Government doubles third quarter income

The Maldives government has almost doubled state income for the third quarter of 2011, increasing revenue 92 percent on the same quarter last year, according to the Maldives Inland Revenue Authority (MIRA).

Total dollar income for the period, according to MIRA, was US$60.5 million, made up largely of tourism lease payments (31.7 percent) and income from the 3.5 percent Tourism Goods and Services Tax (19.3 percent, or US$11.6 million). That tax is set to increase to six percent next year.

Total state income stands at Rf 3.4 billion for the year so far (US$220 million), according to MIRA.

Presenting the 2012 budget to parliament this week, Finance Minister Ahmed Inaz predicted that altogether, government income was expected to reach a record Rf 9 billion (US$583 million) this year.

Total expenditure out of the 2012 state budget is estimated to be Rf14.6 billion (US$946.8 million), an 18 percent increase from 2011. However the Inaz highlighted that recurrent expenditure was in line with income for the first time in many years, and the deficit was expected to drop to single figures.

Based on current estimates for 2011 the Maldives had recorded economic growth of 7.5 percent, Inaz said, an improvement of 5.6 percent in 2010. Growth was aided by a 21 percent tourism arrivals – the Maldives expects to welcome its millionth visitor for the year.

The introduction of the TGST was particularly significant in 2011 as it revealed that the government had been substantially underestimating the size of the tourism economy, which based on TGST receipts was actually three times larger than previously imagined.

Registration and collection has also gone surprisingly smoothly. Speaking to Minivan News in May, Inaz remarked on willingness of tourism businesses of all sizes to declare and pay the tax.
“The TSGT is being taken from big resorts as well as small guest houses on remote islands – very small businesses. They declare – amazingly, they declare,” he noted.
However despite the large influx of foreign currency into the tourism sector the Maldivian economy remains subject to a ongoing dollar shortage, with most people unable to exchange rufiya into dollars at the official rate of Rf 15.42.

Inaz expressed concern that 47 percent of transactions in the domestic economy were made through other currencies – almost all resorts charge in dollars and bank overseas – and called on the Maldives Monetary Authority (MMA) as the country’s central bank to take measures to enforce the use of rufiya as legal tender.

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DQP files case against GMR, MPs critique scheme

Dhivehi Qaumee Party (DQP) today submitted a case to the Civil Court against infrastructure development company GMR Male International Airport Pvt Ltd, challenging its right to collect a US$25 (Rf385.5) Airport Development Charge (ADC) and US$2 (Rf30.8) Insurance Charge commencing January 2012.

The fees are to be charged to internationally-bound passengers only. As of 4:00pm on Tuesday the case had not yet been registered.

The government signed a 25-year contract with GMR on 28 June 2010. On 30 September 2010, four opposition parties filed a case against GMR at the Civil Court. The court registrar rejected the claim.

Under the contract the Maldivian government receives:

  • A sum of U$78 million as advance payment which is to be deducted from the profit due to Government.
  • 1% of the Gross Revenue in the first four years (2010-2014) and 10% of the Gross Revenue from the general business in the remaining years.
  • 15% of the Gross Fuel Sales in the first four years and 27% of the Gross Fuel Sales in the remaining years.
  • GMR is also to invest US$375 million over a period of 25 years.

The development fee is considered “standard procedure in most airports“, GMR officials earlier told Minivan News. GMR said it would have included the fee in the ticket price, but until International Air Transport Association (IATA) provided certain codes it would have to charge the fee separately.

DQP claims that GMR’s lease of Ibrahim Nasir International Airport (INIA) was unconstitutional, illegal, and bore trademarks of corruption. It additionally claims that GMR’s contract would not have been approved if passed through official procedures.

DQP Secretary General Abdulla Ameen confirmed the case and directed Minivan News to the party website for further details. The web page’s last registered update was 29 November 2010.

“Article 97 of the Constitution prohibits any form of taxation without legislation,” reads on section. “Levy on departure passengers have always been done through legislation, including amendments thereof. In fact the current levy of USD18 for foreigners and USD14 for locals was introduced by the present government through amendments to the relevant law.

“However, the right to levy a US$25 and a US$2 (a total of US$27) was given to GMR by the Government without the passage of any law.”

DQP further claims that the government bypassed Parliament on the decision to lease INIA, thereby making GMR’s claim that it can collect the development and insurance fees is “null and void.”

State Transport Minister Adil Saleem previously informed Minivan News that the development fee had been approved by the government as part of its contract with GMR.

Immigration and customs authorities are said to support the move.

DQP told Haveeru that GMR had failed to develop INIA as per its agreement with the government, but is trying to charge customers extra fees on the pretext of airport development.

Speaking in Parliament today, Kulhudhuffushi-South MP Mohamed Nasheed said GMR is receiving all funds from airport handling.

GMR recently announced that baggage handling would be transferred from a local company to one chosen by GMR.

Nasheed said the agreement between the government and GMR was not a fair deal, and that losses incurred exceeds income earned.

“I want to highlight the fact that the US$990 charged from a [Boeing] 777 aircraft that lands during the day has been increased to US$2,985 while the fee collected from the aircraft that lands during the night has been raised to US$3,885. This is a 60-80 percent increase in charges but no improvements have been brought to the services provided by the airport,” he said.

“And we cannot accept the US$1.6 million rent charged per month from a small land plot which measures 800 square feet. Questions arise whether GMR is developing the airport by taking money from us Maldivians or whether they are developing the airport on their funds?”

Hoarafushi MP Ahmed Rasheed said, “While we are exaggerating a minor difficulty a small number of people have to bear for the sake of our nation, we don’t have anyone to speak about the development and advantages the people will be able to obtain from the most number of people who use the airport.”

In the past four months GMR has opened two lounges at INIA and expanded baggage beltways; it is currently adding eight check-in counters and two security lanes. Tourism Minister Maryam Zulfa previously expressed satisfaction with GMR as “an example for the Maldives as it moves forward.”

DQP Vice President Imad Solih earlier submitted a separate though similar civil case arguing the illegitimacy of the charge and requesting the court take action against Finance Ministry.

The Civil Court is expected to soon deliver a verdict on the case.

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Fantasy fines official, health head remains at post, says Mayor

Male’ City Council’s Trade Section has fined Fantasy Bakers Rf 6500 (US$420) for selling goods produced with expired products, City Mayor Ali Manik has confirmed.

Earlier today, local media Haveeru reported that Council Health Section Manager Hassan ‘Jambu’ Afeef had ‘unofficially’ issued the Rf 6,500 fine, and was consequently stripped of his duties.

However Manik told Minivan News today that Afeef had not been removed from his duties.

“They are trying to damage my reputation,” Afeef claimed. “Currently I am on vacation and I will not respect any decision to suspend me.”

“Hassan is still with us, of course, he has not left his duties,” said the Mayor, who was puzzled by the question. “The Rf 6,500 fine was approved by the Council, so of course it is official.”

The Mayor said an additional Rf100,000 (US$6500) fine from the City Council may be “issued after the court case”, for which police are currently conducting an investigation of Bakers Fantasy on the Prosecutor General’s order.

The Mayor could not say if the court would also issue a fine to the company.

Speaking today to Minivan News, Afeef said media reports were “incorrectly based on false information provided by certain council members.”

“The council decided to fine Fantasy for Rf100,000. Officials from the Trade Section subsequently went to Fantasy and reduced the fine to Rf 6,500,” he said. “It was not me, and it should be noted that some of the council’s members are not very responsible and are not even not cooperating with responsible members of the council.”

He said the decision to reduce the fine to Rf ,500 was made by him, and that some council members are “generally uninformed of council activities.”

“I was told that I am attempting to damage a business and that it would give a bad name to the Fantasy stores when I brought the issue to the council,”’ he said. “I said ‘I’m working for the people,’ and that it was the citizens who eat the products and it is my responsibility to stop it.’”

Afeef said media had been informed of the council’s statements on the Fantasy issue and that council members responsible had since apologised to him.

“They called me and said I was right about the Fantasy issue and the next day they wanted to erase the minutes of that meeting, but I did not allow this,” he said. “I am an MDP councilor. If they taking a salary from the citizens’ money, they should be sincere to the citizens. This a setup to damage my reputation and good name,” Afeef claimed.

Afeef reiterated that he remains fully employed as head of the Council’s Health Section, which he said the President and First Lady regarded “as an important social institution.”

Bakers Fantasy was closed on October 28 by Male’ City Council. The council subsequently inspected three storehouses and Aioli Restaurant, which is owned by Fantasy Pvt. Ltd. Expired products were found in two of three storehouses, however Aioli was found clean.

Fantasy Store was closed by police for two days on November 7 while police searched for expired goods, but was re-opened in order to protect business operations. Police intervened after the store had ignored an order from Community Health Services, which has legal authority to order temporary closures.

Fantasy shops are known for imported products and quality produce, and are popular among locals and expatriates.

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State budget for 2012 submitted to parliament

The state budget for 2012 was submitted to parliament today by Finance Minister Ahmed Inaz with a projected fiscal deficit of 9.7 percent, down from 21 percent in 2009, 16.1 percent in 2010 and 10.1 percent in 2011.

In his introductory statement, Inaz said the programme-based budget was prepared with special focus on producing results and maintaining recurrent expenditure in line with income.

“The programmes included in the budget are based on the Strategic Action Plan,” he explained. “Special attention has been given in the budget programmes to provide adequate and quality service to the public. The government’s aim is to match up the figures in the budget with development plans and ensure that all state expenditure is made to achieve a stated target.”

Steering committees have been formed to oversee the 31 programmes in the budget, Inaz continued, urging MPs to evaluate the progress of implementation over the course of the year.

Total expenditure out of the 2012 state budget is estimated to be Rf14.6 billion (US$946.8 million), representing an 18 percent increase from 2011.

With the enactment of taxation legislation under the government’s economic reform package, revenue is projected to increase 11 percent from 2011 to Rf10.8 billion (US$700 million) next year with tax revenue expected to account for Rf7.3 billion (US$473 million).

The resulting fiscal deficit is to be plugged with Rf1.9 billion (US$123 million) in foreign loan assistance, Rf2 billion (US$129.8 million) forecast as budget support, and Rf750 million (US$48.6 million) from privatisation proceeds and sale of treasury bills and bonds in the domestic market.

Among the programmes that account for the increase in government spending, said Inaz, include a universal health insurance scheme and construction of housing units with foreign loan assistance.

Inaz noted that Rf2.1 billion (US$136 million) was allocated for education – which includes the ‘Hunaru’ training programme, student loan schemes and projects for improving school infrastructure – and Rf100 million (US$6.8 million) as capital investment for health corporations along with Rf20 million (US$1.2 million) for local councils to strengthen the public health sector.

While 44 percent of recurrent expenditure will be spent on salaries and allowances for state employees, Inaz said the wage bill has been reduced as a result of the voluntary redundancy programme conducted this year and the transfer of civil servants to corporatised entities.

State benefits and subsidies meanwhile account for 30 percent of recurrent expenditure followed by 17 percent (Rf120 million or US$7.7 million) on administrative costs.

The government is currently undertaking a review with World Bank assistance to ensure that subsidies are “means-tested and targeted” in 2012, Inaz revealed.

Inaz observed that unlike previous years, state revenue in 2012 will cover recurrent expenditure while deficit spending will be on capital investments.

The Rf3.8 billion (US$246 million) allocated for capital expenditure and net lending in 2012 represents a 43 percent increase from 2011, Inaz noted, adding that “the main reason [for the increase] is the estimated rise in foreign aid and large projects” such as the construction of 500 housing units with loan assistance from the Indian Exim (Export-Import) Bank and 2,500 housing units with loan assistance from the Chinese Exim Bank.

“Although total expenditure will increase as a result of these projects, we believe it is one of the most important projects that should be undertaken right now as resolving the shortage of housing is also the solution to a number of social problems,” Inaz said.

Investment programmes in 2012 fall under two broad categories of climate change and adapation programmes – which includes coastal protection, harbour construction, land reclamation, investments in renewable energy as well as establishing water and sanitation systems – and socio-economic investment programmes such as the housing projects.

Reiterating that the main priority in formulating the budget was to ensure value for money spent in terms of providing services, Inaz however explained that “due to the present structure of the state, Rf32 out of every Rf100 is spent on salaries and benefits, Rf6 is spent on interest payments on loans and Rf13 is spent on administrative costs.”

“After spending Rf27 [out of every Rf100] on capital expenditures, there is just Rf22 left to spent on services that offer direct benefits to the public,” he said, adding that Rf22 out of every Rf100 had to be spent on loan repayments.

2011

As expenditure outstripped revenue by Rf3 billion (US$194.5 million) in the 2011 budget of Rf12.9 billion (US$836 million), Inaz said the deficit was plugged through foreign aid and loan assistance as well as proceeds from privatisation and sale of T-bills and bonds.

Government income is meanwhile expected to reach a record level of Rf9 billion (US$583.6 million) this year.

Based on current estimates, said Inaz, the economy grew by 7.5 percent in 2011 compared to 5.7 percent in 2010. The forecast for economic  growth in 2012 is however 5.5 percent.

On the tourism industry, which accounts for 70 percent of GDP, Inaz said arrivals were expected to have risen 21 percent in 2011 from the previous year.

As of the end of September, tourist arrivals are 17.7 percent higher than 2010.

Although fish catch by volume rose 3.9 percent from 2010 in the first seven months of the year, Inaz said the Maldivian fisheries industry was not expected to improve in the next two years with the continuing decline of fishing in the Indian Ocean.

The introduction of long-line fishing and development of an aqua-culture and mari-culture industry was important to raise productivity, Inaz suggested.

With imports expected to rise in 2012, Inaz said the current account deficit will increase from 26 percent of GDP in 2011 to 28 percent next year.

To plug the widening current account deficit, said Inaz, economic policies in the budget were geared towards increasing exports and growing small and medium-sized businesses.

Inaz explained that the worsening balance of payments was tied to the ballooning fiscal deficit since 2005, which increased local currency in circulation and resulted in an “unstable foreign exchange market” and the creation of a black market for dollars.

In addition to tightening fiscal policy and rationalising expenditures, Inaz said money changers had to be regulated and the use of Maldivian rufiyaa as the legal tender should be enforced.

Expressing concern that 47 percent of transactions in the domestic economy were made through other currencies, the Finance Minister called on the Maldives Monetary Authority (MMA) as the country’s central bank to take measures to enforce the use of rufiyaa as legal tender.

A senior government official meanwhile told Minivan News that the government was still waiting on the income tax bill to be passed by parliament. The proposed tax will apply only to those who earn over Rf 30,000 a month (US$2000).

“It is not significant in terms of revenue, but it is important in terms of governance as it gives us the full picture,” the source said. “It will enable a full system of reporting and close loopholes that allow people to pass off business income as their own.”

The 3.5 percent tourism goods and services tax will be raised to six percent next year.

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Renewable energy prices posed with high potential

The cabinet has set prices for government-owned utilities companies to purchase renewable energy as part of an investment scheme to bring the Maldives closer to its carbon neutral goal.

“We think renewable energy has a lot of potential, it is why we are in the business. We think this is where things should be going,” said Renewable Energy (REM) Director Hudha Ahmed. Noting that diesel rates are currently higher than projected solar energy rates, she said solar energy is a more reliable source long-term.

According to the Cabinet’s decision, State Electric Company Limited (STELCO) can buy a unit for Rf3.42. South Central Utilities Limited will be charged the highest rate per unit (Rf5.39), and Upper North Utilities Limited can buy a unit for Rf4.44. Units are available to Northern Utilities Limited for Rf4.40, Central Utilities Limited for Rf3.97, and Southern Utilities Limited for Rf3.94.

The Maldives currently aims to cut carbon emissions by 60 percent using solar power. Currently, no company is carrying out a commercial renewable energy project in the Maldives.

STELCO, which just received the rates and is awaiting conditions from the Ministry of Housing and Environment, said there are plans to provide renewable energy locally.

“We have some projects which are being planned, mostly in solar and wind. One solar project is expected to be commissioned in a few weeks,” said STELCO Chief Technology Officer Mohamed Zaid.

Since signing the Copenhagen Accord in January 2010 the Maldives has focused on decarbonising the electricity sector, which accounts for over 31 percent of industrial project expenses.

Decarbonising the country is expected to cost the Maldives US$3-5 billion over the next 10 years.

The rates approved by the Cabinet were researched and recommended by Maldives Energy Authority. Deputy Director Ajwad Musthafa said the rates were calculated according to fuel prices in each region and differences in fuel efficiency.

“The amounts we set were about 10 percent cheaper than they currently are in diesel,” Musthafa said.

Over 25 percent of the Maldives’ GDP is spent on diesel used for boats alone.

Consumers won’t be affected by the plan, which currently targets investors only and is likely to be lucrative, he added.

“As it stands now, a person can put a solar panel in his home and send the power to a grid. Having invested in energy production, that person can expect a six to seven year payback period before making a profit, which are expected to grow significantly with time. Currently, there is no mechanism in place between the investor and the utility company, but I believe it is being developed,” said Musthafa.

He observed that the system would be especially attractive to people in the Upper South and South Central regions, “where energy prices and feed-in tariffs are higher.”

In September, the Maldives signed the Renewable Energy through Feed-In Tariff in an effort to reduce electricity costs by promoting a shift from oil fuel to renewable energy sources.

“The existing system is fairly inefficient in these areas,” he said. “About fourteen years back the government was charging an Rf3.5 flat rate for energy. We got complaints from investors, so now we are trying to make it more exciting for investment.”

Earlier this month the Maldivian government solicited bids from solar power companies to power 29 islands, which are facing power generation difficulties. Many small islands have small power stations, which are expensive and yield disproportionate returns.

As fuel prices increase, Musthafa explained, so will the feed-in tariff, and the overall price of diesel is unlike to drop in coming years. By comparison, locally-produced solar would be a valuable option.

Musthafa said a buyer’s mechanism was being developed and would be implemented in due time. “Right now, we want to create a market that offers transparent, confident investments,” he said, adding that foreigners are expected to play an important role.

“Foreign investors will only have to sign a power purchase agreement. Nothing has to be taken from the government’s side,” he said. Local companies are also expected to benefit from external support provided by foreign investors.

Past the investment phase, the solar plan includes capacity development, training and awareness programs on renewable energy, and methods to make the investment more affordable, including concessional loans.

“Our hope is that by early next year we will have the proper institutional set up to make this happen,” Musthafa said.

Correction:

Previously, this article stated, “As it stands now, a person can put a solar panel in his home and send the power to a grid…Currently, there is no mechanism in place between the investor and the utility company, but I believe it is being developed.”

It should have read, “As it stands now, a person can install a solar panel in his home and sell the power to a grid…We have already established a set of technical guidelines and application procedures for Solar PV installations. Additional regulations are being developed.”

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Parliament passes bill reducing, eliminating import duties

Parliament today passed a bill proposed by the government under its economic reform package to amend the Export-Import Act of 1979 to reduce and eliminate import duties for a wide range of goods.

The amendment bill was passed today with unanimous consent of 60 MPs present and voting.

Among the items for which custom duties would be eliminated include construction material, foodstuffs, agricultural equipment, medical devices, passenger vessels and goods used for tourism services.

However, the bill was passed with an amendment to charge a Rf10,000 (US$650) annual fee for passenger vessels and no change to tariffs for spare parts. While import duties were eliminated for construction material such as cement, glass, tin, aluminium, plywood and plastic fittings, an import duty of five percent will be levied on tiles, which was reduced from the previous 25 percent.

Import duty was reduced to five percent for furniture, beds and pillows as well as cooking items made from base metals. Other kitchen utensils had duties reduced to 10 percent.

While import duties were eliminated for most fruits and vegetables, 15 percent would still be levied on bananas, papaya, watermelon and mangoes as a protectionist measure for local agriculture. Areca-nuts would have duty reduced from 25 percent to 15 percent.

Import duties for tobacco would be hiked from 50 percent to 150 percent. However an amendment proposed by the government to raise import duties for alcohol and pork from 30 to 70 percent was defeated at committee stage.

A total of Rf2.4 billion was projected as income from import duties in the 2011 budget. With the passage of the amendment bill today and ratification by the President, the figure is expected to decline to Rf1.8 billion next year. The shortfall is to be covered by Rf2 billion in tourism goods and services tax (T-GST) and Rf 1 billion as general goods and services tax (G-GST) revenue.

MDP parliamentary group leader MP Ibrahim Mohamed Solih was not responding to calls at the time of press.

PPM Media Coordinator and Vili-Maafanu MP Ahmed Nihan told Minivan News today that all members of the party’s parliamentary group voted in favour of the bill and stressed the importance of “providing relief to businesses” paying GST on top of custom duties.

“By this vote today, we have answered the MDP’s allegations that we tried to stop Majlis sittings to prevent this bill from being passed,” he said.

Speaker Abdulla Shahid and the ruling party should bear full responsibility for the cancellation of nine sittings over three weeks, Nihan said, as the dispute over the convicted Kaashidhoo MP’s attendance could have been avoided.

The PPM council member condemned the ruling party’s “efforts to blame the Majlis cancellation on opposition parties.”

“PPM will support any measure that will provide relief to the public,” he said, adding that the party would “very closely monitor” pricing by retailers following the elimination of import duties.

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Fantasy store investigation ongoing

Fantasy Store has re-opened after being closed for two days following the closure of its associated bakery, which was recently found to be using and selling expired products.

Bakers Fantasy was closed by Male’ City Council on October 28. The council subsequently inspected three storehouses and Aioli Restaurant, which is owned by Fantasy Pvt Ltd.

Fantasy shops are known for imported products and quality produce, and are popular among locals .

Speaking to local media Haveeru, councilor ‘Jambu’ Hassan Afeef said expired products were found in two of three storehouses, and that storehouses were not properly lit. All expired products were destroyed, he said.

Aioli’s inspection yielded no surprises, he added.

Police Sub-Inspector Ahmed Shiyam told Minivan News that the police had been ordered by the Prosecutor General’s (PG) office to investigate the matter.

“Fantasy is still being investigated,” said Police Sub-Inspector Ahmed Shiyam. “The police wanted to investigate the store to be 100 percent sure that nothing expired was being sold, and we have told the store that it can continue operations but cannot sell foods prepared on site.”

The bakery remains closed.

The operation has involved several public authorities. Police initially tried to get a court order to close down the bakery. However, Shiyam said a court order was not needed as the council could perform the closure directly.

Fantasy Store was closed by police after ignoring an order from Community Health Services, which has legal authority to order temporary closures.

“The police went to the administrative office with a search warrant, but the staff refused to open saying they didn’t have the authority,” said Shiyam. “Police called senior management, but they wouldn’t answer the calls. Police waited two hours before an official came to open the doors.

“At that point the police could have used force to open the doors, but they didn’t want to do that. We wanted a peaceful operation,” he said.

At the time, police removed expired goods including yogurts from Fantasy Store shelves. Shiyam said the police were sensitive to the business needs of the company and employees.

“We got all the necessary information for our investigation, and believe the store can operate under certain restrictions. We know that there is negative business impact if the store cannot operate, and don’t want to hurt the local economy,” he said.

Officials at the Prosecutor General’s Office and Health Ministry had not responded to inquiries at time of press.

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Local handicraft producers join forces against imported counterfeits

The tourists who buy tokens of remembrances prior to returning home after a brief holiday in Maldives tend to believe that the items they have bought are authentic or “Made in Maldives”.

The souvenir items bought are carried all the way from the Maldives, far across the oceans to their home country and gifted to their loved ones, sometimes displayed in their living rooms, providing significance to the brief holidays the tourists have spent in Maldives. The items displayed often create interest and knowledge about the history and culture of the country and sometimes what the buyers learn about the work of art are fixed in their mind and are passed on with the products. The importance of authentic handicraft items and the handicraft industry goes beyond this.

Maldives is country rich in heritage and a culture worthy of immersion and discovery through token and memory. The authentic souvenir items bought by tourists buy show aspects of culture, history and identity, be it the Gadhdhoo mat, the coconut shell necklace or the lacquer item for Baa Thuladhoo.

These authentic handicraft items helps in defining who we are and the context which we live in both in the past and present.

Today, Maldives is a country where tourism has become the largest economic industry playing an important role in earning foreign exchange revenue and generating employment in the tertiary sector. The sector has its linkage to the handicraft industry as well. The constraints confronting the handicraft industry reflects that the weak linkage between the tourism industry and the authentic handicraft industry.

It is said that in the past Maldivian craftsmanship had a regional reputation of excellence reaching as far as the Arab nations. Over time development has taken place with 1972 marking the introduction of the tourism industry to the Maldives. Although the demand for handicraft items increased with this development, with the limited natural and human resources, the supply was not sufficient enough to cater for the increasing demand, resulting in imported handicraft items flooding the market.

Today imported handicraft items, with counterfeit labels identifying them as “Made in Maldives”, dominate the market. The local producer does not have the necessary marketing skills nor the proper channels to market their products as authentic local products, while the visiting tourists do not have the means of identifying authentic handicraft items.

With the market dominated by the cheap imported counterfeited products, the local producer is unable to compete in terms of price and supply. The significance of the culture and heritage of Maldives, which can be displayed through the handicraft items, are often lost and out of focus when the visiting tourists are unable to distinguish them from the imported counterfeits.

The visitors do not get a fair choice of choosing between the authentic local products and the imported counterfeits. These constraints confronting the local producers require measures and support from different stakeholders including the concerned government authorities, businessmen, producers and society at large.

Sustainable tourism requires these constraints to be minimised, paving way for the local producers to share the opportunities and gain more from the benefits of tourism. Maldives Authentic Crafts Cooperative Society (MACCS) was initiated with this aim – to assist the local producer to market their products. MACCS aims to overcome the current constraints confronting the artisans of the rural areas of Maldives and to become identified throughout the Maldives and the world as a development and marketing cooperative of authentic Maldivian handicrafts.

Registered in Male’, MACCS was inaugurated during the Hubasaana festival in October 2011 in Seenu Atoll Maradhoo. Following the inauguration, MACCS has been tirelessly networking with the producers of the country, finding ways and means of marketing their products for the SAARC Summit to be held in Addu City from November 10-11 2011.

During the SAARC Summit, First Lady Laila Ali graced the stall of MACCS at the Gan International Airport. Members of MACCS welcomed her with a handmade gift item designed and made by one of the MACCS members. The displayed products were shown which ranged from items of heritage value, items of utility, and items of beauty and adornment all of which are made by local producers.

The Gadhdhoo mats renowned for their meticulous artisanship, beauty and quality, produced by Faiza of Gdh Gadhdhoo, are displayed in different forms in the stall. It is framed as show piece and it is also displayed as small table mats ideal for a gift item. Bags are also designed with an “indigenous flair”, using designed pieces of mats providing a functional gift item.

Faiza is a producer who has networked with MACCS, and MACCS in turn is promoting her creations. Designed mats have been produced in Huvadhoo Atoll of Maldives for more than four hundred years. It is well established that fine pattern mats, or kunaa, were presented as royal gifts in ancient times. Mats are made from natural vegetation found in the islands. In making a Maldives mat it is dyed using natural dye to the three basic colors used in the kunaa, which are black, brown and yellow. The strips are then woven manually to produce fine quality mats of unique designs.

MACCS is not only showcasing heritage items like the Gadhdhoo mats or lacquer items produced in Baa Atoll. Contemporary creations like those of self-taught designer Wimla are also displayed. These creations are one of a kind pieces often fused with subtle touches of flaura and fauna of our environment. Her creations are also inspired by traditional themes and are often based on motifs and designs found in traditional mats and lacquer work.

Displayed in the Gan airport stall are her hand painted shawls – unique and excellent gift items. Using shells, small rocks pieces found on the beach and waste items such as plastic bottles, she also designs necklaces and brooches creating unique and distinct pieces of jewelry adding significance to recycling and re-using, one of the major goals of MACCS. There are many local producers and designers among us who are artistic and creative who wants to give significance to recycling and reusing.

Displayed are also the products of Moomina Abdulla of Lh Naifaru, who has skillfully crafted the Samusa Gonu, Thoshali and Mulhoashi, items which are commonly used throughout the Maldives in the past. These products are made from the leaves of the coconut tree and are basketry items use to carry fish and different type of things.

In addition to a source of food, historically parts of the coconut tree have been used to make household products such as food covers, sieves and winnowers while the timber is used for boat building. Her creations illustrate Maldivian island setting and the multifaceted use of our national tree, the coconut palm.

In total there are 28 producers out of which the work of 11 are on display at the Departure Terminal of Seenu Gan International Airport. Anyone who wishes to see these creations are welcome to stop by at the Gan International Airport departure terminal. MACCS hope to replicate this exhibition in the near future in resorts all over the Maldives.

MACCS is working with passion and interest to promoting local arts and crafts and facilitating market access for local products. The cooperative acts as a central buying and selling point and is creating a network of producers and buyers. The cooperative will procure the crafts from all over Maldives directly from the producer. The idea is to improve their income by doing away with the middleman, and also ensuring that the customer receives the item at a reasonable price. MACCS is committed and determined through its cooperative to support communities, in the promotion of handicrafts making it a sustainable livelihood for the producers throughout Maldives.

While we all recognize pieces of heritage need to be preserved for future generations we also believe that much has to be done to reap the benefits of the handicrafts industry, by marketing and promoting local authentic products.

MACCS is the logo that visitor has to look for when they are shopping for souvenir items. The logo involves not only the passion of a like minded house wives who are dedicated to promote the handicraft industry of Maldives but it also proudly represents a number of producers of Maldives who are living in the far flung island of Maldives.

The logo reflects the aim for wider outreach, empowering producers and pursuing sustainable development through promoting the local handicraft industry of Maldives. The next time when you are shopping for a souvenir item, perhaps you will see the small logo proudly displayed on authentic handicraft items representing the authenticity and quality of a product made and marketed by MACCS. The creativity and ingenuity of MACCS products will set them apart from counterfeited imported products. This is the way how MACCS is going to go forward and market the local producers’ creations.

Aminath Latheefa is a member of the Maldives Authentic Crafts Cooperative Society (MACCS): www.maccs.com.mv

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‘Dolphin Lagoon’ to offer conservation, education, recreation

The government’s decision to lease a lagoon to a dolphin habitation and family recreation project proposed by top tennis player Amir Mansoor will not force the marine creatures into captivity, and will support conservation efforts for one of the ocean’s most personable yet at-risk inhabitants.

On October 4, the Cabinet deliberated on a paper submitted by the Finance Ministry to lease a lagoon, location unspecified, for a dolphin habitation and training center.

While program specifics have not been officially released, an individual who has participated in such programs elsewhere and is familiar with the Maldives’ project informed Minivan News that the lagoon project is as much a conservation effort with educational motives as it is a recreational enterprise.

Correcting local media’s use of the word “trainer”, the source said the project will create “an open water program during which the dolphins will accompany the care takers on daily unstructured excursions,” and defined the role of caretaker as “taking a dog for a walk. This isn’t a Seaworld enterprise, with hoops and balls for public entertainment.”

While the lagoon program does not aim to put dolphins on display for commercial purposes, the source acknowledged that “it is an industry, you can’t deny that. People want to swim with dolphins. But this program is saying, ‘make it sensible.'”

Demonstrations will be offered but sources say they will be educational, not commercial.

“The demonstrations will show what dolphins are capable of, their speed, their use of eco-location, and other details. It will be fun, but education is the goal. Many people don’t know the basic facts of a dolphin’s lifestyle,” said source.

She added that reachout programs will be established with local public schools, handicapped organisations and orphanages.

The site is also being planned as “a place to spend the day,” featuring billiards, table tennis, photography, a restaurant, and play areas. With daily ferries from Male’, the cost will be friendly to locals.

“Above all, we’re trying to offer both locals and expatriates something to do. The dolphin program is a part of this larger recreational plan,” she summarized.

Freedom: the benchmark for success

The dolphin program includes two lagoons: a 1 kilometre living area surrounded by nets and allowing for free flow of water and fish, and a second, much larger area for excursions. The design is intended to simulate a natural habitat.

“The proposed lagoon is the largest for the small number of dolphins that will inhabit it in the world,” said one source. “It’s so spacious that if the dolphins don’t want to participate in an activity or hang around divers, they can just swim off. The philosophy is, ‘we’ll reward what you like, but you ignore what you don’t like’.”

The program follows a blueprint first attempted by the United States Navy in the 1960s. Since then, several conservation-based facilities have opened in the Caribbean with consistent levels of success.

Freedom is a critical benchmark: “Since the dolphins accompany trainers on daily excursions to the open ocean, it is clear to most people that the dolphins are free to leave or choose to return ‘home’,” said Director of Dolphins and Programs for the Curacao Dolphin Academy and President of the Southern Caribbean Cetacean Network (SCCN) George Kieffer.

Dolphins have allegedly exhibited natural behavior in these facilities including hunting, breeding and social ranking.

Though given the option to swim off, sources observe that dolphins willingly return to their enclosed living space when excursions are over. “They like to be intrigued and challenged, so the programs are always offering new exercises. If you were to put dolphins in a lagoon and just feed them, they would be very unhappy. As long as the challenges keep coming, the dolphins appear to be happy.”

“Make it sensible”

While some activists criticise any form of animal captivity, others suggest that open water programs are protecting the dolphin species.

Kieffer said programs similar to that proposed in the Maldives receive significantly less criticism than marine parks or inland aquariums, and nearly all negative claims have been “demonstrably untrue.”

“The success would appear to be measured by all three [existing facilities] having not only self-sustaining breeding populations, but increasing populations,” he said. As these populations surpass facility capacities, others such as the Maldives’ lagoon program are being endorsed.

“Once these animals have been bred and raised in open water programs, they can’t be released into the wild,” said a source familiar with the programs. “It’s better to find a way to keep them healthy. The program in the Maldives is good because these dolphins need a place to go.”

Rather than capture and train indigenous bottlenose dolphins, the Maldives’ lagoon program will import dolphins already bred in similar facilities. The bottlenose does well in human care, said Kieffer, preferring “small numbers within a social group and shallow water. [Maldives’] local dolphins such as the pan-tropical spotted dolphin and the spinner dolphin prefer deep water and hundreds of individuals within a large moving social group.”

Minivan asked Kieffer if the world’s oceans are safe for dolphins.

“Sadly no; they are vulnerable to the swift and diverse pressures human activities are placing on the sea. Dolphins and whales have endured over 50 million years of the ocean’s natural stresses and strains. And now in just the past several decades, our impact on the seas has rendered them fragile.

“Dolphins are a charismatic species that attracts human attention. The popularity of aquariums, zoos, and interactive programs highlights this point. When people have the opportunity to intimately view and interact with dolphins, they have the potential to form a cognitive and emotional connection – one that has the potential to arouse individuals to care for their new-found friends and become involved in marine causes.”

Local objections

Reports of the ‘dolphin lagoon’ were earlier published by local daily Haveeru. Individuals affiliated with the program said responses have not been positive.

Local dive magazine Scuba Tribe subsequently launched a campaign against the dolphin lagoon on social media outlets Facebook and Twitter.

Scuba Tribe’s argument begins by stating that “little is known how this project would proceed.”

“A training center for dolphins or a lagoon where tourists would come up to see them by paying a fee to see them is out of the question as they all can see them in the wild every single day. Local resorts and dive centers have regular dolphin watching cruises that happen on a daily basis,” reports the Scuba Tribe website.

A source familiar with diving practices in the Maldives claimed that many tour boats are not trained to approach dolphins, and that excessive diving in popular sites such as Hanifaru Bay has pushed fish populations away from these locations.

“Tourists can be seen jumping by the dozens into the water, pushing to see the animals,” she said, noting that in August up to 17 boats could be seen at Hanifaru at one time. “This year was really disappointing for diving, because it was out of control. Why aren’t groups like Scuba Tribe worrying about this? Crowding on dive sites, disappearance of species like the whale shark from their favored areas, these are issues that are affecting the natural world and will soon affect the tourism industry as well. Everyone is involved.”

Hanifaru reef became a Marine Protected Area (MPA) in 2009 and a Core Area of the Biosphere Reserve after “intense tourism activities…threatened [the site’s] sustainability.” Activities are now subject to a site management plan.

Dolphins are most challenged by the impact of human activity in their habitat. Pollution, entanglement in fishing gear, collision with boats and unsafe fishing practices are a few examples. Whale and Dolphin Conservation Society cites coastal development, particularly for marine tourism, and chemical pollution as leading threats.

“Dolphins are also killed unintentionally in gill net, drift net, and purse-seine fishing practices around the world,” Kieffer said.

Purse seining, a fishing method whereby a vessel deploys an enormous net to encircle and capture entire schools of fish at once, “is very cost effective but indiscriminate, and generates a large amount of bycatch,” wrote Minivan News in a recent article. The practice is allegedly done in waters fringing on the Maldives’ national borders. “Nothing escapes,” Solah Mohamed, Head of Production for the Maldives’ Felivaru fish cannery, said of the practice.

Director of environmental NGO Bluepeace Ahmed Ikram said the NGO did not have a position on the lagoon program but was soliciting public opinion.

“We are aware of the project and are publicizing it through Facebook and Twitter to see what the public response is. Then we will analyze and discuss the results in the next week.”

Ikram said that the Maldives’ many environmentally-relevant projects has kept Blue Peace busy and made it difficult to focus on individual projects, such as the lagoon.

“This seems to be part of a progression of projects aimed at eco-tourism which do not quite live up to expectations,” he surmised. “It looks like everything is for sale, and most of it is for tourism.”

The downside of publicity

Publicity is a driving factor in Maldives tourism, however one source suggested that it can be too much.

“National Geographic did a report on Hanifaru Bay, and now tourists are all coming and saying, ‘We want to go to Hanifaru.’ As a result, it became a protected area. To protect the dive site, you have to control traffic.”

In 2009, documentary film “The Cove” turned the international eye on Japan’s dolphin hunting culture and industry. Its implications for dolphin centers have proved damaging.

According to the film, Japanese fishermen entrap dolphins and sell them to international buyers, some of whom work for marine entertainment organisations such as Seaworld. The remaining dolphins are slaughtered and sold as food, often labeled as fish or whale meat, “The Cove” website alleges.

Dolphin meat has been debated as unsafe for human consumption.

A source argues that the film’s implication that dolphin centers around the world cooperate with the Japanese industry is inaccurate and harmful to legitimate conservation programs.

“Dolphins which are exported or sold for business purposes go through very strict documentation procedures,” she said. “None of the parks in the US, Caribbean or Europe have dolphins that originated in Japan, and they have the proper paperwork to prove it.”

The source added that the film’s message has made dolphin program development more controversial. “If we did import dolphins from Japan, we would be accused of sustaining slaughter,” she said.

Minivan News subsequently learned that the Maldives’ lagoon dolphins will not come from Japan, and will be examined by American scientists to ensure that local wild dolphins are not negatively affected.

Avoiding the tourist trap

Keiffer shared his understanding of the Maldives’ facility with Minivan News: “From what I’ve learned, your local facility will not be a run-of-the-mill tourist trap looking to “cash-in” on dolphin popularity by any means necessary. On the contrary, I believe it is striving to be one of a very few organizations setting the standards by which dolphin display facilities are expected to meet if they truly intend to convey a sense of respect and appreciation for the animals under their care.”

He added that the facility’s success would demand caretakers be able to support the dolphins’ physical and emotional needs.

A local source compared the proposal to other operations. “Dolphins are in appalling conditions in some places. Aquariums, for instance – that’s a real cage. People should be opposing those. But this is a totally different ballgame.”

If approved by the government, the facility is expected to be completed by the end of 2012. An official title has not yet been selected.

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