Author: Ahmed Naish

High Court orders DRP Leader Thasmeen to settle MVR 1.9 million debt to Deputy Speaker Nazim

The High Court today upheld a Civil Court verdict in April 2011 ordering Dhivehi Rayyithunge Party (DRP) Leader Ahmed Thasmeen Ali to settle an outstanding debt of MVR 1.92 million (US$124,513) owed to Deputy Speaker Ahmed Nazim.

MP Nazim, who recently joined the Progressive Party of Maldives (PPM), sued the DRP presidential candidate in March 2011 to recover MVR 1.92 million (US$124,513) unpaid from a loan worth MVR 2.55 million (US$200,000).

While the High Court upheld the lower court verdict, the ruling (Dhivehi) invalidated the part of the Civil Court verdict ordering Thasmeen to pay Nazim MVR1,800 (US$140) incurred as lawyer’s fees based on a rate of MVR300 per hearing.

Nazim had claimed MVR100,000 (US$6,485) as compensation for lawyer’s fees.

The three-judge panel presiding over the case included High Court Chief Judge Ahmed Shareef, Judge Abdulla Hameed and Judge Ali Sameer.

The High Court judgment coincided with the launching today of the DRP’s fourth national congress at the Dharubaaruge convention center with 700 delegates.

At the final hearing of the Civil Court case in April 2011, Thasmeen’s lawyer reportedly claimed that Nazim agreed to sell Shaviyani Kabalifaru, which was leased for development as a resort in 2005, to raise funds to cover the MVR 2.55 million loan.

Thasmeen’s lawyer denied that an agreement was made between the pair to pay back the loan in a month, claiming that Nazim failed to find a buyer for Kabalifaru as agreed upon in November 2008.

The lawyer also denied Nazim’s claim that the loan was taken to pay back Thasmeen’s debts at the Bank of Maldives.

However, Nazim’s lawyer, Mohamed Saleem, disputed both claims, demanding documentation to prove that Thasmeen gave power of attorney to Nazim to sell the resort.

At a previous hearing, Nazim’s lawyer had produced a document with Thasmeen’s signature, prompting Judge Hathif Hilmy to note that the purported loan agreement had a reference number and that it was therefore reasonable to expect Thasmeen to be aware of the details of the amount in question.

At the time the case was filed, Thasmeen’s DRP was in a formal coalition with the minority opposition People’s Alliance (PA) led by Nazim and current PPM presidential candidate Abdulla Yameen.

The DRP-PA coalition agreement was terminated in July 2011 amidst internal strife within the then-main opposition party, which saw a breakaway faction loyal to former President Maumoon Abdul Gayoom leaving the party to form PPM in October 2011.

Following an acrimonious war of words between then-DRP ‘Honorary Leader’ Gayoom and his successor Thasmeen, the former president withdrew his endorsement of the DRP presidential candidate in March 2011.

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Government bill on raising import duties narrowly accepted by parliament for consideration

Parliament voted 26-25 today to accept for consideration a bill proposed by the government to increase import duties as part of a raft of measures to raise MVR 1.8 billion (US$116 million) in new income.

The amendments to the Import-Export Act (Dhivehi) submitted by MP Riyaz Rasheed on behalf of the government proposes raising tariffs on a range of items such as liquor, pork, tobacco, perfume, cement, gas and energy drinks.

MPs of the opposition Maldivian Democratic Party (MDP) voted against the amendments while MPs representing parties in the ruling coalition voted in favour.

However, during preliminary debate at today’s sitting of parliament, some government-aligned MPs expressed concern with the potential rise in prices as a consequence of reversing import duty reductions.

The acceptance of the bill for review by committee follows parliament’s 28-27 rejection last week of government-sponsored legislation to raise the airport service charge to US$30.

Hiking the departure tax on foreign passengers was among the measures proposed by the Finance Ministry with the 2013 budget to raise additional revenue, which also included increasing Tourism Goods and Services Tax (T-GST) to 15 percent from July 2013 onward, leasing 14 islands for resort development and introducing GST for telecom services.

Following the narrow defeat of the airport service charge amendment bill, Finance Minister Abdulla Jihad told local media that a “significant amount” would be lost from projected revenue as the additional income was anticipated in budget forecasts.

“If the amendments for the import duty are not passed, we will find it extremely difficult to manage the budgets of institutions. So it’s critical that the parliament expedites work on the bills and support them,” he was quoted as saying by newspaper Haveeru.

Jihad confirmed to Minivan News this week that the cabinet has decided to suspend or delay implementation of development projects financed out of the state budget due to shortfalls in revenue.

The government was in the process of formulating a supplementary budget to be put before parliament by the end of April, Jihad said.

Meanwhile, speaking to press on Sunday (April 21) following the signing of contracts for construction of harbours in four islands, Housing Minister Dr Mohamed Muiz said the budget was “in a very fragile state.”

“We can only spend what is earned as income. The government proposed new revenue measures when it submitted the budget. It was approved on principle when the budget was passed,” Muiz said.

“However, according to my information, difficulties have arisen in implementation [of the measures]. As a consequence, aside from these four islands, the finance ministry has instructed me not to sign or commence with any infrastructure project in any island from now on. Unless the People’s Majlis passes new means of earning income for the government, the finance ministry has instructed us not to begin any project financed out of the government budget, be it harbour construction or land reclamation or any project undertaken by the housing ministry.”

Revising import duties

The current administration’s intention to revise the changes made by the previous government to import duties was announced in June 2012.

Import duties were reduced or eliminated for a wide range of goods under the previous administration as part of its economic reform package to introduce direct taxation and restructure government finances.

Through amendments approved unanimously in November 2011, import duties were eliminated for construction material, foodstuffs, agricultural equipment, medical devices, passenger vessels and goods used for tourism services.

Tariffs were meanwhile reduced to five percent for furniture, beds and pillows as well as cooking items made from base metals. Other kitchen utensils had duties reduced to 10 percent.

While import duties were eliminated for most fruits and vegetables, 15 percent was to be levied on bananas, papaya, watermelon and mangoes as a protectionist measure for local agriculture. Areca-nuts had the tariff reduced from 25 percent to 15 percent.

Import duties for tobacco was meanwhile hiked from 50 percent to 150 percent.

However, an amendment proposed by the government to raise import duties for alcohol and pork from 30 to 70 percent was defeated at committee stage.

A shortfall in revenue from lower tariffs was expected to be covered by proceeds from T-GST and GST, the latter of which was introduced concurrently with the import duty reductions.

In December 2012, the Maldives Custom Service (MCS) revealed that income from collecting import duties declined by 50 percent in the first 10 months of 2012 compared to the previous year.

Meanwhile, in November 2012, an International Monetary Fund (IMF) mission to the Maldives cautioned that a ballooning fiscal deficit had “implied a rise in the public debt ratio, which now stands at over 80 percent of GDP, and has also helped to boost national imports, thus worsening dollar shortages in the economy and putting pressure on MMA (Maldives Monetary Authority) reserves.”

The IMF forecast for the current account deficit in 2012 was “nearly 30 percent of GDP this year.”

“Gross international reserves at the MMA have been declining slowly, [and] now account for just one and a half months of imports, and could be more substantially pressured if major borrowings maturing in the next few months are not rolled over,” the IMF mission warned.

The mission recommended formulating “a realistic and prudent budget for 2013″ to rein in the fiscal deficit, suggesting hiking taxes and “selectively” reversing import duty reductions.

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Umar Naseer’s PPM future to be decided on Thursday

A five-member disciplinary committee will decide the future of Umar Naseer in the Progressive Party of Maldives (PPM) on Thursday (April 25), according to local media, following the lapse of a seven-day period for Naseer to ‘reform and realign’ with the party’s charter or face expulsion.

Umar stands accused of violating the party’s charter or regulations by levelling serious allegations against PPM presidential candidate MP Abdulla Yameen at a rally held shortly after he was defeated in the party’s presidential primary.

The rally was organised without the approval of the PPM council, which contended that it was held in violation of the party’s rules mandating support for the presidential candidate after the primary.

Umar went ahead with the rally despite pleas for unity by the party’s leader and figurehead, former President Maumoon Abdul Gayoom.

Umar alleged at the rally that primary winner MP Abdulla Yameen was backed by the Gayoom family and the PPM parliamentary group, controlled all of the party’s organs, including the council and election committee, and had “rigged” the primary by ballot stuffing, falsifying the count and “pouring black money” to buy votes.

He further alleged that criminal gangs, convicts and drug smuggling “networks” were part of Yameen’s campaign team.

“Less than 24 hours after my brother Abdulla Yameen won the primary, the foremost person in the Maldives’ corruption network, Deputy Speaker of the People’s Majlis Ahmed Nazim joined the PPM,” Umar said, declaring that he would not back Yameen if he contests the September presidential election with “corrupt people” in his team.

Yameen, who is also half brother of former President Gayoom, denied the accusations, while the PPM later asked Umar to apologise for his remarks or face disciplinary action.

Following his refusal to publicly apologise or defend himself at a subsequent disciplinary committee hearing, Umar’s case was sent to the PPM council and he was given an ultimatum to “come back into the party’s charter” and “reform” himself within seven days.

Umar however remains defiant and addressed supporters on Saturday night in front of his “Command Center” campaign office in Male’.

Umar advised his supporters not to leave the party even if the PPM council or disciplinary committee decides to expel him.

The former PPM deputy leader said he would not cease “speaking the truth” even if he was either dismissed from the party or “hung upside down.”

Umar said he made the allegations of the primary being rigged to inform PPM members of how the election was conducted.

“But we must remain with PPM. We have spoken the truth. We have not lied or deceived,” he said.

Umar asserted that he would prove his allegations of wrongdoing in the primary in court.

PPM member Rahma Moosa, an Umar supporter, filed a case at the Civil Court last week challenging the results of the primary.

“Broad coalition”

Umar also warned that the PPM would face the same fate as the Dhivehi Rayyithunge Party (DRP) in 2008 if the party contested the presidential election in September without a “broad coalition.”

Umar revealed that discussions were ongoing between Jumhooree Party (JP) presidential candidate MP Gasim Ibrahim and President Dr Mohamed Waheed to reach a power sharing agreement beneficial to both parties.

If the talks were successful, Umar said an invitation would be extended to the PPM leadership to join the coalition.

“If our parties face MDP [formerly ruling Maldivian Democratic Party] in this year’s presidential election without forming a broad coalition, [they] would have to eat sand like DRP did in 2008,” Umar said.

“MDP cannot be defeated without such a broad coalition,” he added. “If it is every one for himself, every one going their own way separately in the first round, I am certain that there is the danger of MDP coming back.”

Umar urged all parties to compromise in order to reach an agreement on forming the alliance.

While former President Gayoom was a “truthful and trustworthy” person with integrity, Umar said the same could not be said of PPM presidential candidate MP Abdulla Yameen.

Meanwhile, speaking at a press conference yesterday (April 21), Dhunya Maumoon, state minister for foreign affairs and PPM council member, said the party was not worried about the coalition forming around Dr Waheed.

Compared to the smaller parties, Dhunya said, PPM had more members as well as parliament seats.

Former President Gayoom’s daughter suggested that other parties were worried because they were “certain” that PPM would win the election.

PPM MP for Laamu Fonadhoo, Abdul Raheem Abdulla, meanwhile claimed that the party would face the election with 70,000 or 80,000 members.

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MP Riyaz Rasheed withdraws amendments to keep tourism bed tax in place past 2013

MP Riyaz Rasheed of the Dhivehi Qaumee Party (DQP) has withdrawn a government-sponsored amendment to the Tourism Act to keep a US$8 bed tax in place beyond 2013, citing lack of support from parties in the ruling coalition.

The flat rate of US$8 per occupied room, per night, was to be abolished at the end of this year to be offset by sales and land taxes.

The MP for Thaa Vilifushi announced that he was pulling out the legislation after the preliminary debate started at today’s sitting of parliament.

Riyaz expressed concern with the lack of support from coalition partners for revenue raising measures proposed by the government.

Riyaz, who had submitted the bill on behalf of the government, called on President Dr Mohamed Waheed’s administration to consult with pro-government parties represented in parliament before proposing further legislation.

During today’s brief debate on the proposed amendment, most MPs argued that the tourism industry would be adversely affected if the bed tax was not discontinued as planned with the introduction of Tourism Goods and Services Tax (T-GST).

Riyaz’s decision to withdraw the bed tax amendment follows parliament’s rejection last week of government-sponsored legislation to raise the airport service charge to US$30, which was among a raft of measures proposed by the Finance Ministry in the estimated 2013 budget to raise MVR 1.8 billion (US$116 million) in new income.

MPs voted 28-27 against proceeding with the bill at committee stage following preliminary debate.

During the debate last week, MPs of both the opposition Maldivian Democratic Party (MDP) and government-aligned Progressive Party of Maldives (PPM) – respectively majority and minority parties in parliament –  accused President Dr Mohamed Waheed of using state funds to finance his presidential campaign.

Parliament’s rejection of the government-sponsored bill prompted the Finance Ministry to suspend new development projects financed out of the state budget due to shortfalls in revenue.

Finance Minister Abdulla Jihad said that the cabinet decided to postpone planned infrastructure projects that have not yet started in an attempt to ease cash flows.

Speaking to press yesterday (April 21) following the signing of contracts for construction of harbours in four islands, Housing Minister Dr Mohamed Muiz said he was instructed by the finance ministry not to commence any further infrastructure projects included in the 2013 budget.

“As you know, the government’s budget is in a very fragile state. We can only spend what is earned as income. The government proposed new revenue measures when it submitted the budget. It was approved on principle when the budget was passed,” Muiz said.

“However according to my information, difficulties have arisen in implementation [of the measures]. As a consequence, aside from these four islands, the finance ministry has instructed me not to sign or commence with any infrastructure project in any island from now on. Unless the People’s Majlis passes new means of earning income for the government, the finance ministry has instructed us not to begin any project financed out of the government budget, be it harbour construction or land reclamation or any project undertaken by the housing ministry.”

Housing Minister Muiz – a senior member of the government-aligned religious conservative Adhaalath Party – called on all state institutions to cooperate and work together to “improve the country’s economic condition.”

Other revenue raising measures proposed with the 2013 budget included hiking Tourism Goods and Services Tax (T-GST) to 15 percent from July 2013 onward, leasing 14 islands for resort development, introducing GST for telecom services, raising oil tariffs, and “selectively” reversing import duty reductions.

Finance Minister Jihad confirmed to Minivan News yesterday that the government was in the process of formulating a supplementary budget by the end of April.

Economic Development Minister Ahmed Mohamed – a senior member of the government-aligned Dhivehi Rayyithunge Party (DRP) – however told newspaper Haveeru last week that a supplementary budget would be of no use if parliament failed to approve the proposed revenue raising measures.

“Numbers written on paper will not increase funds. One or two billion rufiya can be added to the budget through the supplementary budget,” he explained. ”But shouldn’t there be a way to get that three or four billion rufiya?”

During the budget debate in December 2012, Majority Leader MP Ibrahim Mohamed Solih warned that the additional revenue projected in the budget was unlikely to materialise.

The MDP parliamentary group leader claimed that the import duty revision to raise tariffs on oil “will not be passed in this Majlis.”

Moreover, he said at the time, the MDP would not support increasing T-GST without consultation with the tourism industry.

Predicting that revenue in 2013 would reach “only MVR 11 billion at most,” Solih had warned that income would not be enough to meet recurrent expenditures on salaries and administrative costs.

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Government suspends new development projects due to budget constraints

The government has decided to delay implementation of new development projects financed out of the state budget due to shortfalls in revenue, Finance Minister Abdulla Jihad confirmed to Minivan News today.

Jihad said that the cabinet decided to postpone planned infrastructure projects that have not yet started in an attempt to ease cash flows rather than deducting a specific amount from the development budget.

“We are in the process of [drawing up a supplementary budget]. Hopefully by the end of the month we will have something,” he said.

The decision to suspend new projects was revealed by Housing Minister Dr Mohamed Muiz today following the signing of contracts to build harbours in four islands.

Speaking to press after the signing ceremony, Muiz said he was instructed by the finance ministry not to commence any further infrastructure projects included in the 2013 budget, such as harbour construction or land reclamation.

Muiz explained that government-funded projects in the pipeline will be pushed back until parliament passes bills to raise additional revenue.

The move follows parliament’s rejection last week of government-sponsored legislation to raise the airport service charge to US$30, which was among a raft of measures proposed by the Finance Ministry in the estimated 2013 budget to raise MVR 1.8 billion (US$116 million) in new income.

Other measures included hiking Tourism Goods and Services Tax (T-GST) to 15 percent from July 2013 onward, leasing 14 islands for resort development, introducing GST for telecom services as well as oil, and “selectively” reversing import duty reductions.

Following the narrow defeat of the airport service charge amendment bill in parliament, Jihad told local media that a “significant amount” would be lost from projected revenue as the additional income was anticipated in budget forecasts.

“If the amendments for the import duty are not passed, we will find it extremely difficult to manage the budgets of institutions. So it’s critical that the parliament expedites work on the bills and support them,” he was quoted as saying by newspaper Haveeru.

The bill proposed by the government to raise the airport service charge was defeated 28-27 despite the ruling coalition’s provisional majority in the 77-member house.

During the parliamentary debate last week, MPs of both the opposition Maldivian Democratic Party (MDP) and government-aligned Progressive Party of Maldives (PPM) – respectively majority and minority parties in parliament –  accused President Dr Mohamed Waheed of using state funds to finance his presidential campaign.

Supplementary budget

Dr Waheed meanwhile told the people of Thulusdhoo in Kaafu Atoll yesterday (April 20) that there was no cause to worry about the budget or rumours of impending bankruptcy.

“The Maldivian economy is not really that bad,” he was quoted as saying by Haveeru.

President Waheed however conceded that “difficulties” had arisen due to spending beyond the country’s means in the recent past.

As a consequence of deficit spending financed by loans, Dr Waheed said the government had to spend an amount almost equal to the state’s wage bill on interest and loan repayments.

“We Maldivians are not indebted to anyone. We are proud people. We pay back what we borrow. We don’t have any outstanding payment, to any party,” Dr Waheed said in his speech, according to the President’s Office website.

He added that the finance ministry was preparing to submit a supplementary budget to parliament before the end of April, which would seek funds needed to provide services to the public without interruption.

Economic Development Minister Ahmed Mohamed – a senior member of the government-aligned Dhivehi Rayyithunge Party (DRP) – however told Haveeru last week that a supplementary budget would be of no use if parliament failed to approve the proposed revenue raising measures.

“Numbers written on paper will not increase funds. One or two billion rufiya can be added to the budget through the supplementary budget,” he explained. “But shouldn’t there be a way to get that three or four billion rufiya?”

The minister also referred to media reports suggesting that some government offices have exhausted their annual budgets after the first three months of the year.

Parliamentary approval

During the budget debate in December 2012, Majority Leader MP Ibrahim Mohamed Solih warned that the additional revenue projected in the budget was unlikely to materialise.

The MDP parliamentary group leader claimed that the import duty revision to raise tariffs on oil “will not be passed in this Majlis.”

Moreover, he said at the time, the MDP would not support increasing T-GST without consultation with the tourism industry.

Predicting that revenue in 2013 would reach “only MVR 11 billion at most,” Ibu warned that income would not be enough to meet recurrent expenditures on salaries and administrative costs.

Meanwhile, Minority Leader MP Abdulla Yameen, parliamentary group leader of the PPM, said at the time that the government’s objectives or policies could not be discerned from the proposed budget.

“These projects are very random or ad hoc. The government’s planning should be better than this,” he said.

While President Waheed had taken note of the high salaries paid by institutions such as the People’s Majlis as “a serious problem,” Yameen said he could not see “any kind of sign” of reducing recurrent expenditure or salaries and allowances for government employees.

The state’s wage bill amounts to 48 percent of recurrent expenditure, which accounts for 70 percent of government spending.

2013 budget

A public sector investment program (PSIP) of MVR 3.1 billion (US$201 million) was proposed within the 2013 budget.

This included MVR 1.5 billion (US$97 million) from the state budget, MVR 21 million (US$1.3 million) from domestic loans, MVR 1.2 billion (US$77 million) as foreign loans and MVR347.6 million (US$22.5 million) as free aid.

After parliament trimmed more than MVR 1 billion (US$64.8 million) from the MVR 16.9 billion (US$1 billion) budget submitted by the Finance Ministry, Jihad warned that funds allocated in the budget would not be enough to manage expenses and predicted that a supplementary budget would be needed before the end of the year.

Parliament’s Budget Review Committee approved MVR 1.6 billion (US$103.7 million) in cuts from recurrent expenditure and added MVR 389 million (US$25.2 million) for infrastructure projects.

The budget items that the committee reduced included; overtime pay (cut 50 percent), travel expenses (cut 50 percent), purchases for office use (cut 30 percent), office expenditure (cut 35 percent), purchases for service provision (cut 30 percent), training costs (cut 30 percent), construction, maintenance and repair work (cut 50 percent) and purchase of assets (cut 35 percent).

The committee also instructed the Finance Ministry to reduce an additional MVR 605.7 million (US$39.2 million) from office budgets.

In December 2012, the Finance Ministry ordered offices to cancel all overseas trips, such as for study tours and training, and to seek approval from the ministry for all official trips that were not completely funded by foreign parties; cancel all repair work for the rest of December; and cancel purchases of capital items that were not included in the public sector investment programme (PSIP).

In the circular, the Finance Ministry noted that 15 percent had previously been deducted from office budgets to reduce the fiscal deficit “as a result of income being lower than estimated in the 2012 budget passed by parliament.”

However, since government spending necessary to provide essential services to the public could not be reduced, “the state’s expenditure has to be further controlled as additional measures are needed to reduce the state’s budget deficit,” the circular stated.

In July 2012, the Finance Ministry instructed all government offices to reduce their budgets by 15 percent, with only 14 of 35 offices complying by the given deadline.

“Some offices will face difficulties. But we don’t have a choice,” Jihad told local media at the time.

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High Court overturns lower court ruling on Nexbis deal

The High Court on Thursday (April 18) overturned a Civil Court ruling declaring the Anti-Corruption Commission (ACC) could not terminate a border control system (BSC) agreement signed by the Department of Immigration with Malaysian mobile security firm Nexbis.

The latest High Court ruling (Dhivehi) clears the way for the Civil Court to hear the case filed by the ACC should it be resubmitted.

The Civil Court had ruled last year that it could not hear the case filed by the commission after previously declaring that the ACC did not have legal authority to terminate the contract signed with Nexbis in November 2010.

The ACC appealed the ruling at the High Court on February 27, 2012.

In December 2011, the ACC submitted corruption cases to the Prosecutor General’s Office (AGO) against former Immigration Controller Ilyas Hussain Ibrahim and Director General of the Finance Ministry, Saamee Ageel, claiming the pair abused their authority for undue financial gain in awarding Nexbis the MVR 500 million (US$39 million) BSC project.

Ex-controller Ilyas – brother-in-law of President Dr Mohamed Waheed and current state minister of defence and national security – pleaded not guilty to the charges at the first hearing of the trial on April 10 this year.

While the High Court had overturned the previous Civil Court ruling that held the ACC did not have legal authority to terminate a contract, the High Court ruling was itself appealed at the Supreme Court, which has yet to issue a judgment on the case.

Meanwhile, on December 25, 2012, parliament voted unanimously to instruct the government to terminate the BSC agreement with Nexbis.

All 74 MPs in attendance voted in favour of a Finance Committee recommendation following a probe into the potential financial burden on the state as a result of the deal.

In September 2012, the ACC informed the committee that the deal would cost the Maldives MVR 2.5 billion (US$162 million) in potential lost revenue over the lifetime of the contract.

The Finance Committee meanwhile found that the government had agreed to waive taxes for Nexbis despite the executive lacking legal authority for tax exemption.

Following the signing of a Memorandum of Understanding (MoU) with the US government in March this year to provide a border control system to the Maldives, representatives from Nexbis told Minivan News that the company was uncertain what the MOU would mean for the group’s own border control technology.  The technology has been in use at Ibrahim Nasir International Airport (INIA) since September 2012.

“We do remain confident that the Maldivian government will honour its obligations under the 2010 concession agreement,” read a statement from lawyers representing the company.

“We are confident also of the support we have received by the Immigration Department in implementing and fully operating the system, but remain cautious of individuals that continue to pose obstacles to prevent the success of this project is stemming the national security issues faced by the Maldives today.”

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Government undermining decentralised administration, claims LGA vice chair

Vice Chair of the Local Government Authority (LGA) Shujau Hussain has warned that the government’s alleged non-cooperation and failure to provide funds for local councils could “bring the system of decentralised administration to a halt.”

Speaking at a press conference yesterday (April 17), Shujau claimed that the Finance Ministry was withholding funds to atoll and island councils.

“The system coming to a halt will have a big impact on the country’s stability. Politicians should know this. It is not just squabbling among political parties that threatens stability. The day this system comes to a halt is the day this country is plunged into a deep pit,” he said.

Shujau claimed that employees of pre-schools in certain atolls have not been paid salaries for past three months, adding that a solution had not been found after months of meetings with the Finance Ministry and an exchange of official letters.

“The government says they want the system of decentralised administration to function very well. [But] what the finance minister is doing is withholding everything owed to councils,” he claimed.

“This government wants to keep the centralised system in place to govern. So I do not believe that President Waheed’s government is providing any cooperation at all for the system to function.”

Moreover, said Shujau, a number of island council offices have been closed due to lack of funds in the budget to pay utility bills.

Minivan News was awaiting a response from Finance Minister Abdulla Jihad at time of press.

Shujau meanwhile went on to question the government’s “sincerity” in providing support for local government.

The LGA was set up by the landmark Decentralisation Act of 2010 as a parent body tasked with overseeing local councils and coordinating with the government.

Last week, Shujau criticised the Attorney General’s Office for failing to approve 2,000 LGA municipal regulations. He suggested that the lack of approvals demonstrated an unwillingness among the government and President Dr Mohamed Waheed’s cabinet to allow local government mechanisms to function.

In January this year, the government asked the LGA to dissolve the Male’ City Council (MCC), which has an opposition Maldivian Democratic Party (MDP) majority.

The MCC has been involved in a number of disputes with the government during 2012 following February’s controversial transfer of power.

LGA member Ahmed Faisal told local media at the time that the Home Ministry requested the MCC be dissolved following deliberations by the cabinet.

“We have received a letter signed by the Home Minister. But we have not tabled the issue in the agenda yet. And I don’t even believe that the Home Minister could order a council to be dissolved like that. Because there are a lot of things the LGA has to complete before that,” Faisal was quoted as saying.

Faisal accused Home Minister Jameel of requesting the city council be dissolved for “political purposes.”

Faisal also criticised Jameel for allegedly being unaware of the difficulties faced by councils in his role as chair of the LGA. The LGA member stressed that dissolving councils was a long process and that the LGA has not made any decision yet, adding that dissolving the council without addressing difficulties it faced would be “unjust.”

Meanwhile, speaking at a rally last week, former President Mohamed Nasheed claimed that a host of public services has been either disrupted or discontinued following the transfer of presidential power last year.

“Every island that I go to, I see commenced projects unfinished. Harbours have come to stop. Sewerage systems have come to a stop. The change of school sessions to a single session have come to a stop. Aasandha [health insurance] has become a Baisandha [halved]. Transport [networks] have come to halt, everything has stopped. So I think Waheed’s campaign slogan is ‘halted’,” he was quoted as saying.

“President Waheed has neglected the most prosperous one and a half years of this nation. Since my government was changed through a coup, I can only perceive this coup [government] as something that has come to halt.”

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Police submits Asward assault cases for prosecution

Police have submitted cases against two suspects for prosecution on charges of assaulting Raajje TV reporter Ibrahim ‘Asward’ Waheed in February.

Police Spokesperson Chief-Inspector Hassan Haneef told Minivan News today that the cases had been forwarded to the Prosecutor General’s Office (PGO) yesterday (April 16), adding that the investigation into the murder attempt was still ongoing.

Police said evidence uncovered during the investigation implicated the suspects Ahmed Vishan, 22, M. Carinlight Northside, and Hassan Raihan, 19, G. Fehima, in the crime.

Asward, 22, news head of the opposition Maldivian Democratic Party (MDP)-aligned broadcaster Raajje TV, was attacked with an iron rod at 1:18am on February 23 while riding a motorbike near the artificial beach area of Male’.

Commissioner of Police Abdulla Riyaz described the attack via Twitter as a murder attempt.

The attack left Asward unconscious, and he was transferred to a hospital in Sri Lanka for treatment, where he had to undergo major surgery last month to correct a maxillary fracture (broken jawbone).

At a press conference in March, police said two suspects had been arrested in connection with the “planned” attacked.

Head of Serious and Organised Crime Department Mohamed Daud revealed that both suspects had criminal records and belonged to “groups” or gangs in the capital.

Daud claimed at the time that the attack was not thought to be politically motivated.

Violence against media

Maldivian journalists took to the streets of Male’ to protest in the wake of the assault, joining international organisations who also condemned the violence.

The Commonwealth’s Committee to Protect Journalists (CPJ) expressed alarm at the string of attacks against reporters, and “called on all sides in the political conflict to halt violence against the media.”

“We condemn these vicious attacks on reporters and call on all parties to do their utmost to ensure that journalists are able to work safely,” said CPJ Asia Program Coordinator Bob Dietz.

The CPJ said journalists in the island nation “have faced numerous attacks since elected President Mohamed Nasheed was ousted a year ago.”

The attack on Waheed was the most serious incident of violence against a journalist in the Maldives since July 2012, when a group of alleged Islamic radicals slashed the throat of blogger Hilath Rasheed.

Rasheed, who had been campaigning for religious tolerance, narrowly survived and has since fled the country.

President Dr Mohamed Waheed Hassan Manik meanwhile condemned the attacks on the journalists via his official Twitter account.

“Strongly condemn attacks on journalists. No justification for brutal acts of terror,” he wrote on the social media site.

Condemning the attacks in a press release, the opposition MDP called for a thorough investigation to determine the perpetrators “regardless of their political affiliation”.

Former President Mohamed Nasheed’s spokesperson, MP Mariya Didi said the attacks affected “everyone who believes in democracy and media freedom.”

“Since last year’s coup, journalists have been repeatedly threatened, harassed and, in some instances, violently attacked by the police and by criminals. However, the authorities continue to turn a blind eye to the problem,” she stated.

“Since the unlawful transfer of power there has been a sharp increase in violent crimes. But the police continues to preoccupy themselves with politically motivated arrests, rather than investigating these violent crimes. Over 800 MDP supporters have been arrested in the past year. Yet, murderers, drug traffickers and gangsters are left to roam freely,” she said.

“Months have passed since brutal murder of the MP Dr Afrasheem Ali and fatal attack on liberal blogger Hillath Rasheed, without perpetrators being found. Impunity enjoyed by the security forces is creating a culture of crime that is deeply concerning,” she added.

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Hiking airport service charge to US$30 narrowly rejected at parliament

Legislation proposed by the government to raise the airport service charge from departing international passengers to MVR460 (US$30) was narrowly rejected by parliament today.

The amendment bill submitted by government-aligned MP Riyaz Rasheed was rejected with 28 votes against, 27 in favour and two abstentions.

At the parliamentary debate on the bill yesterday (April 15), MPs of the opposition Maldivian Democratic Party (MDP) and government-aligned Progressive Party of Maldives (PPM) opposed the proposed hike.

MPs of both the majority and minority parties alleged that President Dr Mohamed Waheed planned to use an expected MVR185 million (US$12 million) from raising the departure tax to finance his presidential campaign.

The 1978 law imposing the airport service charge on departing passengers was first amended under the previous administration and raised to US$18.5 for foreigners.

The imposition of a similar Airport Development Charge (ADC) of US$25 by Indian infrastructure group GMR was previously a major point of contention for the Waheed administration, which terminated the concession agreement with the GMR-led consortium to modernise the airport in December 2012.

Hiking the airport service charge from US$18 to US$30 was among a raft of measures proposed by the Finance Ministry within the estimated 2013 budget to raise MVR 1.8 billion (US$116 million) in new income.

Finance Minister Abdulla Jihad told MPs in December 2012 that additional revenue was needed to finance the fiscal deficit and rein in soaring public debt, which was projected to reach MVR 31 billion (US$2 billion) or 82 percent of GDP by the end of 2013.

On January 29 this year, the cabinet decided to impose austerity measures to manage the budget following revenue shortfalls.

“Members of the cabinet noted that, by late this year, the country might have to face enormous challenges unless strict budgetary control measures were not implemented,” the President’s Office said at the time.

During the budget debate in December 2012, Majority Leader MP Ibrahim Mohamed Solih warned that the additional revenue projected in the budget was unlikely to materialise.

The MDP parliamentary group leader noted that most of the proposed measures – such as hiking the Tourism Goods and Services Tax (T-GST) to 15 percent, introducing GST for telecom services, and “selectively” reversing import duty reductions – required parliamentary approval.

Acting Finance Minister Ahmed Mohamed was unavailable for comment today on the impact to government finances from the loss of projected revenue.

Fiscal responsibility

Meanwhile, legislation on fiscal responsibility submitted in 2011 by the previous government was passed with 42 votes in favour and 10 against at a sitting of parliament on Monday (April 15).

If the bill is ratified, the government would be prohibited by law from obtaining loans after January 1, 2016 to finance recurrent expenditure or loan repayment.

The bill also sets limits on government spending and public debt based on proportion of GDP, mandating the government to not allow public debt to exceed 60 percent of GDP.

Borrowing from the central bank or Maldives Monetary Authority (MMA) should not exceed seven percent of the projected revenue for the year, while such loans would have to be paid back in a six-month period.

Moreover, a statement outlining the government’s mid-term fiscal policy must be submitted annually to parliament at the end of the financial year in July.

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