 65 percent last month compared to the same period last year, and imports increased by 11 percent compared to the first quarter of 2013.

The Maldives Monetary Authorities’ latest balance of payments forecasts estimated the current account deficit to have widened to US$562.5 million – representing 22% of GDP in 2014.

Other revenue raising measures to be implemented by the government include raising T-GST to 12 percent this coming November as well as the introduction of GST to telecommunications services from May 1.

Plans to increase Airport Service Charge from US$18 to US$25 appeared to be moving closer to realisation this week, with local media reporting that the measure had been approved my a Majlis committee.

In December, parliament passed a record MVR17.5 billion (US$1.16 billion) budget for 2014, prompting President Abdulla Yameen to call on the legislature to approve the revenue raising measures, which the government contends are necessary to finance development projects.

Recognising that the Maldives is in a “deep economic pit”, President Yameen vowed to slash state expenditure in order to improve government finances following his election victory last November.

Likes(0)Dislikes(0)

No re-votes as High Court concludes Majlis election-related cases

The High Court has delivered verdicts today in 13 election-related cases filed by losing candidates in the March 22 parliamentary polls seeking annulment of the results.

In 12 cases, the High Court ruled that there were no grounds to annul the results and order a re-vote as the evidence submitted was not sufficient to prove electoral fraud.

In the case concerning the Lhaviyani Kurendhoo constituency, the court ruled that there were no grounds to grant the request for a recount of ballot boxes.

Losing candidates from both opposition and government-aligned parties had challenged the outcome of the Majlis elections.

The 13 constituencies were Haa Dhaal Nolhivaram, Shaviyani Funadhoo, Lhaviyani Kurendhoo, Lhaviyani Naifaru, Kaafu Kaashidhoo, Vaavu Felidhoo, Thaa Thimarafushi, Laamu Isdhoo, Gaaf Alif Villigili, Gaaf Alif Gemanafushi and the mid-Hithadhoo, Hithadhoo North and Feydhoo constituencies in Addu City.

While opposition Maldivian Democratic Party (MDP) candidates for Kaashidhoo, Nolhivaram, Feydhoo and Funadhoo filed cases at the High Court on their own accord, cases concerning the Villigili, Isdhoo, and Gemanafushi constituencies were filed by the party.

The rest of the cases were lodged by candidates of the ruling Progressive Party of Maldives (PPM) and its coalition partner Jumhooree Party (JP).

Coalition concerns

Following his loss to an independent candidate, the incumbent JP MP for Lhaviyani Naifaru, Ahmed Mohamed, accused the PPM of attempting to “destroy” its coalition partner.

The veteran MP explained that PPM members contested as independents in constituencies assigned for the JP in the seat allocation deal reached among the coalition parties.

While the independent candidate – Ahmed Shiyam – used the PPM party office, colour, and logo in his campaign for the Naifaru seat, Ahmed Mohamed alleged that the government gave jobs and promotions in the nearby Felivaru fish cannery at his opponent’s request.

“And if that wasn’t enough, [they] anti-campaigned against me while voting was ongoing,” he claimed.

Shiyam – along with three of the five successful independent candidates – signed for the PPM within days of the polls’ conclusion.

JP MP for the Hithadhoo South constituency, MP Hassan Latheef, also accused the PPM of campaigning against him after two senior members of the ruling party contested as independents.

Latheef reportedly alleged that the PPM members used money to bribe voters and influence within the government to provide jobs.

Latheef also noted that he was not invited to a campaign rally in Hithadhoo that was attended by President Yameen. The two independent candidates were however present at the rally, he said.

Marked ballots

Meanwhile, briefing members of the MDP’s national council last week, former Human Resources Minister Hassan Latheef – a member of the party’s legal committee – explained that that the party filed cases concerning the Villigili, Isdhoo, and Gemanafushi constituencies.

As both the constitution and electoral laws stipulate that voting must be conducted through secret ballot, Latheef said the Elections Commission was responsible for ensuring secrecy of the ballot.

Based on precedents established by the High Court and Supreme Court, Latheef explained that the MDP had asked the High Court to declare that ballot papers tagged with a symbol or mark would be invalid.

In the Gaaf Alif Villigili constituency election, Latheef said that about 300 ballot papers were tagged, all of which were counted as valid votes for the PPM candidate.

Similarly, in the Laamu Isdhoo constituency, Latheef said the number of tagged ballot papers was more than 150 while there were more than 100 tagged ballot papers in the Gemanafushi constituency.

Latheef noted that in all three constituencies, the margin between MDP and PPM candidates was smaller than the number of tagged ballot papers identified by observers.

Under a precedent established by a Supreme Court ruling, Latheef said that if the number of ballots whose secrecy was compromised exceeds the margin of victory, the poll would not be valid.

As compromising the secrecy of the ballot in any election was illegal, Latheef contended that tagged ballot papers should be considered invalid votes.

Earlier this month, the MDP issued a press release accusing government-aligned parties of unduly influencing the March 22 polls through coercion and intimidation in addition to vote buying.

Some voters were asked to tag their ballot papers with a special mark or symbol for PPM observers and candidate representatives to identify their votes, the party alleged.

Voters were threatened with dismissal from their government jobs if they did not follow the instructions and proved they voted for the coalition candidate, the press release stated.

In the wake of the Majlis elections, NGO Transparency Maldives stated that while the polls were well-administered and transparent, “wider issues of money politics threatens to hijack the democratic process”.

Likes(1)Dislikes(0)

Kaashidhoo MP Jabir returns to prison after treatment

Maldivian Democratic Party (MDP) MP Abdulla Jabir has been transferred back to prison after receiving treatment for breathing difficulties.

Jabir was admitted to the hospital on April 8, with his wife Dhiyana Saeed at the time telling local media that he was brought to Malé to be treated for respiratory defects with which he had been born.

The Maldives Correctional Services (MCS) has told local media that Jabir was discharged from the hospital yesterday afternoon and was handed to Malé Jail’s medical department.

The Kaashidhoo MP is currently serving a one year sentence for a failure to provide urine to police for testing.

An official from the MCS told local newspapers that Jabir had requested a medical test of his heart but that the service was not available in Indira Gandi Memorial Hospital (IGMH).

He said that the service was now trying to facilitate a way to permit him to go abroad to do the medical test, adding that the MCS would obtain all the medical documents of Jabir before submitting them to the medical board.

Local media has also reported that Jabir was returned to jail with a bilevel positive airway pressure machine – reportedly obtained from Singapore

In a text to MDP parliamentary group members, Dhiyana said: “The pulmonologist who saw him says his previous surgeries for severe sleep apnoea has failed and needs to be admitted.”

Sleep apnoea is a type of sleep disorder characterised by pauses in breathing or instances of shallow or infrequent breathing during sleep.

In an interview with Vnews earlier this month, Dhiyana has said her husband had been in hospital since April 8, revealing that doctors had informed her that Jabir’s breathing stopped four times every hour.

MCS Spokesperson Hassan Zilaal was not responding to calls at time of press.

In February 2014, Jabir was sentenced to jail after being found him guilty of failing to provide a urine sample to police to run a drug test following his arrest on the island of Hondaidhoo in November 2012.

A total of 10 people were taken into police custody on November 16 after police raided and searched Hondaidhoo with a court warrant. Officers alleged they found large amounts of drugs and alcohol upon searching the island.

Seven of the suspects, including the MDP MPs Hamid Abdul Ghafoor and Jabir were among those charged.

At the time, police submitted cases against former SAARC Secretary General and Special Envoy to the former President Ibrahim Hussain Zaki, former President’s Office Press Secretary Mohamed Zuhair and his wife Mariyam Faiz. The manager of Jabir’s resort J Alidhoo Jadhulla Jaleel and Zaki’s son Hamdan Zaki also face charges.

The prosecutor general also charged Jabir for possessing cannabis before he was acquitted by the court on the grounds that there was not enough evidence to prove that he was in possession of cannabis when detained by police.

Charges of alcohol possession remain outstanding, with the last hearing of Jabir and Hamid’s joint trial being suspended due to Jabir’s hospitalisation.

Following the ‘Hondaidhoo’ incident the Prosecutor General has also charged Jabir for possessing alcohol. The trial of the case still continues in the Criminal Court.

Likes(1)Dislikes(0)

President Yameen call on the military to maintain discipline and professionalism

President Abdulla Yameen has called on military officials to maintain discipline and professional standards in their service.

“The state wants to make soldiers professional. The security of the state depends on the professionalism of soldiers.”

“Political ideology should not enter the ranks of soldiers,” said Yameen – the commander in chief of the Maldives National Defence Force (MNDF).

Yameen’s comments were made during a ceremony held in Malé to mark the 122nd anniversary of the military service in the Maldives. The occasion also saw the launch of the military’s own television station and the presentation of numerous awards.

Yameen said disciplinary action has to be taken in order to maintain professional standards. He noted that some “very honorable” members of the military lost their jobs recently, but that this has to be accepted as “the military way of life”.

Though the president noted that the military had gained the love and trust of Maldivians, he warned that such confidence was very fragile.

“The confidence in you from the state and citizens is not guaranteed in any way. It is a very delicate confidence, it is a very delicate contract.”

“Action take during a single incident could lose the society’ confidence in the military. Let us recall the recent past. 2012 presented a strong example of this from the military institution,” Yameen said.

MNDF TV

During the ceremony, President Yameen launched MNDF’s official television channel ‘Addana TV’.

MNDF deputy spokesperson Captain Ali Ihsan told Minivan News today that the channel is currently being received only within the military premises and will be broadcast for the general public after the necessary license is acquired from the Maldives Broadcasting Commission (MBC).

MBC has confirmed that MNDF has not yet registered any television channel for public broadcasting.

While programming is currently limited to just two hours, the future schedule will provide details on the activities of the military and raise awareness of laws, as well as providing entertainment.

The channel will be maintained by the Media and Publishing Service unit of the force and is currently being funded by “well wishers”, explained Ihsan, as well as the MNDF cooperative society SIFCO and its joint venture company SIWEC (owned 90 percent by SIFCO, and 10 percent by the government).

At last night’s ceremony, commendation letters and certificates were awarded to servicemen for various achievements, and honorary shields given to institutions, servicemen, and other individuals in recognition of their services.

Minister of Defence and National Security Colonel (Rt) Mohamed Nazim was honored with the ‘Sincere Service Medal’ for his services towards the development of the military service, the numerous opportunities provided for soldiers, and the “great amount of love for the military in his heart”.

Speaking at the ceremony, Nazim promised the modern and quality equipment necessary to improve the services of the military.

Chief of Defense Force Major General Ahmed Shiyam was also awarded with the same honor for productive works in his personal capacity, and his future plans to reform the military.

The ceremony was concluded with a special prayer and the official MNDF song.

Likes(2)Dislikes(1)

Supreme Court orders Bar Association to change its name

The Maldives Bar Association (MBA) has been given 14 days to change its name, after the Supreme Court deemed the title inappropriate for a private organisation.

“The word ‘bar’ is used even in other countries of the world to refer to an official body formed under a law within specific guidelines, with the participation of the complete legal community and judicial sector with the mandate to uphold confidence and trust in the judiciary,” read a letter sent by the court to the Home Ministry on April 9.

The letter goes on to argue that the MBA is a private group which does not represent all lawyers, meaning that it does not have the legal mandate to represent or to speak on the behalf of the entire profession.

“Therefore, we feel that at a time when there is a law being compiled to regulate lawyers and to form a National Bar Association, the existence of an entity by the name of Maldives Bar Association, which does not have the mandate to regulate or represent lawyers within the Maldives justice system may lead to avoidable confusions,” it continued.

While, the association is yet to convene to discuss the matter, Husnu Suood has said that any action with regards to this issue by the Home Ministry will be challenged in the courts.

“My stand is that we are not going to change the name,” explained Suood, adding that the association would be happy to step aside should the new legislation provide for a ‘Bar Council’.

A 2013 UN report recommended that a “self-regulating independent bar association or council” be established to oversee the legal profession.

Suood noted that the MBA currently has over one hundred members, representing around one fifth of the country’s practising lawyers, with a full membership drive waiting until new legislation is completed.

Past clashes

The Supreme Court’s letter was sent on the same day that new regulations determining the licensing of lawyers were published by the Attorney General.

A bill to regulate the legal profession is included in the government’s 207-bill legislative agenda, to be pursued during the current administration’s five year term.

After receiving the letter, the Home Ministry today informed the Bar Association that it has 14 working days to inform the ministry of the necessary changes.

The day prior to the sending of the letter – April 8 – the Bar Association had called for the suspension of Supreme Court Judge Ali Hameed pending an investigation into allegations over the judge’s appearance in a series of sex tapes.

“Definitely there is a connection between our press statement and the decision by the Supreme Court [to send the letter],” said Suood.

He also drew similarities between the court’s letter and lawyer Ibrahim Waheed’s retaliatory calls for the MBA president’s investigation for bribery – also made on April 8.

The Prosecutor General’s Office has since decided to pursue corruption charges against Judge Ali Hameed in relation to the illegal transfer of credit from his state-funded mobile phone in 2010.

The MBA’s call for Hameed’s investigation came just days after the suspension of Suood had been lifted by the court on the condition he refrain from engaging in any act that may undermine the courts.

Suood was told his January suspension was related to an allegedly contemptuous tweet regarding the Supreme Court’s decision to annul the first round of last year’s presidential election.

Suood himself, however, has claimed the suspension was in fact linked to his role on a Judicial Services Commission (JSC) committee asked to investigate the Hameed tapes.

Both the committee including Suood, and a prior JSC subcommittee have recommended Hameed’s suspension, with full commission repeatedly failing to accede to the request.

Likes(0)Dislikes(0)

Parliament approves import duty hikes

Parliament has approved amendments to the Import-Export Act to raise import duties on a range of goods as part of the current administration’s revenue raising measures.

The amendment bill submitted on behalf of the government by MP Mohamed Rafeeq Hassan was passed with 34 votes in favour and 19 against at yesterday’s sitting of the People’s Majlis.

Once the amendments (Dhivehi) are ratified by the president, a 15 percent tariff will be reintroduced for construction material, articles of apparel and clothing accessories, silk, wool, woven fabrics, cotton, man-made filaments, wadding, special yarns, twine, cordage, ropes, cables, carpets and other textile floor coverings, lace, tapestries, trimmings and embroidery.

Tariffs will also increased from the current zero percent to five percent for sugar confectioneries and diesel motor oil and raised from 10 to 15 percent for organic chemicals and compounds of precious metals, rare-earth metals, radioactive elements or isotopes.

Custom duties for vehicle seat covers will be raised from 35 percent to 75 percent.

While custom duties for organic and chemical fertilisers and pesticides as well as for live chickens, ducks, turkey, quail, and chicks will be eliminated, duties for polythene bags and items that contain hydrochlorofluorocarbons (HCFCs) will be hiked to 400 percent and 200 percent respectively.

The tariff hikes reverses changes brought to the law when import duties for most items were eliminated in late 2011 by the administration of former President Mohamed Nasheed ahead of the introduction of a Goods and Services Tax (GST).

Import duty was also eliminated for food items – with a few exceptions such as bananas, mangoes, watermelons, and papaya to protect the local agriculture industry – as well as for construction material, fabrics and garments, paper and books, environment friendly goods, paints, floor coverings, footwear, steel, medicine, medicinal machineries and products, fertilisers, electric vehicles, cosmetic goods and domestic appliances.

During yesterday’s final debate on the government-sponsored amendments, MPs of the opposition Maldivian Democratic Party severely criticised the indirect tax hikes, contending that the burden of increased prices of goods would be borne by ordinary citizens.

In a press statement yesterday, newly-appointed Maldives Monetary Authority Governor Dr Azeema Adam predicted a rise in the inflation rate as a result of hiking tariffs.

The central bank previously estimated the inflation rate to hold steady at four percent as global commodity prices were expected to decline this year.

The Maldives Customs Service meanwhile revealed last week that revenue in March increased by 12 percent compared to the same period in 2013 on the back of a 30 percent increase in imports.

“Total revenue collected in March 2014 was MVR 139.7 million, while it was MVR 124.8 million in March 2013,” MCS said in a statement.

“Importation of fuel (such as diesel, petrol and jet fuel) shared 36 percent of total imports in March, twice the value of food items imported during the same period. Third most imported category of goods in March was machinery and electronics which accounted for 15 percent of total imports in March.”

Exports, however, dropped by 65 percent last month compared to the same period last year, which was “linked to the 97 percent reduction in the volume of exports by the state-owned Kooddoo Fisheries Maldives Ltd, whose main export is Frozen Skipjack Tuna to Thailand.”

Customs also revealed that imports in the first quarter of 2014 amounted to MVR7.1 billion, which represented an 11 percent increase compared to the first quarter of 2013.

Likes(0)Dislikes(0)

Newly appointed MMA governor reveals plans to strengthen economy

The newly appointed Governor of Maldives Monetary Authority (MMA) Dr Azeema Adam has stated that she will ensure firm action is undertaken to strengthen both the economy and its currency.

“We need to strengthen foreign exchange market regulatory framework and establish a sufficient monetary policy framework in order to maintain the value of rufiyaa,” she told local media yesterday.

Azeema added that the strengthening of these frameworks would also assist in reducing inflation and the rise in prices of general commodities, as well as echoing the concerns of her predecessor regarding monetisation.

“Printing money to overcome the budget deficit is something that brings down the value of the Maldivian rufiyaa. Therefore, this needs to brought to an end.”

“In order to do so, the MMA will assist the government to finance their budget deficit through a market mechanism,” she revealed.

She added that this will be difficult to accomplish without decrease government spending, while also noting the importance of the ratification of the new MMA Act which has been recently drafted.

Azeema also pledged to bring an end to dollar transactions on the black market, noting the importance of maintaining the value of local currency in a country like the Maldives which strongly depends on foreign currency.

The MMA’s recent balance of payments projections estimate that the country’s current account deficit will widen to US$562.5 million in 2014, which is equal to 22 percent of GDP.

She pledged to bring down the expense of running the central bank, stating that decreasing spending throughout the state bodies is imperative to strengthening the country’s economy.

Azeema stated that, although Maldives has a comparatively high level of investments in tourism and other sectors, it has so far failed to be reflected in the country’s financial status.

Productivity increasing

Due to the rapidly developing tourism sector, productivity of the Maldives will increase by 4.5 percent by the end of 2014, she said.

“At the end of 2013 we had US$368 million. Our estimate is that this will rise to 400 million dollars by the end of this year. Looking at how much is imported from this reserve, this is the import of about 2 or 3 months,” local media reported the new governor as saying.

Dr Azeema estimated that, compared to 2013, the current account deficit of the country will increase by 16 percent this year, while the official reserves exceed this. She said that this estimate is made based on the developing tourism sector, and the increased earnings that the government is acquiring from the field.

She went on to reveal that the major work the MMA will currently undertake is to introduce new insurance services and to establish further Islamic financing instruments.

The MMA will assist banks in releasing more loans to individuals by decreasing the minimum reserve requirement that they have to keep deposited at the central bank, she said.

“We need to strengthen the financial sector through revisions, this is a work we must undertake. We do not see big investments being made in the financial sector. However, we need to attract investments into this sector too,” Azeema told the press.

The governor stated that, where required, the central bank will also work to revise necessary laws and regulations in an attempt to strengthen the financial sector. She stated that this would assist the government in obtaining funds to implement various projects, while also being of help to small and mid-level businesses.

She highlighted the importance of creating more public awareness about the financial sector as well as encouraging a mentality of keeping savings from their earnings.

She further said that the MMA would encourage the use of electronic payment systems as opposed to cash and cheques. She stated that more convenient and efficient electronic payment systems will be introduced by the central bank, adding that this would be more secure than cash and cheque transactions.

Likes(1)Dislikes(0)