Author: JJ Robinson

Deficit will increase at current pace on public payroll cuts: IMF

The International Monetary Fund’s (IMF) Country Report for the Maldives, published earlier this month, pegs the country’s fiscal deficit in 2009 at 26.25 percent and notes that while the “political climate for public expenditure cuts remains difficult… the coming months will be a crucial test of [the government’s] ability to prevail.”

The report provides a neutral assessment of the country’s economic condition and its progress towards economic reform and reduction of its significant budget deficit.

It notes that the authorities “have taken remarkable steps to bring about the very large fiscal adjustment”, most explicitly, salary cuts to government employees of between 10-20 percent, “something seen in just a handful of countries worldwide”, alongside “a 40-60 percent increase in electricity tariffs.”

The IMF also lauded the governments “initiation of a program for public employment reform that will ultimately reduce the government’s payroll by one-third”.

The government was facing “intense political pressure”, the IMF report observed, after being compelled by the Civil Service Commission (CSC) to restore salaries backdated to January 1.

“The government has so far paid wages at the reduced levels, including for the police and army, who are not governed by the CSC,” the report said, adding that the decision had been “publicly challenged by the government on legal and economic grounds.”

A final court resolution on the law suit filed by the CSC could take up to one year, the report noted.

Meanwhile, parliament passed the 2010 budget “with amendments totaling a seven percent (4.25 percent of GDP) increase over the government’s proposed budget.”

As a consequence, the report stated, “the annual deficit targets for 2010 and 2011 will be missed on current policies.”

Therefore, it stated, a “key risk” to the country’s economy “concerns the ability of the government to maintain the public sector wage cuts. A negative outcome on this would have a large fiscal impact,” the report said, adding that government’s target for public sector employment cuts had already been pushed back a year from the end of 2010 to the end of 2011.

Secondary risks to the economy included delays in passing taxation reforms through parliament, and “planned public employment cuts.” Tourism was “bouncing back”, it noted, but whether this would affect the recovery of the domestic economy was “highly uncertain”.

Therefore, the government’s capacity to withstand political pressure on the issue of cuts would decide the country’s fiscal recovery “in the near term”, the IMF suggested.

The report was critical of the government’s decision to acquiesce to parliament’s recommendation to restore the wages of independent commissions in January this year, and its commitment to pay civil servant pension contributions from May 2010 until wages were restored to September 2009 levels.

The IMF report acknowledged that “direct redundancies were proving difficult”, however “the transfer of employees to the private sector (which accounts for about two fifths of the planned payroll cuts) has taken place in line with projections.”

Nonetheless, the IMF calculated that if the government continued to pursue economic reform at current pace and policy, the country’s fiscal deficit would increase by one percent of GDP in 2010 and 4.5 percent of GDP in 2011.

Likes(0)Dislikes(0)

Report condemns Maldives for inaction on human trafficking

The Maldives has been placed on the US State Department watch-list for human trafficking, following the country’s failure to “investigate or prosecute trafficking-related offenses or take concrete actions to protect trafficking victims and prevent trafficking in the Maldives.”

The State Department’s 2010 Human Trafficking report, which comes less than a month after the Maldives was given a seat on the UN Human Rights Council, is scathing of government inaction, particularly regarding forced labour and exploitation of Bangladeshi nationals.

“An unknown number of the 110,000 foreign workers currently working in the Maldives – primarily in the construction and service sectors – face fraudulent recruitment practices, confiscation of identity and travel documents, withholding or non-payment of wages, or debt bondage,” the report noted.

“Diplomatic sources estimate that half of the 35,000 Bangladeshis in the Maldives went there illegally and that most of these workers are probably victims of trafficking.”

The report noted that even legal workers were vulnerable to conditions of forced labor, and that the Maldives did not provide services such as shelter, counseling, medical care, or legal aid to foreign or Maldivian victims of trafficking.

The government’s “general policy” for dealing with trafficking victims was deportation, the report said, “and it did not provide foreign victims with legal alternatives to their removal to countries where they might face hardship or retribution. On an ad-hoc basis, it provided extremely short-term housing for migrants immediately before deportation.”

The Maldives did not comply with minimum standards for the elimination of trafficking in persons, however the US State Department conceded that the government “is making significant efforts to do so.”

“Despite these efforts, the government lacks systematic procedures for identifying victims of trafficking among vulnerable populations, and during the reporting period it did not investigate or prosecute trafficking-related offenses or take concrete actions to protect trafficking victims and prevent trafficking in the Maldives,” it said, placing the Maldives on a ‘tier 2 watch list’ alongside Afghanistan, Brunei, Laos, Singapore, Thailand and Vietnam.

Trafficking offenders

Little progress had been made to identify and prosecute trafficking offenders, the report noted, classing three types: “families that subject domestic servants to forced labor; employment agents who bring low-skilled migrant workers to the Maldives under false terms of employment and upon payment of high fees; and employers who subject the migrants to conditions of forced labor upon arrival.”

The report acknowledged “a small number” of women from Sri Lanka, Thailand, India, China, the Philippines, Eastern Europe, and former Soviet Union countries that had been recruited “for forced prostitution in Male”, while underage Maldivian girls were reportedly also trafficked to Male from other islands for involuntary domestic servitude, “a corruption of the widely acknowledged practice where families send Maldivian girls to live with a host family in Male for educational purposes.”

However in numercial terms, the bulk of country’s human trafficking revolved around illegal recruitment of migrant workers, mostly from Bangladesh, who paid on average between US$1,000 to US$4,000 in recruitment fees in order to migrate to the Maldives, potentially indebting them to an employer or agent and making them vulnerable to forced labor.

Limited enforcement

The government had made “limited” efforts to enforce anti-human trafficking laws during the last year, the report said, noting that while the country did not have explicit laws prohibiting human trafficking, the Constitution forbade forced labour and slavery.

“However, the government did not investigate or prosecute any trafficking cases and the only prescribed penalty for labor trafficking offenses is a fine,” it observed.

It noted that the Labor Tribunal, created as part of the 2008 Employment Act, heard eight cases involving foreign workers whose wages had not been paid, but lacked the legal authority to enforce its decision.

“In addition, employment tribunal members and employees expressed concerns about their ability to resolve cases involving foreign workers because all their proceedings were conducted in [Dhivehi],” it added.

Moreover, the report said that the Maldives may have “inappropriately incarcerated, fined, or otherwise penalised” unlawfully trafficked persons because of a lack of comprehensive victim identification procedures.

“The government did not conduct any anti-trafficking or educational campaigns and it did not take steps to create an inter-agency structure – such as a committee or plan of action – for coordination on anti-trafficking matters,” it said, adding that government additionally made no effort to reduce demand for forced labor on the islands.

It noted that in 2010 the Maldives had enacted a provision requiring all employers to use employment agents, and recommended it take steps to ensure that employers and labor brokers “were not abusing labour recruitment or sponsorship processes in order to subject migrant workers to forced labour.”

Response

President of the Human Rights Commission of the Maldives (HRCM), Ahmed Saleem, said the US State Department’s report did not reflect well on the country.

“This is something the government had not believed was happening in the Maldives [until recently],” he said.

“This doesn’t reflect well on us, and it’s an issue that has to be addressed. I’m glad the issue of trafficking has been recognised.”

Saleem acknowledged a deeper “cultural issue” concerning the exploitation of Bangladeshi expatriates, one he noted “is getting worse on a daily basis.”

“Usually Maldivians are very tolerant of expats coming and working here,” he observed.

He added that the commission was currently compiling a report on human trafficking in the Maldives, and noted that while the State Department’s report was highly critical of the Maldives, the US itself had committed “gross human rights violations”, and “should hold itself to the same standards to which it holds other countries.”

“They should also expect criticism,” he said.

Introducing the report, US Secretary of State Hillary Clinton noted that 2010 was the first time the United States had included itself in the rankings,

“The United States takes its first-ever ranking not as a reprieve but as a responsibility to strengthen global efforts against modern slavery, including those within America. This human rights abuse is universal, and no one should claim immunity from its reach or from the responsibility to confront it,” she said.

“Huge scams”

Bangladeshi High Commissioner Professor Selina Mohsin said “unscrupulous brokers” were bringing Bangladeshi nationals into the country by photocopying legitimate work visas – bearing her signature -“hundreds of times”, which authorities were continuing to accept at the border.

“I’ve tried to meet the Human Resources Minister [Hassan Latheef] and ask him to stop accepting photocopies of work permits,” she said.

“I haven’t signed a single work permit since the beginning of April – how is it workers are still coming into the Maldives? Just today I found a copy of my signature on a photocopied work permit. Unless the original is brought over by the employee, we can’t stop this,” she said, suggesting there was “some problem” occurring at either the labour ministry or immigration.

“All they have to do is stop letting [illegal expatriates] into the country. It is ridiculous that this is happening – why can’t the government only accept original work permits?”

Prof Mohsin said the situation was a result of brokers and employers, both in the Maldives and overseas, running “huge scams” reaching up to several hundred million US dollars.

“I just tried to have a Bangladeshi agent deported – I caught him almost red-handed – but his Maldivian friends have taken him to court so he can stay in the country,” she said, noting that the case was still ongoing.

Few of the local authorities had Bangla speakers, she noted, making communication an issue as well. For example, the employment tribunal was conducting cases in Dhivehi and the expatriates involved could not understand what was going on, she said.

“It should be the government providing interpreters, rather than us,” she claimed. “In places like the UK there are policemen who speak other languages.”

When workers arrived and became unemployed, “they can’t be deported because that costs money, and if there’s no employment, people turn to crime,” she noted.

Prof Mohsin was also critical of HRCM, commenting that she “hardly saw [Saleem] anywhere. If he is invisible, what use is it in having a Human Rights Commission?”

Minister for Human Resources Hassan Latheef had not responded to Minivan News at time of press.

Likes(0)Dislikes(0)

DRP condemns NYT ‘looters’ article as “cheap propaganda gimmick”

The Dhivehi Rayyithunge Party (DRP) has issued a statement condemning an article published in the New York Times, in which journalist by Matthew Saltmarsh described former President Maumoon Abdul Gayoom as a “looter” and alleged he had misappropriated state funds.

The article further claimed that the present government was working with the Stolen Asset Recovery Initiative (StAR), a joint initiative of the World Bank and the United Nations, to recover US$400 million allegedly stolen by the former administration.

The DRP stated that the repeated accusations of embezzlement leveled at Former President Maumoon Abdul Gayoom “are the MDP government’s last ditch efforts to resuscitate its waning public support and confidence in the face of its failure to manage the Maldivian economy.”

“The MDP government, in an year and a half of searching through its ‘presidential commission’, has failed to find anything that they can pin against President Gayoom to defame his character. The MDP government will continue to fail in their sinister plots,” the DRP statement read.

“This latest accusation is no different from that by MDP official Hassan Afeef in the run up to the 2008 Presidential Election. A defamation suit was filed against him. It is notable that Afeef has to date ignored the verdict of the court of the set compensation,” the statement noted, adding that “local MDP-controlled newsletter ‘Miadhu’ has also published an article repeating the many lies in Matthew Saltmarsh’s article.”

The party observed that the allegations in the NYT article were largely based on a 2009 report by Auditor General Ibrahim Naeem, who “was sacked recently following serious acts of corruption and misappropriation of state funds.”

“It is common knowledge that Naeem’s audit reports were both politically-motivated and riddled with inaccuracies. References from such documents are unbecoming of professional journalists, albeit the MDP government utilises them as handbooks to achieve their political objectives. Furthermore, the fact that Finance Minister Ali Hashim had himself provided the quotes for the article is notable,” the DRP statement said.

“The DRP will take all necessary action to alert the international community to the government’s sinister motives behind the allegations against the Former President. We condemn the government for its continued attempts to shroud its incompetence in running the country behind cheap propaganda gimmicks.”

Speaking to newspaper Haveeru, Gayoom dismissed claims in the audit report as “politically-motivated” and “lies from A to Z”, and vowed to “protect myself from defamation” by taking both Saltmarsh and Hashim to court.

“He [the former Auditor General] issued the reports during the 2008 presidential election with certain political motives,” Gayoom told Haveeru.

“The reports were directly targeted at me with an agenda to attack my dignity, just a day before voting began. Moreover, the reports are definitely questionable, since he was sacked by parliament through a no confidence motion,” Gayoom said, insisting he had “never abused state funds.”

Government could be seeking US assistance

Meanwhile, newspaper Miadhu carried unverified claims this morning that Hashim, along with Foreign Minister Ahmed Shaheed, Home Minister Mohamed Shihab and Attorney General Husnu Suood, had rendezvoused in Europe to meet with FBI officials “at an unidentified location in the European continent.”

Hashim told Minivan News he had nothing to clarify as he had “never met FBI officials anywhere in the world.”

The Foreign Minister appeared to be in no hurry to dispel the rumours, however.

“Should that meeting have taken place, obviously we wouldn’t be talking about it,” Dr Shaheed said. “What I can say is that the government is serious about reclaiming stolen assets, and we’re very confident it will happen really quickly.”

He said he doubted Gayoom or the DRP had a viable case against the NYT.

“The DRP should consider the distinct international legalities governing past and present politicians, particularly heads of state. Mr Gayoom should recognise that people in such positions will face criticism.”

“I don’t think they are serious,” he said. “In defamation lawsuits the onus is on public figures to prove malicious intent or reckless disregard for the truth. One must have a lot of money to hire a hotshot lawyer capable of proving that against a particular article by the NYT.”

Likes(0)Dislikes(0)

JSC amends criteria for judicial appointments

The Judicial Services Commission (JSC) has issued a statement amending the educational and experience criteria for the appointment of judges.

Judges appointed to courts in Male’ must have either a degree, masters degree or PhD in Islamic Shariah, law or Shariah law, and at least three years/two years/six months experience in a law-related field, depending on their respective level of qualification.

President Nasheed’s member on the JSC, Aishath Velezinie, said the criteria did not apply for existing judges and would only affect new appointments, a condition not mentioned in the JSC’s press statement.

“Of the 207 of the judges currently in office, 39 have degrees or higher. Some left school before grade seven, meaning they haven’t completed primary school,” she noted.

“The rest have certificates that were tailor-made to familiarise them with the previous constitution. Judges do not have the means, resources or access to knowledge to enforce the current constitution, and this [statement] looks like a way of confusing people into thinking that the JSC is addressing the issue.”

President Mohamed Nasheed recently made an official request to the JSC to review and amend the guidelines governing the educational qualifications of judges, criticising the existing criteria as setting the bar too low.

“For the standard to determine educational qualification, they are saying [judges must possess] a certificate in either law or Shariah, and even if the certificate is not accredited by the Maldives Accreditation Board, it must be a certificate of at least level three or higher accepted by the government”, he said.

The minimum educational qualification for judges approved by the JSC was therefore “essentially grade seven”.

The Judges Association of Maldives (JAM) condemned President Mohamed Nasheed criticism of the JSC decision on determining guidelines for the reappointment of sitting judges, warning his interference could “render the separation of powers obsolete”.

Velezinie meanwhile said she had hope that all sides of parliament would come together to address the matter.

The JSC had not responded to Minivan News at time of press.

Likes(0)Dislikes(0)

Maldives suffering worst coral bleaching since 1998

The Maldives is currently suffering the most serious incidence of coral bleaching since the major 1998 El Niño–event that destroyed most of the country’s shallow reef coral.

Coral bleaching is caused when rising water temperatures stress the coral, leading it to expel the algae it uses to obtain nutrients. When water temperatures rise even slightly, algae leaves the coral polyp and enters the water column, causing the coral to lose its colour and eventually die.

Reports of bleaching have been trickling in from marine biologists and researchers across the country.

Hussein Zahir from the Marine Research Centre (MRC) has been collecting reports of the bleaching, and said that based on his estimates, “10-15 percent of shallow reef coral is now completely white, while 50-70 percent has begun to pale.”

Senior Marine Biologist Guy Stevens, based at the Four Seasons Resort in Landaa Giraavaru, said that he had noticed that bleaching was beginning to occur last year “after a change in the weather linked to El Niño. The last one in 1998 was pretty catastrophic, and reefs in the Maldives have been recovering ever since.”

“It had a huge impact across the Indian Ocean, and the Maldives was most affected – pristine reefs suffered coral mortality rates of 95 percent,” Stevens explained. “At the time people were mortified and scientists were predicting the end of the reefs – coral is the foundation of the whole reef ecosystem.”

Picture1
Coral in North Male Atoll at different stages of bleaching

Since the devastating El Niño in 1998, marine biologists in the Maldives “have been holding their breath for the next one. In the meantime the coral has been slowly recovering. It was pretty depressing in 2003, but roll forward to 2010 and it’s starting to look good again. It recovers exponentially.”

Meanwhile, colleagues of Stevens based in Thailand, which escaped largely unscathed in 1998, have reported coral mortality rates “of up to 100 percent.”

“The hot spots move around, but they cover a big area and the coral here could easily take another hit,” Stevens commented.

Zahir noted that temperatures this year were following similar patterns to those of 1998, with a surface temperature in April of one degree above the long term average.

However the recent drop in temperature, brought on by rain and the onset of the southwest monsoon, has lowered the surface sea temperature and brought some relief, “and may give the coral time to recover.”

“Now the temperature has dropped from 32 degrees to 29-30 degrees, so hopefully things will improve. The conditions are right for the coral to become healthy again,” Zahir noted, however he emphasised the need for the tourism industry to assist with monitoring the bleaching.

“Here in the Maldives we have a vast reef area, and the MRC has very little capacity to do surveys. From the very beginning we’ve been running a bleach-watch reporting programme with the dive industry, but for some reason the feedback has been very disappointing. There’s a hundred resorts, but I can count on my fingers the ones who are working to raise awareness. I know it might impact on their marketing, but this needs to be documented.”

All the MRC required was GPS coordinates and an indication of how much bleaching was occurring, he explained.

In the meantime, both Stevens and Zahir noted that there was little that could be done to prevent further bleaching.

Picture2
Cooler temperatures may have averted disaster

“There is very little we can do, especially in a resort environment, other than reducing human impact on the reef while it recovers – that means ceasing things like sand-pumping and beach renewal on a daily basis, while the reef is especially vulnerable to sedimentation,” Zahir explained.

Verena Wiesbauer, a marine biologist at Male-based consultancy Water Solutions, said she had just returned from visiting two islands in North Male’ Atoll and had documented heavy coral bleaching.

“The reefs had only just recovered, and now it’s struck again. It’s a big setback,” she observed.

“Fortunately it’s not as bad as 1998, and now the temperature is dropping. But I hope someone will keep track of the paling coral, to see if it gets its colour back.”

Wiesbauer added that the bleaching did not appear to have affected fish numbers yet, and suggested that “many fish don’t need live coral as long as the structure is there for them to hide in, and many algae feeders don’t mind [bleaching] at all. But there are some specialist coral feeders we need to watch for changes.”

Meanwhile, like Zahir, Stevens observed that the tourism industry appeared to have been in no hurry to report that bleaching was occurring.

“That’s something the resorts obviously don’t want to publicise,” Stevens commented. “But I don’t think it’s any good burying our heads in the sand, when there’s going to be no sand left to bury our heads in.”

The artificial coral breeding programs run at many resorts were well-intentioned, “but rather like putting a band-aid on a gushing wound.”

“It doesn’t address the issue. Rather [breeding programmes] are a tool to raise awareness and alleviate pressure on the local reef. But there are things like sand-pumping that resorts should halt during periods of bleaching because it makes the problem worse,” he said, concurring with Zahir.

“Otherwise there’s very little we can do – it’s really a global issue. We haven’t seen a reduction in fish life, turtles and mantas, and it seems those parts of the ecosystem can survive while the reef structure is at least in place, but overall I think we’re going to see a gradual decline. Coral reefs may be the first ecosystem we’ll lose on our planet.”

Images courtesy of the Marine Research Centre (MRC).

Likes(0)Dislikes(0)

MTDC profits drop 29 percent

Profits of the Maldives Tourism Development Corporation (MTDC) in 2009 dropped 29 percent to Rf86 million, according a report in Haveeru.

In its annual report MTDC claimed management issues at Herathera resort were the major reason for the decline in 2009. The company received a profit of Rf46.6 million from the resort in 2008, but this fell to Rf76,458 in 2009.

MTDC also invested heavily in settling disputes with Yacht Tours Maldives, spending RF23.3 million to extricate itself from the arrangement and losing a further Rf17.3 in land rent.

The report also blamed the 2009 economic recession for MTDC’s difficulty in obtainnig bank loans to pursue investment projects.

Likes(0)Dislikes(0)

MNDF steps up patrols against pirate threat

Maldives National Defense Force has increase its patrols in the western waters of the Maldives because of the number of dinghies from Africa being sighted, reports Miadhu.

Lieutenant Ahmed Mujuthaba told Miadhu that the patrols were being conducted with the assistance of neighbouring countries.

Suspicious dinghies have been spotted in the north, central and southern areas of the Maldives during the past six months, he revealed to Miadhu, although he added that they were more likely to have strayed rather than be engaging in piracy.

Several weeks ago a Somali man narrowly escaped being buried after a dinghy containing him and five other men was recovered near Makunudhoo in Haadhaalu Atoll.

Likes(0)Dislikes(0)

NYT report claims government and StAR seeking $400m in stolen assets

A report in major US newspaper The New York Times has claimed that the Maldives government is seeking to seize US$400 million allegedly stolen by the former government, assisted in its recovery efforts by the Stolen Asset Recovery Initiative (StAR).

StAR is a joint initiative of the World Bank and the United Nations, which claims to have recovered US$5 billion over the past 16 years. It estimates conservatively that between US$20-40 billion is stolen annually from developing countries “through bribery, misappropriation and corruption – about 15 percent to 30 percent of aid to the developing world.”

In the Maldives, a  number of politically-connected figures, including former President Maumoon Abdul Gayoom, had now become the targets of  “increasingly coordinated efforts to repatriate misappropriated funds,” the NYT report said.

“Results to date have been encouraging, but much more can be done,” the NYT said, citing “officials and development experts.”

Representatives of the former government have steadfastly denied the existence of stolen funds. Gayoom’s assistant and former chief government spokesperson Mohamed Hussain Shareef (Mundhu) told Minivan News in December that  “there is no evidence to link Gayoom to corruption”, and urged accusers “to show us the evidence.”

“If you have the details make them public, instead of repeating allegations,” he said. “[The former president] has said, ‘go ahead and take a look, and if you find anything make it public.’”

Friday’s report in the NYT described the Auditor General’s report, published in 2009, as “a guidebook on self-enrichment.”

“An estimated US$9.5 million was spent buying and delivering a luxury yacht from Germany for the president; $17 million was spent on renovations of the presidential palace and family houses. Mr Gayoom built a saltwater swimming pool, a badminton court and a gymnasium, and he bought 11 speed boats and at least 55 cars — including the country’s only Mercedes-Benz,” the NYT noted.

“And the list goes on, from Loro Piana suits and trousers to watches and hefty bills for medical services in Singapore for ‘important people and their families. There was a US$70,000 trip to Dubai by the first lady in 2007, a US$20,000 bill for a member of the family of the former president to stay a week at the Grand Hyatt in Singapore. On one occasion, diapers were sent to the islands by airfreight from Britain for Mr Gayoom’s grandson.”

The Auditor General Ibrahim Naeem was dismissed in late March by an opposition-controlled parliament (Majlis) following a no-confidence motion and allegations of corruption.

Naeem, who was himself appointed by the former president and a then-ruling party majority Majlis, claimed at the time that the charges were an attempt to discredit his office and prevent him from reclaiming the government’s money stored in overseas bank accounts.

“A lot of the government’s money was taken through corrupt [means] and saved in the banks of England, Switzerland, Singapore and Malaysia,” Naeem said in March, during his first press conference in eight months.

The Maldives government has meanwhile “begun the paper chase”, Friday’s NYT report claimed, “but it lacks the resources to unravel a complex trail that it assumes runs through the British Channel Islands, Singapore and Malaysia.”

“Much of the looted money ends up in complex corporate structures and bank accounts held by associates offshore, making it hard to identify the beneficial owners. This raises the issue of tightening regulation of service providers and of the legal firms that create front companies that invest in assets like real estate and art,” the report noted.

However, “large banks now recognise the issue” and were increasingly willing to cooperate with international financial investigators.

“Eleven leading lenders, including UBS and HSBC, have formed the Wolfsberg Group, an association to develop standards to counter money laundering and terrorist financing,” the NYT said, adding that governments were  being urged to provided lists of “politically exposed persons, those potentially subject to corruption because of their jobs.”

The NYT spoke to Finance Minister Ali Hashim, who said that “the banks and other institutions came from abroad, and lowered their standards to the standards that were in the country.”

Foreign bank managers were given free holidays on luxury tourist resorts, Hashim told the NYT, which might have made it “hard for those managers to subsequently turn down risky or inappropriate credit requests.”

Hashim said the government now needed the money to offset a decline in tourism and plug the country’s 34 percent budget deficit.

“What we are asking the World Bank is, help us get this back,” Hashim told the NYT. “Then we won’t need to have that much foreign aid.”

Likes(0)Dislikes(0)

Maldives seeks to end oil addiction

The Maldives must cure itself of its addiction to oil and develop alternative energy sources from local resources if it is to prosper, Vice President Dr Mohamed Waheed Hassan said today at a UN roundtable held at Bandos Island Resort.

The occasion was the Maldives signing a commitment to phase out hydro-chlorofluorocarbon (HCFC) emissions by 2020, a decade ahead of other countries, and one that has attracted an assistance grant of US$1.1 million from the UN.

HCFCs (such as chlorodifluoromethane) is used in older refrigeration and air-conditioning units as a replacement for heavily ozone-depleting CFCs, however it also is now considered too harmful.

“It makes sense to move away from HCFCs,” Dr Waheed said. “It is outdated technology and has already been phased out in most western countries, and it is increasingly difficult to repair appliances that use it.”

The move was part of the government’s larger agenda of becoming carbon neutral by reducing reliance on fossil fuels, driven by economic as well as environmental imperatives, the VP explained.

“The Maldives is highly dependent on oil. Our economy totally dependent on imported fuels, but we have absolutely no control over oil prices,” Dr Waheed said. “Our economy is slowly recovering from mismanagement of the past, and an oil price hike now would destabilise our economy. We all know how volatile oil prices are – and the global economic recovery means an increased demand, which is likely to increase prices further.”

Because of the country’s dependency, Dr Waheed explain, “a high oil price means a high cost of doing business. We want to break our dependence on foreign oil using our own natural resources: sun, wind and waves. In the Maldives renewable energy makes sense because imported oil is costly – it is very expensive to ship oil to small islands like the Maldives.”

The Maldives’ oil addiction meant that “today we have one of the world’s highest prices for electricity – 25-30 US cents per kilowatt hour, and there are some reports islands where people are forced to pay 60 cent per kilowatt hour. Schools complain that 25 percent of their budget is spent fueling their diesel generators.”

Addicted

A report published by the UNDP in 2007 on the vulnerability of developing countries to fluctuating oil prices ranked the Maldives dead last, a fair stretch behind Vanuatu, effectively placing the country among the world’s most oil-addicted nations.

“Island countries in general are extremely vulnerable to increased oil prices. They comprise distant and small markets and have to bear the burden of higher shipping costs, while electrical power generation is largely fueled by diesel,” the report noted.

President Mohamed Nasheed said that the Maldives stood perfectly placed to demonstrate to the rest of the world “that a less hazardous development pattern is possible, viable and financially feasible.”

He acknowleged the efforts of the previous government towards that development, noting that the Maldives was able to phase CFCs two years before its mandated deadline.

“I thank the previous government, especially former President Maumoon Abdul Gayoom, for his singular focus on CFCs, ozone depletion and the environmental issues he raised very early.”

He also acknowledged that even if the Maldives succeeded in demonstrating that a country could be powered by renewable energy and reached its goal of carbon neutrality, “what we do not have major impact health of planet.”

Rather, Nasheed said, the Maldives could prove to other countries that isolated communities could be self-sustaining.

“The window of opportunity this planet has is not so long – science is very certain and we have to act,” he said. “If we don’t, this planet will go on, with new equilibriums and balances that may not be receptive to human habitation – that is what we are trying to overcome.

“We have the technology already – it is a question of how bold we are in implementing it.”

Likes(0)Dislikes(0)