Category: Business & Tourism

Maldives business news

Government finances “further deteriorated in first six months of 2013”: MMA Quarterly Economic Bulletin

Government finances “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, according to the Quarterly Economic Bulletin of the Maldives Monetary Authority (MMA) released last week.

The central bank observed that the government’s target of reducing the budget deficit to 3.6 percent of gross domestic product (GDP) this year from 12.6 percent in 2012 “now seems rather challenging.”

“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 (MMA) and other domestic sources to finance its growing deficit,” the report stated.

The economic bulletin explained that around 15 percent of total revenue budgeted for 2013 – MVR1.8 billion (US$116.7 million ) – was to be raised from new revenue measures, “which so far have not materialised.”

The revenue raising measures proposed in the 2013 budget included hiking Tourism Goods and Services Tax (T-GST) to 15 percent from July 2013 onward, raising airport service charge to US$30, leasing 14 islands for resort development, raising tariffs on oil, introducing GST for telecom services, and “selectively” reversing import duty reductions.

In April, parliament rejected government-sponsored legislation to raise the departure tax on outgoing passengers, prompting Finance Minister Abdulla Jihad to seek parliamentary approval to divert MVR 650 million (US$42 million) allocated for infrastructure projects in the budget to cover recurrent expenditure.

The move followed a cabinet decision to delay implementation of new development projects financed out of the budget due to shortfalls in revenue.

The economic bulletin meanwhile revealed that total revenue in the first half of this year (MVR5.9 billion or US$382 million) increased by 22 percent compared to 2012 on the back of a 35 percent increase in tax revenue.

Tax revenue was “boosted by favourable receipts from GST [Goods and Service Tax] and Business Profit Tax (BPT).”

While GST receipts rose by 46 percent, “contributed by the increase in the rate of GST on the tourism sector (T-GST), from 6% to 8% on 1 January 2013,” BPT receipts increased by 83 percent.

The MMA report explained that BPT collection this year was “based on financial returns for the twelve months ending June 2012, while the BPT collections made in 2012 were based on the financial returns of for the six months ending August 2011.”

Growing government spending

The economic bulletin also revealed that the total government expenditure of MVR6.7 billion (US$435 million) in the first half of 2013 was 8 percent higher than the same period in 2012.

The growth of government spending was “entirely due to the 21 percent (MVR965.3 million) growth in recurrent expenditure, which was partly offset by the 26 percent (MVR440.6 million) decline in capital expenditure during the period.”

Capital expenditure declined due to the government’s decision to suspend infrastructure projects financed out of the budget “in the face of significant shortfalls in revenue due to the inability to implement new revenue measures.”

The increase of recurrent expenditure was meanwhile “driven by the increase in spending on wages and salaries and government pension contributions, both of which largely reflects the transfer of employees in health corporations to civil service commission and employees in Aviation Security Service to Ministry of Defence and National Security starting from January 2013.”

In its professional opinion on the budget proposed for 2013, the Auditor General’s Office had suggested “major changes” to right-size the public sector and “control the salary of state employees and expenditure related to employees” to rein in the budget deficit.

The Auditor General observed that, compared to 2012, the number of state employees was set to increase from 32,868 to 40,333 – resulting in MVR 1.3 billion (US$84.3 million) of additional expenditure in 2013.

This anticipated increase included 864 new staff to be hired by the Maldives Police Service (MPS) and Maldives National Defence Force (MNDF).

Deficit financing

The budget deficit forecast for 2013 was MVR 2.33 billion (US$149 million) – to be financed by MVR 1.15 billion (US$74.5 million) in foreign loans and MVR 1.17 billion (US$75.8 million) in domestic finance.

The MMA’s economic bulletin noted that the budget deficit was largely financed from domestic sources, including the issuance of treasury bills (T-bills) to banks and non-bank sectors.

“At the end of June 2013 the total outstanding debt stock of government securities (T-bills and T-bonds) rose to MVR11,702.3 million which reflects a net issuance of MVR586.9 million in the first half of 2013 compared with MVR615.8 million in the same period of 2012,” it stated.

“Meanwhile, with the increasing challenges faced by the government in financing its growing deficit through domestic sources, the government at times had to resort to the MMA, to finance its deficit. During the first six months of 2013, the change in MMA net credit to government increased to MVR781.0 million from MVR131.2 million in the first six months of 2012.”

The country’s trade deficit also widened in 2013 compared to the same period last year due to higher level of imports, which “reflects the increase in domestic demand driven by economic recovery and the increase in government expenditure.”

While gross international reserves increased in the first six months of 2013 due to the “accumulation of foreign assets by the commercial banks,” the bulletin noted that, “in terms of import cover, gross reserves remained unchanged at 2.5 months in June 2013 reflecting the acceleration in import growth.”

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Government targets public share sale in airport operator MACL over next seven days

The government has announced its intention to begin publicly selling shares in the state-owned Maldives Airports Company Limited (MACL) – the current operator of Ibrahim Nasir International Airport (INIA).

Although the country’s Finance Ministry today told Minivan News that no timeline had been finalised for the sale owing to “legal process”, the President’s Office confirmed the state had planned to begin offering shares to the public within the next seven days.

India-based newspaper ‘The Hindu’ has meanwhile quoted an unnamed government source as claiming the administration of President Dr Mohamed Waheed was expected to hold most of the shares in the state-owned company on the back of such a sale.

The share sale has been announced despite arbitration hearings pending in Singapore into a US$1.4 billion compensation claim filed by India-based GMR, after a 25 year agreement to develop and manage a new terminal at INIA was declared void by the current government in November 2012.

The government maintains the decision to terminate the World Bank-approved GMR tender was made over allegations of corruption, claims ultimately rejected by the country’s Anti-Corruption Commission (ACC) this year.

President Waheed’s administration last November gave the foreign investors seven days to hand over the unfinished airport to the government-owned Maldives Airports Company Limited (MACL), which later sought to transfer the assets to a newly-created, state-owned entity called Male’ International Airport Limited (MIAL).

The government later abandoned its intentions towards such a transfer by June this year, on the basis that the “the termination of the contract between the government of Maldives and GMR [is] currently in the arbitration stage.”

With the transfer cancelled, Finance Minister Abdulla Jihad told Minivan News today that the cabinet had approved plans to sell shares in MACL to members of the public, although no date had yet been agreed to begin such a sale.

“There is a legal process we have to follow. We are working on the time frame,” he added.

Jihad request that all other questions over the legal implications of the share sale amidst ongoing arbitration should be directed to the office of Attorney General (AG) Azima Shukoor.

President’s Office Media Secretary Masood Imad said he too was aware the government was looking to sell shares over the “coming week”, but said any further queries should be forwarded AG Shukoor or other members of special committee charged with overseeing the airport’s development.

AG Shukoor and Deputy AG Ahmed Usham were not responding to calls from Minivan News at time of press.

Meanwhile, Maldives Airports Corporation Limited (MACL) CEO Ibrahim ‘Bandhu’ Saleem requested Minivan News contact the Ministry of Finance regarding all information on the MACL share sale.

Asset concerns

In May this year, a global body representing the world’s airports, issued a notice advising its members to exercise caution before making any investments relating to INIA, over concerns of the government’s intention of transferring MACL’s assets to MIAL.

In an email obtained by Minivan News dated May 8, Airports Council International (ACI) advised: “due diligence while considering any investment in the Maldives, considering the latest developments, uncertainty of outcome of elections, the legal and financial risks of the current arbitration and the nascent legal framework.”

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Government rules out supplementary budget to plug 2013 shortfall, commits to T-bill sales

Finance Minister Abdulla Jihad has said the government has overcome the need to issue a supplementary budget to plug a shortfall in state spending for the current year, relying instead on short-term treasury bills (T-bills) to carry over its debts.

The comments were made as the Ministry of Finance today confirmed it had been officially requested to present the proposed annual 2014 state budget to parliament on October 30, with work ongoing despite the challenges posed by the upcoming Eid holidays.

Jihad previously told Minivan News that despite anticipating parliament would need to approve a supplementary budget after state offices were found to have exhausted their recurrent expenditure for 2013 by April, the government was now instead relying on T-bills to balance outgoings.

The finance minister last month said that the Maldives was relying on 28 day T-bills to help “roll over” debt one month at a time after parliament had failed to approve a number of measures to try and increase state expenditure not included in the 2013 budget.

T-bills are sold by governments all over the world as a short-term debt obligation backed by sovereign states. In the Maldives, they have a maximum maturity of six months, in which time they must be repaid.

The present government’s reliance on T bills has been slammed by the opposition Maldivian Democratic Party (MDP), which has previously questioned why there had been an increased reliance on short-term financing considering total state revenue rose 16 percent over the 12 months up to July 2013.

Borrowing fears

The Finance Ministry claimed in August that it had managed to reduce state spending since 2012, despite the MMA raising fears that the current “beyond appropriate” levels of government expenditure was leading to a vicious cycle of borrowing.

Early last month, the government said it hoped to secure longer-term financing measures to cover the shortfall in annual revenue as the number of 28-day T-bills sold by the state almost doubled in July 2013 compared to the same period last year.

According to the Maldives Monetary Authority (MMA) monthly review for August 2013, sales of T-bills for July 2013 has risen by 95 percent year on year.

The MMA stated that there had been a 163 percent in 28 day T-bills by July 2013 compared to the same time last year, despite sales of T-bills with a maximum maturation period of three month and six months declining by 63 percent and 83 percent respectively.

Sales of T-bills were also up 35 percent for July 2013 over the previous month, according to the MMA’s figures.

Budget issues

Finance Minister Jihad told Minivan News earlier this year that the state’s increased reliance on T-bills between July 2012 and July 2013 reflected the difficulties faced by the government in trying to raise budgeted revenue during the period.

He added that with only “a few people” in the private sector now interested in purchasing the short-term debt obligation from the government, T-bills has been sold as part of wider investments made by the state through the country’s pension fund.

Parliament in April rejected government-sponsored legislation to raise the airport service charge to US$30, which was among a raft of measures proposed by the Finance Ministry in the estimated 2013 budget to raise MVR 1.8 billion (US$116 million) in new income.

Other proposed measures include hiking Tourism Goods and Services Tax (T-GST) to 15 percent from July 2013 onward, leasing 14 islands for resort development, introducing GST for telecom services as well as oil, and “selectively” reversing import duty reductions.

Opposition’s T-bill concerns

Mahmoud Razee, former Economic Development Minister under the previous government, claimed T-bills should only be used by the state to help cover its operational expenses, rather than serve as a long-term means of financing.

“With income tax revenue having increased according to the Maldives Inland Revenue Authority (MIRA), why have [T-bill sales] gone up? Under the MDP government we were using T-bills to meet our cash flow,” he said. “This had nothing to do with the fiscal deficit.”

Razee argued that while the former government had itself sought foreign loans to balance the financial deficit while in power, the administration of former President Mohamed Nasheed had worked to avoid relying on T-bills for longer-term financial concerns like balancing the national fiscal deficit.

“The moment T-bills are increased, this directly affects loans that banks are able to give to the private sector, leading to the cost of borrowing increasing,” he said.

Razee claimed that the MDP government had attempted to try and extend income tax reforms introduced during its time in office to further boost revenues – a plan he said was cut short by the controversial transfer of power on February 7, 2012.

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Maldives customs workers suspend strike, give management one week to meet demands

Maldives’ Customs Service workers initiated strike actions on Thursday morning and have threatened a full work stoppage if senior management does not meet their demands by the end of next week.

At 8:30am approximately 90 customs officers began protesting in the main customs building in Male’. They met with Deputy Commissioner General of Customs Mohamed Kamal and other senior management at 10:30am to discuss customs workers’ grievances, communicate their demands, and provide a petition signed by over 250 workers.

As of 11:00am the strikers agreed to give management one week to fulfill their demands and “give a solid answer”, otherwise the strike will restart Thursday.

“From the olden days there has been favoritism and the same thing is still practiced now. We will protest, we won’t stop. These problems should be solved if senior management wants us to be calm,” one of the strike organisers told Minivan News today.

“We decided [to strike] for our children’s future, for their sake we thought we should come out and express ourselves,” the source said. “This is the first time ever customs workers have participated in any strike.”

“We are not fighting for our own individual rights, but for the [customs] staffs’ rights,” the source noted.

Customs workers are aggrieved about senior staff engaging in discriminatory, nepotistic practices, that have led to inequitable promotions, retirement packages, and training opportunities, multiple customs workers told Minivan News today.

“Inequality is very high within customs, people won’t tolerate this,” a source lamented. The source also noted that gender discrimination is a factor impacting women within the government agency.

While “favoritism has been a problem from the beginning”, customs officials noted that these problems have been exacerbated since individuals with education and experience have been overlooked and mistreated by senior staff. “Promotions have not been based on qualifications, these things shouldn’t be happening,” said a customs official.

“On August 15, 2013 senior management met at 12:00am and developed a promotions list in secret. That’s not legal,” the source alleged. The source noted that the promotions criteria was altered to include the subjective “competency” category, however staff were not shown their employment appraisals.

The sources alleged that the promotion grading system has not been adhered to, and instead senior staff have unfairly advanced employees.

“There have been discrepancies in promotions, for example some have received double promotions, while others have not been promoted at all due to their political affiliations,” a customs officer said.

“Promotions have not been lawfully done. The management board includes staff with relatives working under them. They can’t make decisions [regarding promotions] in that state,” said another customs official.

“Some of the senior staff have not attended [the office regularly] and amended their attendance [record], but their status in the human resources [section] says they have attended,” the source noted. “Since there are problems with their performance, how can they objectively evaluate ours?”

In addition to grievances about inequitable promotions, nepotism has led to unfair working conditions as well, a customs official explained.

“Wives and relatives of senior staff are allocated tasks and assigned to sections [within customs] where they only have to work in the morning. There are many sections that require shift duty, but they don’t get assigned shifts,” the source noted.

“Senior staff follow separate rules, they come and go as they please, don’t swipe their finger, and no one is supervising them,” the source continued.

“Recently a case happened regarding a high level shipment, but senior staff instructed us not to fine the shipment and to let it go,” the source added.

Also, employees are being transferred to different departments repeatedly and frequently without reason, according to one source who reported being shifted between three different sections over the last six months.

Another customs official highlighted inadequate working conditions, such as the lack of desks and chairs for some employees, are also problematic for some employees.

The strikers noted that after the promotions were announced in August, they communicated their grievances to the Commissioner General (CG) of Customs, the Home Minister, President Mohamed Waheed, and filed a petition with the Anti-Corruption Committee (ACC).

“The CG said he did what he wanted and no one can do anything about it, the Home Minister said he’d look into it and the President said he’d establish a separate committee to look into the matter,” according to a customs officer. “But still there has been no decision or action taken.”

Customs officers presented a list of demands that include correcting discriminatory practices as well as holding the Human Resource Board of Directors accountable for their corrupt practices.

The board consists of the CG, eight section directors, as well as the human resource section head, customs officials explained.

“The Human Resources Board thinks that this is their company, but this is a government agency,” declared a customs official.

“We are demanding a separate entity be established to deal with promotions and the previous promotions awarded [since August] be cancelled,” the source added.

Some of the customs officers who participated in this morning’s strike claim that senior management told them their protest action was illegal and threatened to fire participants.

“They can fire us, we are ready for that, but they have to fire the board first,” said a customs officer. “We don’t trust [the management] anymore.”

Senior management’s response

Meanwhile, senior customs officials are considering the workers demands but have denied threatening to fire strike participants.

“A group of staff voiced discontent with some aspects of evaluating performance and promotion criteria used, which they claim are unfair,” Deputy Commissioner General of Customs Mohamed Kamal told Minivan News today.

“Management met them and noted the issues. Possible remedial actions are being analysed,” he continued.

“Firing employees are not being considered, that’s speculation,” he added.

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MACL denies imminent strike action by air traffic controllers, as staff allege pay and safety concerns

Air traffic controllers in the Maldives say they are building up to a full work stoppage over ongoing grievances and safety concerns left unaddressed by the current government.

Such strikes could lead to delays and disruption of flights to the luxury tourism destination, that welcomes almost one million tourists a year.

Several controllers responsible for organising the strike explained to Minivan News that they have been raising safety concerns with all relevant government authorities following the restructuring of the state-owned Maldives Airports Company Limited (MACL). Despite countless promises, no action had been taken, they said.

“For the last six months we’ve been ‘going by the book’, following all the procedures which causes a lot of delays. In the aviation industry that is considered a mild strike,” the air traffic controllers explained.

The air traffic controllers are now “building towards a full strike”, and many are even now calling in sick to work, the sources said.

A full strike would involve notifying all the relevant regional and international agencies, airlines, and all relevant government agencies in the Maldives, because no planes will be able to land except for hospital and humanitarian aircraft.

“This strike affects everyone, sea planes as well. Whatever happens at Ibrahim Nasir International Airport (INIA) will cause delays at the domestic airports as well,” they added.

Six air traffic controllers should be on duty at all times, three in the control tower and three in area control, the sources said.

“Last night only two people showed up to work,” they confirmed.

“The [MACL] management and Maldives National Defence Force (MNDF) had to run the system last night,” the air traffic controllers claimed. “Management is totally stressed.”

“This morning only one person was working area control, so management has had to fill in and today at 1:00pm nobody one went into work,” the controllers stated.

As a result, MACL management is also trying to close the area control centre and combine all operations in the control tower, the sources said.

“A pilot from a domestic carrier called me today to say he’s hesitant to fly because the guy currently in the tower doesn’t know what he’s doing – it’s a big safety issue,” one of the controllers alleged.

Ground staff at Kaadedhdhoo domestic airport in Gaaf Dhaal Atoll told Minivan News that since strike activity began many domestic flights had been delayed “three or four hours” while a number of international flights coming into Male’ “have been diverted to Colombo”.

CEO of the Maldives Airports Corporation Limited (MACL), Ibrahim ‘Bandhu’ Saleem, told Minivan News no such strikes were occurring.

“As far as I’m concerned there is no strike – you are wrong,” said Saleem.

He explained that there have been no flight cancellations or delays at INIA and that “only Male’ international [airport], not domestic airports, are under my control.”

While Saleem insisted there is no strike, he noted “there are contingency plans in place [in the event of a strike].” He declined to answer further questions.

The air traffic controllers told Minivan News that while they were not aware of flights being cancelled as of early this afternoon, a flight from Dharavandhoo airport in Baa Atoll was one-and-a-half hours delayed this morning “because INIA couldn’t handle the air traffic.”

Safety and standards

The air traffic controllers claimed strike action was supported by 75 controllers – over 95 percent of the country’s qualified staff.  They are demanding the reinstatement of a professional grading system, adherence to International Civil Aviation Organisation (ICAO), and the holding of the presidential run-off election that remains suspended by the Supreme Court.

“This was not a political issue,” they emphasised. “But now because we’ve lost trust in and cannot negotiate with the current government, [the strike has taken a political direction],” the air traffic controller sources told Minivan News.

“We were counting on a new election and government so we could bring our problems to them. If there’s no election our grievances will be exacerbated. [Now] we don’t know when we’ll be able to vote and elect a new government,” the sources continued.

The controllers repeatedly emphasised that the Maldivian Air Traffic Controllers Association (MATCA) was not involved [in organising the strike], “because they don’t want this to appear a politically motivated thing.”

Concerns and demands

The air traffic controllers said staff were not getting proper breaks, domestic airports are understaffed, the radar system – installed at INIA in 2008 – does not meet ICAO standards, and the professional grading system for controllers had been abolished.

“Everyone got knocked down to the same grade one position, there have been no promotions or pay raises in four years,” the sources explained.

The professional grading system ranks experience level and qualifications, with four levels: 1) basic air traffic, 2) aerodrome (tower) controller, 3) approach controller, and 4) area controller. While the same task is performed at each level, the airspace area each controller is responsible for increases.

“If air traffic controllers are continuously stressed out they might get into trouble by losing a picture [on radar],” the sources warned. “More fatigue means more mistakes, but we can’t makes mistakes is this job.”

The sources said MACL staff from Male’ are sent to work the domestic airports. However, the majority of domestic airports are understaffed, with only one or two air traffic controllers. At least three people should be running the control tower at any given time, the sources explained.

“Where there is only one person working the tower – like in Forvumulah’s airport – that individual has to stay awake. He only gets four hours of sleep a day and has to work 30 days continuously without a day off,” they continued.

“If you are the only person on duty you cannot leave the room, it’s a safety issue,” the controllers explained.

Thimarafushi airport in Thaa Atoll has no air traffic controller, however the Civil Aviation Authority gave authorisation for the airport to operate anyway, the sources alleged.

“That’s totally fine by us, even in the US there is uncontrolled airspace. It’s not a big issue as long as the pilots feel that they can land and take off,” the sources added.

“No one to trust” in government

“The government is trying to say everything is running smoothly, while trying to buy us out,” alleged the air traffic controllers. “We also gave an interview to Haveeru yesterday but they nothing has been posted about it.”

“Minister Adheeb called us today asking us if we were on strike. He’s pretending he didn’t know that our concerns hadn’t been addressed, even though we met with him earlier this year,” the sources noted.

“Three supervisors – of eight total – went to the MACL Managing Director’s meeting today. He’s asking them to talk to us to bring us back to work,” the sources continued.

“We are professionals and don’t want to create chaos in the Maldives, but with the current situation there is no one to talk to,” they explained. “We’ve tried to do it in a democratic way and did every single thing [to resolve our grievances]. We’ve exhausted all resources. There is no one to trust,” they added.

“We have been trying to raise these problems – again – since 7 February  2012 with the current government run by [President Mohamed] Waheed, [Jumhooree Party Presidential Candidate and MP] Gasim [Ibrahim], and [Progressive Party of the Maldives Presidential Candidate and MP Abdulla] Yameen,” the sources continued. “They promised us action but didn’t take it.”

The air traffic controllers have additionally met with Vice President Waheed Dean, Defence Minister Mohamed Nazim, Tourism Minister Ahmed Adheeb, Transport Minister Ameen Ibrahim, MACL, the Civil Aviation Authority, and the Labour Relations Authority, “but nothing happened,” they explained.

Over a year ago air traffic controllers submitted a case to the Labour Tribunal signed by more than 40 individuals, the sources noted.

“On December 21, 2012, over 60 air traffic controllers signed a petition that gave notice that we would be going on strike. We were promised that by January 1 our grievances would be addressed, the grading structure would be re-implemented and we would receive proper raises,” the sources added.

The controllers agreed to withdraw the case when promised the reforms and did, however  the promised action was still not forthcoming.

“We met with MDP’s Mohamed Nasheed and he pledged that under his government he would correct the mistakes and try to get us better pay,” the controllers noted. “We [also recently] met with the other political parties, but so far nothing.”

“Some [of us] are waiting for confirmation in writing [that our demands will be met], but many are waiting for the Supreme Court to rule so we can have an election,” the sources continued. “We’ve heard that MACL ground services employees are also planning to strike.”

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Indian authorities report hundreds of workers forced from Maldives without wages

The Indian High Commission in Male’ has said it is aware of hundreds of cases over the last three months where its nationals have gone unpaid, before facing deportation or being forced to return home without their earnings.

State institutions and bodies including the country’s Labour Relations Authority (LRA), police, immigration officials and the foreign ministry have all been accused by the high commission of failing to fulfil their duties, and – in some cases – “deliberately encouraging” the mistreatment of foreign workers.

The concerns have been raised by Indian authorities after the Bangladesh government last week temporarily halted migration of its own nationals to work in the Maldives – unless accredited by the state – over fears they were becoming victims of a “section of unscrupulous recruiting agencies”.

In June, the Maldives was placed on the US State Department’s Tier Two Watch List for Human Trafficking for a fourth consecutive year – with the US State Department noting conditions of “fraudulent recruitment, confiscation of identity and travel documents, withholding or nonpayment of wages, and debt bondage”.

Indian High Commission sources – citing the example of the Bangladesh Government – said that its own authorities should now consider similar intervention after increasing instances of workers being denied salaries and basic human rights.

“No employer can take a foreign national’s passport, yet this is happening. Some semi-literate workers who are here cannot draft letters or seek justice. Without pay they cannot go to the Civil Court,” said a commission source.

“So they are having to leave the country either with no salary, or instead compromising and getting just some of the money they are owed. Ultimately their employers just contact agents and then bring new workers to the country.”

Minivan News was last week shown several files containing correspondence by the Indian High Commission detailing its communications with Maldivian private employers who have not provided expatriates their wages, despite accepting that payments are owed to former Indian staff.

The majority of promises for financial reimbursement remain unfulfilled at time of press, with the employees in question having been forced to return home or turn to the high commission for food and support, Indian authorities have said.

Commission support

Indian nationals Santosh Kumar Ram and Harendra Kumar are the latest expatriates forced to leave the Maldives, after unsuccessfully pursuing months of unpaid wages that left them without food or income, and forced to beg their own government for financial support.

An official for the Indian High Commission said that the two men, who had both been in the Maldives since last year, had communicated their concerns on July 22, 2013, alleging they had not been paid by their employer for the final six months of their employment.

Despite the intervention of the high commission, both men – who had been staying in shelter provided by their employer – had been declared absconders by the state, resulting in them leaving the country this week as deportees. Their former employer, who denied responsibility for the two men, did provide return flights for the two Indian nationals, but declined to pay them the earnings claimed to be outstanding.

“This is completely unacceptable,” said a diplomatic source with knowledge of the case.

While provided shelter by their employer – who has denied ever employing Santosh Kumar Ram and Harendra Kumar – the two men have not been given food, relying instead on the commission to ensure they were fed.

The two men had previously sought support at the Department of Immigration and Emigration’s shelter for undocumented workers in Male’, opened this year as part of attempts to offer a more “humane” means of tackling the issue of unregistered foreign workers in the country.

However, the high commission said both expatriates were denied assistance at the shelter as their then-employer, despite not providing food, had given them accommodation.

In a similar case earlier this year, the Indian High Commission said another six of its nationals had been forced to leave the country without four months of salaries they were owed by their employer. The commission argued that they could not afford to remain in the country for ongoing legal action to claim their money.

In a letter seen by Minivan News, one employer said that delayed payments to the six workers was related to the “financial crises”, but promised the Indian High Commission the debt would be settled.

The six affected workers, since returned to India, are still waiting for their earnings at time of press.

High commission sources said that they had also been made aware of semi-literate foreign nationals being sent to other islands by their employers for non-existent work.  Once on another island, they were then being reported as having fled the company with whom they are registered for their visa.

Department of Immigration Chief Executive Officer (CEO) Abdullah Munaaz and Chief Superintendent of Immigration Zubair Muhammad were not responding to calls from Minivan News at time of press.

Minivan News was also awaiting a response from the Foreign Ministry at time of press over the high commission’s concerns.

“Systematic abuse”

Immigration Controller Dr Mohamed Ali has previously told Minivan News that while almost all foreign workers coming to the Maldives arrive under registered companies, some were finding themselves “illegally used” by employers due to “systematic abuse” of the visa system.

Foreign low-wage workers are often lured to the country by agents after paying a ‘recruitment’ fee or entering into debt – sometimes as high as several thousand dollars – that is shared between local agents and recruiters in the country of origin, most significantly Bangladesh.

In many cases the workers are then brought into the country ‘legitimately’ by a specially-created paper company, created using the ID of a complicit or unwitting Maldivian national, for the stated purpose of working on a ‘construction project’ of dubious existence.

The exact scale of the Maldives’ unregistered foreign workforce remains unknown, with estimates ranging from between around 40,000 people to potentially double that amount.

In April, Immigration Controller Dr Mohamed Ali confirmed that authorities had targeted the return of 10,000 unregistered workers by the end of the 2013.

The pledge to return a pre-determined number of expatriates was criticised at the time by the Human Rights Commission of Maldives (HRCM), which raised concerns that some workers were potentially being punished for the actions of employers or agents acting outside the law.

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Port workers strike to “send a message to the government”

The Maldives Ports Workers Union (MPWU) has taken strike action today following the Supreme Court’s decision – backed by the government – to postpone the second round of the presidential election.

“We are taking our constitutional right to give a message to the government,” said Ibrahim Khaleel, President of the Maldives Ports Workers Union.

Around 90 of the union’s 490 members opted not to come into work for today’s morning shift, though Khaleel pointed out that workers would return to work for the later shift.

“There is not much work there today, but next week we have a charter boat with more than 300 containers. If we are not given an election date, we will stop any future operations. We are just giving that message.”

“The ports union will do this again and again if they do not listen to us,” said Khaleel.

The Supreme Court is scheduled to give a verdict on its election annulment case today – filed by the Jumhooree Party (JP) after its defeat in the first round earlier this month.

After the Elections Commission expressed its intention to go ahead with the polls – scheduled for yesterday (September 28) – the court issued an order to security forces to halt proceedings by force if necessary.

Khaleel said a decision was made not to picket outside the ports today, alleging the port’s management “sent thugs” to attack union workers picketing the port earlier this year.

He argued that police protection had been requested on this prior occasion, but had not been forthcoming.

Both the MPWU and the Tourism Employees Association of Maldives (TEAM) joined forces in May this year to demand amendments to the recently enacted Freedom of Assembly Act.

Clause 24(7)b of the law prohibits any gatherings at the country’s ports, airports, or resorts, without police authorisation – a clause the unions have claimed effectively banned strike action.

After TEAM’s call for “prolonged strikes” last week should the presidential run-off be delayed, Minivan News has received reports of a number of politically motivated dismissals in some of the country’s resorts, in what some staff described as a “firing spree”.

Import dependency

Vice President of the Maldives National Chamber of Commerce and Industry (MNCCI) Ishmael Asif warned of the likely impact such strikes could have on the country.

“As a country that relies heavily on imports for all of its needs,  a ports strike could have severe impacts on business in the country,” he warned.

As small island state with with a land mass of only 115 square miles, the Maldives has near-total dependency upon imports for basic foodstuffs and commodities, as well as goods used to supply the country’s luxury tourism industry which is indirectly responsible for 90 percent of the economy.

The country’s “excessive reliance on imports” was discussed in a recent government report into economic diversification, which noted that the country’s current account deficit had grown to US$600 million (27 percent of GDP) in year 2012.

“The import dependency continues to grow. The CIF [cost, insurance, and freight] value of merchandise imports has increased from us$120 million in 1990 to us$1.5 billion in 2012,” read the report.

It also noted that the country imported over 90 percent of foods in 2012 – worth US$318.9 million –  resulting in “huge implications for food security as well as inflation.”

Male’s port – managed and administered by the Maldives Ports Ltd (MPL) company – handled 580 ships in 2012, processing over one million tonnes of freight.

Current MPL CEO Mohamed Latheef told Minivan News today that he was unaware of any strike activity.

The MPWU staged a small strike last year after it alleged the MPL had removed the workers’ television after they had used it to watch the Maldivian Democratic Party aligned Raajje TV. MPL claimed the disagreement was a misunderstanding.

That strike received high-profile backing from the International Transport Workers’ Federation (ITF).

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Politics in paradise: Irufushi resort staff complain of political “firing spree”

Additional reporting by Neil Merrett

Staff at Irufushi Beach and Spa resort have expressed concern over a “firing spree” affecting staff members professing to support the Maldivian Democratic Party (MDP).

The resort, which in May 2013 abruptly terminated its agreement with hotel giant Hilton leading to the overnight resignation of 30 employees, is owned by Maldivian Development Alliance (MDA) leader Ahmed ‘Sun’ Shiyam. MDA is the coalition partner of the Progressive Party of Maldives (PPM), and is backing its candidate Abdulla Yameen in the presidential run-off.

According to staff at the resort, the management has been on a “firing spree” since the conclusion of the first round of elections, while some others have been suspended or warned of dismissal.

Minivan News obtained copies of three letters of termination, one dated September 19 and two dated September 26, instructing staff that their employment was “terminated with immediate effect”, and ordering them to collect their belongings and leave the island the same day. The letters did not give reason for the terminations.

Mohamed Rishwan, one of the first staff members who was fired from Irufushi, spoke to Minivan News about the “unfair circumstances surrounding [his] unexpected dismissal”.

Rishwan, who worked in the resort’s housekeeping department, was dismissed on September 26 and alleged the only response from the Human Resource Department to his request for a reason was “I don’t know. These were orders from the top management. Why do you need to support [MDP presidential candidate] Mohamed Nasheed?”.

“Our work and politics have been absolutely entangled by the current management. Staff at the resort are living in a constant state of fear of losing their jobs, despite performing at their best. The rumour is the HR Department plans to dismiss many others there who support MDP. Pressure increased after Nasheed won the majority of votes even on Irufushi in the first round,” Rishwan said.

According to results from Irufushi’s ballot box in the first round of voting on September 7,  59 staff on the resort voted for the MDP, 38 for the PPM, six for the JP and one for incumbent President Mohamed Waheed.

“When I demanded to meet the HR head after I was suddenly and unexpectedly dismissed, Shiyam’s brother met with us. He said there was no reason except that the resort no longer wanted us there. He then spent the rest of the meeting asking us why we supported Nasheed, promoting Yameen and his policies and trying to dissuade us from supporting MDP,” Rishwan continued.

“I told him I no longer wanted to live in fear, under such extreme political pressure, being discriminated against for political reasons. We were even harassed in the staff quarters by supporters of the opposite political ideology. The staff of Irufushi have been stripped of many constitutional rights and live under the repression of this new politicised management.

The Tourism Employees Association of the Maldives (TEAM) on Thursday committed its 5000 members to “prolonged” strike action should the election be delayed.

“The management have ordered all staff to register at the resort for voting. They’ve also said at staff briefings that all staff must vote for Yameen, and that no one should dare try implementing the workers’ strike that Nasheed spoke of,” Rishwan alleged.

“One colleague refused to register to vote at the resort, saying he will finish his duty and go to his nearby home island to vote citing that it was his constitutional right to do so. He was immediately fired. Some of my former colleagues are now saying that they will not dare cast a vote at all,” he said.

Another source, currently working at Irufushi, spoke on condition of anonymity of what he described as a repressive atmosphere among resort staff.

“Things are very difficult. I need to hold this job, so don’t name me. Shiyam is firing anyone he even suspects of supporting the MDP. Most of us are under what I would say is psychological trauma right now, afraid to speak our minds as there is so much pressure from above. We can’t all afford to lose our jobs, but is political affiliation any reason to be legally dismissed from a job?”

“MDA is forcing staff to sign up for their party, that’s the only path to job guarantee or promotion these days. They are also hiring groups of youth who live on this island but do nothing besides preparing campaign banners for the MDA coalition. I’ve been working here for many years, but I feel like a stranger here now with so many new, hostile faces. The sudden lack of usual liberties is very disheartening,” he said.

“There’s been at least five dismissals in the last week, and no one knows who is next. You see, this is our livelihood, how we support families. This is why everyone is bowing down to this repression, even if reluctantly, and attempting to hold our jobs.”

“Sun Shiyam has addressed all staff in extremely disrespectful, and even vulgar, terms. Let me quote what he said at a staff briefing: ‘You MDP lot are making ‘haram’ use of my money as your wages. You are not entitled to any of it. I will make sure I push out every single one of you MDP dogs from my resort. Mark my words.’ You see, this is the reason the staff are in fear. We need to let word out and let the world know,” another staff member told Minivan News.

“The management holds nightly staff gatherings where they slander Nasheed and praise Yameen. Staff are made to agree with all they say, or face dismissal within two days. They have said that they want 100 percent votes for Yameen from Irufushi in the second round, and that it is mandatory for all staff members to register to vote on Irufushi itself.”

“In fact, we’ve been told that if Yameen doesn’t win 100 percent, they will see what percentage Nasheed gets, and fire an equal percentage of staff based on who they suspect might have cast those votes. Most of us are now saying we will just cast invalid votes, or just not vote at all,” he said.

“Shiyam took over this resort in what the staff refers to as another coup d’etat at the resort level. Since then we have been gradually stripped of rights we are legally entitled to as citizens of the Maldives.”

Resort response

General Manager of Irufushi Beach and Spa Resort, Abdulla Thamheed, rejected allegations that the resort had fired staff members for politically-motivated reasons.

He said that after Sun Travel and Tours took over the site following the company’s decision to terminate its agreement with Hilton in May, a number of staff members had been fired for “not sharing the resort’s values”.

“These people were not on the same page with the company, so we have gone our separate ways,” he said.

Thamheed said the resort had not been affected by calls for strike action by tourism workers over the indefinite suspension of the run-off election.

He also questioned the motivation of any Maldivian seeking to damage the country’s luxury tourism industry, stating that most staff members had families they needed to support.

“No one is interested in striking [on the resort],” he said.

Before answering questions on the allegations of politically-motivated sackings at the resort, Thamheed requested he be quoted on the record as expressing concerns over “why a white European” was allowed to working at a Maldives-based publication such as Minivan News.

“The fact you are a white European doesn’t mean you can come to a third world country and break into our privacy,” he told Minivan News. “You are a white European and a failure in the UK. I have managed many five star resorts and met journalists from newspapers like the Sunday Times and the Daily Telegraph,” he said.

Upon confirming the reporter’s nationality as a UK citizen, Thamheed expressed his view that the journalist was a stereotypical reminder of the Maldives’ colonial past.  Asked to clarify his comment, he accepted that the Maldives itself had not been colonised by the UK.

“You see yourself as an imperialistic and colonial person, who believes they have imperial superiority over us. No one will give you a job outside this country,” Thamheed said.

He added that although his comments were “not personal”, but questioned Minivan News’ ethics as a news organisation and said the reporter could not be called a journalist for producing what he believed was “biased, one-sided propaganda”.

Thamheed went on to state that as a white European in the Maldives, the Minivan News reporter would not have sought to contact someone for a story in their own country during evening time.

“I have met many top journalists from newspapers like the Sunday Times and the Telegraph. Do you really think this is how journalists are supposed to behave?” he said.

Thamheed requested that his words be remembered by the journalist and quoted directly in this article.

“I don’t think you will be able to sleep tonight,” he said. “I am very happy I have spoken to you.”

MDA leader, MP and Irufushi owner Ahmed ‘Sun’ Shiyam was not responding to calls at time of press.

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Nasheed calls for tourism workers to strike should election be delayed

Former President and Maldivian Democratic Party (MDP) presidential candidate Mohamed Nasheed has called on tourism workers to strike, should run-off elections scheduled for September 28 be delayed.

Following Nasheed’s appeal, the Maldives Association for Tourism Industries (MATI) issued a statement warning of “irreparable consequences” to the Maldivian economy unless the election is expedited.

“It is absolutely important to expedite the election and settle the issue or else there would be irreparable consequences to the Maldives, and especially to tourism which is the back bone of the economy. Therefore, it is important for everyone to see the importance of this in the interest of the country at large,” said MATI Chairman M.U. Manik, one of pioneers of the country’s 40 year-old tourism industry.

The Supreme Court ordered the Elections Commission (EC) on Monday to indefinitely postpone run-off polls until it issues a verdict in an ongoing case filed by the Jumhooree Party, which placed third and is now seeking to annul the vote.

Nasheed emerged as the front runner in the first round of the polls with 45.45 percent (95,224 votes), followed by Progressive Party of Maldives (PPM) candidate Abdulla Yameen who received 25.35 percent (53,099 votes). JP candidate and resort tycoon Gasim Ibrahim narrowly missed out on the run-off with 24.07 percent (50,422), and contested the results at the Supreme Court alleging electoral fraud despite unanimous positive assessments of polls by local and international election observers.

“I call on tourist workers to strike if there is no election on Saturday. For everyone to strike. There is an election scheduled on Saturday – whether that election happens or not is in one sense in your hands and mine,” Nasheed told tourism workers, at an event on Monday evening to explain the party’s manifesto.

Secretary General of the Tourism Employees Association of the Maldives (TEAM), Mauroof Zakir, told Minivan News the organisation was holding discussions on whether to endorse Nasheed’s call.

“We are discussing whether TEAM as an organisation will back [Nasheed’s] call or leave it up to individual resort workers. We have to think about the consequences on employees’ jobs. Many resort workers are calling us and are saying they are willing to go on strike, but in such a way that resorts continue to operate,” Mauroof said.

The tourism industry is indirectly responsible for upwards of 70 percent of the Maldives’ GDP, and a substantial majority of Maldivian resort workers support the MDP.

Results from resort ballot boxes in the first round revealed overwhelming support for the party, even at many properties owned by Nasheed’s political opponents such as Vice President Waheed Deen’s Bandos Island Resort (51 percent MDP).

The trend was particularly notable at prominent international chains in the luxury tourism sector, famous for providing relaxing and idyllic escapes for honeymooners, including Sheraton Maldives Full Moon Resort and Spa (58 percent MDP), Dusit Thaani Maldives (73 percent MDP), Conrad Maldives Rangali Island Resort (62 percent MDP), and One and Only Reethi Rah (75 percent MDP).

Tourism Minister Ahmed Adheeb has meanwhile told local media he will not allow politicians to sacrifice the tourism industry and its workers, and appealed to staff not to strike.

“They plan and involve the tourism industry every time there is political turmoil, every time things do not happen as they want. They called for a tourism boycott in international media. There were effects from that. We are seeing the same thing now. We cannot allow any politician to involve the tourism industry in politics. We cannot allow politicians to sacrifice the tourism industry and its workers every time things are politically turbulent,” he told newspaper Haveeru.

The Supreme Court will be hearing closing arguments this evening.

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