Ahmed Naish – Page 57 – Minivan News

Imports, exports rise in 2012 as current account deficit worsens

Imports in the first ten months of 2012 increased by 18 percent compared to the same period last year, the Maldives Customs Service (MCS) has revealed.

In a press release on Thursday, MCS explained that while goods worth MVR 16.25 billion (US$1 billion) were imported in the first ten months of 2011, the figure as of the end of October 2012 was MVR 19.22 billion (US$1.2 billion).

However, as a result of import duty reductions approved by parliament in late 2011, income from import duties decreased by 50 percent compared to the same period in 2011.

“While MVR 2.09 billion (US$135.5 million) was received as import duties by October last year, import duties received in the same period this year was MVR 1.05 billion (US$68 million),” the press release stated.

As of January 1, 2012, it added, import duties were completely eliminated for some items while it was substantially reduced for other goods.

MCS has also collected MVR 40.5 million (US$2.6 million) as fines for import duty fraud and evasions and other fees so far this year.

As of October 2012, the highest volume of imports to the country came from United Arab Emirates with goods worth MVR 5.71 billion (US$370 million), followed by Singapore with goods worth MVR 3.68 billion (US$238 million).

Exports from the Maldives meanwhile rose 45 percent in the first 10 months of 2012 compared to the same period last year.

While locally produced goods worth MVR 1.38 billion (US$89 million) were exported in the first ten months of 2011, the figure as of October this year reached MVR 2.01 billion (US$130 million).

The highest volume of goods was exported to Thailand at MVR522 million (US$33.8 million) followed by France at MVR 355 million (US$23 million).

The Finance Ministry revealed last week that real GDP growth of the fisheries industry was expected to be 9.7 percent in 2012 on the back of a boom in fisheries-related manufacturing and subsequent exports.

Balance of payments

An International Monetary Fund (IMF) mission to the Maldives last month noted that a ballooning fiscal 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 IMF forecast for the current account deficit 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.

According to an overview of the economy presented by the Finance Ministry along with the state budget (Dhivehi) proposed to parliament last week, the current account deficit in 2012 was expected to be 27 percent of GDP.

The current account deficit was forecast to widen to 28 percent of GDP in 2013 as imports far exceed exports.

The volume of imports in 2013 was forecast to be seven percent higher than this year, the Finance Ministry stated.

The forecast for revenue from exports in 2013 was US$350.7 million, up from an estimated US$329.8 million in 2012.

Fisheries exports and jet fuel re-exports are projected to rise in 2013, the Finance Ministry explained.

The Finance Ministry also revealed that the official treasury reserve declined from US$334.9 million at the end of 2011 to an estimated US$297 million by the end of this year.

As the reserve was expected to be further depleted in 2013 as a result of paying back loans taken by the government, the Finance Ministry estimated that the reserve would be enough for 1.7 months worth of imports on average in 2013.

However, the ministry noted that the official reserve could rise to US$339.4 million in 2013 if proposed revenue raising measures are implemented – including hiking T-GST to 15 percent and raising the airport service charge from departing passengers to US$30.

“Considering the amount of imports from the official reserve, this is a reserve enough for two months of imports,” the Finance Ministry stated.

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DNA testing reveals child sex offender

DNA testing has revealed that a 37 year-old man impregnated a 11 year-old girl in the Feydhoo ward of Addu City, police have said, after concluding investigation of a case that prompted shock and public outrage last month.

The 11 year-old victim in Seenu Feydhoo gave birth two months prematurely on November 1 after being taken to hospital complaining of stomach pains.

The infant died in the early hours of the following morning (November 2).

On November 4, police confirmed that a 37 year-old male suspect had been taken into custody in connection to the case.

In a press briefing on Thursday, Inspector Hassan Shifau, acting head of the Family and Child Protection Department, explained that DNA samples from the infant matched the 37 year-old suspect, Mohamed Javid of Maradhoo-Feydhoo Gulfamge.

Shifau said police obtained DNA samples from all males in the household of the 11 year-old victim.

Javid was a friend of the girl’s parents and visited the house every night, Shifau explained.

Police discovered during the investigation that Javid had been sexually abusing the victim since early 2012, he added.

The second suspect, Adam Saeed, 45, had been living in the girl’s house. Both suspects had previously been arrested on drug-related charges.

The victim meanwhile told police that she did not tell anyone about the abuse she suffered.

Family members and school mates questioned during the investigation said they were unaware that the girl was pregnant as it did not show on her body.

The girl was said to be of a “quiet” and reserved nature.

An official from the Feydhoo health centre told local media last month that “the girl admitted that she got pregnant after someone had sexually molested her.”

In the press briefing, Inspector Shifau appealed to parents to have a closer relationship with their children to ensure that they would be able to share accounts of abuse.

Upon conclusion of the investigation by a team of the Family and Child Protection Department working with the Seenu Gan police station, Shifau said police were in the process of forwarding the case for prosecution.

Child abuse in the Maldives

The case of the 11 year-old giving birth prompted a wider public debate on child sexual abuse in the Maldives, while politicians and NGOs called for a swift investigation.

Speaking to Minivan News at the time, Islamic Affairs Minister Sheikh Mohamed Shaheem Ali Saeed labelled it “a very big crime,” adding that the young girl should not herself take any blame or punishment.

“Personally I can’t say any word to punish a small girl in grade six. This may be a rape or sexual abuse case,” he said.

Dhivehi Rayyithunge Party (DRP) MP Rozaina Adam said the case was “unacceptable” and “shocking”, demanding on social media that police make the case a high priority.

“An 11 year-old doesn’t get pregnant by herself! This is child abuse we are talking about here n authorities need to find out who is responsible,” she wrote on Twitter.

However, Ali Rameez, a famous singer who gave up music and now heads the Islamic NGO Jamiyyathul Salaf, tweeted: “All you people who claim to be Muslims! In Allah’s Shariah [law], a child grows up when he or she reaches puberty. Not when they turn 16, 18, 25.”

Rameez, who also hosts a religious program on private radio station SunFM, tweeted earlier that he was “not aware that children could get pregnant.”

The comments were criticised by some social media users including former Environment Minister Mohamed Aslam, who tweeted: “Where are the children’s right groups… Where is HRCM.. Horrified with the preaching of people like Ali Rameez.”

Local NGO Advocating the Rights of Children (ARC) meanwhile issued a statement calling on the government, civil society organisations and the general public to step up efforts to combat child abuse in society.

“It is an obligation for us as responsible citizens to protect our children, and it is the Maldivian government’s obligation as a signatory to the Convention of the Rights of the Child (CRC) that all international commitments to protect the rights of all children are adhered to fully,” ARC noted.

Almost one in seven children of secondary school age in the Maldives have been sexually abused at some time in their lives, according to an unpublished 2009 study on violence against minors.

Rates of sexual abuse for girls are almost twice as high than for boys at 20 percent – one in five girls have been sexually abused – while the figure for boys was 11 percent. Girls are particularly at risk in the capital Male’, the report found.

In recent years, local authorities and NGOs have released a number of findings trying to detail the extent of child abuse and wider sexual assaults within society.

The state-run Indira Gandhi Memorial Hospital’s (IGMH’s) Family Protection Unit reported in 2010 that the centre was notified of 42 cases of rape between 2005-2010. Most of these cases were found to involve minors.

According to the Human Rights Commission of the Maldives, 13 rape cases were reported last year alone, the majority of which most were gang rapes or assaults involving minors.

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MPs can be arrested at crime scene, High Court rules

The High Court on Thursday ruled that MPs could be arrested at crime scenes despite a provision in the parliamentary rules stipulating that MPs could not be arrested while there was a pending no-confidence motion.

The ruling (Dhivehi) was made after the Prosecutor General’s Office (PGO) appealed a decision by the Kulhudhufushi Magistrate Court to release MPs Abdulla Jabir and Hamid Abdul Ghafoor, who were arrested on an uninhabited island on charges of alcohol consumption.

While it overruled the magistrate court decision to release the suspects, the High Court however ruled that there were no grounds to detain the MPs any further.

In its appeal, the state had requested authority to arrest the MPs again. But the High Court noted that the only reason police had given for requesting extension of detention was that the suspects might attempt to influence witnesses, ruling that such a possibility no longer existed.

In separate rulings referring to the constitution, the Police Act and Islamic Shariah, the High Court determined that despite the provision in the parliamentary standing orders, MPs could be arrested from crime scenes or if the arresting officer observes a crime being committed.

The article in the parliamentary rules was intended to protect MPs against arbitrary arrest, the High Court noted, but did not preclude arrests under any circumstances.

Section 202(d) of the house rules state that MPs cannot be arrested while there is a no-confidence motion before parliament to impeach the president or remove a cabinet minister, judge or member of an independent commission from his or her post.

Parliament on Wednesday meanwhile approved amendments to section 202 with 27 votes in favour and 18 against.

“The amendment proposed to Article 202 (b) states that if in the event of the arrest of a Member of Parliament under a circumstance that excludes allegations of criminal offense, and where immediate interrogation is not possible, then either the Speaker or the Secretary General of the People’s Majlis must be notified of the arrest in 15 minutes at the most,” according to the Majlis secretariat.

At the time of their arrest on November 16, no-confidence motions were submitted against President Dr Mohamed Waheed Hassan Manik and Civil Service Commission (CSC) Chair Mohamed Fahmy Hassan.

While Speaker Abdulla Shahid had instructed police to abide by the rules and release the MPs, police had refused and contended that it was up to a judge to determine the legality of the arrest.

During the hearings on the appeal, the High Court rejected a request by the state to abolish the provisions in the parliamentary rules as the appeal concerned extension of detention and not the constitutionality of a clause in a specific regulation.

Following an emergency meeting in the wake of the arrests, parliament’s Privileges Committee passed a motion to ask the Prosecutor General to press charges against Police Commissioner Abdulla Riyaz for arresting the MPs in violation of the law, and disregarding the Speaker’s instructions to release them.

The committee also passed a motion to ask the Human Rights Commission of the Maldives (HRCM) to investigate allegations of police brutality against the MPs.

Meanwhile, in a statement at the time, police said 10 people were arrested during a ‘special’ operation on the island of Hodaidhoo in Haa Dhaal Atoll.

In addition to ruling coalition Jumhoree Party (JP) MP Abdulla Jabir and Maldivian Democratic Party (MDP) MP Hamid Abdul Ghafoor – also the party’s international spokesperson – those arrested included former SAARC Secretary General and Special Envoy to the former President, Ibrahim Hussain Zaki, former Press Secretary Mohamed Zuhair and his wife Mariyam Faiz.

The others arrested were Jadhulla Jaleel, Hamdan Zaki, two Sri Lankan nationals named Raj Mohan and Anoor Bandaranayk as well as a Bangladeshi named Suhail Rana.

While Hamdan Zaki – son of Ibrahim Hussain Zaki – was detained on orders of the magistrate court, he was released to house arrest on Wednesday after being taken to hospital. Hamdan’s family told local media that he suffered a seizure when he was taken to the hospital and accused police of ill treatment and negligence.

Hamdan Zaki was admitted at the ADK hospital and reportedly suffered another seizure on Thursday morning.

MP Jabir meanwhile alleged that police used excessive force during the arrest. Jabir previously told Minivan News police actions resembled “a terrorist killing operation.”

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Police fail to bring murder suspect to court

Police on Thursday failed to bring murder suspect Mohamed Samah to the Criminal Court for sentencing.

A court official told local media that the verdict was due to be delivered at Thursday’s hearing, which was cancelled after police did not bring the accused to court despite repeated requests by the judge.

Samah is accused of stabbing police Lance Corporal Adam Haleem to death on the island of Kaashidhoo in Kaafu atoll on July 22.

Following his arrest, Samah confessed to the crime and asked for forgiveness, claiming that the incident occurred while he was under the influence of drugs.

At the last hearing in early November, Samah however told the judge that police extracted the confession through torture.

Samah reportedly told the judge that he would prefer to face the death sentence under Islamic shariah than endure torture in custody.

The judge revealed at the last hearing that three of Haleem’s heirs had opted for qisas (retaliation or death for death).

Following Thursday’s hearing, the Criminal Court – along with the Civil Court and High Court – broke for a 15-day recess. The murder trial will therefore resume after December 15.

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Deputy Minister paid salary with no record of attendance, Tourism Ministry audit report reveals

A Deputy Minister at the Ministry of Tourism, Arts and Culture was paid salary and allowances from April 2011 to January 2012 with no official records of attendance, the ministry’s audit report for 2011 has revealed.

The audit report (Dhivehi) made public on Tuesday stated that a total of MVR 343,351 (US$22,267) was paid to the senior official for 10 months while there was no documentation to show that he “ever attended either the ministry or any office functioning under the ministry.”

The Auditor General recommended recovering the funds and taking action against the responsible staff at the ministry.

While there was no specific regulation governing attendance of political appointees at the time, the Auditor General contended that paying salaries without attendance records was against “the spirit of the public finance regulations.”

In addition, the audit discovered that the ministry gave a temporary license or authorisation to a private company to operate a tourist hotel at the Laamu atoll Kadhdhoo airport in violation of the Tourism Act.

The audit found that the permission was given despite an inspection report finding that the facility did not meet the criteria for a tourist guesthouse in terms of quality of service.

A tourist hotel is ranked higher than a guesthouse, the audit report noted.

Under articles 4, 18 and 19 of the tourism law, the report explained, a tourist hotel could not be operated on the plot at the regional airport.

The hotel was however operated from May 24, 2011 to December 25, 2011 before official permission or a permanent license was sought, the audit report noted.

Local media reported yesterday (November 28) that the guesthouse or hotel was operated by Heavy Load Maldives, a family business of MP ‘Reeko’ Moosa Manik, chairperson of the formerly ruling Maldivian Democratic Party (MDP).

The Auditor General recommended submitting the case to the Anti-Corruption Commission (ACC) for further investigation.

Minivan News is seeking comment from former Tourism Minister Dr Mariyam Zulfa.

The audit report also noted that temporary authorisation or licenses for operating guesthouses were renewed “some times for over a year” while the facilities did not meet the requisite criteria.

Moreover, registration and licenses were provided to some dive centres and guesthouses without collecting registration and licensing fees.

In other cases highlighted in the report, the audit noted that documentation was not properly maintained for equipment such as camera and mobile phones purchased in 2010.

As a result, equipment provided for use by staff was not recovered when the employees left the office.

In addition, the Tourism Ministry did not maintain a detailed income registry with reference numbers and dates as required by the public finance regulations. The regulations require that the registry must be routinely shared with the Finance Ministry.

“However, inquiries for the Ministry of Tourism’s 2011 audit revealed that such a record [of income] was not prepared and maintained,” the audit report stated. “As a result, we note that it could not be confirmed whether the incomes due to the ministry was received in full.”

Offices and departments under the Tourism Ministry

The audit report noted that the Tourism Ministry’s audit for 2011 was conducted without any documentations or financial records from the Department of Information (DOI) operating under the ministry.

Repeated requests for documents from the department went unheeded, the report stated, adding that the financial statement of the DOI was not provided for the 2010 audit either.

On Monday (November 26), the President’s Office announced that the DOI has been abolished as new institutions formed by the 2008 constitutions carries out the functions previously performed by the department.

“Following this change, registration of media; formulating policies and facilitating the development of local media; creating the official Maldives’ calendar; maintaining the registry of journalists and writers; and, representing the Maldives internationally in the press field will be carried out by the Ministry of Tourism, Arts and Culture. Information to international media on local events will be given by the Ministry of Foreign Affairs,” the President’s Office stated.

Meanwhile, concerning the other offices operating under the ministry, the audit found that employees of the Maldives Tourism Promotion Board (MTPB) were paid overtime salaries in violation of the civil service regulations for calculating overtime.

The audit also noted that clothing allowance was paid to all employees in January 2011 in anticipation of overseas trips to attend tourism fairs. However, the allowance was not recovered from two staff at MTPB who did not travel abroad during the year.

An audit of the National Centre for the Arts (NCA) meanwhile revealed that MVR 24,735 (US$1,604) was spent out of the budget on tickets for a lecturer and his family for a “one-day creative writing workshop” on November 19, 2011.

However, an official agreement was not signed between the lecturer and the NCA and there was no documentation at the centre regarding the workshop.

The NCA also spent MVR 33,000 (US$2,140) during a ten-day period on food for 20 staff working on a “Male’ Art Festival” in excess of the approved rate in the public finance regulations. Catering was also arranged without a public announcement after seeking quotations from only two parties, the audit found.

A total of MVR 19,750 (US$1,280) was spent on catering for seven events organised by the NCA in 2010 without seeking quotations from more than one party.

The catering contract was awarded to a particular party at a rate of MVR 50 per person while the public finance regulations specify a rate of MVR 40 per person.

Aside from a note from NCA and catering bills, the audit report noted that no other documentation for the transactions could be found at the NCA.

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Tourism growth slowed to less than one percent in 2012: Finance Ministry

The government’s forecast for economic growth in 2013 is 4.3 percent, following a slowdown to a projected 3.4 percent in 2012, according to an economic and fiscal outlook by the Finance Ministry introducing the state budget (Dhivehi) proposed for next year.

Tourism was especially hard hit in 2012, with growth falling from 15.8 percent in 2010 and 9.1 percent in 2011, to an expected 0.7 percent in 2012.

The original forecast for economic growth in 2012 was 5.5 percent.

An International Monetary Fund (IMF) mission said in a statement earlier this month that economic growth slowed to three and a half percent this year on the back of “depressed tourist arrivals earlier in the year and weak global conditions,” which have been “only partially offset by strong performance in construction and fisheries-related manufacturing.”

The IMF mission forecast “a modest recovery” for 2013 and beyond.

The Finance Ministry’s statement on the economic outlook for the next three years meanwhile explained that the Maldivian economy dipped into recession in 2009 following the global financial crisis in the previous year.

However, the economy rebounded with 7.1 percent growth in 2010 and 7 percent in 2011.

“While [real GDP] was projected to increase in 2012, the main cause of the economic slowdown compared to 2011 was the weakening of the tourism sector during the year,” the Finance Ministry stated.

While the tourism industry grew by 15.8 percent in 2010 and 9.1 percent in 2011, the industry’s growth in 2012 was expected to be 0.7 percent.

The two main reasons cited by the Finance Ministry for the anaemic growth were “the political turmoil the country faced in February” and a decline in the average number of nights tourists spend in the country “as a result of a decline in the average number of days a tourist spent in the Maldives.”

On average, tourism accounted for 28 percent of GDP during the past 10 years.

The main drivers of growth in 2012 were a booming construction industry and growth in manufacturing and fisheries.

Fisheries, manufacturing and construction

The volume of fish catch has been steadily declining for the past seven years. While approximately 185,000 tonnes of fish were caught in 2006, the number dropped to about 70,000 tonnes in 2011.

During the past five years, the value of the fisheries industry declined from MVR 489 million (US$31.7 million) to MVR 321 million (US$20.8 million) with a corresponding fall of 3.3 percent of the economy to 1.1 percent in 2012.

As a result of opening up the country’s Exclusive Economic Zone (EEZ), the industry’s productivity was expected to rise by 9.7 percent in 2012.

However, as fishing in the Indian Ocean was not expected to improve in coming years, the Finance Ministry has forecast the real GDP of the fisheries sector to decline by 1.3 percent in 2013.

Estimated real GDP for the manufacturing industry – fisheries products, foodstuff, furniture and cement – was meanwhile MVR 998 million (US$64.7 million) in 2012, up from MVR 850 million (US$55.1 million) the previous year.

Fisheries-related products accounted for the largest share of the manufacturing industry.

Following 19 percent growth in 2011, the construction industry was expected to have grown by 16 percent in 2012.

“The main reason for the large growth of the sector in 2011 and 2012 was the development of new resorts in 2011,” the Finance Ministry observed, adding that resort development accounted for 50 percent of construction in the Maldives.

Meanwhile, in the retail and import business sector, customs statistics for the first eight months of 2012 showed that the value of goods imported (adjusted for inflation) was 22 percent higher than the same period in 2011.

The real GDP of the business sector in 2012 was an estimated MVR 875 million (US$56.7 million).

Deficit and debt

The Finance Ministry also revealed that nominal GDP in 2011 was MVR31,447 million (US$2 billion) while the estimate for 2012 was MVR34,148 million (US$2.2 billion).

Real GDP in 2011 was MVR20,461 million (US$1.3 billion). Nominal GDP per capita in 2012 was estimated to be MVR 80,260 (US$5,206) per annum.

Real GDP measures the value of all goods and services produced in a country expressed in the prices of a base year – 2003 in the Maldives.

According to the Finance Ministry, the medium term target of the government was meanwhile reducing the fiscal deficit “to pave the way to conduct social and economic programmes” and regain the confidence of international financial institutions.

While a budget deficit of 9.7 percent was forecast 2012, the Finance Ministry said the figure was expected to reach 12.6 percent of GDP by the end of the year.

“The projected deficit in the estimated budget proposed for 2013 is 6.1 percent of GDP,” the Finance Ministry stated. “In the medium term, the budget deficit can be lowered to 1.9 percent of GDP in 2015.”

The Finance Ministry proposed MVR 1.1 billion (US$71.3 million) as foreign loans and MVR 1.1 billion (US$71.3 million) as domestic finance to plug the budget deficit in 2013.

While tax revenue from T-GST, GST and import duties collected in 2012 was lower than forecast, the Finance Ministry revealed that income from Business Profit Tax (BPT) was 80 percent higher than expected.

At the end of 2012, the government would have received MVR 1.3 billion (US$84 million) as BPT while the forecast was MVR763.6 million (US$49.5 million).

Presenting the 2013 budget to parliament on Monday, Finance Minister Abdulla Jihad said revenue forecast for 2013 was MVR 12.9 billion (US$836 million), including MVR 1.8 billion (US$116 million) expected as a result of implementing proposed revenue raising measures.

However, most of the proposed measures – such as hiking T-GST and introducing GST for telecom services – would have to be approved by parliament through amendments to the relevant laws.

More than MVR 200 million (US$12.9 million) was estimated as GST receipts from telecom services in 2013.

The Finance Ministry also revealed that the ‘total external public and public guaranteed debt’ was estimated to reach MVR 13.7 billion (US$888 million) in 2012.

Of the MVR 4.1 billion (US$330 million) of the loan assistance spent in 2012, more than 50 percent was from multilateral financial institutions and 28 percent from bilateral donors.

A total of MVR 1.9 billion (US$123 million) from loan assistance has been spent for various projects in 2012 while the rest was spent for budget support.

As of September 2012, MVR 561 million (US$36.4 million) has been received as budget support – US$16 million from the Asian Development Bank and US$20 million from a standby credit facility extended by the Indian government.

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 expected to remain the same in 2013.

In addition, the government spent MVR 660.5 million (US$42.8 million) in 2011 and MVR 2 billion (US$129.7 million) in 2012 to service domestic debts.

The figure for domestic debt was expected to decline to MVR 1.1 billion (US$71.3 million) in 2013 as payment for US$ 100 million of government bonds sold to the State Bank of India in Male’ – amounting to MVR 771 million (US$50 million) as repayment for a second tranche – has been pushed back to 2014.

Similarly, repayment of three ways and means treasury bonds to the Maldives Monetary Authority (MMA) or central bank amounting to MVR 951 million (US$61.6 million) has also been pushed back.

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.

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State budget of MVR 16.9 billion for 2013 presented to parliament

Finance Minister Abdulla Jihad submitted an annual state budget of MVR 16.9 billion (US$1 billion) for 2013 (Dhivehi) to parliament today, proposing a raft of measures to raise revenue and reduce spending.

Of the proposed MVR 16.9 billion of government spending, more than 70 percent was recurrent expenditure, Jihad noted in his budget speech (Dhivehi).

“As in other years, the highest portion of recurrent expenditure is expenditure on [salaries and allowances for government] employees,” Jihad explained. “That is 48 percent of total recurrent expenditure.”

As total expenditure would outstrip projected revenues of MVR 12.9 billion (US$836 million), Jihad said the resulting deficit would be plugged 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 in budget support, MVR 671 million (US$43 million) was expected as foreign loan assistance, Jihad explained, with the rest to be made up from “domestic finance.”

New measures proposed to raise revenue is expected to account for MVR 1.8 billion (US$116 million) in income, Jihad said.

Jihad further claimed that the budget deficit at the end of 2013 would be MVR 2.3 billion (US$149 million), half the deficit in the current year.

On revenue forecasts, Jihad revealed that income from taxation would account for MVR 9.1 billion (US$590 million) while MVR 3 billion (US$194 million) was expected from other sources, such as resort lease rents, dividends from government companies and profits from the Maldives Monetary Authority (MMA).

On social and economic programmes, Jihad said MVR 2.5 billion (US$162 million) was allocated to the education sector, MVR 1.7 billion (US$110 million) for strengthening the judiciary, MVR 1.5 billion (US$97 million) for improving health services, MVR 2 billion (US$129 million) for social security and welfare and MVR 5.5 billion (US$356 million) for infrastructure projects in the atolls.

A public sector investment programme (PSIP) was formulated with MVR 3.1 billion (US$201 million), Jihad said, 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.

The PSIP projects include 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.

Meanwhile, according to the latest figures from the Finance Ministry, government spending as of November 22 stands at MVR 10.9 billion (US$706 million), while revenues of MVR 8.5 billion (US$551 million) have been collected so far this year.

Jihad said in parliament today that total spending in 2012 is expected to be MVR 16.5 billion (US$1 billion) while revenues would be 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.

Revenue raising and cost-cutting measures

A recent mission from the International Monetary Fund (IMF) urged the government to implement a raft of measures to raise revenues, advising that strengthening government finances was “the most pressing macroeconomic priority for the Maldives.”

Echoing the IMF concerns, Jihad told MPs that rising public debt was “a major challenge to the country’s economy,” revealing that the state’s debt would increase to MVR 31 billion (US$2 billion) by the end of 2013 – 82 percent of GDP.

If the deficit spending trend continues, Jihad warned that the Maldives would face severe difficulties in securing development loans and financial assistance.

Taking the IMF recommendations on board in formulating the budget, Jihad proposed a number of revenue raising and cost-cutting measures,

Review government subsidies to target assistance to the needy
Freeze hiring “as much as possible”
Reforming the universal health insurance programme ‘Aasandha’
Reducing the number of councillors and board members of government companies
Reducing expenditure for trips from government offices to the atolls
Reduce government expenditure on rent for government offices
Reduce overseas trips by government employees
Amending the Pension Act to abolish “double pension”
Reversing import duty reductions
Hiking T-GST (Tourism Good and Services Tax) to 15 percent from July 2013
Introducing GST for telecom services (currently exempt from the tax)
Introducing GST for oil
Increasing airport service charge for foreigners from $18 to $30
Amending the law on revenue stamps
Abolishing 22 loss-making government companies

Jihad appealed to MPs to approve the measures and warned of “bitter consequences for the whole nation” should deficit spending continue in the future.

The Finance Minister urged MPs to “put aside political differences and prioritise national interest” in recognising that the country could not “indefinitely” spend beyond its means.

“We have to accept that these measures will affect all of us to some extent,” he said. “However, if we do not begin taking these measures, we might have to face more severe difficulties as a result of steps we would be forced to take.”

Monetary policy

According to projections by the MMA, said Jihad, the current account deficit is expected be higher than 2012 by 15 percent.

The current account deficit is projected to widen to 28 percent of GDP in 2013, Jihad said.

Collaborative efforts from different sector would be needed to “solve the balance of payments problem facing the country,” Jihad added, as the imbalance in the foreign exchange market has been building for many years, resulting in a parallel or “black market” for dollars.

Policies have been proposed to increase exports and expand small businesses, Jihad said.

Following the submission of the budget today, a joint committee of the parliament’s Finance Committee and Economic Committee would convene to review the proposed budget before it is put for a vote.

The budget debate has meanwhile been scheduled for December 4, 5 and 6, Speaker Abdulla Shahid said today.

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Dr Waheed will be PPM presidential candidate, predicts former President Nasheed

President Dr Mohamed Waheed Hassan Manik will become the presidential candidate of the Progressive Party of Maldives (PPM) with the backing of its leader Maumoon Abdul Gayoom, former President Mohamed Nasheed has predicted.

Speaking at a rally in Shaviyani Foakaidhoo on Saturday night during the on-going ‘Journey of Pledges’ northern tour, Nasheed alleged that his former vice president held secret consultations with PPM interim leader and figurehead, former President Gayoom, 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,” Nasheed 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.”

Nasheed noted that the post of vice president was not included in the old constitution that was twice revised during Gayoom’s 30-year rule.

The Maldivian Democratic Party (MDP) presidential candidate reiterated his allegation that Gayoom orchestrated a “coup d’etat through Dr Waheed” on February 7.

A week before Nasheed’s resignation in the wake of riot police assaulting MDP members and ransacking the party’s meeting hall followed by a police mutiny at Republic Square, Dr Waheed met with opposition politicians at his official residence at 1:00am, after which they pledged allegiance to the then-vice president and called on the security forces not to obey then-President Nasheed.

“In my view, Maumoon is trying to make Dr Waheed PPM’s presidential candidate,” Nasheed said on Saturday night.

He added that Gayoom’s intention was to rule by proxy, alluding to a sultan who wielded power through a sibling on the throne while residing in Egypt.

Nasheed suggested that PPM’s presidential primary was being pushed back because PPM parliamentary group leader, presidential hopeful and half-brother of Gayoom, Abdulla Yameen, would not accept Waheed becoming the party’s candidate.

Addressing party members at a rally on Thursday night to celebrate PPM’s first anniversary, Yameen reportedly claimed that PPM was the only party within the ruling coalition that was defending the government and expressed disappointment with the coalition becoming “fractured.”

Nexbis deal

Yameen also called on the government to “immediately” terminate the controversial border control system agreement with Malaysian company Nexbis and contended that the project was detrimental to the state.

The parliament’s minority leader also criticised the government’s hesitancy to cancel the agreement despite the Anti-Corruption Commission’s (AAC’s) findings of alleged corruption in the deal.

Local media meanwhile reported that parliament’s Finance Committee decided during a closed-door session on Thursday 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 President Nasheed when the corruption allegations first surfaced.

His successor Abdulla Shahid expressed concern over 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 his speech on Saturday that Dr Waheed’s GIP’s Deputy Leader Mohamed ‘Nazaki’ Zaki was complicit in the 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.

Delayed congress

Meanwhile, PPM announced in October that its first national congress has been postponed for a third time. The party’s charter however stipulates that a congress must be held within six months of its formation to elect leaders, after which a primary would take place to select a candidate for the upcoming presidential election.

Local daily Haveeru reported a source within the party citing “political turmoil” as the reason for the delay.

The party held its inaugural convention in October 2011.

Meanwhile, 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.

Dr Waheed is currently leader of the GIP, which has no representation in either the People’ Majlis or local councils and just 2,515 registered members, according to the latest figures from the Elections Commission (EC).

By comparison, PPM currently has 17,486 members and is the minority party in parliament. The party has also won nine out of 12 by-elections held since its inception last year.

Speaking at the PPM rally last week, Gayoom urged senior leaders of the party to be mindful of the party’s unity during the upcoming primary. The party’s national congress is now scheduled for January 2013.

In his speech, Nasheed meanwhile urged MDP members to begin the presidential campaign with the consideration that PPM’s candidate will be Dr Waheed with Dhivehi Qaumee Party (DQP) Leader Dr Hassan Saeed as his running mate.

“This is how I see the picture,” he said. “I am someone who tries to study how President Maumoon does thing. I don’t believe that things could transpire differently after this.”

Nasheed went on to say that the MDP would “easily” beat Dr Waheed as the PPM’s presidential candidate in 2013.

The former President observed that PPM’s strength was in “small islands” and the “the smaller the island, the more support it has,” which was akin to “a disease” that causes the tormented to defe the tormenter.

However, Nasheed noted that in the local council elections in February 2011, MDP won nine out of 11 seats in the Male’ City Council, all six seats in the Addu City Council and made clean sweeps of a number of larger inhabited islands such as Kulhudhufushi in Haa Dhaal atoll and Thinadhoo in Gaaf Dhaal atoll.

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Zaki’s remarks “threat to national security,” claims Defence Ministry

The Ministry of Defence has said widely-reported remarks by Special Envoy of former President Mohamed Nasheed, Ibrahim Hussain Zaki that the previous government would have sought Indian military assistance to protect its economic interests in the Maldives, constitute a “threat to national security”.

In a statement on Friday, the Defence Ministry condemned the remarks “in the harshest terms” and contended that “such actions are very dangerous [threats] to national security and encourage activities that would harm the country’s independence and sovereignty.”

“If we were in the government, definitely we would have done it by now… definitely [asked for] their [Indian forces] to be on the ground,” Zaki was quoted as saying during a recent visit to the country.

The former Secretary General of SAARC reportedly warned India that rising fundamentalism in the Maldives threatened the country’s economic interests.

“Zaki, 67, a former minister in successive Maldivian governments headed by former presidents Maumoon Gayoom and [Mohamed] Nasheed, said he would have called for Indian forces to protect the multi-million-dollar investment by Indian infrastructure firm GMR Group,” Indian media reported on Thursday.

“The attack on GMR contract is an Islamic fundamentalist issue,” Zaki told reporters.

Zaki explained that “many top figures in the Adhaalath Party are educated in Pakistan and draw their philosophy from the hardline Salafist form of Islam.”

“When Islamic fundamentalism takes over the country, if the Lashkar-e-Taiba can take over the country, then I have no choice [but to call in forces from India],” Zaki was quoted as saying, “referring to the Pakistan-based militant group that India blames for the 2008 Mumbai terrorist attack.”

India’s Daily News & Analysis reported Zaki as saying that fundamentalists in the Maldives “have links with terror group Lashkar-e-Toiba” and warned that if Islamic fundamentalism goes unchecked the country could turn into a terror state that threatens Indian security.

Meanwhile, according to the Indian Express, Zaki’s meetings with External Affairs Minister Salman Khurshid, National Security Advisor Shiv Shankar Menon and Foreign Secretary Ranjan Mathai were “a clear signal from New Delhi of its unhappiness with Male’ over its handling of the opposition in that country to the GMR agreement for airport development.”

The Indian Express reported that Zaki received treatment at the Indian Army’s Research and Referral Hospital for injuries sustained during his arrest from an uninhabited island last week on charges of alcohol consumption.

Following his arrest and hospitalisation, former Human Resource Minister and Maldivian Democratic Party (MDP) lawyer Hassan Latheef tweeted that Zaki was “severely beaten by baton and handcuffed for hours”.

Zaki told the Express that he was thrashed with “boots and electric batons” for hours. “There was no space on my body where I was not hit,” he said.

External Affairs Minister Kurshid and his wife were meanwhile “old friends,” Zaki said.

Earlier this month, India’s Business Standard reported that Indian companies operating in the Maldives were expressing concerns over political interference derailing their substantial investments in the country.

“A recent meeting held with the Maldivian Housing Minister [and a joint venture between developers SG18 and Indian super-conglomerate TATA] is said to have ended abruptly with officials from the firm and the Indian High Commission being asked to leave,” the Standard reported.

“Maldivians’ airport to Maldivians”

The Adhaalath Party has been at the forefront of a campaign to renationalise the airport dubbed “Maldivians’ airport to Maldivians” led by parties of the ruling coalition.

Remarks by government spokesperson Abbas Adil Riza at a protest rally by the coalition earlier this month, alleging that Indian High Commissioner D M Mulay has been bribed by GMR, triggered a diplomatic incident and saw the government dissociate itself from the comments.

Meanwhile, Adhaalath Party President Sheikh Imran Abdulla said at a press conference last week that there should not be any further discussions or negotiations with the Indian infrastructure giant and reiterated calls for the government to immediately terminate the agreement.

While the head of the religious conservative party had given the government a deadline of six days to “reclaim the airport” at the rally on November 9, the ultimatum was later extended to November 30.

On Thursday, the anti-GMR campaign presented a petition with 35,000 signatures to President Mohamed Waheed Hassan Manik. The petition was handed to Dr Waheed by Sheikh Imran before a meeting at the President’s Office.

Speaking to press following the meeting, State Minister for Home Affairs Abdulla Mohamed said that the President assured the group that the dispute would be resolved in line with “the wishes of the Maldivian people” and that a decision would be made after a cabinet meeting.

With its second ultimatum, the group warned the government that it would have to resort to “direct action” unless the concession agreement was not terminated by November 30.

“Independence and sovereignty”

The press release from the Defence Ministry meanwhile referred to article 67(d) of the constitution, which states that every citizen has a responsibility “to promote the sovereignty, unity, security, integrity and dignity of the Maldives.”

The Defence Ministry appealed to politicians against making remarks that could undermine “national independence and sovereignty” and “issuing threats of confrontation and the use of force.”

The statement also warned that the Defence Ministry would take “necessary legal action against anyone who commits an act that harms the independence and sovereignty of the nation.”

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