Category: Business & Tourism

Maldives business news

Government says “iconic” Malé-Hulhulé bridge can be finished in two years

Describing the project as “iconic for the whole region”, the Economic Development Minister last night pledged that the Malé – Hulhulé bridge project would take two years to complete.

“Looking at the bridge project, out of the 19 companies that had expressed interest, 7 were international parties,” Mohamed Saeed is reported to have said during a ceremony held to celebrate 100 days of President Abdulla Yameen’s government.

Deputy Minister of Housing Abdulla Ziyadh – whose ministry will become actively involved as soon as a contractor is selected – explained that the government is currently evaluating the received bids.

First touted as a campaign pledge of thirty-year President Maumoon Abdul Gayoom in 2008, the idea of a bridge connecting the congested island of Malé with its relatively spacious suburbs was also an aim of Gayoom’s successor Mohamed Nasheed.

The Nasheed government had put to contract out to tender in late 2011 shortly before its ousting in February 2012.

The current government called for expressions of interest in the project in early December 2013, with the window for interested parties to come forward closing on January 14.

The public private partnership contract will require a company to engage in the design, build, financing, maintenance and operation of the bridge.

“Primary objective of the Government is to bring a relief to the socio-economic issues arising from the urban congestion that is present in Malé,” the Ministry of Economic Development has explained.

Former Minister of Economic Development Mahmoud Razee – a member of Nasheed’s cabinet – told Minivan News today that a bridge would improve local commerce as well as reducing traffic congestion in Malé.

“There will be a mediation of the traffic because what happens in Malé – in the afternoons and evenings – a lot of the traffic is leisure traffic as motorcycles are out on the road, not to go to any particular place but for the sake of having a ride. If these are connected, the area they are able to mill around is increased by several kilometers,” he explained.

The former minister noted that an extension of the bridge westward to connect with Gulhi Falhi and the industrial island of Thilifushi would bring down the cost of warehouse space in the capital.

The final location of the bridge has yet to be announced by the government. Options considered in the past involved connecting Hulhulé with Malé at the tsunami monument area, or from the northern harbour via Funadhoo island.

Razee also echoed the comments of the current Tourism Minister Ahmed Adeeb who has acknowledged that the project is not viable without commercial components.

Mohamed Saeed was reported as suggesting last night that the bridge would be equipped with facilities to generate between 4 and  6 megawatts of renewable energy.

While Razee was skeptical of this proposal, he suggested that bridge could be used to lay cables between islands, reducing the need for expensive undersea cables to transfer production capacity across the Greater Malé area.

Saeed has previously described the building of the bridge as a “challenge”, but said the task is one of the pledges of the coalition government.

When the concession is awarded, Saeed has pledged, investors will not suffer damages, and 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, with the Yameen presidency targeting its restoration as a key foreign policy aim.

During last night’s ceremony, Vice President Dr Mohamed Jameel Ahmed launched a book detailing the key elements included in the ruling Progressive Party of Maldives’ ‎manifesto, and the government’s achievements in its first 100 days.

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Civil Court dismisses STO’s case against MP Riyaz Rasheed’s Meridian Services

The Civil Court has dismissed a case filed by the State Trading Organisation (STO) against MP Riyaz Rasheed’s Meridian Services seeking to recover MVR19.3 million (US$1.2 million) released as credit.

According to local media, the court dismissed the lawsuit after STO lawyers did not turn up to a hearing scheduled for February 6.

Judges are empowered to dismiss cases if the plaintiff or claimant does not attend court hearings.

The former Dhivehi Qaumee Party MP meanwhile joined the ruling Progressive Party of Maldives last month.

STO and Meridian Services signed an oil trade agreement on March 31, 2010, which offered the company a credit facility worth MVR20 million (US$ 1,297,016.86) for purchasing oil from STO.

The agreement stipulated that payments had to be made within a period of 40 days.

However, in August 2010, STO lowered its credit limit from MVR20 million to MVR10 million (US$648,508.43) and shortened the payment period from 40 to 30 days, prompting Meridian Services to sue STO for alleged breach of contract.

Meridian Services lost the first case, however, after Civil Court Judge Abdulla Jameel Moosa ruled in favor of STO.

Case history

In April 2012, the STO sent a letter to the Civil Court requesting withdrawal of the case against Meridian. However, then-STO MD Shahid Ali claimed a week later that the letter was sent “by mistake.”

The STO’s intent was to request delaying hearings as the company did not have the legally required number of members on its board of directors following the “change in government” on February 7, 2012, Shahid explained, adding that the case would resubmitted.

At a hearing of the case in June last year after the trial resumed, STO lawyers claimed that original documents of business transactions with Meridian had been stolen.

The theft of the documents from the STO office occurred on October 27, 2011 and was reported to police at the time, the lawyers said.

The lawyer reportedly requested the opportunity to present witnesses to prove the authenticity of copies or other records of the stolen documents.

However, lawyers for the Vilufushi MP’s Meridian Services disputed the authenticity of the purchase orders, delivery notices, and invoices submitted as evidence by STO, claiming the documents were forged.

The Meridian lawyer claimed that there were discrepancies in the purchase orders and delivery notes with inconsistent numbers and quantities as well as lack of signatures.

In response, the STO lawyer said Meridian had not submitted any evidence or any statement challenging the validity of the evidence submitted by STO.

The judge adjourned the hearing after announcing that a decision would be made at the next hearing over STO’s request to present witnesses.

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Saudi investment firm to develop US$100 million resort in Laamu atoll

Saudi real estate investment and development firm Best Choice has announced plans to develop a US$100 million resort on Vadinolhu island in Laamu Atoll.

“We are negotiating with investors, and we are looking for more,” Best Choice CEO Mohamad Rabih Itani told Minivan News today.

“Our aim is to develop Vadinolhu Island as a high-end resort with world-class facilities to promote it as a complete family destination,” Itani explained in a company press release.

With headquarters in Bahrain, Best Choice – formed just last month – also has offices in Turkey and the Maldives. The company’s owners, however, have been active in the Maldives for a number of years, Mitani told Minivan.

“The company was established last month, but we already had a company in the Maldives called Miulu developments since 2011.”

Established by Saudi investors, the group currently specialises in properties in Italy and Spain, as well as selling mixed-use projects in Turkey and residential developments in Saudi Arabia.

Saudi Prince Salman bin Abdulaziz is scheduled to visit the Maldives this week, and ties between the Arab state that the Indian Ocean archipelago have been growing under the presidency of Abdulla Yameen.

Headlines in Saudi Arabia have suggested that Prince Salman will discuss potential investments and partnerships in energy, tourism, transport, and Islamic affairs, as well the provision of a soft loan facility of US$300 million for the Indian Ocean nation.

President’s Office Spokesman Ibrahim Muaz today said that prince’s visit is still due to take place, and that Prince Salman will meet with President Yameen during his stay.

When asked about Best Choice’s links with the Saudi royal family and the increasing relations between the two states, Mitani stated that the timing of the resort announcement was “pure coincidence”.

The proposed resort, reported to feature 100 beach villas, world-class dining services, wellness facilities, and leisure activities, a Best Choice press release has stated. The resort is expected to be completed by 2017.

“We have already designed a business proposal targeting potential investors to collaborate with us in the operation and management of the resort. We are confident of achieving an operating profit in the second year with the cash payback period at six years,” Mitani explained.

Best Choice’s press release describes the Maldives as “one of the most recent investment destinations in South Asia”.

“Due to its investment-friendly policies, the South East Asian Island offers attractive opportunities to keen investors – especially those into resort management,” read the release.

The Yameen administration has sought burnish the country’s credentials as an attractive place to invest after the premature termination of Indian company GMR’s deal to develop the international airport in late 2012.

Although Yameen’s Progressive Party of Maldives – part of the governing coalition at the time of GMR’s expulsion – includes many vocal opponents of the GMR deal, the party has since distanced itself from the decision.

Reassuring foreign investors of the safety of the Maldives as a destination for investment was recently announced of one of the main aims of the administration’s foreign policy.

The Maldives brand of luxury tourism currently accounts for 70-80 percent of the country’s GDP, with the IMF noting recently that investors in the Maldivian resorts can expect a quicker return on investment than in similar resort industries. The industry attracted over 1.2 million tourists in 2013.

The IMF delegation also noted that, despite plans to increase tourist goods and services tax to 12 percent later this year, the Maldives tourism industry was still only lightly taxed in comparison to other destinations.

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Fisheries ministry commences long line fishing training programme

The Fisheries Ministry has launched a training programme to teach long line fishing to youth in collaboration with the Maldives Industrial Fisheries Company (MIFCO).

Briefing the press this morning aboard a vessel designed for long line fishing, Fisheries Minister Dr Mohamed Shainee said it was important for local fishermen to be active in all areas of the country to prevent encroachment by foreign vessels as the coastguard could not patrol the entire Exclusive Economic Zone (EEZ).

“That would also reduce the illegal fishing from our waters. I believe with the [programme] starting today, our fishermen will go out further at sea, [which would] reduce the share of foreigners in long line fishing at present as much as possible, increase our productivity and create lots of new jobs for youth,” he said.

Long line fishing vessels travel 100 miles from the coast. In October 2011, Minivan News reported that the mass harvesting of fish stocks by foreign vessels was threatening the viability of the country’s tuna fishing industry.

Introducing long line fishing would lessen the dependency on one method of fishing, strengthen the industry’s resilience to external “shocks” and mitigate weakness of the fisheries industry, Dr Shainee said.

Long lining would also allow Maldivian fishermen to catch bigeye tuna, he added, which fetches a high price in the world market.

MIFCO Deputy Manager Ahmed Didi told reporters that the company’s target was to ensure that the youth who complete the training programme would have the capability to work in large yellowfin tuna fishing vessels “anywhere in the world”.

Ten fishermen from Haa Alif Hoarafushi were chosen for the first stage of the training programme, which was to be conducted by experts from MIFCO.

Dr Shainee also contended that long lining was the most environment-friendly method after the traditional pole and line fishing practiced in the country. The pole and line method has long made Maldivian tuna attractive to buyers from premium supermarkets in the UK and Europe.

Precautionary measures would be taken to reduce the impact on the environment, he added, explaining that new types of hooks were available to prevent by-catch of sharks and turtles.

In an interview with Minivan News last month, Dr Shainee noted that the fishing industry has felt the adverse effects of climate change caused by the rising temperature of surface waters.

“If the surface water gets a bit hot, then the fish swims deeper. So we need to penetrate through that layer of the ocean to get access to the fish. That is why we have already introduced long line fishing. That is to diversify from just one way of fishing,” he explained.

“Again, we will be very vulnerable if we commit to just one form of fishery. It is a good sign that in terms of income, we are meeting expectations by value in yellowfin and skipjack fishery. So we already have diversified into two forms of fishing.”

Environmental concerns

The annual fish catch in the Maldives declined from approximately 185,000 tonnes of fish caught in 2006 to about 70,000 tonnes in 2011.

In early 2010, the steady decline prompted the administration of former President Mohamed Nasheed to propose long lining as an alternative method.

In March 2010, the cabinet decided to allow long line fishing on the advice on the Fisheries Ministry.

Fishermen’s Union Chairman Ibrahim Manik told Minivan News at the time that “around 80 per cent of fishermen are against this new method, but the dire situation means there will be those who will adopt this.”

Manik said he expected Maldivian fishermen to be mindful of the ecological impact.

“Even now our fishermen will release any sharks they catch by mistake, so if our people do long lining they will be more careful,” he said.

An influential shark and marine conservation organisation from the UK, Bite Back, warned at the time that a boycott of long line tuna from the Maldives was a possibility if the government allowed long line fishing.

A year earlier, global retail giant Marks & Spencer announced it would no longer buy tuna that was not caught by pole and line.

However, director of private exporter Big Fish, Ali Riza, told Minivan News that the reaction of European consumers was hard to predict.

“It’s not us that overfished the waters, but now that it’s done, we are being told not to do what western countries had been doing,” he said at the time.

“We obviously can’t seal off our waters – fish are migratory. If we don’t do it others will overfish around us, so we might as well be the ones doing it.”

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Saudi prince’s Maldives visit makes global headlines

The visit of Saudi Prince Salman bin Abdulaziz continues to make headlines today after the UK’s Daily Mail newspaper reported that the prince had booked out Anantara’s three South Malé atoll resorts for nearly one month.

Headlines in Saudi Arabia have suggested that Prince Salman – due to arrive tomorrow – will discuss potential investments and partnerships in energy, tourism, transport, and Islamic affairs, as well the provision of a soft loan facility of US$300 million for the Indian Ocean nation.

“The crown prince’s trip to the Maldives comes in response to the invitation extended by Maldivian President Abdullah Yameen Abdul Gayoom,” Maldivian ambassador to Saudia Arabia Adam Hassan told Arab News.

Anantara’s Dhigu, Naladhu, and Veli resorts – all within an hour’s boat ride from the capital Malé – were said to have been reserved for the 78 year old heir to the Saudi throne.

The Daily Mail has reported the comments of “furious” tourists who had reservations cancelled without forewarning or apology.

Staff at Anantara were unable to provide any further information when contacted by Minivan News today. Similarly, spokesman at the President’s Office was unavailable for comment.

Saudi Arabia’s foreign ministry reported last week  that that prince’s official visit to the Maldives came on the invitation of President Abdulla Yameen and would form part of an Asian tour taking in India, Pakistan, and Japan. The President’s Office confirmed the visit but declined to provide further details.

The visit comes amid growing ties between the Yameen administration and the Saudi kingdom. Vice President Dr Mohamed Jameel Ahmed visited Saudi Arabia earlier this month, meeting with the Imaam of the Grand Mosque of Makkah.

The vice president stressed the importance the government placed on enhancing ties with the Arab world and in strengthening religious unity in the Maldives. Shortly after Jameel’s return, the government initiated its pledge to introduce Arabic lessons in schools as part of a drive to increase Islamic learning in the country.

After being invited by the Maldives Islamic Minister Dr Mohamed Shaheem Ali Saeed, the Saudi Arabian Muslim Scholars Association in January agreed to provide a grant of MVR1.6 million to assist in the provision of Islamic education in the Maldives.

Jameel’s trip followed the January visit of Defence Minister Mohamed Nazim, during which time an MoU was signed regarding the increase of air traffic between the Maldives and Saudi Arabia.

Prince Salman is currently in Japan and was today awarded an honorary doctorate from Tokyo’s Waseda University.

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Reduced petrol imports discussed as Indian minister concludes visit

Indian Foreign Minister Salman Khurshid has informed the Maldivian Government of its intention to continue supplying essential goods, with plans to supply petroleum products “on favourable terms”.

A joint statement released at the conclusion of Khurshid’s visit revealed an agreement had been reached  “in principle” with Mangalore Refinery & Petrochemicals Ltd to export diesel, petrol, and aviation fuels to the Maldives.

Mangalore Petroleum is a subsidiary of the India’s state-owned Oil and Natural Gas Corporation.

“[The] Indian side informed the Maldivian side of its agreement to continue supplying essential goods to Maldives,” read the statement detailing bilateral talks held this week.

Local media has also reported that Khurshid pledged US$10 million for the renovation of Indira Ghandi Memorial Hospital (IGMH).

As well as holding talks with the government, the minister of external affairs’ visit included his participation in the the 35th Inter-Summit Session of the SAARC Council of Ministers.

Bilateral talks were held on Thursday (Febraury 20) between Khurshid and the Maldives Foreign Minister Dunya Maumoon.

“The two sides reiterated their commitment to work together to promote democracy, development and mutual respect of each other’s sovereignty and peaceful co-existence and to contribute to peace, prosperity and security in the Indian Ocean region and South Asia.”

After expressing its satisfaction with the success of President Abdulla Yameen’s state visit to India last month, the Maldivian side also thanked India for its resumption of stone aggregate exports and the easing of visa restrictions for travel to India.

Bilateral ties appeared to have reached a nadir in late 2012 following the premature termination of a US$500 million deal to redevelop Malé’s international airport with Indian infrastructure company GMR.

The government’s decision to void the development contract was soon followed by increased visa restrictions and ending of favourable terms for the import of certain construction materials from India.

In early 2013, the Indian High Commission distributed a list of consular issues of concern to local media mainly concerning the mistreatment of Indian expatriate workers.

The list’s release was followed by the Indian High Commission issuing a statement in early February slamming local media in the Maldives for “misrepresentation and twisting of issues”.

“The two sides recalled their commitment to address all issues related to welfare of each other nationals, including speedy provision of consular services, on a priority basis,” read Thursday’s statement on the bilateral dicsussions.

Following President Yameen’s visit to India – his first official abroad since gaining office – senior government figures described Indo-Maldivian ties as being “as strong as they were during Gayoom’s time in power”.

Khurshid’s trip this week also included the gifting of naval landing craft and the laying of a foundation stone for a new Ministry of Defence building.

The visit also saw the official handing over of the new India-Maldives Friendship Faculty of Hospitality and Tourism Studies which India has constructed at a cost of US$11million.

The facility, will provide state-of-the-art infrastructure and equipment for training Maldivians in tourism and hospitality sector. The project also envisages India’s continued engagement through deputation of experts, and exchange of faculty from reputed hotel management institutes of India.

Heveeru reported that Khurshid had pledged funds to renovate Indian-built IGMH during the the tourism faculty’s opening ceremony.

“Indira Gandhi Hospital built in the Maldives by India in 1996 is the most significant symbol of the two countries relationship. It is an important step taken in the development of the Maldivian health sector. India is ready to further improve this national asset,” he said.

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TEAM fears resort workers’ income may be indirectly affected by T-GST rise

The Tourism Employees Association of Maldives (TEAM) has expressed concern that certain resorts are planning to reduce service charges in the wake of the proposed increase to the Tourism Goods and Service Tax (T-GST).

“While the decision to increase Tourism General Services Tax (T-GST) is going to increase the government’s income, some resorts are trying to reduce the percentage of service charge collected from tourist for the resort workers; this is very concerning and unacceptable for our association,” read a TEAM press release today.

Earlier this month the People’s Majlis agreed to revenue raising measures which involved increasing T-GST to 12 percent in order to help finance the government’s record MVR17.95 billion budget.

“Even now, in most resorts, the services charge collected from tourists are not distributed according to law, and they are sometimes spent by the companies; the Tourism Employees Association of Maldives is very concerned about this as well,” said TEAM.

An employee of one of the country’s top resorts explained that current legislation mandated that 10 percent of service charge must be taken for staff, and one percent used for additional staff costs.

“But the current legislation doesn’t specify that the service charge has to be distributed equally,” said the employee – who preferred to remain anonymous. “There are a lot of loopholes.”

The trade union today called for the government to establish a comprehensive legal framework that regulates the payment and disbursal of service charges.

“Service charges and monthly wages and other allowances are privileges that should be sustained through bargaining through an agreement between the employer and and the employed,” said the union.

Workers at the Sheraton Full Moon resort went on strike last month, citing low service charge as one of the reasons. Local reports suggested that Sheraton’s staff were being paid less than one third of the amount made by fellow-workers in similar resorts from service charge.

One general manager, however,  told Minivan News that he felt TEAM’s fears were unfounded, suggesting that comparison with other resorts was a major reason for keeping staff benefits competitive.

“We need to keep staff happy in order to have happy guests. It’s highly uncommon for a resort to do this – it’s just not worth it. We want to attract and keep the best staff.”

“TEAM’s logic doesn’t make sense,” said the GM, who wished to remain anonymous. “I don’t know of any resort that does anything wrong with the service charge.”

Asked about the potential impact of the scheduled changes to tourism charges – which include the reintroduction of that flat-rate bed tax until November, alongside the T-GST increase in the same month – the GM said that it was the top resorts that would be worst affected.

“Higher end resorts will be experience more of a problem after higher T-GST replaces the bed tax, and it’s these resorts which normally charge a higher service rate,” he said.

Earlier this week, IMF representatives told a Majlis committee that – even at twelve percent – the rates of taxation in the tourism sector were “quite low” compared to other tourist destinations.

Dr Koshy Mathai, resident representative to Sri Lanka and Maldives, said he had paid “north of 20 percent” in taxes at a hotel in Fiji and that, as 70 to 80 percent of the Maldivian economy was “driven by tourism”, Mathai said that it was “only natural that the [tourism industry is] contributing resources for the economy to operate.”

He added that “rates of return on Maldivian resorts are among the highest in the world”.

“The people who come here are people with more wherewithal, more financial resources, who are more likely to be price insensitive,” said Mathai.

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Government to reclaim property awarded to ferry service providers

The government is seeking to reclaim properties provided to companies awarded contracts by the administration of former President Mohamed Nasheed in order to establish regional transport networks, President Abdulla Yameen said last night.

Speaking at campaign launching ceremonies for two Progressive Party of Maldives’ (PPM) parliamentary candidates, President Yameen contended that the transport networks had “failed” across the country.

“The network is at a halt in all areas. It is functioning in just two areas. In one of those areas it is a private sector party providing the service. The system has been very much weakened,” he said.

The Maldivian Democratic Party (MDP) government awarded 200 plots of lands under its transport network agreements to the companies contracted to provide ferry services, Yameen noted, claiming that the bidding process was riddled with corruption.

“For islands given to develop resort, on average we are talking about an annual income of US$30 million. If we consider the total income of a resort we are talking about US$30 million dollars. Out of these 200 plots, a lot were given for resort development. All of them have now been sold,” he said.

While the public-private partnership project “in itself was good,” Yameen contended that it was the most wasteful and corrupt programme carried out by the MDP government.

The programme was intended to unduly benefit certain parties by awarding public property and funds, Yameen added, describing it as the worst such “in Maldivian history”.

“So the work we have to do is taking back such properties that can be beneficial to the public [and undo] the action of a group who claimed that there was corruption in the past and that they would stop it,” he said.

Of the two functioning transport networks at present, Yameen noted that ferry service was currently provided by the government-owned Koodoo Fisheries Company in Gaaf Alif and Gaaf Dhaalu atolls.

In October 2012, the MDP-controlled Gaaf Dhaal Atoll Council accused the previous company of ceasing ferry services and asked the transport ministry to cancel the agreement.

Yameen meanwhile vowed that there would not be a corruption case under his administration that would reach the Anti-Corruption Commission (ACC).

“During our five years, God willing you won’t hear of anything that could reach the ACC,” he said, adding that the commission was investigating allegations of corruption “from all sectors” during the MDP’s three years in government.

The government was also seeking to reclaim large plots of land in the capital awarded by the previous government to the MDP-controlled Malé City Council, Yameen said.

However, he added that reclaiming some properties might be difficult even through litigation as estate transactions were advanced in some cases.

PPM campaign

Speaking at the campaign launching event for the PPM’s candidate for the Hulhuhenveiru constituency, Hassan Ziyath, Yameen said he was pleased that “capable and educated youth” were contesting the upcoming parliamentary elections on behalf of the governing Progressive Coalition.

The cabinet was also composed of competent young technocrats, he added, who were working “day and night” with a team committed to implementing the PPM manifesto.

In the campaign launching event for the PPM’s mid-Henveiru constituency candidate, former journalist and television presenter Aishath Leeza, Yameen criticised parliament for failing to approve his nominee for the vacant Prosecutor General post as well as his nominee for the Elections Commission (EC).

The resignation of former EC member Ibrahim ‘Ogaru’ Waheed in October 2013 left a vacancy in the five-member independent commission.

Yameen also criticised parliament for failing to pass legislation such as the penal code, the evidence bill, and the criminal procedures code, which were essential for strengthening the criminal justice system.

The president vowed to establish “a safe and peaceful environment” for citizens in all inhabited islands of the country.

While the government was taking measures to “deter crime,” Yameen said the issue was related to “education of youth.”

He noted that the current administration has introduced Arabic and Quran classes in most schools in the country.

Plans were in the pipeline to introduce civic education and social science subjects in secondary education later this year, he revealed.

“The purpose of including these [subjects] is to provide information to children on how to confront or reconcile upsetting matters that you face within a family or society,” Yameen said, stressing the importance of policies propagated by the state to “maintain Islamic principles.”

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Majority of dollar receipts spent on imports: MMA assistant governor

The majority of US dollar receipts to the Maldives are spent on importing goods to the country, Maldives Monetary Authority (MMA) Assistant Governor Dr Azeema Adam said yesterday at a ceremony to launch the central bank’s first Quarterly Business Survey.

Dr Adam – who was recently named by President Abdulla Yameen as his nominee for the vacant governor’s position – reportedly said that US$1.5 billion out of the approximately US$2 billion that enters the domestic economy was used to pay for imports.

As an island nation heavily dependent on imports, the MMA’s latest balance of payments projections estimate that the country’s current account deficit will widen to US$562.5 million in 2014, which is equal to 22 percent of GDP.

As a result, explained Adam yesterday, there is a shortage of dollars in circulation. The central bank’s chief economist recommended reducing the volume of imports and increasing productivity.

“We have to find ways to keep dollars [circulating] in the economy,” she said.

Securing foreign markets for Maldivian exports was also essential for alleviating the dollar shortage, she suggested.

As a large number of foreign workers reside in the country, Adam said, their remittances added to the dollar outflow.

The business survey meanwhile showed “an increase in the level of business activity” in the fourth quarter of 2013 (Q4-2013) compared to the third quarter (Q3-2013).

“Looking ahead, businesses expect a continuation of this improvement in business activity and volume of demand in Q1-2014 as well. With regard to the labour market, respondents in all sectors, except for the transport and communication sectors, indicated an increase in employment in Q4-2013 compared to Q3-2013,” the summary of the survey results stated.

All sectors surveyed also “anticipate an increase in hiring in Q1-2014 reflecting the expected increase in business activity in this quarter.”

“Pressure on business costs, which includes all labour related costs and other input prices, increased in Q4-2013 when compared to Q3-2013. Similarly, average prices charged by businesses also increased in Q4-2013, except for those businesses in the manufacturing and transport and communication sectors, which indicated no change,” the summary read.

“Going forward, the majority of respondents expect a further increase in their business costs compared to Q4-2013. Average selling prices are also expected to increase, except for transport and communication sectors, which anticipate a decrease in their selling prices.”

A delegation from the International Monetary Fund (IMF) expressed surprise at the “resilience” of the Maldivian economy in a meeting with MPs on the parliament’s public finance committee yesterday.

“Imports are on the shelf. If you go into a shop, you’ll find a wide range of imported goods there. You see people with motor scooters and cars and smartphones. You see people going on travel. All these are available, are done, even while the level of reserves at the MMA is quite low,” observed the IMF’s resident representative Dr Koshy Mathai.

The country’s current international reserves were US$345.7million in December, equating to just over two months worth of imports.

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