Author: Ahmed Naish

Parliament tables no-confidence motion against Defence Minister in defiance of Supreme Court injunction

Parliament announced today that a no-confidence motion filed against Defence Minister Colonel (Retired) Mohamed Nazim has been tabled despite a Supreme Court injunction ordering parliament to halt pending no-confidence votes.

The People’s Majlis secretariat revealed that Defence Minister Nazim has been given the required 14-day notice and his ministry also duly informed by Speaker Abdulla Shahid.

Article 101(a) of the constitution states, “At least fourteen days notice of the debate in the People’s Majlis concerning a motion under article (a) shall be given to the concerned member of the cabinet, and he shall have the right to defend himself in the sittings of the People’s Majlis, both orally and in writing.”

The move comes in apparent defiance of an injunction or stay order issued by the Supreme Court to halt conducting no-confidence votes through secret ballot, pending a ruling by the apex court on the constitutionality of the secret vote.

Speaker Abdulla Shahid and Parliament’s Counsellor General Fathimath Filza were not responding to calls from Minivan News at time of press.

The injunction (Dhivehi) was issued in a case filed by Progressive Party of Maldives (PPM) council member and lawyer of former President Maumoon Abdul Gayoom, Mohamed Waheed Ibrahim ‘Wadde’.

Waheed contended that secret votes were unlawful as article 85 of the constitution states that the People’s Majlis or any of its committees “may decide to exclude the public and the press from all or any part of the proceedings if there is a compelling need to do so in the interests of public order or national security.”

Waheed requested the Supreme Court specify the constitutional measure to determine a two-third majority of parliament – required to impeach the president – and to declare that the Majlis decision to approve a secret ballot was unconstitutional.

On December 3, parliament voted 41-34 to approve amendments to the parliamentary rules of procedure to conduct no-confidence votes to impeach the President and remove cabinet members through secret ballot.

MPs of the government-aligned Jumhooree Party (JP) and Dhivehi Rayyithunge Party (DRP) joined the formerly ruling Maldivian Democratic Party (MDP) to vote the amendment through.

The no-confidence motion against Defence Minister Nazim was submitted by the MDP earlier this month on the grounds that he misused his authority as acting Transport Minister by using the military to influence termination of commercial contracts.

The MDP has also submitted a no-confidence motion to impeach President Dr Mohamed Waheed Hassan Manik.

The no-confidence motion against Nazim was filed with the signatures of 17 MPs, according to the Majlis secretariat.

Under article 101(a), “A motion expressing want of confidence in a member of the Cabinet may be moved in the People’s Majlis, under the hand of at least ten members, specifying the reasons.”

“Challenging separation of powers”

In a separate ruling, the Supreme Court also issued an injunction ordering parliament not to appoint a new member to the Civil Service Commission (CSC) pending a ruling on the legality of parliament’s dismissal of the CSC’s former chair, Mohamed Fahmy Hassan.

Fahmy had filed a case contesting the legality of his removal from the independent institution on November 20 on the grounds that he had allegedly sexual harassed a female employee.

“What is at stake is the supremacy of the parliament as the representative of the people. By its actions, the Supreme Court is challenging the separation of powers that underpins the constitutional basis of governance,” MDP MP Eva Abdulla told Minivan News yesterday.

In its stay orders, the Supreme Court referred to article 144(b) of the constitution, which states: “When deciding a constitutional matter within its jurisdiction, a court may in connection with a declaration pursuant to the article make any order that is just and equitable, including an […] suspending the declaration of invalidity (of a statute, regulation or action due to inconsistency with the Constitution) for any period and on any conditions, to allow the competent authority to correct the defect.”

Kutti NasheedMeanwhile, Independent MP for Kulhudhufushi South, Mohamed ‘Kutti’ Nasheed, contended in his blog yesterday (December 12) that the Supreme Court did not have the legal or constitutional authority to issue the injunctive orders against parliament.

Moreover, the Supreme Court “does not have the power to even accept those cases,” he wrote.

Article 88(b) of the constitution states: “Unless otherwise specified in this constitution, the validity of any proceedings in the People’s Majlis shall not be questioned in any court of law.”

Nasheed argued that decisions made by parliament could not be challenged in court except in instances clearly specified in the constitution.

The purpose of article 88 was to prevent parliament’s decisions being challenged or overturned, Nasheed said, as in the absence of such a clause the Supreme Court would become a “People’s Appeal Majlis” with supremacy over the house of elected representatives.

“If every decision of the People’s Majlis is appealed at the Supreme Court in the manner that any judgement by the High Court can be appealed at the Supreme Court, then there is no difference between the People’s Majlis and the High Court,” Nasheed wrote.

This was against the separation of powers envisioned in the constitution, Nasheed said, which vested legislative powers in parliament and clearly specified instances where its decisions could be challenged at court.

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Government agreed to waive taxes for Nexbis, reveals Parliament’s Finance Committee

The Maldivian government agreed to waive taxes for Nexbis as part of the controversial border control agreement signed with the Malaysia-based mobile security provider, parliament’s Finance Committee has revealed.

The People’s Majlis secretariat explained in a statement yesterday (December 11) that the committee has sent a letter to President Dr Mohamed Waheed Hassan Manik noting the findings of an inquiry to determine the possible financial burden on the state due to the Nexbis deal.

“The Finance Committee told the President that the ties and cooperation between state institutions necessary for the border control system was non-existent,” the Majlis press release read.

The Finance Ministry meanwhile informed the public accounts oversight committee on November 13 that it has yet to receive a copy of the border control agreement.

The committee observed that the government had “not considered” that tax exemption was within the legislative powers of parliament.

Moreover, the committee noted that “no government department has to date” initiated any effort to approve waiving taxes for the Malaysian company.

The Finance Committee also informed the President that the relevant government authorities lacked “authentic and valid information” of the border control project.

The committee further noted that the relevant authorities did not offer “adequate cooperation” in providing information for the inquiry.

In a letter to the Finance Committee on November 1, the Immigration Department explained that the border control system agreement was signed before the Business Profit Tax (BPT) came into effect.

However, the government agreed to exempt Nexbis from the tax with a final decision to be made by the Finance Ministry, the Immigration Department said.

Nexbis deal

Speaking at a rally last month, parliament’s Minority Leader MP Abdulla Yameen called on the government to “immediately” terminate the agreement with Nexbis and contended that the project was detrimental to the state.

The parliamentary group leader of the government-aligned Progressive Party of Maldives (PPM) also criticised the government’s “hesitancy” to cancel the agreement despite the Anti-Corruption Commission’s (ACC’s) findings of alleged corruption in the deal.

Local media meanwhile reported that the Finance Committee had decided during a closed-door session last month to instruct the executive to halt the project.

The decision would however have to be approved through a vote on the Majlis floor following consideration of a report by the committee.

In September, 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.

Following its investigation into alleged corruption in awarding of the contract to Nexbis, the ACC requested the Prosecutor General’s Office (PGO) press criminal charges against former Controller of Immigration Ilyas Hussain, brother-in-law of President Waheed.

Almost a year after the case was forwarded to the PGO however, no charges have been pressed against the former immigration chief to date.

The ACC alleged that Ilyas Hussain had abused his authority for undue financial gain.

Ilyas – a senior member of Dr Waheed’s Gaumee Ihtihad Party (GIP) – was transferred from the post under former President Mohamed Nasheed when the corruption allegations first surfaced.

His successor Abdulla Shahid expressed concern with both the cost and necessity of the project, calculating that with continued growth in tourist numbers, Nexbis would be earning US$200 million in revenue over the 20-year lifespan of the agreement.

Following Dr Waheed’s swearing-in as president on February 7, Ilyas was reappointed controller of immigration. He was however replaced in May with Dr Mohamed Ali and appointed State Minister for Defence.

Former President Nasheed meanwhile alleged in a rally last month that Dr Waheed’s GIP’s Deputy Leader Mohamed ‘Nazaki’ Zaki was complicit in any alleged corrupt dealings in his role as Ambassador to Malaysia.

“Before the [border control] system was established, before there was even a contract in effect, I later heard that equipment was kept in some warehouses in Male’,” he said, claiming that the warehouses were owned by Nazaki Zaki.

Nasheed added that he “agreed completely with Yameen” that the allegations should be investigated.

The border control system is now up and running at Ibrahim Nasir International Airport (INIA), after a Supreme Court ruling in September in favour of Nexbis ended almost two years of efforts by the ACC to block the project.

Under the ‘build operate and transfer’ (BOT) agreement with Nexbis, the government is obliged to pay the security firm US$2 for every foreign passenger processed and US$15 for every work permit for the 20 year lifespan of the contract. Nexbis remains responsible for the upgrading, servicing and administration of the system.

Nexbis has continued to dismiss accusations of corruption within its deal with the Maldives government. The mobile security solutions vendor last year threatened to take legal action against any party in the Maldives alleging that the company was involved in corruption. Nexbis claimed at the time that the speculation over corruption in the deal was “politically motivated” and had “wrought irreparable damage to its reputation and brand name.”

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Gayoom may contest 2013 presidential election

Former President Maumoon Abdul Gayoom, interim leader of the Progressive Party of Maldives (PPM), has signalled that he may run for the presidency in 2013.

Gayoom told Indian newspaper The Hindu yesterday (December 11) that he may consider contesting in a presidential election expected in August or September next year.

“Things change very frequently. So I am keeping my options open,” Gayoom was quoted as saying. “[If I run] it won’t be out of my choice, if ever, it will be out of compulsion. Because I feel I have served the country for 30 years and I feel it is up to other people [now].”

Gayoom however insisted that he preferred not to run.

Since its formation in October 2011, the government-aligned PPM has postponed its national congress on three occasions, despite the party’s charter or regulations stipulating that a congress must be held within six months of registration.

The party held its inaugural convention in October 2011.

In October this year, local daily Haveeru reported that that the party cited “political turmoil” as the reason for the delays.

Gayoom meanwhile told The Hindu that the party’s presidential primary will take place in February after the national congress currently scheduled for January 2013.

“Asked if current President Mohamed Waheed stood a chance to be nominated by PPM as its candidate for presidency, Mr Gayoom said that this can only be decided after Dr Waheed joins the PPM,” The Hindu reported.

Former President Mohamed Nasheed – who defeated Gayoom in the 2008 presidential election with 54 percent of the vote to Gayoom’s 45 percent – said at a rally last month that he believed President Waheed will become PPM’s presidential candidate with Gayoom’s backing.

Nasheed alleged that his former vice president held secret consultations with the PPM figurehead before the controversial transfer of presidential power on February 7.

“Dr Waheed has been scheming with President Maumoon for about two years, that I know of,” he said. “Sometimes in an uninhabited island in Baa Atoll, other times in Alivaage [Gayoom’s former residence]. They have been discussing and talking in different places. Anyone who thinks of carrying out a coup d’etat will know that one thing you need for it is a disloyal vice president.”

In August, Waheed told the Hindu during a visit to Sri Lanka that he was “contemplating” running for office in 2013.

“What I have said is that our administration supports the earliest date for Presidential elections allowed under the Constitution. That in my mind will be July, 2013. I am hoping that the election will be at that time,” he was quoted as saying.

In the same month, former President Gayoom publicly welcomed the prospect of Dr Waheed competing in a primary for the party’s ticket.

In May, PPM Deputy Leader Umar Naseer told local media that Dr Waheed could potentially become the party’s presidential candidate. Naseer however claimed earlier that Waheed would not stand for re-election.

Naseer, along with PPM parliamentary group leader and brother of its interim leader, MP Abdulla Yameen, are the only two candidates that have announced their intention to compete in the primary.

Naseer has however said that he would not compete against former President Gayoom.

Dr Waheed meanwhile is currently leader of the GIP, which has no representation in either the People’ Majlis or local councils and just 3,170 registered members, according to the latest figures from the Elections Commission (EC).

By comparison, PPM currently has 17,111 members and is the minority party in parliament. The party has also won ten out of 13 by-elections held since its inception last year.

Speaking at a PPM rally last month, Gayoom urged senior leaders of the party to be mindful of the party’s unity during their campaigns for the upcoming primary.

At a press conference in September 2011, where the formation of the PPM was announced, Gayoom refused to rule out a presidential bid, stressing that he had not made a decision and would do so “when the time comes.”

“My answer is that the time [for a primary] has not come and we’ll know when it does,” he said after being asked repeatedly by reporters if he intended to run again.

On whether his role as leader of the new party contradicted an announcement in February 2010 that he was retiring from active politics, Gayoom said he made the decision based on the assurance that the Dhivehi Rayyithunge Party (DRP) would function “according to certain principles.”

Gayoom left the DRP to form the PPM following an acrimonious split within the DRP and a public spat with his successor and former vice-presidential candidate, DRP Leader and MP for Baa Atoll Kendhoo Ahmed Thasmeen Ali

“At the time and even up till yesterday, I was at the most senior post of one of the largest political parties in the country,” he said. “So how can it be said that the person in the highest post of a political party is not involved in politics? Up till yesterday I was in politics. Today I am forced to create a new party because of the state of the nation and because it has become necessary to find another way for the country.”

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Finance Ministry instructs offices to implement cost-cutting measures

The Ministry of Finance and Treasury last week issued a circular to all government offices and state institutions with instructions to implement cost-cutting measures during the final month of the year.

The circular (Dhivehi) signed by Finance Minister Abdulla Jihad 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).

Finance Minister Jihad and Economic Development Minister Ahmed Mohamed were not responding to calls from Minivan News at the time of press.

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, 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.

However, in the same month the Finance Ministry decided to reimburse civil servants for the amount deducted from their salaries in 2010 as part of the previous government’s austerity measures.

The deducted amounts, totalling MVR 443.7 million (US$28.8 million), were to be paid back in monthly instalments starting in July.

T-bills

Explaining how finances were raised for the government this year, Jihad told parliament’s budget committee last week that a large number of treasury bills (T-bills) were sold to Champa Brothers when the Maldives Monetary Authority (MMA) commenced sales to private parties in August this year.

Sun Online reported that Champa Brothers purchased T-bills worth US$11 million.

MMA T-bills with maturity dates of 28 days are sold at 7.73 percent interest, 91 days at 7.70 percent interest, 182 days at 7.55 percent interest, and 364 days at 7.70 percent interest.

The MMA made an announcement yesterday (December 10) seeking investors for “private placements” of treasury bills and bonds denominated in both US Dollars and Dhivehi Rufiyaa (MVR).

Meanwhile, according to the weekly financial statement as of December 6, total government expenditure stands at MVR 11.7 billion (US$758.7 million), outstripping total revenues in 2012 of MVR 9 billion (US$583.6 million).

The government spending includes MVR 8.7 billion (US$564 million) in recurrent expenditure, MVR 1.3 billion (US$84 million) in capital expenditure and MVR 1.7 billion (US$110 million) for loan repayments, resulting in a deficit of MVR 2.7 billion (US$175 million) so far.

Of the recurrent expenditure, MVR4.48 billion (US$290 million) was spent on salaries and allowances for employees and MVR 4.2 billion (US$272 million) on office administrative costs.

In November, a mission from the International Monetary Fund (IMF) urged the government to implement a raft of measures to reduce spending and raise revenue with higher taxes and revised import duties.

The mission advised the government that taming the ballooning fiscal deficit was “the most pressing macroeconomic priority for the Maldives.”

“The fiscal deficit is expected to rise in 2012 to 16 percent of GDP [Gross Domestic Product] in cash terms, and likely even higher if one accounts for the government’s unpaid bills, accumulated in an increasingly challenging environment for financing,” the IMF mission stated.

In April 2012, the head of a previous IMF mission to the Maldives told Minivan News that the country’s fiscal deficit was “substantially understated” at less than 10 percent of GDP as projected in the 2012 budget, predicting a figure closer to 17.5 percent of GDP or higher.

“The large deficit has 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 most recent IMF mission said in its statement.

Debt and deficit

In his budget speech to parliament last month, Finance Minister Jihad said total spending in 2012 was expected to be MVR 16.5 billion (US$1 billion) while revenues would reach MVR9.4 billion (US$609 million).

The revenue forecast in the 2012 budget was however MVR 11 billion (US$713 million).

“At the end of 2012, the state’s budget deficit is estimated to be at MVR 4.3 billion (US$278 million). That is 12.6 percent of GDP,” Jihad revealed.

According to the Finance Ministry, government spending on loan repayment and interest payments was expected to reach MVR 3.1 billion (US$201 million) in 2012.

Including an estimated MVR 13 billion (US$843 million) in domestic debt, the total public debt is expected to reach MVR 27 billion (US$1.7 billion) in 2012 and MVR 31 billion (US$2 billion) in 2013 – 82 percent of GDP.

As a result of financing budget deficits with loans for the past six years, ‘total external public and public guaranteed debt’ was estimated to reach MVR 13.7 billion (US$888 million) in 2012.

Moreover, the government spent more than MVR 1 billion (US$64.8 million) in 2011 and MVR 1.1 billion (US$71.3 million) in 2012 to service foreign debts as interest and repayments.

The figure was forecast to remain the same in 2013.

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Defence Minister departs on official visit to China

Minister of Defence and National Security Colonel (Retired) Mohamed Nazim departed to China today on an official five-day visit at the invitation of the Chinese Minister of National Defence.

In a press release today, the Defence Ministry revealed that Nazim is due to hold official talks with the Chinese Minister of National Defence General Liang Guanglie and meet members of the Chinese central military commission.

“During his visit, the Defence Minister will hold meetings with China’s National Defence University, Military Medical University and Shanghai Institute for International Studies as part of his efforts to seek further opportunities for education in China,” the press release stated.

The official visit would further enhance Sino-Maldives “defence and military ties” and secure Chinese assistance for developing the Maldivian military, the Defence Ministry said.

The Defence Minister’s official visit to China follows last week’s termination by the government of a 25-year concession agreement with Indian infrastructure giant GMR to modernise and manage the Ibrahim Nasir International Airport (INIA).

The move fuelled speculation in the Indian media of a Chinese role in the government’s decision to void the agreement and evict the GMR-led consortium.

“Looking at the political situation and political framework in Maldives, I can’t rule out anything,” GMR Airports chief financial officer ( CFO) Sidharth Kapur told journalists in New Delhi last week.

In November 2011, China became the first non-SAARC nation to open an embassy in the Maldives. AFP at the time reported Indian officials as expressing concern that it was “part of a Chinese policy to throw a ‘string of pearls’ – or a circle of influence – around India.”

Meanwhile, the Hindu reported today that President Dr Mohamed Waheed Hassan Manik has dismissed suggestions that China urged the Maldives to push out the Indian company.

“The only significant cooperation we have with China at this time is through development assistance… like building the museum, housing projects. I don’t think India should worry about it at all,” Waheed was quoted as saying.

The President further claimed that the Maldives was presently “not looking for a foreign investor” to develop the international airport, with the government yesterday announcing it was undecided on whether any new privatisation agreement would be sought in future.

However, officials from India’s External Affairs Ministry told the Indian Express on condition of anonymity that “China was keen to get a foothold in the Male’ airport asset as a base in the Maldives would put the dragon state in control of the oil routes in the region and give it greater dominance over sea lanes.”

India’s Economic Times meanwhile characterised the cancellation of the contract as a “strategic loss” for India.

Following an official visit in August, President Dr Mohamed Waheed Hassan Manik told Reuters that China pledged to grant the Maldives US$500 million (MVR 7.7 billion) in loans, equal to nearly one quarter of the Maldives’ GDP.

President’s Office Spokesperson Masood Imad told The Hindu a day before the airport handover that the government would again float a tender for its modernisation “and get more parties in to take the work forward.”

“The tender will be floated by the Maldives government in a transparent manner and after consulting investors. The mistakes made during the float of the tender which has been cancelled will not be repeated,” Imad told the paper.

Environment Minister Dr Mariyam Shakeela has meanwhile separately appealed to China for financial and technical support, telling journalists from the Chinese government’s authorised web portal China.org.cn that the Maldives “needs funds for infrastructure building.”

“We are obviously in need of funds and technical assistance as we do not have the financial means, the technical know-how or the capacity to address these huge climate change issues,” said Dr Shakeela, in an appeal for assistance with climate adaptation.

Minivan News has learned that senior Chinese military officials landed at the airport in the tense week leading up to the handover.

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Proposed budget faces cross-party criticism

The state budget for 2013 submitted to parliament by Finance Minister Abdulla Jihad has come under heavy criticism from both opposition and government-aligned parties during last week’s 16-hour budget debate.

Speaking during Thursday’s sitting, Majority Leader MP Ibrahim Mohamed Solih ‘Ibu’, parliamentary group leader of the formerly ruling Maldivian Democratic Party (MDP), contended that the proposed budget could not be salvaged or improved through amendments.

Ibu suggested that parliament should “set this aside” and approve enough funds for the state to function in the first three months of 2013.

“After that, appeal [to the government] to propose a budget that is beneficial to the whole nation and represents all constituencies. I don’t believe we can implement this budget any other way,” the majority leader said.

Ibu argued that the estimated revenue of MVR 12.9 billion (US$836 million) was unlikely to materialise.

“This [projected income] includes MVR 1.8 billion (US$116 million) in new revenue. [But] this will not be received,” Ibu asserted.

The MDP MP for Lhaviyani Hinnavaru explained that parliamentary approval would be required for the new revenue raising measures, such as reversing reduced or eliminated import duties, hiking T-GST to 15 percent, raising the airport service charge from US$18 to US$30 and introducing GST for telecom services.

Ibu claimed that the import duty revision to raise tariffs on oil “will not be passed in this Majlis,” calling on the budget review committee to scrap the estimated revenue forecast from import duties.

The MDP would not support increasing T-GST without consultation with the tourism industry, he added.

Predicting that the 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.

Moreover, the fiscal deficit would be considerably higher than the forecast of six percent of GDP, he contended.

“The Finance Minister said the budget deficit in 2013 would be MVR 2.3 billion, that is MVR 2 billion less than the current year. This, too, is a serious deception,” he said, adding that the figure would be closer to MVR 5.9 billion (US$382.6 million) or higher than 10 percent of GDP.

Ibu also noted that while US$50 million was to be taken as foreign loans at an interest rate of 10 percent for budget support, the Finance Ministry did not include any information of the supposed lender.

“The [budget] document says we don’t yet know where the money is going to come from,” he said.

With a public debt-to-GDP ratio of 85 percent at the end of 2013, Ibu said international financial institutions would declare the Maldives “bankrupt.”

The majority leader also criticised Finance Minister Jihad for failing to mention budgeted salary increases for military and police officers as well as plans to hire 800 new officers for the security services.

Combined with the transfer of about 5,400 employees in the health sector to the civil service, Ibu explained that the wage bill would shoot up by 37 percent.

Ibu further questioned whether funds would be available to implement the proposed public sector investment programme (PSIP) of MVR 3.1 billion (US$201 million).

“I am saying that not even 25 percent of this MVR 3 billion PSIP can be implemented next year,” he said, adding that details of lenders for the proposed loans were not provided.

Ibu also protested that the only project for Hinnavaru in 2013, the sixth largest population in the country, was a youth centre worth MVR750,000 (US$48,638).

Echoing the concerns of the parliamentary group leader, MDP MP Eva Abdulla revealed that MVR 6 million (US$ 389105) was added to the budget of the Maldives National Defence Force (MNDF) following the controversial transfer of presidential power on February 7.

Since the MDP government was ousted in the wake of a police mutiny on February 7, Eva said that the police and army have hired 250 and 350 new staff respectively.

Consequently, the institutions spent more than MVR 75 million (US$4.8 million) in addition to the approved budgets for 2012, she claimed.

The proposed budget of MVR 930.9 million (US$60.3 million) for defence expenditure in 2013 was meanwhile 14 percent higher than 2012.

Eva observed that the increase in the government’s wage bill of 37 percent was approximately MVR1.7 billion (US$110 million), which was also the amount allocated for harbour construction in the 2013 budget.

These funds should instead be spent for “harbours, education, sewerage and housing,” she argued.

“I know that the coming year is an election year. But what we know from the experience of [the presidential election in] 2008 is that the election cannot be won by adding employees to the government,” she said.

Coalition partners

Meanwhile, minority leader MP Abdulla Yameen, parliamentary group leader of the Progressive Party of Maldives (PPM), said 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 continuing deficit spending and accumulating high levels of public debt was a serious concern, “a good thing about this budget is that it hasn’t considered taking funds from the MMA’s [Maldives Monetary Authority’s] ways and means account, or in common language printing money, to finance this MVR 4 billion (US$259 million) [deficit].”

Financing the deficit with loans from the central bank leads to depreciation of the rufiyaa and rising inflation, Yameen said.

Securing commercial or concessional loans to plug the deficit was however “fine in itself if it can be repaid,” he added.

While President Dr Mohamed Waheed Hassan Manik has noted 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.

In his budget speech last month, Finance Minister Jihad noted that almost half of recurrent expenditure was paying salaries and allowances.

On the proposed revenue raising measures, Yameen said PPM could not support introducing GST for telecom services.

“I believe there should be ways to raise income for the government without taking this tax. Therefore, we, our party, cannot support trying to get MVR 200 million (US$12 million) in additional income through imposing GST on telecommunications,” he said.

Concurring with the MDP parliamentary group leader, Yameen called on the government to consult the Maldives Association of Tourism Industry (MATI) to determine whether the sector would be adversely affected by the proposed T-GST hike from 8 to 15 percent.

Government-aligned Jumhooree Party (JP) Leader MP Gasim Ibrahim, business magnate and chair of the budget review committee, said that parliament should consider the economic and social impact “at the micro-level” of the proposed revenue raising measures.

Gasim urged MPs on the budget committee to assess the costs and benefits of the proposed measures, noting that increasing import duties would lead to higher prices.

The MP for Alif Dhaal Maamigili appealed against proposing “unrealistic and empty documents” with the budget and pledging infrastructure projects that could not be delivered.

“The budget we passed for this year was in reality higher than MVR 16 billion (US$1 billion). But coming to year’s end we know from the revised budget that we achieved about MVR 12 billion or MVR 13 billion. So we are actually showing a dream to the public. We are intoxicating them with hopeful fantasies,” he said.

MP Visam Ali of the government-aligned Dhivehi Rayyithunge Party (DRP) meanwhile said it was regrettable that a sizeable portion of the population did not have access to “basic services” such as sewerage, water and electricity while the GDP per capita was forecast to exceed US$5,500 in 2013.

With public debt projected to reach 82 percent of GDP next year, Visam said immediate steps were needed to avoid “bankruptcy”.

She added that it was questionable whether the proposed revenue raising measures could be approved next year as the government had yet to submit any of the amendments or bills required for its implementation.

Visam also expressed concern with administrative costs for government offices increasing by more than MVR 500 million (US$32.4 million) in 2013 compared to this year, noting that it diverts funds away from the public sector investment programme.

In a recurrent complaint of most MPs who spoke during the budget debate, Visam said the two islands in her constituency were neglected in terms of development projects in 2013.

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Supreme Court criminalises offences within the exercise of freedom of assembly, expression

The Supreme Court decided in a 6-1 ruling last week that the police should investigate criminal offences carried out within the exercise of the rights to freedom of assembly and expression.

The ruling comes in a case filed by the Attorney General in September requesting the court to determine that public disturbances in the name of political protests were not within the scope of the rights guaranteed in the constitution.

These included protests outside private residences late at night, use of defamatory language and incitement to violence – “calling for people to be killed, hanged and attacked.”

The Supreme Court was asked to declare that such actions infringed upon the right to life, liberty and security of persons (article 21); the right to privacy and respect for private and family life (article 24); the right to protect reputation and good name (article 33); and special protection for children, young, elderly and disadvantaged people (article 35).

The apex court ruled that activities that violate “public safety, health, tranquillity and morality” could be considered criminal offences and falls within the purview of the security services.

The case was filed by the Attorney General following months of protests by the formerly ruling Maldivian Democratic Party (MDP) and the dismantling in March of the party’s protest camp by security forces.

President’s Office Spokesman Masood Imad told Minivan News last month that the government fully supports the right to protest, but it needs to be done in such a manner that does not adversely affect the lives of others.

“A protest should be about changing something. A protest conducted in residential areas has nothing to do with parliament. Public protest and public nuisance are two very different things,” he contended.

The MDP meanwhile likened the move to Bahrain’s efforts to outlaw protesting.

“The MDP strongly condemns efforts to restrict freedom to assembly by the government. One of the most fundamental clauses in the new constitution is the right to protest and we are witnessing democratic gains fast slipping,” said MDP Spokesperson Hamid Abdul Ghafoor.

Dissenting opinion

In his dissenting opinion, Justice Ahmed Muthasim Adnan – the only Supreme Court Justice with a background in common law – concluded that establishing a judicial guideline for the exercise of rights and freedoms was not within the remit of the Supreme Court.

He contended that such principles “should be determined in a law passed by the People’s Majlis.”

Justice Adnan noted that the case was considered ‘ex parte’ or conducted for the benefit of one party.

He noted that according to article 16 of the constitution, the rights and freedoms enshrined in chapter two were “subject only to such reasonable limits prescribed by a law enacted by the People’s Majlis in a manner that is not contrary to this Constitution. Any such law enacted by the People’s Majlis can limit the rights and freedoms to any extent only if demonstrably justified in a free and democratic society.”

It was therefore clear that rights and freedoms could only be restricted or narrowed through a law passed by parliament, Justice Adnan added.

The Attorney General’s request was not a matter to be decided by the Supreme Court, he concluded, as “these problems should be proposed to the People’s Majlis for a solution.”

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President Waheed requests parliamentary approval for loans of over US$96 million

Parliament has begun debate on the MVR 16.9 billion (US$1 billion) state budget for 2013 submitted by Finance Minister Abdulla Jihad last week.

At the beginning of Tuesday’s sitting, Speaker Abdulla Shahid read out a letter from President Dr Mohamed Waheed Hassan Manik requesting parliamentary approval for loans and government guarantees in the coming year.

Parliamentary approval for loans is required under amendments brought to the Public Finance Act in 2010.

Speaker Shahid announced that the President’s request was sent to parliament’s Finance Committee for consideration and review.

Minivan News understands President Waheed requested parliamentary approval for loans amounting to over US$96 million.

Presenting the budget to parliament last week, Finance Minister Jihad explained that next year’s budget deficit was to be financed with MVR 971 million (US$62 million) as budget support and MVR 1.3 billion (US$84 million) from Treasury bill (T-bill) sales.

Of the MVR 971 million estimated as budget support, MVR 671 million (US$43 million) was expected as foreign loan assistance, Jihad said, with the rest to be made up from “domestic finance.”

Jihad told parliament’s budget committee on Sunday that a large number of T-bills were sold to Champa Brothers – at an interest rate of about eight percent – when the Maldives Monetary Authority commenced sales to private parties in August this year.

Sun Online reported that Champa Brothers purchased T-bills worth US$11 million.

MMA T-bills of maturity dates of 28 days are sold at 7.73 percent interest, 91 days at 7.70 percent interest, 182 days at 7.55 percent interest, and 364 days at 7.70 percent interest.

Budget debate

Speaker Shahid announced that the debate would take place from 9:00am to 5:00pm with intervals until Thursday.

During Tuesday’s debate – which proceeded haltingly due to frequent loss of quorum – most MPs complained of the lack of funds allocated for development projects in their constituencies, such as harbours, water and sanitation systems, additional classrooms and upgrades to health centres.

In his budget speech (Dhivehi) last week, Jihad revealed that the public sector investment programme (PSIP) for 2013 included construction and repairs of harbours in 14 islands, establishing sewerage systems in 11 islands, water systems in three islands, 1,500 housing units in eight islands, 21 new mosques and upgrading the regional hospitals in Kulhudhufushi and Addu City to tertiary level.

Jihad said MVR 3.1 billion (US$201 million) was earmarked for the PSIP, with 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.

Speaking first during Tuesday’s debate, MP Ali Waheed of the formerly ruling Maldivian Democratic Party (MDP) said there were no funds or projects in the budget for his constituency or the neighbouring island of Mahibadhoo in Alif Dhaal atoll.

The MDP parliamentary group deputy leader insisted that the government should continue implementing the former ruling party’s manifesto.

Government-aligned Dhivehi Rayyithunge Party (DRP) MP for Kelaa, Dr Abdulla Mausoom, expressed concern with taking more loans to finance the budget deficit while the public debt was expected to reach MVR 31 billion (US$2 billion) in 2013 – 82 percent of GDP.

Considering the high levels of debt, Dr Mausoom observed that his each of his constituents in Kelaa in the northernmost atoll of the Maldives “are indebted by MVR 85,000 (US$5510)”.

As a consequence of “unequal development of the country,” said Mausoom, there was no sewerage in the islands of Kelaa and Filladhoo.

The DRP MP criticised the administrations of both Presidents Maumoon Abdul Gayoom and Mohamed Nasheed for running up huge deficits and public debts, claiming that public debt “shot up like a rocket” during the three-year rule of the latter.

DRP MP for Kanditheemu, Mohamed Hussain, meanwhile protested over zero funds allocated for the island of Goidhoo in Shaviyani Atoll, part of his constituency.

The MP contended that smaller islands were neglected during formulation of the budget. He added that details of what was needed for the islands were shared with both President Waheed and Finance Minister Jihad prior to the drafting of the budget.

While he did not propose expenditure of more than half a million for the three smallest islands in Shaviyani Atoll, there was “a blank space next to Goidhoo” in the budget.

Local media reported that islanders of Goidhoo launched protests this week over the lack of funds allocated for development of the island.

Independent MP for Vaavu Atoll Velidhoo, Ali Mohamed, said his constituents in Foddhoo have been protesting at the island council for the past five days because the island’s pier was “crumbling” and damaged beyond use.

MDP MP for Ihavandhoo in Haa Alif atoll, Ahmed Abdulla, objected to infrastructure projects for the constituency approved in the budget for 2012 having come to a standstill.

MP Ahmed Abdulla claimed that MVR 10 million from a MVR 70 million loan from the Bank of Maldives had been disbursed but a planned sewerage project for Ihavandhoo did not commence this year.

Meanwhile, at the beginning of today’s sitting, Speaker Shahid said MPs should be “ashamed and embarrassed” that debate was only able to continue yesterday for two and a half hours out of six hours allotted in the agenda.

Yesterday’s debate was frequently interrupted by loss of quorum and was eventually cancelled around 4:00pm. At least 20 MPs are required to be in the chamber for sittings to proceed.

Shahid appealed for cooperation to let all MPs speak before the conclusion of the budget debate on Thursday.

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Parliament approves amendment to conduct no-confidence votes through secret ballot

Parliament voted today 41-34 to approve amendments to the parliamentary rules of procedure to conduct no-confidence votes to impeach the President and remove cabinet members through secret ballot.

Today’s vote passed after a similar proposition was narrowly defeated 39-34 in November.

In October, the ousted Maldivian Democratic Party (MDP) submitted a no-confidence motion to impeach President Dr Mohamed Waheed Hassan Manik.

The no-confidence motion has however yet to be tabled in the Majlis agenda. Under the rules or standing orders, the President must be given a 14-day notice ahead of the vote.

Today’s vote was won after MPs of the government-aligned Jumhooree Party (JP) and Dhivehi Rayyithunge Party (DRP) – including respective leaders MPs Gasim Ibrahim and Ahmed Thasmeen Ali – joined MDP MPs to vote in favour of the amendments.

The amendment to the house rules was meanwhile approved after MPs voted in favour of a report (Dhivehi) by the MDP-majority General Affairs Committee, which voted last month in favour of the amendments proposed by MDP MP Ibrahim Rasheed for secret voting.

During today’s debate on the report, MPs of the government-aligned Progressive Party of Maldives (PPM) contended that the report was tabled in the agenda in violation of Majlis rules and criticised having to vote on the same issue for a second time.

PPM MPs along with some DRP MPs and several Independent MPs argued against secret ballots in parliament and insisted that constituents deserved to know how their MPs vote.

MPs further contended that conducting no-confidence votes through secret ballot would give weight to widespread allegations of corruption levelled against parliament.

Meanwhile, speaking at rally on Thursday night, Adhaalath Party President Sheikh Imran Abdulla called MPs who voted in favour of secret ballot “traitors.”

Imran warned that he would “chase after” MPs and the Speaker if the amendments were approved and threatened “direct action”.

“The day that [Speaker Abdulla] Shahid takes a vote to destroy the country is the day that we run after him,” Imran had said.

In an apparent response, Speaker Shahid said in a statement this week that intimidation and threats of force against MPs violated “the spirit of the constitution and democratic principles.”

Article 90(a) of the constitution states, “No member or other person shall be liable to any proceedings in any court, and no person shall be subject to any inquiry, arrest, detention or prosecution, with respect to anything said in, produced before, or submitted to the People’s Majlis or any of its committees, or with respect to any vote given if the same is not contrary to any tenet of Islam.”

While informing MPs of the wishes of the public was part of democratic norms, Speaker Shahid said in his statement that it did not include threats, intimidation and “inflicting psychological or physical harm on MPs.”

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