Author: Daniel Bosley

Week in review: November 30 – December 7

The past week has seen the administration of President Adbulla Yameen make tentative steps towards resolution of the country’s dire economic situation.

The Government of China offered the Maldives US$8.2million in grant aid for development projects. Reports also emerged in Indian media of its government being on the verge of unfreezing a credit standby facility – initiated before the recent deterioration in bilateral ties.

The New Indian Express suggested that the official announcement would be made during Yameen’s visit to India, also announced in the past seven days.

Further aid flows for climate change adaptation projects were also forthcoming, with the European Union pledging an additional €4million to the €34million given since 2009.

Solid progress on the 2014 budget continued to elude the government this week, however, with the submission of details to parliament delayed for the fourth time as the finance minister awaited further specifics about the administration’s plans.

Specific designs for the long-awaited construction of a bridge linking Malé and Hulhumalé were requested by the government, although foreign investor confidence is unlikely to have been improved by the Maldives’ failure to appear on Transparency International’s Corruption Perceptions Index for the second consecutive year.

Meanwhile, confidence in the country’s tourism industry remained undiminished at the World Travel Awards in Qatar, where the Maldives collected the prize for ‘World’s Leading Island Destination’.

Politics, police, and protecting Islam

Despite prior promises of leniency from the government, Maldivian Democratic Party MP Hamid Abdul Ghafoor was briefly imprisoned this week after the Supreme Court revoked a number of parliamentary privileges.

Hamid – who has cited parliamentary privileges to defend himself against contempt of court charges – spent just hours in Maafushi jail before the High Court overturned the Criminal Court’s six-month sentence.

Fellow MDP MP Imthiyaz Fahmy led the Parliamentary Privileges Committee in suggesting that the Supreme Court was compromising the independence of parliament.

Elsewhere in the Majlis, MPs from all sides of the political divide took to the floor of the house to support a constitutional amendment further safeguarding Islam’s position as the country’s sole religion.

The police this week recommended that the Prosecutor General’s office pursue charges against Raajje TV’s CEO and its head of news for a report criticising the Supreme Court. Police also detained an individual in relation to the arson attack that destroyed MDP-aligned Raajje TV in October.

Less progress was reported in the case of Supreme Court Judge Ali Hameed’s sex-tape allegations, with police admitting they have been unable to identify the individual widely reputed to be Hameed. The police did, however, promise that more information from abroad may yet shed light upon the issue. Local media had suggested that police investigations had been thwarted by the Criminal Court’s failure to provide the required warrants.

Retired Police Commissioner Abdulla Riyaz was honoured this week by his former colleagues prior to his move into the political arena.  Home Minister Umar Naseer used the celebrations to order police to remove any material that might incite hatred against the force.

The fostering of dissent within its own ranks was the reason given for further dismissals within the military – three senior officers were dismissed, whilst 34-year veteran Lieutenant Colonel Zubair Ahmed told Raajje TV that he had been forced to retire from the MNDF.

The Defence Ministry this week threatened action against any media outlets who criticised its disciplinary procedure, subsequently receiving censure itself from the Media Council.

Finally, preparations for the January 18 local council elections continued in the past seven days, with government-aligned parties – excluding the Adhaalath Party – deciding to divide seats up amongst themselves to maximise their prospects. The opposition Dhivehi Rayyithunge Party hopes to arrest its declining fortunes going into future polls by rebranding its party color, logo and slogan.

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EU pledges further €4million for climate change adaptation

The European Union has today revealed it is to release an additional €4million to address climate change in the Maldives.

“Climate change is one of the most pressing development issues that we need to address in today’s world,” said EU Ambassador and Head of Delegation to Sri Lanka and the Maldives H.E. Mr David Daly Tin a press release today.

“The EU has always been at the forefront of concrete action against climate change, while Maldives has through its commitment to Carbon Neutrality and more recent pledge to become a UNESCO Biosphere Reserve at the Rio Summit, led the world by example,” he continued.

The EU press release today noted that this latest climate change grant to the Maldives brings the organisation’s overall contribution to €38million over the past four years.

Granting €6.5 million to the Climate Change Trust Fund in 2009, the EU became the first body to give funds to the scheme intended to assist the Maldives in its pledge to become carbon neutral by 2020.

The initiative was agreed between the EU, the World Bank and the administration of President Mohamed Nasheed – whose efforts to raise awareness of climate change brought international acclaim, most notably at the 2009 Climate Change Forum in Copenhagen.

In a recent report titled ‘Turn Down The Heat’, the World Bank reasserted the urgent need for concerted efforts to support the Maldives in adapting to climate change, due to a projected sea level rise of 115 centimetres by 2090.

The new EU funds will go towards replicating previous projects with a particular focus on the country’s two southernmost atolls – Addu and Fuvahmulah – which will also receive capacity building assistance for local government structures.

Local NGO Transparency Maldives has in the past noted the potential for corruption due to institutional weaknesses in the Maldives’ climate governance structures.

“The current projects, being implemented by the World Bank in partnership with the Government of Maldives, focuses specifically on renewable energy solutions, wetlands conservation, rainwater harvesting, coral reef monitoring and solid waste management,” stated the EU today.

A further 22,000 inhabitants are expected to benefit from the new projects in Fuvamulah, Addu, and parts of North Ari Atoll.

“It will enable the Government in implementing a clear strategy for wetland and drainage management, ecotourism and community rainwater harvesting. The project also aims at partnering with tourist resorts for coral reef monitoring and demonstrates the manner in which efficient monitoring can be used as a tool to support decision-making, particularly in the context of coral reef protection and conservation,” read the release.

During the summer, the United States also pledged US$7.2 million for global climate change adaptation project, also including local level capacity building and exploration of further avenues for cooperation on climate change.

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Government requests bids for Hulhumale’ bridge project

The Economic Ministry has announced the opening of a bidding process for a bridge to be built between Male and Hulhumale at a press briefing held at the President’s Office today.

“We are looking for a party to design, operate and maintain [the bridge]. This means commercial components will have to come with this,” said Tourism Minister Ahmed Adheeb this afternoon.

“That is how this will become sustainable. As you know, a bridge will not be sustainable in the Maldives if it relies solely on the traffic. So, this will come with commercial components. It will become a very big investment.”

An announcement calling for expressions of interest has been placed in the government gazette today, with offers requested for the building, maintenance and operation of the bridge linking the two largest urban areas in the Greater Male’ area.

Bids from domestic and international parties will be accepted until December 29.

Minister of Economic Development Mohamed Saeed described the building of the bridge as a “challenge”, but said the task is one of the key pledges of the coalition government.

He wants bridge work to start as soon as possible, promising that when the concession is awarded, investors will not suffer damages, and that the project will receive “protection” from the Maldives constitution.

Investor confidence in the Maldives had been negatively impacted under the Presidency of Dr Mohamed Waheed.

The country’s largest ever foreign direct investment deal – the US$500million lease to re-develop Ibrahim Nasir International Airport – was unilaterally terminated by the government late last year.

Arbitration proceedings are continuing in Singapore, with Indian infrastructure giant GMR claiming US$1.4billion for “wrongful termination”.

Similarly, Malaysian firm Nexbis was given just two weeks to leave the country after the government terminated its deal to install and operate a border control system after the government suggested the MDP-brokered deal was causing “major losses” to the state.

The idea of a bridge linking connecting the islands of Male’ and Hulhumale’ – an artificially reclaimed island built to combat the rising population of Male  – was proposed during the presidency of Mohamed Nasheed in 2011.

The building of a bridge was to accompany the Veshi Fahi Male’ de-congestion programme – a flagship project of the Maldivian Democratic Party (MDP) government under its manifesto pledge to provide affordable housing.

The project was launched on November 10, 2010 to ease congestion in the capital and develop the Greater Male’ Region, consisting of Hulhumale’, Vili-Male’, Thilafushi industrial island and Gulhifalhu.

Following the ousting of Nasheed’s administration in February 2012, his successor President Mohamed Waheed announced it had been trying to get a US$150 million loan (MVR 2.31 billion) from Turkey’s Exim bank to fund the project.

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Maldives absent from Corruption Perceptions Index for second consecutive year

The Maldives has again failed to appear on Transparency International’s Corruption Perceptions Index (CPI) after the anti-corruption organisation was unable to secure the minimum required information necessary.

“We didn’t make the index as the required minimum of three sources of information was not received by TI,” explained Transparency Maldives’ Advocacy and Communications Manager Aiman Rasheed.

The CPI scores are base on a minimum of three expert sources – usually from international organisations with expertise in governance of business climate analysis. Examples include the World Bank, International Monetary Fund, Global Insight, or the Asian Development Bank.

Transparency International was only able to obtain information from two sources for this year’s list.

Asked if he thought the absence of the Maldives from the CPI for a second year would have a negative impact on perceptions of the country, Rasheed was dubious.

“My honest opinion is that it can hardly get any worse, we’re already in the bottom of the pile. The developments in 2012 and 2013 do not appear to have improved the public sector in terms of reducing corruption and empowering those who fight corruption,” he said.

He did admit, however, that the Maldives failing to appear on the index for two straight years would raise questions, though he stressed that multiple organisations involved in the collection and analysis of the required data made the assignation of blame to individual bodies unhelpful.

“The problem is that Maldives is a small country and the interactions of international institutions – from which the data is derived – may be limited, as well as the required information may not have been obtained in time, or the data that eventually do come through may not be utilized due to data quality,” continued Rasheed.

After moving up to 134th (of 182 listed states) in the 2011 index, the Maldives did not appear on the 2012 list.

Following the Maldives 2011 appearance in the list, Rasheed described the corruption in the Maldives as “grand corruption” when compared to smaller lever problems elsewhere in the region.

“In the Maldives there is corruption across the judiciary, parliament and members of the executive, all of it interlinked, and a systemic failure of the systems in place to address this. That why we score so low.”

The interference of the judiciary in this year’s presidential elections was roundly criticised internationally after the initial poll was annulled following a questionable Supreme Court ruling regarding fraudulent votes.

This year’s lists consists of just 175 states, with Denmark , Finland and New Zealand taking the top spots for the third year running.

The two positions at the bottom of the table were again occupied by North Korea and Somalia, again for the third consecutive year.

The CPI measures perceived levels of public sector corruption across the globe and is the most widely used indicator of corruption used worldwide.

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India reported to be releasing further credit to Maldives

Indian media has reported that the country will re-open its US$100million standby credit facility to the Maldives during the scheduled visit of newly elected President Abdulla Yameen later this month.

Whilst the President’s Office was unable to comment on the validity of the story, the New Indian Express has today reported that the Indian Government is expected to “unfreeze” the remaining part of the loan.

The Indian government agreed to grant the facility during an official state visit by Prime Minister Manmohan Singh in 2011, in order to help the Maldives meet short-term budgetary needs.

The first installment of US$30 million was granted in October 2011, with a further installment of US$20million released in time for the early 2012 visit of President Dr Mohamed Waheed to India.

A third installment of the facility however, was delayed after tensions between the Indian and Maldivian governments rose just weeks ahead of the eviction of the Indian GMR group which had been undertaking the development of Ibrahim Nasir International Airport.

Whilst the official reason given for the delay in the disbursal of the third loan installment was described as a result of the Maldives Government’s failure to complete the required paperwork, a diplomatic source at the time suggested that perceived anti-Indian rhetoric from senior political figures could yet have a bearing on future financial assistance.

The failure to secure the third credit installment was soon followed by the Indian government calling in US$100 million worth of debt.

Despite the current governing Gulhifaivaa Coalition comprising many of the parties that made up the previous administration, President Yameen has made improved relations with India a top priority after winning the November 16 run-off election.

Yameen’s PPM suggested the termination of the GMR agreement – currently the subject of a US$1.4 billion arbitration case in Singapore – was done against its advice.

In the weeks following his assumption of office, Yameen has talked openly of the potential of Indo-Maldivian relations, whilst the Indian High Commissioner to the Maldives has called the country’s bilateral ties “privileged”.

After Yameen had written to Indian PM Singh inviting him to visit the Maldives as soon as he was able, the President’s Office announced this week that Yameen would be visiting India on his first official state visit on December 22.

Budget support

Local media has today reported that a revised budget will be sent to the Majlis today, after repeated delays required to accommodate the campaign pledges of President Yameen.

Finance Minister Abdulla Jihad – reappointed to his position under the new president – had presented a MVR 16.4 billion budget for 2014 with a projected deficit of 2.5 percent of GDP to parliament on October 30.

Yameen has expressed concern over the economic vulnerability of the Maldives and pledged to reduce state expenditure by MVR 1 billion.

“State debt is sky high. The state budget’s expenses are extremely high. Hence, we have to prioritise reducing state expenditure. I will start work very soon to reduce budget expenses,” Yameen said during his inauguration speech.

The Maldives Monetary Authorities’ (MMA) most recent quarterly review noted that Government finances had “further deteriorated in the first six months of 2013” due to a sizeable shortfall in expected revenue coupled with a marked increase in recurrent expenditure.

“These developments have resulted in a widening of the budget deficit as indicated by the large financing requirement of the government during the first six months of 2013. The difficulties in accessing long-term foreign funds to finance the budget deficit resulted in the government resorting to the Maldives Monetary Authority and other domestic sources to finance its growing deficit,” the report stated.

The Yameen administration also announced earlier this week the securing of 50 million yuan (US$8.2 million) in Chinese grant aid “for the implementation of developmental projects and the advancement of public services.”

The MMA’s November figures showed that gross international reserves had fallen in monthly terms whilst showing a slight year-on-year increase. The country was reported to have enough reserves to cover 2 and a half months’ worth of imports.

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President to visit India on December 22

After receiving and invitation from Indian Prime Minister Manmohan Singh, President Abdulla Yameen will make an official visit to the country on December 22.

Indian media has also reported that President Yameen will be the chief guest at the convocation of the SAARC-established South Asian University (SAU) on Dec 24.

The invitation came in reply to a letter by Yameen to the prime minister in which he assured Singh of his administration’s desire for enhanced bilateral ties and urged Singh to pay an official visit to the Maldives as soon as it was mutually convenient to do so.

Since taking office, President Yameen has stressed his desire to enhance recently-strained relations between the neighbouring countries.

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Parliament privileges committee seeks Majlis intervention in MP Hamid appeal case

The Majlis Parliamentary Privileges Committee has unanimously decided parliament should intervene in the appeal case of member Hamed Abdul Ghafoor, who was sentenced to six months for failure to attend Criminal Court hearings.

“The committee was of the opinion that the Criminal Court had acted outside of the boundaries of the law by summoning MP Hamid to court on a day when the parliament as well as committee sittings were scheduled,” said Deputy Chair of the Committee and Maldivian Democratic Party (MDP) MP Imthiyaz ‘Inthi’ Fahmy.

“Therefore this action by Criminal Court was clearly against the Privileges Act, thus a violation of privileges of both an MP and the parliament as a whole. On this grounds the committee has sent the report to Majlis Speaker to which the Speaker.”

Hamed was handed the custodial sentence during a month-long period of refuge sought within the grounds of parliament, which ended following the conclusion of the presidential election on November 16.

Hamed was originally asked to appear in court regarding an alleged refusal to produce a urine sample when asked by police following his arrest on suspicion of drug and alcohol possession last year.

He was arrested on the island of Hondaidhoo along with a number of senior MDP party members last year.

The MP himself, however, maintains that his stay in the parliamentary grounds was intended to highlight the importance of MP privileges.

“My holding up in the Majlis was in defense of parliamentary privileges, which was not reported in the media. We have found out members privileges are not understood,” Hamed told Minivan News today.

The Henveiru South representative suggested that Criminal Court Judge Abdulla Mohamed scheduled a hearing to clash with the parliamentary schedule as the case against him was failing.

He has subsequently been placed under house arrest, with the newly appointed Home Minister Umar Naseer telling local media that the state did not have the resources to transport the MP to and from Dhoonidhoo island prison in order for him to fulfil his parliamentary duties.

During his period of sanctuary, Hamed’s Maldivian Democratic Party (MDP) amended the parliament’s standing orders to allow an MP convicted of criminal acts to continue to attend Majlis sittings.

Hamed, as well as the Speaker of the House Abdulla Shahid, have consistently maintained that the summons to appear clashed with the MP’s parliamentary duties, contravening the Parliamentary Privileges Act.

“He has been issued court summons in violation of the Privileges Act. He has been issued a sentence because he took the privileges he is legally afforded as an MP,” Shahid told Minivan News earlier this month.

“I have written about this matter to the Prosecutor General [PG]. The Prosecutor General agrees with me. He has written a letter to the Supreme Court. He feels that the judiciary in this case has gone out of its way to punish Hamid.”

The PG Ahmed Muiz has since resigned as the Majlis prepared no-confidence proceedings against him – the President’s Office is currently accepting applications for his replacement.

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Local fish exporters reduce price paid for catch

Local fish exporters have this week announced that they will be reducing the price paid to fisherman following a drop in global fish prices.

Horizon Fisheries, Koodoo Fisheries Maldives Ltd (KFML), Felivaru Fisheries and MIFCO have all reduced fish buying prices, telling local media that the price would increase along with global market prices.

Global fish prices are reported by local media to have dropped from US$2500 to US$1850, with Maldivian fishermen now receiving MVR18 per kg of fresh fish with ice, and MVR16 per kg without.

Ibrahim Manik of the Fisherman’s Union has suggested that leading government figures are amongst the country’s largest fish exporters.

“The senior officials of the PPM administration are fish exporters. Gasim’s Jumhooree Party and Yameen’s PPM’s [Progressive Party of Maldives] Zameer are fish exporters. As they make profits fishermen are facing a lot of damages.”

In the wake of the reduced prices, however, the government’s KFML announced it would be reducing ice and fuel charges in order to lessen the effects of the reduced fish prices.

The company reduced the selling price of diesel from MVR 17.25 to MVR 17, and the price of a ton of ice from MVR1050 to MVR 850, Sun Online revealed. The company also announced it would be reducing maintenance fees as well as attempting to penetrate new markets.

The newly appointed Minister of Fisheries Dr Mohamed Shainee told local television last week that he hoped the ruling Progressive Party of Maldives manifesto pledge to ensure all fishermen receive a basic income of MVR10,000 could be introduced next year.

“There is a lot of support for the policy from fishermen. This will incentivize the fishermen. They catch more than MVR 10,000 on good fishing days. But if the weather is bad or if the catch is low, there is a degree of despair. We are providing an incentive to overcome this despair to get ready for the next fishing season,” Shainee told Sun TV.

He revealed that the government would finance the scheme through the collection of MVR500 from each fisherman during the good months of fishing each year. It was also noted that the government planned to allocate MVR45 million from the MVR100 million allocated to subsidies fuel charges for fishing boats and hopes to designate a budget of MVR 90 million for the scheme.

While tourism is the Maldives’ largest economic sector, indirectly responsible for up to 70 percent of GDP and up to 90 percent of foreign exchange, fisheries is the country’s largest employer at over 40 percent.

The total fish catch has been declining each year since 2006 reaching 83.1 thousand metric tonnes in 2011, leading to fears about the impact of climate change and overfishing by better equipped fishing fleets on the borders of the Maldives’ Exclusive Economic Zone (EEZ).

The European Union earlier this month declined to extend the duty-free status of imported fish from the Maldives, following the country’s failure to comply with international conventions concerning freedom of religion.

The Maldives exports 40 percent of its US$100 million fishing industry to the EU, its single largest export partner by value.

Before January 2014 those exports are duty-free under the Generalised System of Preferences (GSP) program, a non-reciprocal trade agreement extended to developing countries.

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Maldives reaches one million tourists target for 2013

The Maldives has reached one million tourist arrivals for the current year, with the Tourism Ministry announcing that 1,000,203 had visited the country as of Monday (November 25).

The Maldivian government had narrowly failed to reach this milestone target in 2012, after a year of political turmoil and an economic slump in key markets.

“It’s a major victory for the whole country,” recently re-appointed Tourism Minister Ahmed Adheeb was quoted as telling media yesterday.

“This victory has been made possible amidst boycott campaigns and other such obstacles. Resort owners, ministry employees and MMPRC have worked really hard for this.”

Repeated delays to the scheduled presidential elections recently brought threats of prolonged strike actions from leading tourism industry groups, including the Tourism Employees Association of Maldives (TEAM).

In late October the People’s Majlis accepted a bill that would criminalise any actions calling for a tourism boycott, supporting or endorsing a boycott, participating in a boycott, or any act that would incite fear amongst tourists.

Previously this month, the Finance Ministry revealed that “political turmoil” had caused growth in the tourism industry to stall in 2012, though it did anticipate that the sector – responsible for around 28 percent of GDP in each of the past five years – would return to growth this year.

The Tourism Ministry revealed yesterday that the “Maldives received 925,413 tourists at the end of October 2013 and 783,999 tourists at the end of October 2012, which is an increase of 18% compared to the same period of last year.”

“A total 284,926 Chinese tourists visited the Maldives which is 30.8% of the total arrivals to the Maldives and is the highest arrival from a single source market,” continued the ministry’s press release.

The large numbers of Chinese arrivals to the country’s idyllic resorts, the Finance Ministry has suggested previously, was increasing arrivals whilst reducing the relative value of the industry.

“As the most number of tourists to the country now come from China, we note that the low number of nights on average that a Chinese tourist spends in the Maldives has an adverse effect on the tourism sector’s GDP,” read the Finance Ministry’s ‘Fiscal and Economic Outlook: 2012 to 2016’ statement this month.

Recent tourism statistics show that, whilst there was a slight growth in European arrivals this year, the overall share of the market is now dominated by Asia.

Prominent resort owner and leader of the government-aligned Maldivian Development Alliance Ahmed ‘Sun Travel’ Shiyam has blamed the relative decline in the European market on the state’s failure to properly market the destination.

The official hashtag of London’s World Travel Market was hijacked by Maldivian pro-democracy activists this month, making global headlines by linking prominent resort owners with the overthrow of former President Mohamed Nasheed.

A similar tactic was used by anti-government protesters in 2012 as the government re-launched the ‘Sunny side of life’ slogan that had been temporarily replaced under Nasheed’s tenure.

In order to celebrate the one million tourist milestone, the Ministry of Tourism together with Maldives Marketing & PR Corporation and the Airport Reps Association of Maldives will be holding a week of celebrations at Ibrahim Nasir International Airport between December 25 to December 31.

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