Author: Ahmed Naish

Journalists association calls on government to amend controversial regulations on publishing literature

The Maldives Journalist Association (MJA) has called on the government to amend controversial new regulations enacted this week that subjects prose and poetry published in the Maldives to government approval.

The MJA contended in a press release yesterday that the regulations were unconstitutional, noting that Article 27 guarantees “the right to freedom of thought and the freedom to communicate opinions and expression in a manner that is not contrary to any tenet of Islam.”

“The Article does not state that free expression could be restricted by law. Only expressions or opinions contrary to a tenet of Islam are restricted,” the MJA observed.

While the MJA urged a proper review of regulations before enforcement or publication in the government gazette, opposition MPs, civil society, and the information commissioner have also criticised the new rules.

The regulations prohibit publishing literary material without seeking authorisation from the national bureau of classification (NBC) – which functions under the youth ministry – and prescribes a fine of between MVR500 (US$32) and MVR5,000 (US$324) for violations.

The regulations define publication of literary material as “as any writing, photograph or drawing that has been made publicly accessible electronically or by way of printing, including publicising or circulating on the internet.”

Publicising poetry was defined as “publishing poetry in writing in any manner, recording it, selling it as a studio album, including it in a film or documentary, broadcasting or telecasting, publicising it on the internet, and or publicising it as a ringtone.”

Following an outcry on social media yesterday, the youth and sports ministry issued a press statement claiming that the rules would not apply to either social media or registered newspapers and online news outlets.

“We note that approving books, poetry and songs published in the Maldives is not a new rule but has been done by this bureau for many years as well as at present,” the statement read.

Information commissioner concerned

Information Commissioner Abdul Azeez Jamal Abubakur told Minivan News today that he met members of the bureau and senior officials at the youth ministry yesterday and expressed his concerns.

“They accepted [the concerns] and said they would release a press statement and would try to amend the regulations through [the People’s] Majlis,” he said.

Azeez suggested that the regulations had “slipped through their fingers” and ended up in a very restrictive or “difficult” form.

“If the regulations are enforced the way it is now, we can’t publish poetry on websites without using a small tactic,” he said.

Azeez referred to the regulations exempting publications from a political party, civil society group, company or state institution to disseminate information among members or staff.

“So we’re writing on our website that this poem is intended for members of this association. So we are able to publish now, but that is a very difficult way,” he said, referring to ‘Liyuntheringe Gulhun’ (Writers Association) website.

Azeez told local media yesterday that the regulations were “unlawful” and would “put a lock” on Maldivian literature, noting that half of literary output in the country was poetry.

“Having to seek approval for a poem in this day and age is a big joke. Paying 50 rufiyaa to approve a poem is also a joke,” he was quoted as saying by newspaper Haveeru.

The former Progressive Party of Maldives MP called the regulations “unacceptable” and questioned whether it could be enforced.

Censorship

In a message sent to the media yesterday, former Speaker of Parliament Abdulla Shahid contended that the regulations violate the constitutional rights of freedom of expression, freedom of the press, and the freedom to acquire and impart knowledge, information and learning.

Condemning the government’s “decision to impose pre-publication censorship,” the opposition Maldivian Democratic Party (MDP) MP said the move was characteristic of a dictatorship.

MDP MP and Spokesperson Imthiyaz Fahmy meanwhile told Minivan News that the government was “going back towards censorship as it had existed prior to the amended constitution of 2008.”

“Back then even a musician would be required to get approval of the government when they would want to release a musical record. That way the government would suppress freedom of speech and artistic works as well,” he said.

Imthiyaz said he was once summoned by a government official who demanded an explanation of the “implicit meaning” of a song he had written.

“Because as far as he was concerned it had an unacceptable and hidden meaning in it. And he further said he wanted my testimony in writing because he would be sending the case for criminal prosecution. Free speech and reporting and literature will be a bitter pill to swallow for this authoritarian government,” he said.

NGO Revive has also expressed concern with the negative impact on Maldivian literature as a result of the regulations.

The arts and culture NGO called on the Dhivehi language academy to review the regulations and “ensure that efforts to promote Dhivehi language could be carried out.”

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New regulations mandate government approval before publishing literature

New regulations enacted yesterday will subject the publication of prose and poetry in the Maldives to government approval.

The stated purpose of the ‘Regulations on approving literature published in the Maldives’ (Dhivehi) is “ensuring that literature published or made public in the Maldives fit Maldivian laws and regulations as well as societal norms”.

The rules are aimed at “reducing adverse effects on society that could be caused by published literature.”

The new rules sparked an immediate outcry on social media, including suggestions from former majlis speaker, Abdulla Shahid, that basic constitutional and human rights were being threatened.

The regulations prohibit publishing literary material without seeking approval from the national bureau of classification and prescribes a fine of between MVR500 (US$32) and MVR5,000 (US$324) for violations.

An additional MVR1,000 (US$64) would be imposed for repeat violations.

Moreover, if a publication is found in a court of law to contain “false information”, the approval would be revoked and the person or party would not be granted further approval for a period of one year after payment of fines for the first offence.

Approval would not be granted for three years and five years for the second and third offences, respectively.

“Books must be published in the Maldives after seeking approval from the national bureau of classification,” states section 6(a) of the regulations published in the government gazette yesterday.

However, books or pamphlets published by a political party, association, company or state institution to disseminate information among members or staff would be exempt from the requirement.

“A poem must be made public in the Maldives after seeking approval from the national bureau of classification,” states section 11(a).

Section 11(b) explains that the rule applies to “any form of publication, a separate recording or an album for sale, inclusion in a film or documentary, broadcasting or telecasting, making public through the internet, and circulating as a ring-tone.”

The regulations define books as any piece of writing, photography or artwork published either printed on paper between covers or “electronically, digitally or otherwise.”

The rules apply to publications on the internet.

The regulations also require the national bureau of classification to compile a registry of members for granting approval for publications.

“Books and poetry shall be published in the Maldives in accordance with decisions by members on the registry,” states section 13.

The conditions for membership include being a Maldivian citizen aged 30 years above and a Sunni Muslim. If a member has been convicted of a criminal offence, five years must have elapsed since either the sentence was served or a pardon was granted.

Additionally, members must have at least 10 years of experience in the relevant publishing field.

In granting approval for publication, the regulations state that members must consider whether the piece of literature “fits Islam, Maldivians laws and regulations, and societal norms.”

Moreover, members must consider the potential negative impact on society from the published material.

Section 15(c) states that members must respect the right to freedom of expression guaranteed by the Constitution as well as “constructive new thinking”.

Along with a copy of the manuscript of the book or poem, a form seeking approval and a MVR50 revenue stamp must be submitted to the national bureau of classification.

Publishers must also submit a form seeking an ISB (international standard book) number.

Censorship

Meanwhile, former Speaker of Parliament Abdulla Shahid has condemned the government’s “decision to impose pre-publication censorship.”

The regulations violate Article 27, 28 and 29 of the Constitution, the opposition Maldivian Democratic Party MP tweeted today.

Article 27 guarantees “the right to freedom of thought and the freedom to communicate opinions and expression in a manner that is not contrary to any tenet of Islam,” whist Article 29 ensures “the freedom to acquire and impart knowledge, information and learning.”

Article 28 states, “Everyone has the right to freedom of the press, and other means of communication, including the right to espouse, disseminate and publish news, information, views and ideas. No person shall be compelled to disclose the source of any information that is espoused, disseminated or published by that person.”

The regulations were also contrary to the Universal Declaration of Human Rights as well as the Maldives’ commitments under the International Covenant on Civil and Political Rights (ICCPR), Shahid contended.

The regulations have prompted a flurry of tweets and Facebook posts from Maldivians expressing concern over censorship.

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Supreme Court approval required for transfer of judges

The Supreme Court has issued new rules requiring judges requesting transfer to a different court to seek approval from the apex court.

The rules (Dhivehi) enacted yesterday stipulate that judges of lower courts seeking transfer must write to the Supreme Court stating the reason for the change.

“The transfer of a judge of a lower court from one court to another shall be decided by a majority of the Supreme Court bench,” states section five of the rules.

Former Judicial Services Commission member Aishath Velezinee has accused the court of taking administrative control of the judiciary, while the UN has previously suggested the independence of lower courts is being compromised.

Once a decision is reached, the new rules state that the reappointment would be made by the Judicial Service Commission (JSC) based on the Supreme Court’s proposal. The judge would be given time to conclude cases before the transfer is finalised.

Judges must have served at least two years in the court they were appointed to before the request could be considered.

Before proposing the transfer to the JSC, the rules state that the Supreme Court bench must ensure the importance of the judge working in a different court based on academic qualifications and experience and consider whether the judge has relevant experience better suited to a different court.

For evaluation of the request, the apex court should also consider the quality of work done by the judge, the number of cases heard by the court or judicial area, the number of unfinished cases, the number of judges in the court or judicial area to which the transfer has been requested, and the population of the judicial area.

Outspoken whistleblower, Velezinee, told Minivan News today that the Supreme Court was taking over functions of the JSC.

“The Supreme Court is systematically taking control of the judiciary and misconstruing the Constitution for their benefit,” she said.

“The JSC is controlled by the Supreme Court and remains silent on these matters, facilitating the Supreme Court take over.”

The promotion and transfer of judges was previously overseen solely by the JSC. Last month, the JSC demoted former Chief Judge of the High Court, Ahmed Shareef, to the Juvenile Court as a disciplinary measure.

Under the Judges Act passed in 2010, transfer of judges was to be made by the Judicial Council, before the Supreme Court struck down the relevant articles in the Judicature Act, abolishing the council.

“Take over”

In May, the Supreme Court enacted new rules stipulating that the Department of Judicial Administration (DJA) – tasked with management of the courts and public relations as well as providing facilities, training, archiving systems and security for judges – will function in accordance with policies set by the apex court bench and under the direct supervision of a designated justice.

Velezinee stressed at the time that the administration of justice and the administration of the courts were “two different though interconnected issues.”

“The Supreme Court is misconstruing article 156 of the Constitution and the appointment of a Supreme Court judge to [oversee] the DJA is tantamount to control of the courts,” she contended.

In a comprehensive report on the Maldivian judiciary released in May 2013, United Nations Special Rapporteur for the Independence of Judges and Lawyers, Gabriela Knaul, wrote that “the dissolution of the Judicial Council and the direct control of the Supreme Court over the [DJA] have had the effect of centralising administrative decisions in the hands of the Supreme Court.”

“This has undoubtedly contributed to the strong impression that lower courts are excluded from the administration of justice and decision-making processes,” she noted.

She also referred to “several complaints about internal tensions in the judiciary, where lower courts are left with the feeling that the Supreme Court only works for its own interests, without taking into account the situation of other judges and magistrates.”

Earlier this month, the Supreme Court informed lower courts that it would be appointing magistrates to take over cases where magistrates have recused themselves.

The apex court noted that it has learned of magistrate courts writing to the JSC to appoint magistrates in cases where the presiding magistrate had excused himself.

Noting that the Supreme Court was the “highest authority for the administration of justice” under Article 141 of the Constitution and referring to a circular issued on August 10, 2011 – which stated that the Supreme Court would specify rules for appointing magistrates following recusal –  Chief Justice Ahmed Faiz Hussain asked magistrate courts to write to the Supreme Court if a magistrate recuses himself from a case.

In May, the Supreme Court also formulated new regulations making it mandatory for judges and judicial employees to seek permission to attend overseas workshops, seminars, conferences, or training programmes.

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Maldives strategically unprepared for SEZs, argues former Finance Minister Inaz

The Maldives is strategically unprepared for the negative consequences of creating special economic zones (SEZs), former Finance Minister Ahmed Inaz has warned.

In an opinion piece published on newspaper Haveeru last week, Inaz argued that SEZs could worsen income inequality, deprive local councils of sources of revenue, and lead to a large influx of foreign labour.

“If [the government] wants to create special economic zones, it should prioritise solving problems in the judiciary that the entire country is concerned about as well as the budget deficit,” he wrote.

Policies concerning the SEZs should be formulated with a long term plan that looks ahead 10 to 20 years into the future, Inaz advised.

Investor confidence should be secured, he continued, for which laws needed to be reviewed through political dialogue.

Speaking at a forum on SEZs last week, Maldives Monetary Authority Governor Dr Azeema Adam also cautioned that political consensus was necessary for SEZs to be successful and stressed the importance of a long term strategic plan.

President Abdulla Yameen ratified the SEZ Act on September 1, which he has said would “transform” the economy through diversification, whilst relaxed regulations and tax concessions were necessary to attract foreign investors and launch ‘mega projects’ to mitigate the reliance on the tourism industry.

Inaz meanwhile predicted that a population of foreign workers many times the size of the local population would be created with the development of SEZs.

“Problems (social, political and economic) as well as opportunities that could arise as a result of the [expatriate] population should be weighed academically and discussed and debated,” he advised.

Inaz served as finance minister during the administration of former President Mohamed Nasheed and oversaw the enactment of tax reforms in 2011.

After leaving the Maldivian Democratic Party in February 2012, Inaz told Minivan News he would “always remain independent and serving the national interest.”

Consequences of SEZs

Unlike China and other East Asian countries where SEZs were created about 50 years ago, Inaz observed that the Maldives has never been a “closed economy.”

A large and cheap labour force and rich natural resources contributed to China’s economic success, he noted.

However, he added, social scientists believe that industrial development came at the cost of social cohesion.

Moreover, large multinational companies exert undue influence over decision-making in China and other East Asian nations, Inaz suggested.

While a free market economic policy has always been pursued in the Maldives, “with the designation of separate economic zones, other regions of the Maldives would be closed economically,” Inaz wrote.

Inaz argued that policies enacted in China to integrate its economy with a globalised world were unsuited to the Maldives.

In addition to establishing infrastructure such as airports, utilities and transport networks, Inaz observed that China trained skilled workers such as engineers, accountants, and lawyers years in advance.

“The question is whether there are nearly enough Maldivians with good work ethics who would be inexpensive (compared to neighbouring countries)?” he asked.

Social and economic problems created as a result of not regulating migrant workers during the past 15 years could increase manifold with SEZs, Inaz warned.

If Maldivians were unprepared for new jobs, Inaz predicted that wages could also be adversely affected in the domestic job market.

Inequality

One of the biggest challenges facing the Maldives was income inequality and the small size of the middle class, Inaz continued, which was most evident in the regional disparities between the capital and outer atolls.

Inaz stressed that empowering local councils to generate income by utilising land and lagoons was necessary to reduce disparities.

While social security benefits reduces the income gap, Inaz warned of the negative impact on government revenue of tax exemptions for investors in SEZs.

China and Singapore created SEZs after putting the state’s fiscal affairs on a sustainable footing, he noted.

The value of the Maldivian currency deteriorated as a result of persistent budget deficits since 2004, Inaz observed, which forced the state to print money to finance deficit spending.

Consequently, the interest rate on treasury bills was now nine percent, he noted, which restricts opportunities for local businesses to partner with foreign investors in the SEZs.

“It would be unwise to establish [SEZs] without easing the burden placed on Maldivian businesses by the budget deficit and T-bill rates,” he advised.

If SEZs are created with the fiscal status quo unchanged, Inaz suggested that the government would lose sources of revenue from taxes and lease rent.

The government’s position in negotiations with potential investors would also be weak, he contended.

Inaz further argued that successive governments had been unable to improve provision of services due to a weak system of governance.

“With this reality and serious challenges, what high ground would we climb for safety from the big waves formed by opening up the whole country through a special economic zones law?” he asked.

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MDP calls on PG to drop charges against CNM journalist Haseen

The Maldivian Democratic Party (MDP) has called on Prosecutor General (PG) Muhthaz Muhsin as well as the government to drop charges against Channel News Maldives’ (CNM) senior journalist Abdulla Haseen.

“We note with regret that this is the first criminal prosecution of a journalist since the adoption of a democratic constitution in 2008,” the main opposition party said in a press release on Wednesday night (September 3).

Haseen is currently on trial at the Criminal Court on charges of obstructing police duty during an MDP demonstration on July 21, 2012.

The former Minivan Daily reporter is accused of shoving police barricades at the Chandanee Magu-Orchid Magu junction and using obscene language to address riot police officers.

At the first hearing of the trial last week, Haseen pleaded not guilty and noted that he attended political rallies and street protests to cover them as a journalist.

“This is a charge raised deliberately by the state against press freedom,” Haseen told reporters after the hearing.

“And this is an opportunity to experience for myself how the Maldivian criminal justice system functions.”

The court granted a five-day period for Haseen to hire a lawyer.

In addition to Haseen, Abdulla Idrees of Gulfaamuge in Laamu Maavah and former opposition MDP MP Hamid Abdul Ghafoor are also facing similar charges. The cases were conducted concurrently during the trial.

The next hearing of the case has been scheduled for September 28.

Press freedom

The MDP expressed concern with the filing of charges over two years after the incident allegedly occurred, noting that obstructing police duty was the most common charge pressed by the state.

“And we note with concern that Abdulla Haseen is being prosecuted at a time when the media in the Maldives is facing serious challenges with journalists assaulted, television stations torched, death threats made against journalists, personal safety of journalists lost, and a journalist believed to have been abducted,” the press statement read.

The party added that the Maldives has plummeted in press freedom indexes of international media organisations and called on the state to ensure security for media personnel.

The Maldives dropped to 108th place in the Reporters Without Borders (RSF) Press Freedom Index for 2014, marking a decline in press freedom for the third consecutive year.

In February 2013, opposition-aligned private broadcaster Raajje TV reporter Ibrahim ‘Asward’ Waheed was nearly beaten to death, while the station’s offices and equipment were destroyed in an arson attack in October.

In June 2012, two men slashed the throat of freelance journalist and blogger Ismail Hilath Rasheed with a box cutter.

Prior to the country’s first multi-party democratic election in 2008, the Maldives was ranked 104th – an improvement on its 2007 ranking of 129th. The country’s ranking in 2009 and 2010 reflected dramatic improvements in press freedom – including decriminalisation of defamation,  rising to 51st and 52nd respectively.

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Tourism Minister Adeeb appointed chairman of SEZ investment board

President Abdulla Yameen has appointed Tourism Minister Ahmed Adeeb as the chairman of the board of investment created last week under the Special Economic Zone (SEZ) Act.

Along with Economic Development Minister Mohamed Saeed as vice chairman, the rest of the members are Fisheries and Agriculture Minister Dr Mohamed Shainee, Environment and Energy Minister Thoriq Ibrahim, and Youth and Sports Minister Mohamed Maleeh Jamal.

The five-member board is authorised to grant approval for applications by developers to establish a zone, issue permits and investment licenses, and formulate rules and policies for the operation of SEZs.

Additionally, the board would monitor and review progress of investments, assess risk damage and liability, determine rates of fees and charges, and sign investment agreements between the government and developers.

The board would be assisted by a 17-member technical committee comprised of government officials as well as representatives from the private sector.

Following criticism from the opposition over the appointment of ministers to the board – who contended it was unconstitutional – President’s Office Spokesperson Ibrahim Muaz Ali put out a press statement yesterday (September 6) insisting that the board was instituted in line with laws and regulations.

Article 136(a) of the Constitution states, “A member of the cabinet shall not hold any other public office or office of profit, actively engage in a business or in the practice of any profession, or any other income generating employment, be employed by any person, buy or lease any property belonging to the state, or have a financial interest in any transaction between the state and another party.”

However, unlike boards of state-owned enterprises, Muaz stressed that the ministers on the board would not receive any form of remuneration, noting that it was “a governing board”.

“Therefore, the Maldivian government condemns misleading statements from some politicians made for different political purposes concerning the president forming the board of investment and appointing members,” read the press release.

SEZs

Under the SEZ Act, each zone would be granted to a developer – following evaluation of a proposal – to take overall responsibility for management and operation. Once a permit is granted, finding and choosing investors is left to the developer.

The investor would then be issued a license once the developer submits its agreement with the investor to the board.

The investment agreement signed between the board and the developer would include details of the investment, its value, proposed business activities, details of incentives, compensation formula, dispute resolution mechanisms, rights and obligations of the developer, as well as other terms and conditions.

Speaking at a forum on state broadcaster Television Maldives (TVM) last week, Adeeb said the SEZ law allows the government to offer incentives and “for the first time” negotiate directly with investors, who preferred “a one-stop solution” for applications, permits and licenses.

While US$5 billion has been invested in tourism since 1972, Adeeb suggested that even if one ‘mega project’ such as iHavan “takes off” with more than US$1 billion worth of investment, the economy would be transformed.

The iHavan or ‘Ihavandhippolhu Integrated Development Project’ envisions an international shipping and commercial hub with a container transhipment port, bulk-breaking and warehousing, oil storage and bunkering facilities, an international airport, a cruise liner terminal, a yacht marina, real estate development and ‘vertical’ tourism services.

The project aims to take advantage of the strategic location of the Maldives’ northernmost atoll on a major shipping route – through which more than 700,000 ships carry goods worth US$18 trillion a year – and develop 5,700 hectares of land along with deep natural harbours.

Opposition leader Mohamed Nasheed has, however, dismissed SEZs and the touted mega projects as “castles in the air” whilst his Maldivian Democratic Party (MDP) has warned that the law would pave the way for money laundering and other criminal enterprises, undermine local councils, and authorise the president to “openly sell off the country” without parliamentary oversight.

Speaking at the forum, MDP MP Fayyaz Ismail said large investments could not be secured while foreign businesses did not have confidence in the judiciary.

Fayyaz argued that the SEZ law lacked provisions for oversight and adequate legal protection for investors as well as controls for the inflow and outflow of money, relying solely on the benevolence and integrity of the government.

Addressing allegations concerning criminal enterprises and gambling in SEZs, Adeeb referred to President Yameen’s assurance that investments would not pose a threat to either Islam or Maldivian sovereignty.

“We don’t sell our daughters or women, do we? A clean tourism has been introduced in the Maldives without any prostitution,” he said.

If sound policies to favour local contractors and create jobs for youth are implemented, Adeeb suggested that investors could be brought in while “protecting our religion and traditions.”

“I don’t think gangs or black money are created by a law. It is done outside the law,” he said.

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Political consensus necessary for success of SEZs, cautions MMA governor

Political consensus is necessary for special economic zones (SEZs) to be successful and beneficial to the nation, Maldives Monetary Authority (MMA) Governor Dr Azeema Adam has cautioned.

Speaking at a forum on state broadcaster Television Maldives (TVM) last night, Dr Azeema said one of the most important prerequisites for successful enactment of the SEZ Act was stability and consensus “on a political and national level.”

“If SEZ becomes caught up in political waves, it will not bear fruit,” she warned.

“Political confrontations must come to an end for investors to come to the country, to ensure investor confidence, and for jobs to be created for Maldivians.”

Political disputes should be resolved through “constructive, meaningful and academic debates,” she advised.

President Abdulla Yameen ratified the SEZ Act on Monday (September 1), which he has said would be a “landmark law” that would “transform” the economy through diversification and mitigate the reliance on the tourism industry.

The government has maintained that SEZs with relaxed regulations and tax concessions were necessary to attract foreign investors and launch ‘mega projects’ for economic diversification.

Opposition leader Mohamed Nasheed has, however, dismissed SEZs and the touted mega projects as “castles in the air” whilst his Maldivian Democratic Party (MDP) warned that the law would pave the way for money laundering and other criminal enterprises, undermine local councils, and authorise the president to “openly sell off the country” without parliamentary oversight.

Longterm plan

Dr Azeema went on to stay that SEZs should create wealth and employment opportunities for Maldivians.

School leavers and university graduates should have the necessary skills when they enter the job market, she added, noting that a high employment rate was required for sustainable growth.

Citing International Labour Organisation (ILO) figures, Azeema said over 3,500 zones of varying sizes have been created in 130 countries.

“Economists agree that special economic zones play a very important role in the economic development of a country. It is known that at least 40 million people work in such zones,” she said.

Studies have shown that SEZs increase national productivity and income, she continued, and the zones contribute at least US$200 billion worth of exports worldwide.

However, she stressed that a longterm plan and strategies – which “should be transparent to investors and the public” – would be needed for SEZs to be successful.

While SEZs have been beneficial in some countries, “the results have not been so good” in others, she noted.

She added that SEZs in Singapore and China created in the 1960s and 1970s, respectively, took foresight and years to become successful.

Forum

At last night’s forum – organised jointly by the Maldives Broadcasting Corporation and the Maldives National University business school’s student association – MDP MP Fayyaz Ismail said large investments could not be secured while foreign businesses did not have confidence in the judiciary.

Fayyaz argued that the SEZ law lacked provisions for oversight and adequate legal protection for investors, relying solely on the benevolence and integrity of the government.

Tourism Minister Ahmed Adeeb – co-chair of the economic council – said the law was designed to attract investments beyond the ‘seaplane zone’ close to Malé’s international airport.

Under the existing tourism law, a flat rate of US$8 per square meter was charged for development of tourist resorts, Adeeb explained, which led to investors choosing uninhabited islands closer to the capital.

The SEZ Act combines the government’s policies on population consolidation and foreign investments to expand the economy and develop infrastructure in the north and south, Adeeb said.

Economic Development Minister Mohamed Saeed said SEZs were “tried and tested” in many countries, including small island states in the caribbean, which had a thriving banking sector.

“A zone is created to establish infrastructure that we don’t have through foreign funds,” he said.

Referring to the the iHavan transhipment port project, Saeed said the Maldives could capitalise on its strategic location and the “trillions of dollars” worth of trade that passes through the seven degree channel.

Saeed explained that the Ihavandhippolhu integrated development project would include offshore docking, bunkering facilities, an export processing zone, real estate businesses, and non-convention tourism facilities.

He noted that the development of Singapore’s port saw establishment of banks, a hotel industry, and other subsidiary services.

Adeeb stressed that the SEZ law allows the government to offer incentives and “for the first time” negotiate directly with investors, who preferred “a one-stop solution” for applications, permits and licenses.

While US$5 billion has been invested in tourism since 1972, Adeeb suggested that even if one project such as iHavan “takes off” with US$1.3 billion worth of investment, the economy would be transformed through multiplier effects.

Mohamed Ali Janah, former president of the Maldives Association of Construction Industry, meanwhile said emulation of the SEZ model implemented in the Caribbean and the ‘tiger’ economies of East Asia could take the Maldivian economy to “the next level”.

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Government expenditure rose 58 percent in June, reveals MMA

Government spending in June rose 58 percent compared to the same period in 2013, the Maldives Monetary Authority’s (MMA) monthly economic review for July 2014 has revealed.

Total expenditure, excluding net lending, “amounted to MVR1.6 billion (US$103 million) in June 2014,” stated the report released on Sunday (August 31).

Total government revenue, excluding grants, meanwhile rose four percent in annual terms and reached MVR0.9 billion (US$58 million).

“The increase in total revenue during June 2014 was largely due to the 57 percent growth in import duty and the 9 percent increase in total goods and services tax,” the central bank explained.

“Meanwhile, non-tax revenue registered a decline owing to the 18 percent decline in resort lease rent. As for the increase in expenditure, it was mainly due to the 30 percent increase in current expenditure.”

Budget deficit

In early August, Finance Minister Abdulla Jihad revealed that the government was facing “great difficulty in managing the budget deficit” due to shortfalls in revenue.

The ballooning budget deficit – which Jihad warned could reach MVR4 billion (US$260 million) or 10.6 percent of GDP – could affect the government’s ability to pay civil servants, he said.

A fiscal deficit of MVR1.3 million (US$84,306) had been projected in the record MVR17.96 billion (US$1.1 billion) budget approved by parliament.

The budget was inclusive of proposed revenue raising measures – many of which had failed to materialise during the previous administration – amounting to MVR3.4 billion (US$220 million), or 19 percent of the budget.

“Expenses keep on increasing, even as we don’t receive any revenue. We did not get the expected revenue this year either,” Jihad said last month.

Despite parliament passing the measures in February – including tax and import duty hikes – Jihad predicted at the time that the anticipated revenue might not be realised in full due to compromises.

“We try to make regular salary payments even if we have to take loans in order to do so,” Jihad said.

The monthly review revealed that the total outstanding stock of government securities – treasury bills and bonds – increased 18 percent in July compared to the corresponding period last year, reaching MVR13.7 billion (US$888 million).

“The annual growth in government securities was contributed by the increase in the amount of T-bills issued by the government to manage its growing cash flow requirements,” the review explained.

The MMA had previously warned that shortfalls in revenue and overruns in expenditure could jeopardise the country’s debt sustainability.

In May, MMA Governor Dr Azeema Adam called for “bold decisions” to ensure macroeconomic stability by reducing expenditure – “especially the untargeted subsidies” – and increasing revenue.

Tourism, fisheries and inflation

Tourist arrivals in July increased 20 percent from the previous month and 14 percent compared to July 2013, reaching 100,191 visitors, the review noted.

While bednights rose by nine percent in annual terms, the report noted that average duration of stay declined from 6.0 days in July last year to 5.7 days this year.

“With the increase in bednights, the occupancy rate also rose to 69 percent in July 2014 from 66 percent in the same period last year,” the review stated.

Fish purchases meanwhile declined by 44 percent to 2,124.7 metric tonnes compared to July 2013, the report revealed.

While the volume of fish exports fell by 54 percent, earnings on fish exports declined by 41 percent, which was “contributed mainly by the fall in export of frozen yellow fin tuna.”

The rate of inflation in the capital decreased to 2.4 percent from 3.5 percent in July 2013 and 3.6 percent the previous year, the review found, which was due to “the slower growth of food prices, especially fish, and the moderation in the growth in prices charged for rent and health services.”

The review noted that the trade deficit widened by 38 percent in July compared to the same period last year “due to the 27 percent increase in imports and the 34 percent decline in exports.”

Gross international reserves rose four percent from the previous month and 42 percent in annual terms, the review stated, amounting to US$497.6 million at the end of July.

“This mainly reflects the temporary increase in foreign currency transfers by the commercial banks in the review period,” the central bank explained.

“As for reserves in terms of months of imports, it also increased in both monthly and annual terms and stood at 3.2 months during the review month.”

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Government to halt dismantling gang huts, says President Yameen

The government has decided to stop dismantling huts in public spaces in Malé that police said are used exclusively by gangs, President Yameen revealed at a turf opening ceremony in Henveiru last night.

The process has been halted “until a solution could be found after studying the whole problem,” Yameen said, adding that the efforts were undertaken with “good intentions”.

“However, we believe that [dismantling huts] alone would not solve the problem,” he said.

The president’s comments came after Home Minister Umar Naseer – speaking at a separate event – had suggested there were around 30 gangs in Malé, describing 13 of these as “dangerous” criminal organisations.

President Yameen said he did not believe criminal activities would occur “every time youth congregate” in a neighbourhood spot.

Turning to “law enforcement” in all cases was not desirable, he continued, suggesting that youth could resolve problems through “constructive engagement”.

After police began dismantling huts in Malé on August 13 – claiming they were used for drug dealing and storing weapons used in assaults – groups of youth on motorbikes protested in the capital calling for the resignation of the home minister.

“Where are our huts?” chanted the youth groups.

Yameen meanwhile suggested that sports pitches, facilities, and tournaments for youth “could go a long way” towards reducing crime and resolving “stress and strain” among rival neighbourhood groups.

The turf ground opened last night was built by the State Trading Organisation for the TC and Kuda Henveiru groups.

Referring to MPs in attendance at the ceremony, Yameen urged politicians to work “as ambassadors” with “positive engagement” to resolve disputes among youth.

Yameen said Youth Minister Maleeh Jamal informed him that 10 futsal pitches would be completed during September.

“So a lot of work is being done to engage youth productively in their free time,” Yameen said.

“Releasing negative energy out of dissatisfaction is not the solution for anything,” he advised, adding that it leads to “bad blood” and “more negative energy”.

Conversely, constructive engagement either through dialogue or sports leaves “everybody better off,” Yameen said.

“I don’t doubt that you will use this facility in the right way and that ambassadors would be created through these sports activities as ‘peace ambassadors’ or ‘engaging ambassadors’ to find some relief for the strain in society,” he said.

“Crime wave”

Meanwhile, speaking at a ceremony held yesterday to mark the 10th anniversary of the Maldives Police Service – which was separated from the military and established as a civilian law enforcement body in 2004 – Home Minister Umar Naseer revealed that police have identified “more than 30 gangs” in the capital with about 50 “gang leaders”.

Of the 30 gangs, 13 were “dangerous” criminal organisations, Naseer said, adding that there were more than 500 members in these groups.

Referring to three fatal stabbings in recent weeks, Naseer said gang violence was “the biggest challenge” facing the police.

Police were the “front line” in a “chain” made up of the Prosecutor General’s Office, courts, and prisons, Naseer said, adding that the National Drug Agency (NDA) was an important link in the chain as street violence was connected to drug use.

“The government has resolved to stop the crime wave in the streets. God willing, in the coming days, we will announce strong measures,” he said.

President Yameen has tasked the home minister with formulating a “broad plan” to tackle gang violence, he revealed.

Naseer said conservative estimates suggested there were at least 10,000 drug users in the Maldives, of which 5,000 were unemployed.

Organised criminal gangs were composed of unemployed drug users, Naseer explained, which carry out assaults and robbery under the guidance of gang leaders.

While cases involving gang members were filed at court, Naseer said that gangs intimidate both judges and eye witnesses to prevent convictions.

“God willing, we are preparing an assault on this whole structure [of criminal gangs], which will come very soon,” he declared.

Four issues needed to be considered ahead of implementing the plan, Naseer suggested, advising a “realignment of our thinking”, with a stricter approach to drug users.

“In my view, all of our institutions should know very clearly that drug use is not a disease but a crime,” Naseer said.

Drug users should be punished harshly instead of being offered treatment, Naseer said, drawing applause from police officers in the audience.

However, he added, offenders would undergo rehabilitation while serving sentences.

“Liberalisation,” “excessive freedom,” and alleged calls for “decriminalisation” from politicians were encouraging youth to use drugs, Naseer argued, which created the impression that drug use was not a crime.

Naseer contended that a soft approach for drug users during the past five years had led to a rise in violent crimes.

“Do we stop this by caressing or through harsh punishment?” he asked.

“We cannot find a solution to the problem of stabbing and murders on the street without stopping drugs.”

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