Comment: The unfortunate reality of an island airport

Milton Friedman, one of the most influential economists of 20th century, once said “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand”.

While it has been proved time and again that Governments have no business being in business, the issue is still widely debated and will probably linger on in eternity. However, in the Maldives, this issue of state ownership of businesses takes a totally different dimension. When Mr Friedman made this, now legendary, comment he referred to only the inefficiencies in decision making and economic management that most governments and politicians are riddled with. In the Maldivian context, one has to take into account the mala fide intent as well as narrow self-interests of people in the government as well.

An unfortunate example of how the Government of the day not only destroys value but systematically works against the interest of the people is our prized national asset – Ibrahim Nasir International Airport.

Caught in the middle of political wriggling and costly lawsuits, politicisation of the airport by everyone across the political spectrum and the mullahs typifies all that is wrong with our economy, our businesses and our government.

Ever since the ousting of GMR, whatever progress that had been made at the airport is now being undone – reversal of employees benefits such as employee insurance which was given by GMR to stalling of development works at the airport are just a few examples.

I have been told of way too many stories of flight delays due to systems outages, long unmanageable queues and leaking roofs to be convinced all over again of the Government’s inefficiencies in managing enterprises.

But I do not intend to focus on Government’s inefficiency in managing our national airport in this article. I would rather highlight the systematic manner in which the current Government seems to have taken control of the airport to serves its and its cronies’ own narrow self-interests rather than let it be run in a professional manner that is best for the passengers as well as the nation.

First, Dr Waheed’s government wanted to create a new airport company (MIAL) to take over management of Ibrahim Nasir International Airport with a new MD and a new Board of Directors with the intent of setting up tight control on the airport management. When the AG advised them of legal impossibilities related to this action, he appointed the same set of cronies to the MACL board to ensure he controls the board and all important commercial decisions at the airport.

Of course, at the time of cancelling the agreement, Government did say that new and professional management will be brought to manage the airport within 3 months and there will be no political influence in managing it going forward. Whatever happened to Dr Waheed’s ideas of ‘professional management’, Dr Hassan Saeed’s idea of ‘internationally experienced  foreign CEO and CFO’ and Sheikh Imran’s ‘national consultations for deciding the future of the airport’.

On political appointees and lack of professional management, it is interesting to note that Dr. Waheed’s political appointee as the MD of MACL– Bandhu Saleem has at least started making some noises around what are all the challenges that are facing the airport – lack of funds, no master plan and hardships & sacrifices for 3-4 years in each phase of airport’s development. He said these things in an interview to a local daily and what is most painful is that whatever he said only highlights the stupidity of the decision to oust GMR.

If it was that easy for a government company to get US$350 million funding for the airport, then why would anyone anywhere across the world privatise airports in the first place?

And by that logic, even Dr Waheed would have got his US$500 million loans from China and US$350 million grant from Saudi Arabia for budgetary support by now surely? As for the master plan for development, it was to be announced within 3 months of GMR’s ouster and we haven’t heard a word from anyone on this yet. There are bigger battles for all the politicians to fight, within themselves, in two months.

It’s clear by now that all these lofty promises always sound good to the general public and Bandhu Saleem’s game plan seems to be the same for now, even though reality it is most important to first take care of the basics. I have been told by sources that in one of the first meetings that he called after moving to his office at the airport, his authority was challenged and thwarted directly by the attendees. He intended to undertake frivolous discussions on the “Vision & Mission” for the airport when all the other attendees didn’t even have permanent contracts or medical insurance covers, something that they enjoyed under GMR management.

While airport’s development by MACL is an elusive dream that may never see the light of day, the fear really is that since it is back under MACL (effectively government) control, systematic corruption will rise like never before. What is most interesting for us to note is that all of these moves to take control of the airport operations come at a time when the Presidential elections race is heating up by the day.

Campaign funding is the need of the hour and we know that most elections are won or lost on the level of funding that is available to a candidate. With his allies deserting him thick and fast, what may still keep Dr Waheed in the hunt for the election is the money that his cronies are willing to bet on him while he is still in power.

It is well known that the likes of MVK Shafeeg and Najah have their eyes set on more airport concessions. MVK Shafeeg has been funding most of the anti-GMR protests and has been providing campaign funding aggressively to Dr. Waheed’s coalition.

So, I’ll not be surprised if we see MVK shops coming up in duty free section of the airport soon. A refurbished and world class duty free offering was one of the best things that GMR had done at the airport. MACL’s previous MD Mafooz had publicly stated that duty free is one of the best profit earners for the airport. It will only be in return for securing his campaign funding that Dr. Waheed’s government will allow MVK to get duty free shops at the airport for peanuts.

After all, securing massive amount of funds may be half the battle won in the presidential race of September 2013.  Whatever happens to the airport and its development after that can be put on the backburner like it had been for each of the last 25 years – except for the two when GMR managed it!

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

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Tourist facilities to be developed on local picnic island Kuda Bandos

Additional reporting by Neil Merrett

Tourist facilities are to be developed on Kuda Bandos, the only picnic island located near Male’ accessible to for Maldivians, following the island’s owner Vice President Mohamed Waheed Deen submitting the sole bid for its development.

Vice President Waheed Deen, also the owner of Bandos Island Resort, previously leased Kuda Bandos for US$6000 annually. However, the after the island was opened for bids on November 16, 2012  Deen submitted the sole proposal and won Kuda Bandos again for a rent of US $180,582, according to local media.

A joint venture company will be established with the Government of Maldives to develop the island, including “certain tourist facilities”, Minister of Tourism, Arts and Culture Ahmed Adheeb told local media.

The new facilities will “modernise the island” and increase government revenue, according to Adheeb.

“We don’t want to renew the agreement every two years. Now it is to be handed over through the Tourism Act and the rent will be paid just the same as the resorts,” said Adheeb.

Currently Maldivians have exclusive access to Kuda Bandos, which is located next to Bandos Island Resort, on Fridays, Saturdays and public holidays, when local families are able to travel to the picnic island for a day of relaxation on the beach.

Adheeb claimed that even after Kuda Bandos is developed Maldivians will have full, unrestricted access to the picnic island.

“After development, safari boats can go there with tourists. It will be developed so that everyone will have the opportunity,” said Adheeb. “The tourist facilities will be established to make it easier for the tourists who visit.”

Maldivian picnic island access

Despite Adheeb’s claims that Maldivians will have “unrestricted access” to Kuda Bandos, the former Secretary General of the Maldives Association of Tourism Industry (MATI), ‘Sim’ Mohamed Ibrahim, believes that developing the picnic island for foreign tourists will still limit locals’ ability to enjoy the island.

“There are less places for Maldivians to go. The problem would be solved if Mr Deen created a small island in front of Kuda Bandos [for locals]. It’s not ideal but it should serve the purpose,” Ibrahim told Minivan News today (July 18).

Whether Maldivians will have unfettered access to the sole remaining picnic island near Male’ once it is developed remains to be seen, Ibrahim does not think Maldivians enjoying the island together with tourists should be an issue.

Specifically, safari boats coming to Kuda Bandos with alcohol or foreigners sunbathing in bikinis “is a grey area”, according to Ibrahim.

“It is up to a person to decide what he wants to do or not, I don’t understand why this would be a problem,” he said.

“The question of [drinking] alcohol is not a problem, the issue doesn’t arise, because Maldivians as Muslims don’t drink,” he continued.

“[And] why would there be a problem with foreigners sunbathing in bikinis, if a lot of Maldivians are working on and visiting resorts [every] day?” he asked.

“It happens on Bandos [Island Resort] or any other resort for that matter,” he added. “As it is there is nothing to prevent Maldivians from going to resorts or accessing their facilities.”

Picnic island development

A new tourism regulation entitled the “Procedure to Follow Where the Government Undertakes Joint Venture Investment in Islands or Land”, allows a company with at least a 10 percent share held by the state to develop a resort from land set aside for tourism use, such as a picnic island like Kuda Bandos.

Land used for water sports or diving would also be included once the lease for the area is acquired by a joint venture company.

Published in the Government Gazette Volume 42, number 17 – dated January 28, 2013 – the regulation requires any joint venture partner working with the state on a tourism projects to have a minimum financial worth of US$300 million and make a minimum initial capital investment of at least US$100 million.

Tourism Minister Adheeb told Minivan News in April that the regulations applied to land such picnic islands that were effectively being used “almost as a resort”, such as areas licensed to serve alcohol to tourists, something not allowed on islands designated as “inhabited”.

“The only difference [to these islands] is that tourists cannot sleep there for the night,” he said. “Now they can stay there the night, but [operators] have to pay land rent. It is to stop the concept from being abused.”

However, an island owner involved in the country’s burgeoning mid-market holiday sector has slammed new regulations imposing financial restrictions on tourism joint venture projects with the government, claiming the legislation outright excludes small and medium-scale investors.

These recently implemented amendments to the Tourism Act served to “shut the door” on small and medium-sized investors, alleged the island owner, speaking to Minivan News on condition of anonymity.

“The real issue here would be that only those with very high net worth can be venture partners with government. Very, very few tycoons are in that wealth bracket,” the source said.

“[Former President] Nasheed’s government tried to be inclusive in offering business opportunities. This regulation is exclusive and shuts the door for medium to small-size investors to partner with the government,” the source added.

Meanwhile, the Ministry of Tourism, Arts and Culture has announced a public tender to lease several other islands across the country for development as resort properties.

Through the tender, applicants will bid for a 50 year lease to develop one of several islands including, Kunnamala in Noonu Atoll, Kudafushi and Fasmendhoo in Raa Atoll, Vanabadhi and Kani in Thaa Atoll, Dhigudhoo in Gaafu Alifu, and Ismehela Hera in Seenu Atoll.

Additionally, seven parties have expressed interest to develop tourist resorts on the islands of Madifushi in Meemu Atoll, Keradhdhoo in Gaafu Alifu Atoll, and Ismehela Hera in Seenu Atoll.

While Ismehela Hera was also included as one of the three islands the Tourism Ministry invited bids for in April, the ministry did not clarify why the island was listed twice, according to local media.

Bidding documents will be made available to Maldivian nationals for a non-refundable payment of MVR 2000 (US$130) or US$300 for foreign nationals, until July 28.

All bids must then be submitted before 1:00pm on August 1, 2013 to the ministry, where they will be opened at a ceremony held later the same day.

Former MATI Secretary General Ibrahim said the process for tenders was “pretty much standard” for obtaining an island lease.

“The investment climate is better than a year ago and source markets are improving,” said Ibrahim.

Tourism Minister Ahmed Adheeb was not responding to calls at time of press.

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President seeking US$300 million credit facility from Saudi Arabia for “budget support”

The government has confirmed it is in discussion with Saudi Arabia, seeking a long-term, low interest credit facility of US$300 million to help overcome “fiscal problems”.

President’s Office Spokesperson Masood Imad confirmed President Waheed had held discussions with senior Saudi Arabian dignitaries including Crown Prince Salman bin Abdulaziz Al Saud over the proposed credit facility, during his recent visit to the country.

“The president has initiated the talks so it is just a matter of working out the details now,” Masood said, explaining that the funds would be used for “budget support” and development projects.

The opposition Maldivian Democratic Party (MDP) has meanwhile said the government would still be required to secure parliamentary approval for the funding.

MDP MP and Spokesperson Hamid Abdul Ghafoor said that the heavily partisan parliament now effectively controlled state finances as a result of former opposition politicians – now part of President Waheed’s government – imposing tighter spending restrictions on former President Mohamed Nasheed’s administration.

Ghafoor argued that with the MDP failing to recognise the legitimacy of the present government due to the controversial transfer of power last February, he did not believe there would be support for approving the credit agreement with Saudi Arabia due to the government’s existing extravagant borrowing levels.

The party accused the current government of reckless financial management, pointing to a potential US$1.4 billion compensation bill facing the state for deciding last year to abruptly terminate a US$511 million airport development contract agreed with infrastructure group GMR.

The compensation claim amounts to four times that of the Maldives’ current state reserves should it be awarded by a Singapore court overhearing arbitration hearings between GMR and the government.

“Since we do net see this government as legitimate, we do not see why we should support them,” he said. “They have put us into debt with their handling of the airport development and another bill for a border control system.”

Earlier this month, Malaysian security firm Nexbis invoiced the Department of Immigration and Emigration for US$2.8 million (MVR 43 million) for the installation and operation of its border control system technology in the country, in line with a concession agreement signed in 2010.

Immigration Controller Dr Mohamed Ali confirmed at the time that Nexbis had submitted a bill seeking charges for the period its system has been in use, as work continues on replacing the Malaysian company’s border controls with new technology provided by the US government.

Development delays

In April this year, Finance Minister Abdulla Jihad sought authorisation from parliament to divert MVR 650 million (US$42 million) allocated for infrastructure projects in the budget to cover recurrent expenditure.

Jihad warned that government offices and independent institutions might be unable to pay salaries or electricity and phone bills if funds were not transferred from the MVR 1.8 billion (US$117 million) Public Sector Investment Programme (PSIP).

Earlier the same month, Jihad also announced that the government had decided to delay all new development projects that were to be financed out of the state budget due to shortfalls in revenue.

The decision to suspend new projects was revealed after Housing Minister Dr Mohamed Muiz told local media at the time that he had been instructed not to commence any further infrastructure projects included in the 2013 budget, such as harbour construction or land reclamation.

Both Finance Minister Jihad and Economic Development Minister Ahmed Mohamed were not responding to calls from Minivan News at time of press.

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Dead dolphin found with puncture wound to head

A dolphin with a puncture wound to the head was found dead and stranded on Hoadedhdhoo Island in Gaafu Dhaalu Atoll yesterday morning (July 17).

In the early morning hours of Tuesday a Hoadedhdhoo resident discovered the dead dolphin on the west side of the island – which faces away from the interior of the atoll towards the open sea.

The dolphin showed no signs of life, but had sustained a visible puncture wound which was bleeding onto the hard, flat coral that surrounds the island like a buffer.

“I think fishing boat people injured it because its head was bleeding. The dolphin looked like its head had a puncture from a fishing hook,” a Hoadedhdhoo government official told Minivan News today (July 17) on condition of anonymity.

This incident could be a potential issue for the Maldives’ fishing industry, which is known for its environmentally sustainable pole and line method, where no nets are allowed, preventing bycatch which makes it ‘dolphin safe’.

The source said he believed the dolphin must have died recently because there was no foul odor coming from the body at the time it was discovered.

A white object in the dolphin’s mouth was a piece of coral probably put there by small children that had been playing near the body, the source explained.

The source noted that “not a lot” of fishing boats are seen off the coast of Hoadedhdhoo. However, large pods of dolphins have been observed in the channel slightly north of Hoadedhdhoo.

About five or six years ago a small dolphin was found dead on the same side of the island, however it did not appear to have sustained any injuries, another Hoadedhdhoo resident told Minivan News on condition of anonymity.

Dolphins essential for Maldives’ ecosystem

Following the reported incident, Minivan News contacted the Maldives Marine Research Centre (MRC) to determine the species and age of the dead dolphin.

“From the characteristics of its body shape and erect dorsal fin, it appears to be a common spinner dolphin (Stenella longirostris). They can be easily identified by a long slender beak with a black tip and black lips, while their bodies are mainly grey with three toned coloration,” MRC Assistant Research Officer Mariam Shidha told Minivan News today.

While it was difficult to determine the exact size of the deceased dolphin based on the photographs, it is “most likely to be an adult”, since adults range between 1.8 – 2.1 meters in size, while they mature at the size of 1.5 – 1.7 meters, explained Shidha.

“Dolphins are important to our ecosystem because they are apex (top level) predators which control the populations of fishes and squids to keep it all balanced,” Shidha emphasised.

She explained that stranding of cetacean species – a such as whales, dolphins, and porpoises – “do not happen that often” in Maldivian waters; at most two to three per year are reported.

“[Moreover,] in the Maldives its a very rare thing for a dolphin to be injured by a fishermen since they are not a bycatch of pole and line fisheries,” she said. “However, in the Pacific Ocean, fishermen sometimes purposefully catch dolphins as they use other [unsustainable] fishing methods in order to get to the yellowfin tunas that swim underneath dolphins.”

“The MRC has had no reports of such deliberate acts of abuse or harm to dolphins [in the Maldives],” said Shidha. However, any incidents of people harming dolphins or strandings should be reported to the MRC.

All dolphins and whales are protected under the Maldivian Law and almost all the species of dolphins found in Maldivian waters are listed in the IUCN’s red list of threatened species, noted Shidha.

The MRC is working to raise awareness about why dolphins are essential for the environment in the Maldives.

“We are educating the public on the importance of protecting these charismatic fauna which are so important for the functioning of the ecosystem,” emphasised Shidha. “Also we have held a Cetacean Symposium and outreach programs for school children.”

Fisheries Ministry

“When we find a [stranded] dolphin it’s important to know how it happened. However, I don’t know how we can investigate [in this case],” Minister of Fisheries and Agriculture Ahmed Shafeeu told Minivan News today.

“The type of pole and line fishing we have [in the Maldives] is done in a way that doesn’t harm dolphins,” said Shafeeu. “We have not had reports of dolphins being caught, it’s very unlikely.”

“Although an accident or something can happen, in that case the dolphin should be released immediately,” he emphasised. “Catching dolphins in any way [intentional or unintentional] is not allowed by law.”

“Sometimes dolphins are found washed up on the shore [of an island]. In those cases the incident should be reported to the local island council,” explained Shafeeu. “[But] there is no specific regulation that requires island councils to report to national offices if an animal is found.”

“However, if there are concerns of malpractice or someone is known to be deliberately hurting an animal, then it should be reported [to the relevant authorities beyond the island level],” he added.

‘Dolphin safe’

Environmentally-friendly, sustainable pole and line fishing allows Maldives’ tuna to be certified as ‘dolphin safe’, enabling it to be sold as a “premium” product for the European and US markets.

The ‘dolphin safe’ certification is provided by the Earth Island Institute (EII), an international non-governmental organisation (NGO).

Earlier this year EII Associate Director Mark Berman explained to Minivan News that EII’s ‘dolphin safe’ policy requires that “no tuna company will deal in sea turtles, sharks, dolphins, whales, or their products. All efforts to minimise bycatch of these species is mandatory”.

A November 3, 2011 EII press statement read, “the Maldives tuna industry has adopted a policy to ensure that no dolphins are ever killed in tuna nets.”

“That Dolphin Safe standard is respected all over the world”, Dolphin Safe program Associate Director Mark Berman told Minivan News at the time. “Major tuna importing nations will not buy tuna from governments that harm dolphins.”

According to the EII website, the companies licensed with the dolphin-safe label must meet the following criteria:

  • No intentional chasing, netting or encirclement of dolphins during an entire tuna fishing trip;
  • No use of drift gill nets to catch tuna;
  • No accidental killing or serious injury to any dolphins during net sets;
  • No mixing of dolphin-safe and dolphin-deadly tuna in individual boat wells (for accidental kill of dolphins), or in processing or storage facilities;
  • Each trip in the Eastern Tropical Pacific Ocean (ETP) by vessels 400 gross tons and above must have an independent observer on board attesting to the compliance with points (1) through (4) above
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Tourism Ministry revokes permit of tour operator Atoll Paradise over fraud allegations

The Maldives Tourism Ministry has suspended the permit allowing local tour operator Atoll Paradise to take holiday bookings, following allegations the company – now under police investigation – has defrauded customers and international travel agents.

Tourism Ministry Senior Legal Officer Faseeh Zahir told Minivan News that the government had temporarily revoked Atoll Paradise’s licence to operate as a travel agent, and fined the company MVR 1 million (US$65,000).

“We have received several complaints from customers and foreign travel agents in recent months that bookings have been cancelled [by the company], but no refund has been given,” he said. “There are allegations of fraud and of the company not acting according to regulations. This is not just a case of one guest, we have received several complaints.”

Faseeh said that although the company’s permit to operate as a travel agent had been temporarily revoked, Atoll Paradise would still be required to honour all existing bookings.

“However, from today, Atoll Paradise is not allowed to take any new bookings from clients,” he said.

According to Faseeh, the Tourism Ministry has received several complaints of alleged fraud by Atoll Paradise over the last two months as authorities have sought to hold talks with the company.

He said the ministry had noted some “misconduct” by the company and decided based on complaints received to both fine and revoke Atoll Paradise’s permit until all alleged outstanding payments and grievances had been settled.

With the ministry not itself being an investigative authority, Faseeh added that police had also been informed of the Atoll Paradise case.

Police Chief Inspector Hassan Haneef confirmed that an investigation was now expected to begin into the company’s operations following the allegations of fraud.

According to Faseeh, any decision to return Atoll Paradise’s permit would depend on the outcome of the police investigation, as well as whether the company could resolve the complaints against it from clients and travel agents.

Award success

Atoll Paradise is one of the Maldives’ largest locally-owned tour operators, with the company in May winning several accolades including the Maldives’ and Seychelles Leading Tour Operator at the World Travel Awards (WTA) Indian Ocean ceremony.

The company was also awarded the title of the World’s Leading Luxury Boutique Tour Operator at the 2012 WTA ceremony.

Atoll Paradise’s office in Male’ was not responding to calls at time of press. The company had also failed to respond to email enquiries at time of press.

Ministry focus

The Tourism Ministry said today that Atoll Paradise was not the first local tour operator to have its permit revoked by the government over allegations of misconduct.

Ministry Legal Officer Faseeh said that ministry had last year revoked the license of one local operator accused of acting outside the law.

He urged guests intending to book a Maldives holiday through a local operator to be aware of their rights and ensure they had been provided with a booking agreement specifying terms of cancellation. Resort bookings in the luxury honeymoon destination can reach many thousands of dollars.

Faseeh said local tour operators were required to communicate and agree terms for cancelled bookings, as well as communicating them to the client upon confirming a booking.

He added that guests wishing to seek clarification on a booking or travel agency could directly contact the ministry or industry body, such as the Maldives Association of Travel Agents and Tour Operators (MATATO), via e-mail.

Any complaints against a tour operator could meanwhile be registered through the Tourism Ministry’s website here.

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Closer Chinese ties not a replacement for strained Indian relations: President’s Office

The President’s Office has said efforts to establish closer political and economic links with China are not an attempt to directly replace bilateral assistance traditionally provided by India – despite the recent strained relationship between Male’ and New Delhi.

President Dr Mohamed Waheed was reported in Sri Lankan media on the weekend as providing “hints” that the Maldives was moving away from India and towards China in terms of development, economic assistance and bilateral ties.

Senior Advisor to President Waheed, Teresa Wells, said despite a changing relationship with China that had led to growing economic and diplomatic ties in recent years, efforts were also under way to improve relations with India due to earlier decisions by the current government.

Dr Waheed has lately come under criticism by some partners in his coalition government – who are directly contesting against him in this year’s election – for his alleged handling of bilateral relations with India since coming to power last February.

Wells dismissed any implication that ties with India were being cut or reduced.

“The president feels that relations are improving with India,” she said. “ We would want relationships with both India and China.”

Speaking to the Sri Lankan Sunday Times newspaper on July 7, President Waheed said the relationship between the Maldives and India has been strained after his government last November declared a US$511 million airport development agreement with India-based GMR void.

He added that although restrictions on visas for Maldivian patients seeking medical treatment in India and a supply of construction materials remained in place, improvements had since been seen in bilateral relations between the two countries.

President Waheed said that the Maldives had also nonetheless moved to boost commerce ties with China.

“In terms of bilateral assistance, we have more access to Chinese financing now for development projects,” he said.

“Chinese nationals now make up the biggest chunk of tourists to the Maldives. With Europe in recession there is a slight decline of European tourists but with the middle class in China growing, the Maldives has become a new destination for them.”

Election predictions

Dr Waheed also expressed confidence during his visit to Sri Lanka that he would win September’s election by defeating former President Mohamed Nasheed, whom he succeeded following a controversial transfer of power in February last year on the back of a mutiny by sections of the country’s police and military.

“I am very confident of victory in the upcoming poll because I know that the Maldivian people will prefer me over the other candidates. I have steered Maldives through rough waters and very difficult times,” he told the Sunday Times.

“No one will join the former president because everybody has had a bad taste in the mouth after what happened last time.”

President’s own Gaumee Iththihaadh Party (GIP) is currently facing potential dissolution for lacking the minimum requirement of 10,000 members as stipulated in the recently passed Political Parties Act.

Meanwhile, the Maldives Anti Corruption Commission (ACC) last month alleged that of 100 members of the GIP interviewed, 85 percent of those polled had no knowledge of ever joining the party.

National interests

President Waheed also drew on parallels between himself and Sri Lankan counterpart Mahinda Rajapaksa in terms of efforts to protect national interests and “sovereignty”.

“Sometimes when we are smaller countries there is a tendency to push us around but we both feel we need to stand up to them,” he said.

Playing up his commitment to national interests, President Waheed also told Sri Lankan media that while the state-owned Maldives Airport Company Limited (MACL) had not ruled out future foreign assistance to develop the airport, the country could oversee such work itself.

“The airport is now being managed by our own airport company and there are plans to develop it. We will soon be developing a second runway. We will find the investment facility to develop the airport the way we want,” he was quoted as saying.

The Maldives faces a potential bill of US$1.4 billion – an amount four times the size of the Maldives’ state reserves – from GMR as part of compensation being sought in a Singapore through an ongoing arbitration process.

Coalition criticism

Despite Waheed’s claims about securing financing for the airport, the government-aligned Progressive Party of Maldives (PPM) last month claimed foreign investors were now turning away from the Maldives due to concerns about political stability and safety in the country.

On June 29, PPM presidential candidate Abdulla Yameen was quoted in local media as expressing concern that foreign businesses were shunning the Maldives in favour of financing projects in other countries in the region.

“With our present woes no one wants to invest here. They are looking at Seychelles and Caracas. No foreign investor wants to come to the Maldives,” Haveeru reported him as saying.

Earlier the same month, the PPM – part of the current coalition government – accused President Waheed of ignoring its advice by abruptly terminating the airport development contract with GMR.

MP Ahmed Nihan alleged that while the PPM believed terminating the GMR contract had been the right decision, President Waheed had nonetheless personally taken an executive decision to cancel the agreement without listening to the party’s advice in seeking a compromise with the company and the Indian government.

However, the PPM’s coalition partners later accused the party of making “contradictory statements” regarding the decision to terminate GMR’s concession agreement, accusing its senior leadership of trying to terminate the deal at the time without discussion or following due process.

Despite the high-profile termination of GMR’s concession agreement, the government’s sudden eviction of the Indian investor did not appear on a list of 11 grievances handed to all senior Maldivian reporters by the Indian High Commission in January.

The list instead included concerns such as discrimination against Indian expatriates and the confiscation of passports by Maldivian employers.

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US government pledges US$9.7 million for Maldives climate change adaptation, election preparations

The United States government has pledged US$9.7 million (MVR 149 million) to the Maldives as technical assistance for climate change adaptation and election preparations.

The memorandum of understanding (MoU) between the two nations was signed yesterday afternoon (July 7) by the Maldives Ministry of Foreign Affairs Ambassador-at-large Abdul Azeez Yoosuf and U.S. Agency for International Development (USAID) Acting Mission Director Todd Sorenson.

The United States Ambassador to Sri Lanka and the Maldives Michele J Sison highlighted the importance of the agreement during the American Embassy’s Independence Day reception held last night (July 7) in Male’.

“The MoU will allow us to expand and enhance our bilateral cooperation, it is a truly special day… [it is my] sincere hope that the many ties that bind our two nations will grow ever stronger,” Sison stated.

Under the MoU, USAID will provide US$7.2 million for a global climate change adaptation project, and US$2.5 million as technical assistance for election preparations.

The Ambassador highlighted the importance of consolidating democracy and promoting the integrity of the electoral process prior to the September 7 presidential elections as the impetus for the US working with Maldivian partners to prepare for elections. One of the new programs covered under the MOU, through USAID, was launched by the U.S.-based International Foundation for Electoral Systems (IFES).

“These efforts will promote the integrity of the electoral process in Maldives in advance of the September 2013 presidential elections, but also support efforts aimed at the local council and parliamentary elections which are to follow [in 2014],” said Sison.

“The US has urged all parties all actors here to work together to chart a positive way forward that respects the Maldivian constitution, Maldivian democratic institutions, human rights and the will of the Maldivian people,” she continued.

“As such, we’ve called on all sides here to work closely together to ensure the elections in Maldives are free, fair, transparent, credible and inclusive and that the results are accepted by all stakeholders,” she added.

The US government in partnership with the UN is also “actively supporting” a small grants program for Maldivian civil society.

“Democracy – good governance – is not just about elections it’s about the process of governance and the interaction between the government and the people,” noted Sison. “Which is why… we are looking to support projects to enhance the democratic space and to effectively engage civil society organisations in promoting good governance.”

“The US is proud to be supporting Maldivian efforts to strengthen civil society and consolidate the democratic transition,” she added.

The Ambassador also reflected on the founding of the United States, the evolution of democracy within the country over the last 237 years, and the democratisation process in the Maldives. She noted the personal responsibility of citizens to strive toward a more perfect union by pushing forward, speaking out when there is injustice, and advocating for those who cannot advocate for themselves, as President Barack Obama noted in a 2008 presidential campaign speech.

“I thought of those words – both of our founding fathers and of President Obama – as I thought about the Maldives, because in the coming weeks and months ahead, reflecting the vibrancy of Maldivian institutions, the Maldivian people will once again make their voices heard in a democratic process,” said Sison.

The American Embassy’s other current initiatives include “robust USAID projects” aimed at increasing Maldivian capacity to cope with the impact of climate change and improving water security. USAID is also working with the Maldivian government to identify additional areas of cooperation related to climate change adaptation.

The US is also becoming “increasingly active” in the Maldivian economic and commercial sector.

“I’m happy to report that a number of other US companies are looking to expand their operations here, their presence and investment in the Maldivian economy,” noted Sison.

Furthermore, US initiatives have also been extend to the education sector with the “Access English Language” teaching program – with programs in Male’, Addu City, and Kulhudhuffushi in Haa Dhaal Atoll – and “Access Microscholarship”.

“The goal of these english language enrichment microschoarlips is to enable Maldivian secondary school students to pursue higher education and to increase their employment opportunities – we hope – in the job market,” Sison explained.

She also noted that US is “very proud” that the cooperation, joint exercises, and training endeavours conducted with the Maldives National Defence Force (MNDF) and the Maldives Police Service remain “very strong and robust”.

“The US knows that all of you are as committed as we are to the prosperity of Maldives, to the democracy of Maldives, and to the well being of Maldives. We hope to work together with you in a way that will inspire and benefit future generations of young Maldivians,” the ambassador concluded.

Maldives’ Minister of Defence Mohamed Nazim assured the attendees of the US Embassy’s independence day event – who included the Indian High Commissioner Rajeev Shahare, various UN agency officials, and Maldivian government ministers – that the government of Maldives was committed to ensuring elections were “free, fair and competitive”.

“Exactly two months from today maldives will vote in a historic election to elect a president,” said Nazim.

“Free and fair elections are the strongest and most visible manifestations of a country’s democratic development. The Maldives remains committed to moving forward to consolidating democracy,” he stated. “We are continuing to further strengthen our democratic institutions.”

“We are grateful to the United States for the Maldives election program 2013-14 which will contribute profoundly to strengthen the capacity of state institutions and civil society organisations in preparing for the presidential elections,” he added.

Nazim also highlighted other “key global issues of mutual concern” both governments and working closely on, particularly in the areas of national defence, promoting democracy and the respect of fundamental human rights, as well as climate change adaptation.

“The Maldives-US defence cooperation which has been vital in enhancing our national defence capabilities,” he noted.

“Climate change is an existential threat to the Maldives. As a low-lying state, no country is more vulnerable and none is more committed to increasing investments in renewable energy,” said Nazim. “I salute President Obama for his recent initiative aimed at finding a global solution to the question of climate change.”

“Climate change is too critical an issue to be left unaddressed. We need to find solutions and be ready to make hard decisions and hard choices,” he added.

“The relationship is based on a solid foundation of friendship, shared beliefs, and mutual respect. The US continues to be a close partner of Maldives through diverse spheres and greatly contributes toward the socio-economic development of the country,” Nazim concluded.

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Politicians trivialising severity of economic problems, foreign investment: Chamber of Commerce

The Maldives National Chamber of Commerce and Industries (MNCCI) has accused senior politicians of trivialising the severity of the country’s economic problems, claiming parties are addressing financial concerns with negative slogans rather than actual policies.

The concerns were raised as the government-aligned Progressive Party of Maldives (PPM) claimed over the past week that foreign investors were now turning away from the Maldives due to concerns about political stability and safety in the country.

“Bad shape”

While accepting the present “bad shape” of the Maldives economy, the chamber of commerce criticised negative campaigning on the economy by senior figures in the last two governments – arguing they had done little to address an ongoing shortage of US dollars and a lack of investment banking opportunities and arbitration legislation in the country.

On Saturday (June 29), PPM presidential candidate Abdulla Yameen was quoted in local media as expressing concern that foreign businesses were shunning the Maldives in favour of financing projects in other countries in the region.

“With our present woes no one wants to invest here. They are looking at Seychelles and Caracas. No foreign investor wants to come to the Maldives,” Haveeru reported him as saying.

The concerns were shared by Yameen’s running mate, former Home Minister Dr Mohamed Jameel Ahmed, who told a campaign rally in Raa Atoll days earlier that the PPM was the only party able to secure peace and safety in the country required to boost foreign investor confidence.

Dr Jameel was dismissed as home minister by President Dr Mohamed Waheed in May this year after announcing his decision to stand as running mate for rival candidate Abdulla Yameen in September’s election.

Minivan News was awaiting a response from Dr Jameel about the party’s economic policies at time of press.

While MNCCI Vice President Ishmael Asif accepted that political stability was a key challenge to building foreign investor confidence, he added that senior political figures such as Dr Jameel had failed to implement much needed legislative reforms to aid investment while in power.

Asif argued that Dr Jameel was not the only government figure in the last five years guilty of failing to try and boost investor confidence in the Maldives.

“We are not happy. People are using the economy as a campaign slogan. All parties are looking to come to power and they will do or say anything to be in power,” he said.

Asif expressed particular concern over various parties’ using the country’s present economic difficulties to score points during campaigning without offering their own solutions.

“The economy is not healthy right now. We do not hear any solutions from these people. We want to hear positives about will they change,” Asif said.

“What exactly did Jameel do for the economy? What did Anni [former President Mohamed Nasheed] do? What also did Dr Waheed do? What did any of them do?”

Economic record

Asif argued that ahead of the upcoming presidential election scheduled for September, it was hugely important that voters evaluated all candidates on the basis of their recent economic record.

He said that the Maldives’ first multi-party democratic election in 2008, the country had failed to implement a number of legislative reforms required to provide greater freedom to foreign investors.

According to Asif, key economic reforms lacking included the establishment of investment banks to encourage foreign parties to borrow domestically, and arbitration law to ensure that investments were protected in the country’s courts.

He said that with rival parties and President Waheed all campaigning ahead of this year’s election, there appeared to be little consensus to try and deal with “huge issues” such as the dollar shortage.

Accountability

Asif said he believed that the majority of voters had failed to properly hold their leaders to account since the democratic transition in 2008, comparing the nation’s democratic freedoms over the last five years as being comparable to “a child with a new toy”.

“We have not really understood democracy here. Many have not grown up with the right to question that comes with democracy, so we don’t know how to test the capacity of our leaders,” he said.

Raising concerns that the loudest and most controversial figures had dominated the country’s political arena since 2008, Asif said fears of a lack of accountability were a significant difficulty for the economy.

“Take the Ministry of Trade for example. There is a huge issue over the supply of US dollars, yet instead everyone is focused on their own parties. There is no mandate to address this,” he said.

Opposition concerns

The opposition Maldivian Democratic Party (MDP) meanwhile rejected criticisms over its foreign investment record, claiming it had attempted to introduce a raft of economic reforms for the economy while in power, before the government was controversially changed on February 7, 2012.

The present government, made up entirely of former opposition parties, came to power after former President Mohamed Nasheed resigned from office during a mutiny by sections of the police and military.

MDP MP and Spokesperson Hamid Abdul Ghafoor said that it was hypocritical for the PPM, or any other party serving in the present government, to raise concerns about political stability, given that they had intentionally deposed the country’s first democratically-elected government.

On an economic level, Ghafoor claimed the former MDP government had sought to introduce an economic reform package aimed at encouraging investment not only in the country’s tourism industry, but in a wider number of sectors such as energy, communications and infrastructure.

He said that this investment focus had been seen in the introduction by the former administration of direct taxation, the restructuring of government finances and the reduction or elimination of import duties on a wide range of goods.

Before Nasheed came to power, Ghafoor said the country had been managed much like a “corner shop” – with no mechanisms to attract and keep investors in the country.

He argued that one legacy of this approach to foreign investment could be still be seen in the country’s courts, which he continued to remain a “mess”.

Judicial criticisms

Before his resignation, former President Nasheed controversially detained the Chief Judge of the Criminal Court Abdulla Mohamed, in a move he claimed was needed to prevent him from continuing to rule on cases while charges of misconduct against him were investigated.

In November 2011, the Civil Court ordered the Judicial Service Commission (JSC) to take no action against the chief judge over an investigation into his alleged misconduct until the country’s court reached a verdict in a case filed against him. The Civil Court case preventing action against Abdulla Mohamed was filed by the chief judge himself.

In the build up to the judge’s arrest, Nasheed continued to raise concerns over allegations of perjury and “increasingly blatant collusion” between senior judicial figures and politicians loyal to the former autocratic President Maumoon Abdul Gayoom.

Since Nasheed’s resignation, NGOs and independent experts including UN Special Rapporteur for the Independence of Judges and Lawyers, Gabriela Knaul have expressed concern over politicisation within the country’s court system.

Accusing the PPM – as part of the present coalition government –  of being directly involved in instigating a mutiny within the country’s security forces prior to the change of government last year, MDP MP Ghafoor alleged the party was also culpable for ruining interest in foreign investment.

He accused PPM presidential candidate Abdulla Yameen in particular of using President Waheed as a “pawn” last November to abruptly terminate a US$511 million contract with India-based GMR to develop and manage Ibrahim Nasir International Airport (INIA).

Indian infrastructure giant GMR recently filed a claim for US$1.4 billion in compensation from the Maldives, following the government’s sudden termination of its concession agreement citing  “wrongful termination” and loss of projected profits.

Meanwhile, the PPM accused President Waheed of ignoring the advice of his coalition government by terminating the agreement.

Waheed’s allies hit back by accusing the PPM of making “contradictory statements” regarding the decision to terminate GMR’s concession agreement, claiming the party’s senior leadership tried to terminate the deal without discussion or following due process.

The MNCCI claimed in September last year that legal wrangling between the government and India-based developer GMR over the multi-million dollar airport development contract was not anticipated to harm confidence in the country’s “challenging” investment climate.

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Nexbis sends Maldives US$2.8 million bill for operation of border control system

Malaysian security firm Nexbis has invoiced the Department of Immigration and Emigration for US$2.8 million (MVR 43 million) for the installation and operation of its border control system in the country, in line with a concession agreement signed in 2010.

Immigration Controller Dr Mohamed Ali confirmed that Nexbis had submitted a bill seeking charges for the period its system has been in use, as work continues on replacing the Malaysian company’s border controls with new technology provided by the US government.

Immigration officials have said that although “testing” is currently underway on the new US-donated system, Nexbis’ border control technology remains in use at present.

Nexbis’ legal representatives in the Maldives, Suood, Anwar & Co, have requested that within 30 days, the country’s immigration officials pay the company its share of a fee levied on every passenger arriving and departing from the country, Sun Online has reported.

Under the concession agreement signed with the Maldives government, Nexbis levied a fee of US$2 from passengers in exchange for installing, maintaining and upgrading the country’s immigration system.  The company also agreed a fee of US$15 for every work permit card issued under the system.

Nexbis’ lawyers argued that the company had expected the fee to be included in the taxes and surcharges applied to airline tickets in and out of the country, according to local media, but said these payments had not been made due to the government’s “neglect” in notifying the relevant international authorities.

Neither Nexbis or Suood, Anwar & Co had responded to emails from Minivan News at time of press.

The bill from Nexbis follows parliament voting unanimously to terminate the agreement on 25 December 2012, in line with a recommendation from the Finance Committee alleging foul play in the signing of the agreement with former Immigration Controller Illyas Hussain Ibrahim.

Presenting the Finance Committee report to the floor, Chair MP Ahmed Nazim explained at the time that the “main problem” flagged by the Anti-Corruption Commission (ACC) was that the tender had not been made in accordance with the documents by the National Planning Council authorising the project.

The Finance Committee also recommended terminating the agreement over concerns it contained clauses to waive taxes to the company, Nazim said. He noted that imposing or waiving taxes was a prerogative of parliament under article 97(d) of the constitution.

Following parliament’s termination of the project in December, Nexbis sought a legal injunction to prevent any cancellation of the agreement while court hearings over the contract were still ongoing.

The company has sought to contest whether the ACC has the power to compulsorily request the government to cease all work in relation to the border control system agreement.

However, in April of this year, the High Court overturned a Civil Court ruling declaring the ACC could not terminate a border control system (BSC) agreement signed by the Department of Immigration with Malaysian mobile security firm Nexbis.

The High Court ruling (Dhivehi) cleared the way for the Civil Court to hear the case filed by the ACC should it be resubmitted.

Nexbis has emphatically denied allegations of corruption, previously speculating that “criminal elements supporting human trafficking” were seeking to sabotage the agreement.

Alternate technology

Department of Immigration and Emigration Spokesperson Ibrahim Ashraf has said he had not been made aware of any official request from Nexbis for payments beyond media reports, and declined to comment on the issue.

Ashraf did confirm that immigration officials were continuing to use the Nexbis system while border control technology being provided free of charge by the US government was under development.

“Testing of the [US] system is now going on, so the Nexbis border control technology remains in use,” he said. “Some minor adjustments have to be done to the [US] system to customise it to our needs.”

US border system

In March this year, the US government signed a Memorandum of Understanding (MOU) to provide the Maldives with a border system after several years of uncertainty and legal wrangling over the future of the country’s immigration controls.

Following the signing of the MOU, Nexbis said it had not been consulted or provided with any details of the US government’s agreement to provide the new system to the Maldives.

Representatives for the Malaysian company at the time expressed uncertainty over what the MOU would mean for the group’s own border control technology that has been in use since September 2012, as part of its concession agreement with the government.

Lawyers representing Nexbis said at the time that they were confident the Maldives government would “honour” its contractual obligations under the 2010 concession agreement.

“We are confident also of the support we have received by the Immigration Department in implementing and fully operating the system, but remain cautious of individuals who continue to pose obstacles to prevent the success of this project is stemming the national security issues faced by the Maldives today,” read a statement.

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