Author: Ismail Humaam Hamid

MDP says poorly prioritised 2015 education budget will lead to corruption

The Maldivian Democratic Party (MDP) has said that the poorly prioritised education sector of the 2015 state budget is structured in a way which will eventually lead to corruption.

While speaking at a press conference, MDP education and training committee chair and former education minister Dr Musthafa Luthfee criticised the allocation of a large budget to the education ministry without proper planning.

“A lot of money from the budget has been allotted to the education ministry,” claimed Dr Luthfee. “This includes the salaries of eight new political figures to be hired to the ministry bringing the total of political figures to 20.”

MDP’s budget review committee earlier this week previously accused the 2015 state budget of being ‘aimless’ and criticised it heavily for not being goal-oriented.

The record MVR 24.3 billion (US$ 1.58 billion) proposed budget for 2015 is currently at the committee stage in the Majlis, where today’s session was held behind closed doors for the first time in the legislature’s history.

Dr Luthfee today claimed that the education budget of MVR2.45 billion (US$ 160 million) had no connection whatsoever to the government’s manifesto which had promised to bring ‘innovative’ changes to the sector in the upcoming year.

Education minister Dr Aishath Shiham last week said “significant changes” had been brought to the education sector during the first year of the current administration, including introduction of Quran as a subject for grades one to seven, Arabic language in 20 schools, and vocational training.

A volunteerism programme and a new “vocational education stream” would also form a major part of next year’s plans for the sector, she added.

Malé City Council Deputy Mayor Shifa Mohamed – herself a former minister of education – alleged that the government had not budgeted the required MVR532 million (US$34.5 million) needed to raise the salaries of teachers despite promises made by both President Abdulla Yameen and Vice President Dr Mohamed Jameel Ahmed.

The Teachers Association of Maldives (TAM) has threatened to stop work numerous times this year, demanding the government to reform the education system and to settle the pay discrepancies.

After a full strike appeared inevitable in September, discussions with the government appeared to have gained results, with TAM expressing confidence that the president was attending to the issue.

The MDP education committee also expressed concern over the MVR481 million (US$31.25 million) increase in the recurrent expenditure of the ministry while questioning the need for 2,159 new staff to be hired under the ministry.

“Current teacher to student ratio stands at 1 to 9. We don’t understand the need to increase the number of teachers while the current teachers are not getting proper pay and the schools are in need of new facilities,” said Shifa.

The government currently employs just under 25,000 civil servants, representing over seven percent of the population. Finance minister Abdulla Jihad told the public accounts committee last month that government would freeze recruitment for 2015 in a bid to control spending.

Shifa today commented on the lack of allocated funds for the government’s promises to provide Arabic language as an additional subject in all schools and to ensure that Quran education is included in all stages of education.

The education committee’s vice-chair, Shaifa Zuabir expressed the committee’s concern over promises to make the Maldives Polytechnic a central hub in training the 95,000 individuals who are to be provided with employment during President Yameen’s government.

“95,000 individuals are to be trained from Maldives Polytechnic,” said Shaifa. “Yet we see the Government has only assigned a mere MVR 13.4 million (US$ 870,000) to Maldives Polytechnic.”

MDP Vice-Chair Ahmed Ali Niyaz claimed the 2015 budget is not different from those during former president Maumoon Abdul Gayyoom while stating the budget ‘serves for administrative purposes alone

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Nasheed questions government’s legitimacy and record as one-year anniversary looms

Maldivian Democratic Party (MDP) President, Mohamed Nasheed has criticised the government for failing to keep promises made when it came to power almost one year ago.

Beginning by questioning the manner by which President Abdulla Yameen came to power, the former president suggested the election coalition had faltered and investor confidence had not been restored.

While giving an interview to Raaje TV last night (November 11), Nasheed also slammed the government for its failure to respond adequately to the abduction of Minivan News journalist Ahmed Rilwan 96 days ago.

“There is no doubt that Rilwan was abducted. All the information obtained by the police and other separate investigations point to an abduction,” said Nasheed.

Recalling the much-delayed, and once-annulled presidential elections last year, Nasheed reminded viewers that yesterday’s Republican Day has traditionally seen the start of a new presidential term.

“Republican Day has always been the day when the new presidential term begins and ends,” said Nasheed. “However, President Yameen’s gave oath after the assigned date. This raises legitimacy issues with how the Government came to power.”

Last year’s Republic Day saw former President Dr Mohamed Waheed inform the nation that he would stay in power for one week beyond the constitutional end of his term in order to avoid a power vaccum after repeated delays in the poll to find his successor.

The 2013 presidential elections eventually saw the MDP and Progressive Party of Maldives (PPM) candidates contesting the second round, with the PPM’s Abdulla Yameen eventually winning the election after forming a coalition with the Jumhooree Party (JP).

“Recent events have made it clear the that the coalition has failed,” said Nasheed in reference to the government’s acquisition of JP leader Gasim Ibrahim’s Kaadedhoo Airport after the MP spoke against the government’s flagship Special Economic Zones (SEZ) bill.

Nasheed noted that the people in charge of the government right now received a very small percentage of the total votes once the votes from JP supporters were discounted.

Promises broken

Nasheed pointed out that the government made a lot of promises towards the betterment of fishermen – including a pension of MVR10,000 (US$650) which was not included in next year’s proposed budget. But the price per kilo of tuna has dropped from a healthy MVR18 during Nasheed’s government to a mere MVR6 today, he continued.

President Yameen recently announced a foreign policy shift from west to east, partly as a result of the Maldives’ failure to qualify for extended duty-free status for fish exports after non-compliance with international conventions concerning freedom of religion.

Nasheed also attacked the government’s SEZ Act, suggesting that there has been little interest shown by foreign investors even after all the necessary laws and regulations have come to place.

The SEZ act – which offers relaxed regulations and tax concessions – described by President Yameen as a landmark law that will “transform” the economy through diversification and mitigate the reliance on the tourism industry.

While speaking about the proposed 2015 annual budget, Nasheed said that like during Maumoon Abdul Gayyoom’s 30-year regime, the current government has included a large sum as expected earnings which would eventually lead to higher budget deficit.

“For example, expected earnings from SEZ investments is valued at MVR1.5 billion (US$ 100 million). This is ambitious and unrealistic,” explained Nasheed.

The 2015 annual budget includes MVR3.4 billion (US$220 million) as expected revenue from brand new income generating measures including acquisition fees from SEZ investments and the introduction of a green tax on tourism.

A recent MDP budget review concluded that such expectations were unrealistic after stating that even if the government were to obtain MVR1.5 billion (US$100 million) as acquisitions fees at a rate of 10 percent of the investment it suggests an investment of US$1 billion.

The single biggest investment in the country to date was the ill-fated MVR7.6 billion (US$ 500 million) deal with India’s GMR group for the development Ibrahim Nasir International Airport in 2010. A Singapore court of arbitration is currently evaluating the amount owed by the government for the wrongful termination of the deal in November 2012.

The former president described the government’ abrupt terminations of foreign investments as saddening, suggesting that it would decrease investor confidence in the nation.

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NGOs suggest government’s failure to engage is damaging civil society

As last week’s NGO conference came to close, the award ceremony – with Minister of Defence Mohamed Nazim acting as chief guest – suggested strained relations between government and civil society.

Of the 22 organisations taking part in the conference organised by the Human Rights Commission of the Maldives – 12 from Malé and 10 from the atolls – not all stepped up to receive certificates from the minister.

“I believe there are more relevant figures to be the chief guest at an NGO conference the country’s defense minister,” explained one NGO representative who boycotted the ceremony.

The main aim of the conference, in addition to providing networking opportunities, was to create a forum in which the participants could share the scope of the work done by the NGOs as well as discussing greater issues faced by civil society.

NGOs involved suggest that many of those issues involved the government’s lack of effective engagement, perhaps typified by the recent decision of the immigration department – headed by minister Nazim – to introduce exit permits for migrant workers.

The controversial scheme was reversed less than two weeks after being introduced after complaints from NGOs, who had not been consulted adequately prior to its introduction.

Groups present at the conference listed migrant workers rights as one of their main areas of interest, alongside health rights, children’s rights, women’s rights, and disability rights.

Lack of support

Discussing concerns raised during the conference, Maldivian Democracy Network’s (MDN) Shahinda identified the government’s lack of financial support for NGOs as the most pressing issue facing civil society.

“For several years, the government has allotted financial support for NGOs in the state budget. However, we have never seen the support being fully realizsed even though it is stated in the budget,” said Shahinda.

HRCM Vice President Ahmed Tholal noted that, although financial support for NGOs is included in the state budget, a lot of the expenditure is spent on sports association rather than NGOs working for human rights.

“Given the lack of state financial support, NGOs often have to resort to individuals and donors,” continued Tholal. “The current public perception is that if an NGO has a donor, then it must be one sided or politically motivated. This is not true in most cases.”

A general lack of perception or an understanding of the work civil society is doing was another key issue raised during the three-day conference.

While speaking at the closing ceremony, one participant representing Muraidhoo Ekuveringe Jamiyya from Haa Alif Muraidhoo, said there was little appreciation of work done by NGOs from either the public or from government institutions.

Chairperson for the Maldives Association of Physical Disabilities, Ahmed Mohamed, commented that the general public remains unaware of disability rights.

“I think it is the duty of the government to increase awareness or work on empowering NGOs so that we can increase our outreach in spreading awareness,” said Ahmed.

MDN also suggested that the poor public appreciation of civil society and the lack of acknowledgement of NGO could be traced back to a lack of engagement from the government.

“Every year, our annual reports are sent to the home ministry which just files it. The reports detail what we do, our achievements and other relevant information. All of this is not acknowledged by the state so the general public is unaware of the work we do,” complained Shahinda.

Tholal also stressed the importance of state acknowledgment of NGO work, suggesting that public perception is shaped by the state’s response to work done by NGOs.

“NGOs are institutionalised and organised voices of the public. Government institutions have to respect statements and reports from NGOs whether they agree or disagree with the political ideology of the government,” noted Tholal.

Shahinda added that the public sometimes has unrealistic expectations of NGOs, saying that organisations do not have the capacity to deal with every single issue.

An intimidating future?

HRCM Vice President Tholal stressed that NGOs role as human rights defenders was being jeopardised as there was insufficient space and capacity to operate effectively and independently.

NGOs at the conference voiced concern over the prevalence of threats and measures made by the state to intimidate and silence civil society and other independent institutions.

“There have been numerous threats and attacks on civil society organisations and individuals. Government has done little to no work to address these threats,” said Shahinda.

Most recently, Supreme Court initiated a ‘suo moto’ proceeding against the HRCM for its Universal Periodic Review (UPR) submission made to the UN, while denouncing the HRCM’s suggestions that the judiciary was controlled and influenced by the Supreme Court.

A similar proceeding – in which the court acts as both plaintiff and judge – was used in the ousting and prosecution of Elections Commission President Fuwad Thowfeek and Vice President Ahmed Fayaz in February.

In October 2013, the home ministry launched an investigation into comments made by Transparency Maldives and the Tourism Employees Association of the Maldives (TEAM), saying that it would not allow any organisation to challenge the law.

Staff at anti-corruption NGO Transparency Maldives have also been subject to death threats as well as one employee being physically assaulted during the recent Majlis elections.

Asked about the future of the civil society in the Maldives, Tholal reiterated the importance of state acknowledgement in order to improve the current atmosphere.

“I believe that the civil society is the most important voice in raising issues against the state in making it more responsible,” said Tholal.

While things may get difficult, Shahinda expressed confidence that important work carried out by civil society groups would continue.

“If things do not change, it is going to be more and more challenging. However, I am sure these challenges alone will not hinder the work of the civil society”.

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US$6 green tax to be introduced from November 2015, says tourism minister

The new green tax for tourists will be introduced from November 2015 at a rate of US$6 per bed per night, Minister of Tourism Ahmed Adeeb has revealed.

Speaking at a press conference held by the cabinet’s Economic Council today, Abeeb said that guest houses would be exempt from paying the new tax in order to reduce the impact on small and medium businesses.

“Since 2013 the guest house venture has been on the rise. We do not want to hinder the development of these businesses so we have decided to exempt guest houses from paying the tax,” said Adeeb, addressing concerns raised by the opposition Maldivian Democratic Party (MDP) earlier in the day.

The introduction of the new tax is to come 11 months after the abolition of the bed-tax, which will continue to be charged at US$8 a night until the end of this month.

Some resort owners have suggested that the combination of the bed tax with the rise in T-GST to 12 percent this month has affected bookings, though Adeeb today vowed there would be no further increases in T-GST during the government’s current term.

The T-GST rise came after urging from the IMF, which has suggested that the previous rate of 8 percent was low for a tourism industry as profitable as the Maldives’.

Adeeb said today that the council does not believe the green tax will hinder the demand from tourists – especially from Europe – who will become “champions” of the Maldivian environment by paying the tax.

2013 saw a record 1.3 million tourists spend just over  7 million bed nights in the country, although the country’s macro economic stability has remained a concern.

The tourism minister has previously said that revenue generated from the new levy would be spent on resolving the waste management issues in the greater Malé region – an issue made more pressing with the Economic Council’s recent termination of the Tatwa waste management contract.

Adeeb also revealed the council’s plans to remove import duty on construction material needed for the refurbishment of resorts, thereby stimulating resort development which he said would provide numerous employment opportunities for the youth.

President Abdulla Yameen last week announced that five new resorts would begin construction in 2015 in the northern atoll of Haa Dhaalu, which currently has none in operation.

Also speaking at the press conference, Minister at the President’s Office Mohamed Hussain Shareef said  the government was seeking to begin the re-development of Ibrahim Nasir International Airport midway through next year.

“Beijing Urban Group and Maldives Airports Corporation Limited has finished the drawings of the airport and are in the process of submitting the proposal to China’s Exim bank in order to finance the project,” explained Shareef.

Shareef also re-iterated the government’s plans to start work on the proposed Malé-Hulhulé bridge in the year 2015, before opening the bridge in 2017.

“The bridge survey team is almost done with the feasibility study and it will be submitting its reports to the Chinese Government who will then finance the bridge through grant-aid and low interest loans,” said Shareef.

Agreements to develop the INIA and to promote the Malé-Hulhulé bridge were signed during Chinese President Xi Jinping’s visit to the Maldives as part of his South-Asian tour in September.

During his visit, President Xi also officially requested that the Maldives participate in China’s 21st Century Maritime Silk Route, before journeying to India as part of his tour of the region.

Shareef concluded the press conference by commenting on what the governing Progressive Party of Maldives has described as attempts by the opposition to spread misinformation regarding comments made by the foreign minister on Sino-Indian discussions about the silk road project.

After Dunya Maumoon’s comments to the Majlis last week appeared to suggest that Indian had discussed joining the project with President Xi, the Indian government released a statement strongly denying such talks had occurred.

Shareef warned the MDP – which has today announced its intention to table a no-confidence motion against the foreign minister – that it would have to answer to the international community which had been informed of its attempts to sow discord.

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MDP criticises proposed 2015 state budget as “aimless”

The proposed MVR24.3 billion (US$1.58 billion) 2015 state budget is not aimed at delivering the promises made in the Progressive Party of Maldives (PPM)’s manifesto, says the Maldivian Democratic Party (MDP).

MDP Vice-Chair Ahmed Ali Niyaz said today that the party’s budget committee had researched the proposed budget and concluded it to be “aimless”.

“The current government has submitted a budget like those for Maumoon’s regime which serves for administrative purposes alone,” said Niyaz.

Niyaz added that the MDP had submitted programme budgets under a strategic action plan during its time in office.

The party’s MP for the Gan constituency, Fayyaz Ismail also accused the government of manipulating the methodology for calculating the country’s GDP in order to show a double digit figure.

“Given the high expenditure of the budget, if the income generating measures fail, the budget deficit might increase to MVR5 billion (US$330 million),” said Fayyaz today.

While presenting the 2015 budget to the parliament for approval last week, Finance Minister Abdulla Jihad stated that the estimated budget deficit 2015 would be MVR1.3 billion (US$84 million).

“If the government fails in gaining supplementary loans it might have to resort to printing money which would severely harm the country’s economy,” continued Fayyaz.

The printing of money to cover government expenditure has elicited concern from successive Maldives Monetary Authority governors, as well as the World Bank.

Jihad had noted that MVR3.4 billion (US$ 220 million) would be raised from new income generating measures including the introduction of a green tax, and acquisition fees from the investments coming under the new Special Economic Zones (SEZ) Act.

MDP Budget Committee Chair, Hussain Amru today called such expectations “unrealistic”.

“If the government is looking to raise MVR1.5 billion (US$100 million) as acquisitions fees at a rate of 10 percent of the total investment, it suggests that the government expects MVR15.3 billion (US$ 1 billion) in investment,” stated Amru .

The single biggest investment in the country to date was the ill-fated MVR7.6 billion (US$ 500 million) deal with India’s GMR group for the development Ibrahim Nasir International Airport (INIA) in 2010. A Singapore court of arbitration is currently evaluating the amount owed by the government for the wrongful termination of the deal in November 2012.

The MDP today listed the programmes announced by the government that were not accounted for in the 2015 budget, which included the proposed Kulhudhuhfushi airport, subsidies for fishermen and agricultural workers, and the promised flats for newly wedded couples.

“MVR100 million (6.51 million) has been allocated for conducing the feasibility study of the Malé-Hulhulé Bridge,” said Amru. “However the government informed us that the feasibility study was conducted with grant aid from the Chinese government. Where is the 100 million going to?”

The party said they had submitted their report to the parliamentary group, which would raise these concerns during the budget review process.

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MDP slams foreign minister for giving false information regarding Chinese silk route

The Maldivian Democratic Party (MDP) has criticised the foreign minister for providing false information while responding to questions put forward in the Majlis regarding the Maldives’ participation in China’s Maritime Silk Road initiative.

“The party severely condemns foreign minister Dunya Maumoon for intentionally providing false information about Maldives and its diplomatic relations with other countries,” read an MDP press statement released yesterday (November 8).

President of the People’s Republic of China Xi Jingping has called on the Maldives “to get actively involved” in the creation of a maritime trade route linking China to the east coast of Africa and the Mediterranean.

The Ministry of Foreign Affairs has today released a statement seeking to clarify any confusion caused by these remarks, saying that Dunya had “noted her concern if her choice of words had led to any confusion”.

When asked about the potential impact of the scheme on India-Maldives relations, Dunya told the parliament last week that India had also discussed participating during the recent state visit of Chinese President Xi Jinpeng.

However, Indian Diplomats in Malé promptly refuted the claim, releasing a statement containing comments from the Indian External Affairs Ministry which denied such talks having taken place.

“[T]his matter was neither raised, nor discussed, nor is it reflected in any of the outcomes of the visit of President Xi Jinping to India,” the ministry official told Indian media on Thursday (November 6).

The Maldives foreign ministry today said that Dunya had mentioned various discussions having taken place between India and China “on a wide range of issues” as an example of the excellent relations between the two nations.

The MDP also noted that it was “shameful” that the Indian Government had to re-clarify the public after “lies” from the foreign minister, and warned the government that such actions will weaken Maldives’ relations with other countries.

Fears have been expressed by the opposition regarding the potential for the government’s willingness to participate in the scheme to damage relations with regional neighbours.

The party also called for the resignation of Dunya, stating that intentionally providing false information to the parliament was a crime under the Maldivian Constitution.

The Chinese president travelled to India after having visited the Maldives where numerous MoUs were signed between the two governments – most notably agreements promoting the Malé-Hulhulé bridge and the redevelopment of Ibrahim Nasir International Airport (INIA).

The new INIA agreement comes while previous developer, India’s GMR, waits to hear how much they are to receive in damages after a Singapore arbitration court ruled their prematurely terminated contract with the Government of Maldives to have been “valid and binding”.

As Chinese companies pledge assistance with major infrastructure projects, Indian companies continue to fall foul of the Maldives’ changing political currents.

Meanwhile, China’s rising economic presence in the Indian Ocean region has stoked concerns in New Delhi that China is creating a “string of pearls” encircling India, including Chinese investments in ports and other key projects in Sri Lanka and Pakistan.

*This article was amended shortly after publication to include an additional statement from the Ministry of Foreign Affairs

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Immigration department suspends exit permit regulations indefinitely

The recently introduced exit permit scheme has been suspended indefinitely after complaints about the regulation, which requires foreign workers to obtain permission from their employers before leaving the country.

Immigration Information Officer Hassan Khaleel told Minivan News today that the regulation was suspended after several complaints from different organisations, including numerous airlines and NGOs.

“The exit permit issue has been suspended from today onwards. We will consider and address every single complaint received and look at the regulation from several perspectives before re-implementing,” he explained.

The regulation, which came to effect on October 19, required expatriate workers to present a form signed by their employer at airport immigration before leaving the country.

Speaking at the time, Khaleel explained that the introduction of the exit permit system came after requests from employers concerned at the number of expatriate workers leaving the country without their employer’s permission.

He added that the immigration department believed the new regulations might help lessen the illegal practice of withholding passports – which has been described as ‘rampant’ in the Maldives by the US State Department.

Local NGO Transparency Maldives (TM) expressed concern, however, that the exit permits would exacerbate the well-documented abuses within the immigration system.

Advocacy and communications manager at TM, Aiman Rasheed, said that the regulation might have the same effect of withholding the travel documents of the worker, leading to the “employer having control over the mobility of the worker”.

“While this is an infringement on the freedom of movement for workers, it also presents opportunities for perpetuation of bondage, trafficking, etc, by limiting movement of the worker,” said Aiman.

While exact figures are unavailable, the number of expatriate workers in the Maldives has been estimated to be as high as 200,000 – equivalent to two thirds of the local population.

Long viewed as a country with a poor record on combatting human trafficking, the Maldives was this year removed from the US State Department’s Trafficking in Persons (TIP) watchlist.

Exit permit systems are also operated in other nations with large numbers of expatriate workers – such as the UAE and Qatar, although Qatar announced earlier this year that it was to abolish the practice after pressure from human rights groups.

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President Yameen announces development of five resorts in Haa Dhaalu Atoll

President Abdulla Yameen has announced plans to develop five resorts in the northern Haa Dhaalu Atoll next year.

Yameen said that the first islands to be developed as resorts by the current government will be located in Dhipparufushi, Vaikarumuraadhoo, Kanamana, Kudafaru, and Keylakunu islands in the country’s second-northernmost atoll.

During his visit to the northen atolls, President Yameen also talked about the government’s plans to develop an airport on Kulhudhuhfushi to further encourage the arrival of tourists.

Officials from the government promised the even distribution of resorts earlier this year following an online petition calling for the area to participate in the benefits of the country’s billion dollar tourism industry. Haa Dhaalu is currently the only atoll in the country without any operating resorts.

President’s Office Spokesperson Ibrahim Muaz told Minivan News of the strategic importance of Kulhudhuhfushi Island, which has a population of around ten thousand people.

“Projects like the proposed airport, resort development, and the I-Havan mega project will bring with it prosperous employment opportunities for the people residing the northern atolls, eliminating need of migrating to the capital Malé for employment,” said Muaz.

Muaz also noted that such projects, while providing numerous employment opportunities, would also develop the infrastructure in the region and improve the general living conditions in the North.

The UNDP’s most recent Human Development Report noted that disparities between the central and outer atolls were causing losses to human development, with the northern atolls reporting to suffer the most from limited job opportunities and social services.

Regional development

This year’s Avaaz petition – signed by just over 500 people – noted that the economic and societal problems of the 20,000 inhabitants of the atoll could be alleviated by the development of resorts.

The petition argued that the development of the region’s “pristine uninhabited islands” would halt the “mass migration” to Malé which was “tearing up the social fabric of our society”.

President Yameen’s election campaign pledged to develop 50 operational resorts during the five year presidential term. Yesterday’s proposed 2015 budget also planned for tourism growth, with 10 new resorts proposed in a MVR24.3 billion budget plan.

Despite the total number of resorts in the country exceeding one hundred, the majority are clustered around Malé and the country’s main international airport.

After initial plans for the 40-year-old industry’s development envisioned regional hubs, the introduction of sea planes has encouraged the concentration of resorts in the now-crowded central atolls.

The government’s plans for regional development have centered around the controversial SEZ bill, which it argues will decentralise development in order to promote regional growth – though the bill’s detractors fear that the policy will come at the expense of political decentralisation.

Relaxed regulations in the SEZs are intended to attract investors for a number of ‘mega projects’, including the iHavan – or ‘Ihavandhippolhu Integrated Development Project’ – in Haa Alif Atoll.

The project aims to take advantage of the strategic location of the Maldives’ northernmost atoll on a major shipping route – through which more than 700,000 ships carry goods worth US$18 trillion a year – and develop 5,700 hectares of land along with deep natural harbours.

Meanwhile, environmental NGO Ecocare has protested against the proposed Kulhudhuhfushi airport, pointing out that the airport’s development would destroy a mangrove area which would be reclaimed in order to build the airport.

Ecocare suggested a speedy ferry transportation system to Hanimaadhoo Airport which is just 16.6 km away after labelling the Kulhudhuhfushi airport as “economically less viable”.

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Government decides to implement a ‘green tax’ on tourists

Tourism minister Ahmed Adeeb has told local media that a bill detailing proposed ‘green tax’ for tourists will be sent to parliament this month.

“Levying this tax is necessary given Maldives’ fragile environment. Revenue generated from the tax will go into managing the waste from local resorts and other islands,” said Adeeb who also serves as the co- chair in the cabinet’s Economic Council.

The exact percentage to be levied will be decided after consultations with relevant stakeholders, he added.

Earlier this month, Adeeb said he would aim to resolve waste management issues within the next two years using state-owned companies, after announcing the termination of the deal with India based Tatva Global Renewable Energy.

Minister of Finance and Treasury Abdulla Jihad also spoke of the proposed green tax while submitting a record MVR24.3 billion (US$1.5 billion) state budget for parliamentary approval today.

Jihad noted that the tax will form part of revenue raising measures, which also include the addition of ten resorts to the current 112. The proposed changes are anticipated to raise MVR3.4 billion (US$220 million) in new revenue.

Levies on the tourism industry – which accounts indirectly for up to 90 percent of the country’s GDP – formed a major part of proposed revenue raising measures in 2014.

An IMF-recommended hike on Tourism Goods and Service Tax (T-GST) from eight to 12 percent was approved by parliament in February and came into force last Saturday (November 1), prompting concerns from industry insiders.

Speaking to Minivan News today, former Managing Director of Maldives Tourism Development Corporation (MTDC) Mohamed Matheen said that the budget issues could not be resolved without addressing the structural issues within the budget.

“The budget deficit cannot be resolved regardless of how the tax regime is set without addressing issues like the high recurrent expenditures of the government, which is a lot higher than the majority of the countries,” said Matheen.

One general manager from a prominent resort told Minivan News last weekend that bookings appeared to be down for November, with both guests and operators aware of the “double tax” as the T-GST increase combines with the bed tax – a measure also continued this year as a way to boost government coffers.

“November will be tough,” he explained. “Top end resorts will really feel this. There’s no way further increases could be stood.”

He also expressed concern that the resorts were being asked to carry the fiscal burden of the government’s failure to curb expenditure.

Former President Mohamed Nasheed has also criticised the hike in the T-GST saying that it would cause immense difficulties to the general public.

“Now a [ticket] to a flight to Addu has gotten more expensive than a flight to Colombo. This is not, in any situation, how it should be priced,” Nasheed told local media.

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