Author: Ahmed Naish

World Bank predicts positive outlook for Maldivian economy in 2014

The World Bank predicts a positive outlook for the Maldivian economy in 2014 with a projected GDP growth of 4.5 percent, according to its annual global economic prospects report.

Economic growth would be “driven by strong tourist arrivals, particularly by robust growth in the Chinese tourist segment,” observed the report released last week.

“In the medium term, the economy is projected to grow at a more sustainable pace of about four percent annually, as tourism revenues from Europe pick up.”

The report did warn, however, that an increasingly likely El Niño conditions in the regions represented a medium-term economic risk.

GDP growth in 2015 and 2016 is projected at 4.2 percent and 4.1 percent respectively.

The Maldives Monetary Authority (MMA) had revealed earlier this month that economic activity expanded in the first quarter of 2014 “driven by the strong growth of the tourism sector during the ongoing high season of the industry.”

Total tourism receipts in the first three months of the year increased by 10 percent compared to the first quarter of 2013, reaching US$801.1 million.

The central bank noted that the 10 percent annual increase in arrivals during the first quarter was “entirely driven by the significant increase (24 percent) in arrivals from the Chinese market.”

Chinese tourists accounted for 27 percent of guests during the first quarter of 2014. Europe however retained the largest market share despite the continuing growth of the Chinese market, accounting for of 51.3 percent of all arrivals.

Challenges and risks

In late May, a delegation from the World Bank led by the World Bank Vice President Philippe Le Houérou – in his first visit to the Maldives since assuming the post in July 2013 – met President Abdulla Yameen and agreed to work with the government in developing a national strategy for fostering growth and consolidating public finances.

The discussion focused on “the need to reduce fiscal deficits, create a favourable investment climate for the private sector and delivery of key public services,” according to a press release from the World Bank.

“Maldives has enjoyed economic growth during the last decade and expects to achieve 4.5 percent growth in 2014,” Le Houérou was quoted as saying.

“But it still faces challenges, such as balancing public accounts while delivering public services on some 200 islands across hundreds of kilometres of the Indian Ocean. The issue is how Maldives can make the most of its potential in order to achieve inclusive and sustainable development.”

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.

El Niño

The global economic prospects report meanwhile warned that impending El Niño weather conditions could be “a key medium-term risk” for growth in the South Asia region.

In 1998, catastrophic El Niño bleaching killed 95 percent of the Maldives’ corals – a key attraction for tourists – following three months of unusually high seawater temperatures that year.

The World Bank report noted that as of May “the likelihood of El Niño conditions in 2014-15 was assessed at 60-70 percent.”

“Strong El Niño conditions resulting in deficient rainfalls or drought can have more significant impacts. Although ample grain stocks should mitigate adverse effects on food security, weak agricultural performance could keep food inflation, and in turn, retail inflation, high—perhaps necessitating a tighter monetary policy stance than otherwise, which may have adverse implications for investment and growth,” the report explained.

Among other risks for South Asian economies were “stressed banking sectors” and slow pace of institutional reforms as well as geopolitical and financial risks.

“Given the reliance of the South Asia region on imported crude oil, it remains vulnerable to political developments in Ukraine and Russia that could result in tighter international oil supplies,” the report cautioned.

“An escalation of geopolitical tensions that cause crude oil prices to spike can significantly impact current account sustainability in the region.”

Other external risks include declining capital flows from high income countries – which could have “adverse effects on exchange rates” – and a sharp slowdown in China’s economic growth, which would “represent a risk for the global economy, and in turn, for regional growth prospects.”

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Islamic Ministry to seek opinion of religious scholars on Maldivians joining Syrian civil war

The Ministry of Islamic Affairs has decided to hold a forum on Tuesday night (June 17) for local religious scholars to discuss Maldivians leaving to fight in the Syrian civil war.

Islamic Minister Dr Mohamed Shaheem Ali Saeed revealed on social media yesterday that the ministry decided to consult scholars following inquiries and concern from the public regarding the issue of jihad.

“The ministry’s opinion will be shared with the public after consulting scholars. Insha Allah,” he tweeted.

Shaheem told local media that discussions at the forum – which will take place at the Islamic Centre – will focus on the question of jihad from a Shariah perspective.

Scholars are expected to determine whether fighting in Syria could be considered a religious obligation or jihad.

In May, an online media group called Bilad Al Sham Media (BASM) – ostensibly run by Maldivians in Syria – revealed that two Maldivians had been killed in the war-torn Arab nation.

While the first Maldivian was killed in a suicide attack, the group claimed a second Maldivian was killed shortly thereafter in a gunfight with soldiers loyal to Syrian President Bashar Al Assad.

Moreover, in October 2013, local media reported that two Maldivian men – aged 25 and 35 years – were apprehended from Ibrahim Nasir International Airport on suspicion that they were leaving to join the Syrian civil war.

The reported deaths of two Maldivian militants last month prompted investigations by both the Maldives Police Service (MPS) and the Maldives National Defence Force (MNDF).

Responding to police attempts to locate the group last week, BASM stated in a Facebook post that they could be found at the Jabhat al-Nusra (al-Qaeda in Syria) base in Idlib, northwestern Syria.

“Now lets see whether they can bring us back,” read the post.

Government stance

Islamic Minister Shaheem had previously stated that he personally did not believe it was right for “any Maldivian youth to join another country’s war in the name of Islam.”

Vice President of the Fiqh Academy Sheikh Iyaz Abdul Latheef meanwhile told Minivan News that the academy has no official view on the matter. Iyaz has however blogged about the issue in his personal capacity.

Writing on ‘MV Islam Q&A’ last month, Iyaz contended that it was unacceptable ‘jihad’ to fight in a war without seeking prior permission from the leader of the nation and from one’s parents.

He also said that another issue arising from such ‘jihad’ is the unforgivable error of killing another Muslim.

Asked by reporters about Maldivian militants in Syria, President Yameen said Maldivians were not departing to Syria with either the government’s knowledge or consent.

Responsibility for criminal activity must be borne by the individual who committed the crime, Yameen said.

“If any Maldivian – regardless of where they are, or for what reason, even if not for war – notifies us that they are unable to come back to the Maldives, the government will offer any possible financial assistance to them. However, there is no way we can bring back anyone forcefully against their will,” Yameen told the press on his return to an official visit to India last month.

A former senior police officer who spoke to Minivan News at the time on condition of anonymity described  the government’s response as “highly irresponsible” and called for immediate preventive measures.

“It has previously been alleged that there are terror cells here, and that the Maldives is also somehow involved in financing terrorism activities,” he noted.

“In fact, the government must have been aware of this way before it was discussed in mainstream media. In light of these events, it is a likely danger – and a far more serious threat – that such actions may start operating here on our own land.”

Speaking to Minivan News following BASM’s threats against the police, the ex-officer questioned both the capacity and the desire of authorities to prosecute such activities.

The former officer pointed to the lack of comprehensive anti-terror laws in the country and questioned the decision to have controversial Sheikh Adam Shameem speak at the police’s recent master parade.

“For the police to invite these people validates the accusations made by some that police and the security services are quite supportive of extremist elements and extremism in general,” said the former officer.

The opposition Maldivian Democratic Party (MDP) has also claimed there is a prevalence of extremist ideologies within the Maldives security forces.

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MDP resumes political activities with reopening of haruge

The Maldivian Democratic Party (MDP) has resumed political activities with the reopening of a new haruge (meeting hall) in the capital Malé last night (June 11) after a hiatus in the wake of successive electoral defeats.

The main opposition party announced that weekly gatherings will take place on Sunday and Thursday nights at the new haruge in Galolhu Aaras, located near the Television Maldives (TVM) studios.

The meeting hall was officially opened by founding member and artist, Ahmed Abbas, at a ceremony attended by former President Mohamed Nasheed, MDP MPs and city councillors.

Speakers at last night’s rally – the party’s first public gathering since the March 22 parliamentary polls – severely criticised the current administration over alleged failure to fulfil campaign pledges as well as the state of healthcare in the Maldives.

The meeting hall would become an outlet for public opinion and grievances, said MP Ibrahim Shareef, vowing that the party would ensure that fundamental rights and freedoms are protected.

Shareef also contended that the government has not undertaken any significant development projects in the atolls since assuming office in November last year.

In her remarks, Malé City Deputy Mayor Shifa Mohamed referred to the ransacking of the MDP’s previous meeting hall on February 7, 2012, by mutinying riot police, soldiers, and opposition protesters prior to the controversial resignation of President Nasheed.

Shifa said the party had remained quiet in order to see what President Yameen could accomplish with a parliamentary majority and control over other state institutions.

The former education minister contended that the current administration has not introduced new services or launched new social security programmes, noting that universal health insurance and other benefits were introduced by the MDP government.

Shifa also claimed that single parents were not receiving their monthly allowance.

President Yameen’s administration was “top heavy” with an excessive number of political appointees, she argued, while no progress had been made in fulfilling the campaign pledge of creating 94,000 jobs.

The government was holding ceremonies and functions – in lieu of carrying out development projects – to create false headlines and mislead the public, she said.

Meeting halls in the atolls would also be opened in the near future, Shifa continued, inviting members to a maahefun (traditional celebratory feast on the eve of Ramadan) on the night of June 19.

The MDP’s inactivity in recent weeks does not mean that the party accepted defeat in the presidential election, Shifa said, referring to the Supreme Court’s annulment of the first round of the presidential polls last year based on a secret police forensic report.

“Don’t think that we have forgotten all of that,” she said.

The MDP “single handedly” winning over 105,000 votes in the presidential election was testament to the party’s strength, said MP Imthiyaz Fahmy ‘Inthi’, noting that all other political parties were forced to form an alliance to compete against the party.

The MDP’s main task was overcoming the effects of a 30-year dictatorship, Inthi suggested, contending that the MDP was the only hope the Maldivian people had for democracy and good governance.

Former MP Ali Waheed meanwhile advised members to raise awareness and educate and inform their friends, relatives, and associates with renewed resolve to return to power.

He observed that the country has come full circle ten years after former President Maumoon Abdul Gayoom launched a democratic reform agenda as the president was once again “an Abdul Gayoom”.

“God willing, the work we are beginning here today will end with the election of the MDP’s presidential candidate as the president of the Maldives,” he said.

The former MDP parliamentary group deputy leader announced his intention to contest for the party’s chairperson post today.

Former President Nasheed also announced his candidacy for the post of party president earlier this month.

Elections for the party’s leadership posts are due to take place on August 29.

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SEZ bill designed to incentivise investment, says Economic Development Minister

The special economic zone (SEZ) bill submitted to parliament last week is designed to incentivise foreign investment with special privileges and tax exemptions, Economic Development Minister Mohamed Saeed has said.

Speaking at a press conference this morning, Saeed said the current administration’s objective was introducing new industries in order to overcome the dependence on the tourism industry, which was vulnerable to external shocks and global events.

The Maldives had to “outperform competitors” by offering incentives so that investors would choose the country over business hubs such as Dubai, Oman, Qatar, Singapore or Hong Kong, Saeed said.

According to the draft SEZ legislation (Dhivehi), investors would be exempted from paying either import duties for capital goods brought in for the development, supervision, and operation of the zone or business profit and withholding taxes.

Moreover, investors in the SEZ will be exempted from paying goods and services tax for a 10-year period.

Additionally, a board of investment – chaired by a minister – established by the law would have the authority to lease land to foreign companies for 66 years while local companies would be able to purchase land.

Saeed said he expects the SEZ bill to become the first piece of legislation to be passed by the 18th People’s Majlis, which began its five-year term last month.

Mega-projects

The Maldives became the number one destination worldwide for “lifestyle holidays” because resorts were developed in the early 1970s as “a kind of special economic zone,” Saeed contended.

While the tourism industry was the main source of foreign currency at the moment, Saeed said the government did not believe that other industries were “alien” or unsuited to the Maldives.

Saeed suggested that the turnover from new industries set up in the SEZs could be two or three times higher than tourism.

“That is because all the large developing economies of the world are near the Maldives. For example, China and India,” he said.

Referring to the government’s ‘iHavan’ transshipment port mega-project, Saeed noted that the Maldives is strategically located astride major sea lanes in the Indian Ocean, through which cargo ships carry US$79 trillion worth of goods from East to West and vice versa annually.

Nine ships an hour travel through these channels, he added.

“Lagoons with the natural depth needed to service those ships is found in this region only in the Maldives,” he said.

While other countries would have to dredge to build ports, Saeed said the Maldives has “wave-free natural ports” that could provide services such as offshore docking facilities throughout the year.

“If turnover from tourism is US$2.5 or US$3 billion [annually], when a shipping industry with offshore docking, bunkering and bulk-breaking facilities is set up in the Maldives – one of the world’s most spacious ports – then consider the benefits. For example, consider the turnover, the GST [goods and services tax] of the turnover, [and other] taxes,” he explained.

The iHavan or Ihavandhippolhu Integrated Development Project involves a transshipment port facility, airport development, a cruise hub, yacht marina, bunkering services, a dock yard, real estate, and conventional tourism developments.

“Freeholds”

The SEZ legislation envisions nine economic zones across the country, including an industrial estate zone, export processing zone, free trade zone, enterprise zone, free port zone, single factory export processing zone, offshore banking unit zone, offshore financial services centre zone, and a high technology park zone.

President Yameen had declared in April that the SEZ bill would become “a landmark law” that would strengthen the country’s foreign investment regime.

“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,” Yameen said at a function in Hulhumalé.

The SEZs would be “likened to cities in Dubai or the Emirates” and “the [business] environment we have in Singapore.”

The new law would enable investors to have “freeholds” in the country and allow investors “to engage in really, really long gestative projects,” Yameen said.

“We are embarking on an era of growth,” he said.

Moreover, addressing participants of the Maldives Investor Forum in April, Yameen had said his administration was “cognisant of the needs of our investors and the requirements to strengthen and redefine the legal and regulatory environment governing foreign investments.”

“To address investment climate and to facilitate mega investments with attractive incentive packages, a Special Economic Zone Bill will be tabled in the parliament soon. Additionally, the Foreign Investment Act and Companies Act are being revised to cater the ever increasing needs of the modern foreign investors,” he said.

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Bill submitted to raise disability benefits to MVR5,000

Adhaalath Party MP Anara Naeem has submitted an amendment to the Disability Act to raise the monthly allowance provided by the state to persons with special needs from MVR2,000 (US$150) to MVR5,000 (US$324).

The stated purpose of the amendment bill (Dhivehi) is to provide financial assistance to families with persons with special needs to seek medical treatment overseas.

While treatment for disabled persons was covered in the government’s ‘Aasandha’ health insurance scheme, the MP for Makunudhoo stated that securing Aasandha in hospitals abroad was difficult for families.

The first reading of the bill took place at today’s sitting of parliament, after which it will be tabled for preliminary debate.

According to local media, Anara has also submitted a petition to parliament for raising the benefits, which has been signed by 54 MPs.

The Disabilities Act (Dhivehi) was passed in July 2010 to provide financial assistance and protect the rights of persons with special needs whilst a national registry was compiled in 2011 with more than 4,000 active members.

Subsidising

The President’s Office meanwhile announced yesterday that the government would cover advance payments for 15 flats in Hulhumalé allocated for children with special needs.

President’s Office Spokesperson Ibrahim Muaz Ali told local media that at MVR18,500 (US$1,199) per apartment, the total cost would be MVR277,500 (US$17,996).

“The government has decided to provide speech therapy, developmental physiotherapy, and occupational therapy both at Vilimalé Health Centre which is being developed as a hospital, and at Dhamanaveshi [in Vilimalé]. It has also decided to provide special seating services for children with disabilities at IGMH,” he was quoted as saying by Sun Online.

In March, the government raised the old age pensions from MVR2,300 to MVR5,000 a month to fulfil a campaign pledge by President Abdulla Yameen and the ruling Progressive Party of Maldives.

National inquiry

In May, hundreds of people gave testimony to the Human Rights Commission of the Maldives’ (HRCM) “National Inquiry on Access to Education for Children with Disabilities.”

Parents spoke of the state’s failure to provide medical services and education to children with special needs whilst private services were costly. A single diagnostic assessment costs MVR5,000 and an hour of therapy costs MVR500, neither of which are covered by the ‘Aasandha.’

According to the HRCM, statistic from 2009 indicate that, out of 2250 children with disabilities, only 230 were attending schools at the time.

Citing a 2010 report by the HRCM and the UNDP, the US State Department’s 2013 Human Rights Report on the Maldives noted that “most schools accepted only children with very limited to moderate disabilities and not those with more serious disabilities.”

“Children with disabilities had virtually no access or transition to secondary-level education. Only three psychiatrists, two of them foreign, worked in the country, and they primarily worked on drug rehabilitation. No mental health care was available in Male. There also was a lack of quality residential care,” the report stated.

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Expansion of economic activity in first quarter driven by tourism sector growth: MMA

Domestic economic activity expanded in the first quarter of 2014 “driven by the strong growth of the tourism sector during the ongoing high season of the industry,” according to the Maldives Monetary Authority’s (MMA) quarterly economic bulletin.

Total tourism receipts in the first three months of the year increased by 10 percent compared to the first quarter of 2013, reaching US$801.1 million, the central bank revealed.

“In Q1-2014, the average operational bed capacity of the industry also increased by four percent when compared to Q1-2013 and totalled 26,999 beds, contributed by the opening of more resorts and guesthouses during the period,” the bulletin explained.

“Despite the increase in the operational bed capacity of the industry, the occupancy rate of tourism accommodation facilities remained relatively unchanged at 84 percent when compared to Q1-2013, owing to the higher increase in bednights.”

Arrival trends

On arrival trends in the first quarter, the bulletin noted that the 10 percent annual increase in arrivals was “entirely driven by the significant increase (24 percent) in arrivals from the Chinese market.”

Chinese tourists accounted for 27 percent of guests during the first quarter of 2014. According to the Tourism Ministry, the Chinese market expanded by 24 percent with an additional 16,960 tourists compared with the same period of 2013.

Statistics from the Tourism Ministry show that 331,719 Chinese tourists visited the Maldives last year –  a 44.5 percent increase from the previous year.

Chinese tourists accounted for 29.5 percent of all tourist arrivals in 2013.

“Meanwhile, after recording three successive quarters of positive growth, arrivals from Europe (which constitute over half of total tourist arrivals) registered a marginal decline of two percent in Q1-2014, mainly due to a substantial fall in arrivals from Russia owing to its economic crisis and partly due to Easter calendar effects,” the bulletin continued.

“The poor performance of the Russian market (the third main market from Europe since Q2-2012) is in stark contrast to the double-digit growth rates exhibited by the Russian market throughout the last year.”

The bulletin noted that all major markets from Europe recorded a decline in arrivals. While arrivals from Germany – “the main source market from Europe” – and Italy both declined by four percent, arrivals from France declined by two percent.

“The better performance of UK market during the quarter is attributable to the sustained growth of the British economy since last year,” the bulletin observed.

Fisheries and construction sectors

The fisheries industry in the first quarter of 2014 “continued to be adversely affected by falling tuna prices in the international market since September last year,” the bulletin observed.

“This is reflected by the annual decline in fish purchases by collector vessels (12 percent) and the fall in both volume and earnings of fish exports in Q1-2014, by 26 percent and 6 percent, respectively,” the bulletin stated.

The construction industry however continued its “ongoing recovery” in 2014, the bulletin continued, which was “indicated by the strong annual growth in construction-related imports and bank credit to mainly residential housing construction projects.”

“Spurred by the strong performance of the tourism and other key sectors, activity in the wholesale and retail sector also picked up during the review period. This was reflected by a 13 percent increase in bank credit to the sector in the review period compared to Q1-2013, while private sector imports (excluding tourism) grew by 9 percent in the same period,” the bulletin read.

“Main driver of inclusive growth”

Meanwhile, a delegation from the World Bank led by the World Bank Vice President Philippe Le Houérou – in his first visit to the Maldives since assuming the post in July 2013 – met President Abdulla Yameen in late May and agreed to work with the government in developing a national strategy for fostering growth and consolidating public finances.

The discussion focused on “the need to reduce fiscal deficits, create a favourable investment climate for the private sector and delivery of key public services,” according to a press release from the World Bank.

“Maldives has enjoyed economic growth during the last decade and expects to achieve 4.5 percent growth in 2014,” Le Houérou was quoted as saying.

“But it still faces challenges, such as balancing public accounts while delivering public services on some 200 islands across hundreds of kilometres of the Indian Ocean. The issue is how Maldives can make the most of its potential in order to achieve inclusive and sustainable development.”

World Bank Country Director for Sri Lanka and Maldives, Francoise Clottes, noted the country’s “great success in developing a world-class tourism sector to take advantage of its breathtaking beauty.”

“This sector is expected to continue to grow and remains the main driver of inclusive growth and sharing prosperity, going into the future,” Clottes said.

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PPM denies using presidential residence for party functions

Functions of the ruling Progressive Party of Maldives (PPM) held at the official presidential residence Muleeage are not funded from the state budget, President Abdulla Yameen has said.

Speaking to the press at a PPM event in Muleeage on Thursday night (June 5), President Yameen reportedly said he did not believe using the official residence for meetings or party activities amounted to misuse of state resources.

The president’s remarks followed Auditor General Niyaz Ibrahim’s insistance last week that state property could not be used for party activities.

Niyaz told local media that Muleeage could only be used either for functions held by the president or the first lady in their official capacity or for meeting invited guests.

Recent signing ceremonies to welcome high-profile new members to the ruling party – most recently Independent MP Abdulla Khaleel and Environment Minister Thoriq Ibrahim – have been held in Muleeage.

President Yameen told reporters Thursday night that while he respected the auditor general’s opinion he did not believe using Muleeage for party functions was a problem.

“No money from the government’s budget or Muleeage budget is spent for any work done here. If there’s a tea or anything else here, we make the expenses outside the budget. So this is not a resource that is consumed,” Yameen was quoted as saying by newspaper Haveeru.

Yameen said he meets members of the public as well as MPs at Muleeage, adding that meeting MPs at the President’s Office to discuss parliamentary affairs would be “too official.”

“If expenses are not made from the government budget, it would be best if the place [Muleeage] is not made too much of an issue,” he suggested.

After assuming office in November, President Yameen had announced that he would continue to live in his private residence. However, the budget allocated for the official residence was increased by MVR2 million (US$130,208) in the state budget for 2014 – rising to MVR19.1 million (US$1.2 million).

In April this year, parliament approved amendments to to the law governing renumeration and benefits for the president and vice president making it mandatory for the state to cover expenses of the pair’s private residences should either choose not to live in the official residences.

“Biased and misleading”

Meanwhile, the PPM also put out a press statement last week contending that the auditor general’s remarks were biased, misleading and politically motivated.

“This party’s activities have not been held in the president’s official residence Muleeage so far,” the party claimed.

The party also contended that the president holding meetings in Muleeage with various individuals could not be considered “a political party activity.”

Alleging that a number of party activities and functions – without the participation of the president – had been held in Muleeage during the administration of former President Mohamed Nasheed, the PPM noted that “the auditor general had not said anything about it” at the time.

The press release went on to criticise the auditor general for not objecting to political party activities allegedly held at the Malé City Council premises as well as the use of the Dharubaaruge convention centre by protesters of the opposition Maldivian Democratic Party (MDP) in the wake of the controversial transfer of power in February 2012.

“Therefore, as this party believes that the interviews given by the auditor general to the media saying that the president’s official residence is being used for this party’s activities were biased and political, we express deep concern about the matter,” the press release stated.

The statement concluded by calling on the auditor general not to make statements without “properly considering the truth of the matter.”

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Government submits bill on special economic zones

A bill on establishing special economic zones (SEZ) to attract foreign investment has been submitted to parliament on behalf of the government by Progressive Party of Maldives (PPM) MP Ahmed Nihan.

The SEZ bill becomes the first piece of legislation to be proposed by President Abdulla Yameen’s administration to the 18th People’s Majlis, the newly-elected PPM parliamentary group leader tweeted on Thursday (June 5).

Speaking to reporters prior to departing to China on Wednesday night (June 4) to attend the Kunming Trade Fair, Economic Minister Mohamed Saeed explained that special economic zones would be established in the north, south and other “strategic locations.”

The SEZ bill is intended to expand the economy and could “bring an end to the dependence on tourism,” he said.

In addition to ports and light industries, Saeed said financial services and bunkering facilities would be made available at the zones.

“So the result of this would be the introduction of different industries to the Maldivian economy in addition to tourism,” he said, adding that the new enterprises could be more lucrative and beneficial than tourism.

Referring to the impact on the Maldives from the 2004 tsunami and the spread of the SARS virus, Saeed stressed the importance of diversification, as the Maldivian economy was vulnerable to external shocks due to the extreme dependence on the tourism industry.

He noted that economic development and job creation was the key focus of President Yameen’s election campaign.

The government conducted “a wide research” in drafting the bill, Saeed continued, and studied the practices of countries such as Dubai, South Korea, Mauritius, Cyprus, China, and Singapore.

The bill would “completely ensure investor protection,” he asserted.

Business-friendly laws were essential for attracting investors for mega-projects planned by the government, Saeed noted, such as the ‘iHavan’ transhipment port project.

The minister also expressed confidence that parliament would pass the bill without delay.

Vice President Dr Mohamed Jameel Ahmed meanwhile observed that the ruling party had a clear majority in parliament with a team of young MPs committed to the government’s economic agenda.

“Freeholds”

President Yameen had declared in April that the SEZ bill would become “a landmark law” that would strengthen the country’s foreign investment regime.

“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,” Yameen had said at a function in Hulhumale’.

The special economic zones would be “likened to cities in Dubai or the Emirates” and “the [business] environment we have in Singapore.”

The new law would enable investors to have “freeholds” in the country and allow investors “to engage in really, really long gestative projects,” Yameen said.

“We are embarking on an era of growth,” he said.

Other economic bills in the government’s legislative agenda include bills on foreign investment, insurance, consumer protection, corporate social responsibility and small claims as well as amendments to the Maldives Monetary Authority Act and the Pensions Act.

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Development and environment protection should go together, says President Yameen

Economic development and protection of the environment should go in tandem to ensure sustainable development, President Abdulla Yameen has said.

In a message on the occasion of World Environment Day, President Yameen said the Maldives’ environment and ecosystems have been adversely affected by some development efforts.

“Therefore, we have to pay more attention to this. And we have to ensure that development and protection and sustenance of the environment go together. That is how sustainable development can be achieved,” he said.

“Doubtless the development that all our citizens want is intertwined with this.”

The current administration has come under fire from local environmental groups following environmental damage caused by a US$37 million four-island reclamation project carried out by Royal Boskalis Westminster.

The Netherlands-based maritime infrastructure company was accused of mining sand from the country’s only UNESCO biosphere reserve in Baa Atoll as well as failing to build a barrier to prevent excess dredge soil from spilling onto the reef in Baa Atoll Eydhaushi Island.

In the two islands where reclamation was completed, houses and vegetation on the shorelines were also covered in fine mixture of sand and salt due to the use of the “rainbow technique” which propels soil into the air.

Climate change

President Yameen meanwhile referred to the findings of the second working group of the Intergovernmental Panel on Climate Change (IPCC) and called for timely action to address climate change.

“The quantity and quality of water resources are being affected. Climate ‎change is negatively impacting crop yields as well. Impacts from recent climate-‎related extremes reveal significant vulnerabilities and expose some ecosystems ‎and many human systems to current climate vulnerability,” Yameen said.

“At the forefront of ‎those facing the effects of climate change are communities living in the world’s ‎low-lying regions and small island states.”

Referring to the theme of this year’s Environment Day – “Raise Your ‎Voice, Not the Sea Level” – President Yameen welcomed the special focus ‎which will be afforded to small island nation states such as the Maldives.

The president noted that the United Nations has designated 2014 as the ‎International Year of Small Island Developing States (SIDs). ‎

Yameen also paid tribute to the climate change advocacy efforts of of former President Maumoon Abdul Gayoom, who he said brought the threats posed by sea level rise to global attention in the late 1980s.

Foreign Minister Dunya Maumoon also emphasised the need to take concrete action to avert climate catastrophe.

A Foreign Ministry press release today said that the minister expressed hope that key international conferences this year would successfully take into account the vulnerability of SIDs.

The Third International Conference on Small Island Developing States will be held in Samoa in September, while the negotiations of a new climate treaty at the Meetings of States Parties of the UNFCCC will also take place in 2014, detailed the release.

The press statement noted that the IPCC’s latest report has “proven that climate change is neither just an environmental issue nor a scientific thesis, but is of a question of the survival of each and every nation around the planet, irrespective of its size.”

“The minister also reiterated that the Maldives continues to be in the front line while refusing to remain a victim, and have been an agent of change in addressing environmental issues,” it added.

“The Maldives is currently in the process of developing a low carbon development strategy which paints a promising picture not only for the nation but the world. Internationally, the Maldives has led efforts to emphasise the links between human rights and climate change, as well as the plight of small states.”

In his message, Environment Minister Thoriq Ibrahim meanwhile noted that 23 percent of the Maldives’ GDP was spent on importing fossil fuels and stressed the importance of developing sources of renewable energy.

The Environment Ministry commenced its programme to mark the World Environment Day with a tree planting event in front of the Male’ Sports Complex.

Other events planned by the ministry include the publication of reports for energy saving in schools, a photography exhibition, a film festival, and a clean up event in Malé.

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