Category: Business & Tourism

Maldives business news

High Court upholds lower court verdicts over unpaid Bank of Maldives loans

The High Court has upheld Civil Court verdicts ordering Mahandhoo Investments and Kabalifaru Investments – two companies with ties to Dhivehi Rayyithunge Party (DRP) Leader Ahmed Thasmeen Ali – to repay millions of dollars worth of loans to the Bank of Maldives Plc Ltd (BML).

DRP MP Mohamed Nashiz, brother of the DRP leader and managing director of Kabaalifaru, and MP Ali Azim, a loan guarantor, were among the appellants at the High Court.

Both MPs had signed ‘joint and several guarantee and indemnity’ agreements for the loans issued in mid-2008.

In the verdicts delivered today, the High Court ruled that there were no legal grounds to overturn the lower court verdicts.

In the first case involving Mahandhoo Investments, BML had issued a US$23.5 million demand loan, a US$103,200 bank guarantee and US$30,090 letter of credit on July 10, 2008.

After BML sued Mahandhoo for non-payment, the Civil Court ruled on October 19, 2009 that the company was not paying the loans in compliance with the agreement and authorised the bank to sell mortgaged properties – including Reethi Beach Resort – to recover the outstanding debts along with incurred interest and fines.

The court ordered the company to settle the outstanding debt in a one year period. However the verdict was appealed at the High Court and remained stalled for almost two years.

The second case meanwhile involved a US$3.3 million loan issued to Kabaalifaru Investment and the appeal of a Civil Court verdict on September 30, 2009 ordering the company to settle the debt in the next 12 months.

Meanwhile a third case involving a Civil Court verdict in December 2009 ordering luxury yachting company Sultans of the Seas – with close ties to the DRP leader – to pay over US$50 million in unpaid loans and incurred interest and fines had also been appealed at the High Court.

In a BML audit report released in January 2009, Auditor General Ibrahim Naeem warned that defaults on bank loans issued to influential political players could jeopardise the entire financial system of the country.

Over 60 per cent of the US$633 million worth of loans issued in 2008 was granted to 12 parties, the report noted.

According to the report, US$45 million was granted to Sultans of the Seas and US$36 million to Fonnadhoo Tuna Products, two loans which comprised 13 per cent of the total loans issued in 2008.

The report noted that Fonaddhoo was owned by current DRP Leader Ahmed Thasmeen Ali – running mate of former President Maumoon Abdul Gayoom in the 2008 presidential election – while the owners of Sultans of the Seas were closely associated with the minority leader.

In September 2009, Maldives Customs filed a case at Civil Court to recover US$8.5 million from Sultans of the Seas in unpaid duties and fines for allegedly defrauding customs to import two luxury yachts.

In February 2010, the court ordered the company to pay Rf110 million (US$7 million) as fines and evaded import duties.

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“Democratisation has its costs”: Maldives comes to terms with tax reform

The Maldives is coming to terms with a reformed tax system, following the introduction of a General Goods and Services tax this week.

Finance Minister Ahmed Inaz said the new system, which has raised the eyebrows of businesses, consumers and politicians alike, is a natural consequence of recent political changes and requires everyone’s support to function sufficiently.

“I think anybody could see that after the 2005 democratic reform, costs increased. These costs had to be met by additional revenue, but they weren’t,” he said.

Currently, the Maldives’ has a state deficit of Rf1.3 billion (US$85 million). Since democratisation, the Maldivian government has surpassed other national governments’ employment rates by employing 10 percent of the national work force. One third of government spending goes to state employees, and nearly half of the 2011 budget was spent on salaries and allowances.

The Goods and Services Tax (GST), which became operative on October 2, has raised a 3.5 percent tax on certain items. Contrary to an earlier tax which was paid for at the point of import and effectively invisible to the customer, the GST requires most businesses to charge an additional 3.5 percent directly to the customer at point of sale.

Certain items are tax exempt, a detail which has allegedly made it difficult to implement at stores selling a variety of products.

Inaz is optimistic that new tax reform system will cut costs and improve business operations. He said many businesses are compliant with the new measures, and are trying “their level best to be sure that this happens.”

“Business owners will have to crunch the numbers, and that will show them more about what is happening in their businesses. They will be able to better see how things operate.”

The GST is part of a larger tax reform system described in “a package of policy reforms that will help stabilise and strengthen the Maldives’ economy” agreed to by the Maldives and the International Monetary Fund (IMF) in May.

The policy reforms include raising the Tourism Goods and Services Tax (TGST) from 3.5 percent to 6 percent from January 2012, and to 10 percent in January 2013. Tourism is one of the Maldives’ leading economic contributors.

Inaz stressed that the tax was a step towards self-sufficiency for the Maldives.

“The international community will not give us the money required to balance our deficit, it is us who have to raise that money and that’s everyone’s responsibility. We have to make sure we can stand on our own feet.”

Meanwhile, opposition party Dhivehi Rayyithunge (DRP) has expressed concern over the tax. After supporting its initial pass through Parliament, DRP released a booklet titled “DRP’s response to the government’s economic nuisance package.” The booklet said businesses were not sufficiently prepared for the transition, and requested a six month delay.

Noting “administrative confusion” and the country’s heavy reliance on imports, the DRP also suggested levying a customs duty at the entry point to the country as a more effective means of raising revenue.

“We believe the GST is a regressive expense. The government doesn’t have the infrastructure to support it, implementation of GST means it will have hire a lot of people.”

DRP Spokesperson Ibrahim ‘Mavota’ Shareef said today that the tax system had not been implemented prematurely, but that it would only benefit large businesses while harming smaller ones.

“The government is doing the opposite of what it preaches,” he said. “Our main problem with the bill is that the government has decreased the tax burden on the very rich, especially in the tourism sector. We want to see the current tax system overhauled and replaced with a modern one.”

Shareef said DRP supports other progressive taxes, and was in favor of the recently announced plan to decrease import duties starting in January 2012.

President Mohamed Nasheed yesterday said a policy to reduce import duties would bring prices down starting early next year.

The President’s Office Press Secretary Mohamed Zuhair told Minivan News that the waiving of certain import duties would be significant.

“Once the new tax system is fully operating, all will fall into place. Prices will drop to even lower than originally,” Zuhair said.

A bill to finalise the tax system is currently before the Majlis, and is expected to take another two or three months to be properly processed.

During the President’s tour of retail, grocery, and supermarket stores on October 3, Zuhair said that operations were “running smoothly”.

“The only issue was that many businesses had a shortage of coins. Maldivians have a habit of rounding up to avoid coin transfers, but in a successful economy coins are important. Maldives Inland Revenue Authority (MIRA) has been doing a commendatory job in distributing coins, and the Maldives Monetary Authority (MMA) foresaw the issue and has a distribution system in place,” he said.

When asked about the DRP’s opposition to the GST, Zuhair alleged that the party’s motives were political.

“They made their case to the President, but the President was advised by his advisors and economic experts that a taxation system needed to be implemented,” said Zuhair.

“It is true that the very rich have not been taxed appropriately as per their earnings,” he acknowledged. “Once the tax system is fully in place, things should stabilise.”

Shareef did not accept that there were political motivations behind the DRP’s objections. “It’s an economic and social issue, concerning the distribution of wealth,” he said.

Inaz did not wish to comment on the matter. “This is an economic issue,” he said.

State Minister for Finance Ahmed Assad previously observed that even with the new taxes proposed by the government, the Maldives still had the most generous tax system in the region – even compared with other island nations, and neighbouring countries such as India and Sri Lanka.

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Maldives a tourism leader in Asia-Pacific region

The Maldives was among the most popular destinations in the Asia/Pacific (APAC) region for the month of July, with a 27 percent increase in visitors.

Hong Kong followed closely with a 22 percent increase in visitors.

“Even during times of economic uncertainty, the Asia/Pacific region continues to perform strongly, reinforcing its image and position as a powerhouse of international travel and tourism,” said Pacific Asia Travel Association (PATA) Strategic Intelligence Centre director, John Koldowski.

Asia Pacific (APAC) tourism destinations continue to see an upward trend in visitors annually. July 2011 saw a seven percent regional rise in arrivals compared to the same month in 2010.

Although Japan suffered a 36 percent drop in July arrivals, allegedly due to the earthquake and tsunami, Northeast Asia on the whole saw a six percent gain on July 2010. The Pacific, meanwhile, experienced a 3 percent drop in foreign arrivals in July 2011.

A Care Ratings Maldives report recently stated that Maldives tourism has made an impressive comeback since the 2009 global recession, and investment from China and India is expected to surpass precedents in coming years.

This year, the Maldives reached 700,000 arrivals by September. According to Tourism Ministry statistics, 19.9 percent of these arrivals were Chinese.

The increased activity within the APAC region could have a cultural impact at home. “Maldivian staff are more familiar with Western culture,” said Maldives Association of Travel Agents and Tour Operators (MATATO), Mohamed Maleeh Jamal. “Many speak Italian, French, German. So, the shift required to cater to more Asian guests and customers has lead many Maldivians working in the industry to familiarize themselves with Chinese, Japanese and Korean languages and cultural practices.”

Jamal pointed to the 2004 tsunami as the turning point for the Maldives’ tourism market.

“Before then, tourism was dominated by western European countries, and travel companies in China and the Middle East had limited access. Resorts were reaching occupancy levels regularly, and so expansion was not necessary,” said Jamal.

After the tsunami, however, interest from western Europe declined and the tourism sector was forced to work more closely with neighboring countries and their travel agencies. “The Maldives was also receiving complaints that the market wasn’t diverse enough,” said Jamal.

Jamal added that China is an important trading partner for the Maldives, and there was room to expand the business relationship.

But the Maldives has several advantages in the Chinese market. “All countries want to get tourists from China, and the Maldives has an advantage,” said Jamal. “It carries an image of paradise islands and tropical vacations, which is very appealing. In addition, the Maldives is becoming a celebrity hot spot. Given the celebrity worshiping culture that is increasingly common in China, the Maldives is very appealing.”

Jamal commented that Sri Lanka is trying hard to compete with the Maldives’ market.

Tourism is the largest contributor to Maldives’ GDP and foreign currency, accounting for 70 percent of the national GDP indirectly. Maldives Marketing and Public Relations Corporation (MMPRC) aims to draw 1 million tourists to the Maldives by the end of 2012.

PATA international visitor arrival figures suggest that improved economic stability is bolstering APAC’s tourism trend.

According to Care Ratings, Foreign Tourist Arrivals (FTA) surged this year as China’s economy flourished and European economies made a slow comeback. Chinese tourists are projected to account for 15 percent of Maldives FTA by 2020.

But PATA studies note that the source market is shifting into northern Europe and Asia.

Koldowski pointed to a 50 percent increase in Russian arrivals so far this year, and a 14 percent jump in South Asian arrivals in July with 90,000 more visitors than the same month in 2010.

Southeast Asian arrivals to the region grew by 12 percent during the same time frame.

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Opposition launches campaign against income tax

The opposition Dhivehi Rayyithunge Party (DRP) launched “a special campaign” yesterday against the introduction of a personal income tax in the Maldives.

Speaking at a press conference at private broadcaster DhiTV, DRP Leader Ahmed Thasmeen Ali said that “the purpose of our campaign is to undertake efforts to inform citizens as broadly as possible of the effect of [the introduction of income tax].”

“Considering the state of the country today, economic growth has been considerably stalled,” he said. “The base for income tax – the tax base – is very small. If you look at the tax brackets, the number of people who have to pay income tax is very low. This is because our development has not reached that level and most citizens are not wealthy. This is something we have to consider before introducing such a tax.”

The consequences of levying a personal income tax under the prevailing economic circumstances would be reduced investment, slowed economic growth and worsening unemployment, Thasmeen argued.

As the number of people who earn Rf150,000 (US$9,700) a month are quite few, said Thasmeen, an additional tax burden would discourage them from investing and incentivise down-sizing or cost-cutting measures, such as layoffs, in their businesses.

In August, the party issued a booklet titled “DRP’s response to the government’s economic nuisance package” noting that all citizens would have to file tax returns.

“The charts of the government’s fiscal and economic nuisance package show Rf300 million will be received in 2012 from income taxes and 475 million in 2013,” it reads. “Instead of making all citizens file tax returns in order to earn 475 million two years after taxes are introduced, it would be far better to reduce the government’s useless expenditure by that amount.”

Thasmeen meanwhile asserted that administrative costs for collecting the income tax would be prohibitive: “MIRA [Maldives Inland Revenue Authority] has not revealed the figures yet, but we believe that will be a surprisingly high amount,” he said.

Following a meeting with Thasmeen in August to discuss the government’s economic reform bills currently before parliament, President Mohamed Nasheed told press that the minority leader of parliament had expressed concern with the personal income tax.

While the government was open to suggestions of lowering or reviewing the proposed tax rates, Nasheed said at the press conference following the meeting that financial experts had advised the government that an income tax was necessary for the tax regime to function as a whole.

Progressive taxation

Presenting the draft income tax legislation to parliament on July 18, MP Ilyas Labeeb of the ruling Maldivian Democratic Party (MDP) said that the purpose of the economic reform package was shifting away from custom duties in favour of direct taxation in the Maldives for the first time.

“Income tax will be taken from individuals whose total monthly income from their salary or other sources exceed Rf30,000 (US$1,900),” Labeeb explained. “The tax will be taken from income above that amount.”

All citizens and non-citizens who earn their income in the Maldives will be eligible for the tax. For naturalised citizens and residents, income earned abroad will be taxable as well.

Ilyas explained that the income tax would be progressive and divided into five tax brackets, whereby people with higher income would pay higher rates.

The tax rates are set at three percent for monthly incomes between Rf30,000 to Rf40,000; six percent for incomes between Rf60,000 and Rf100,000; nine percent for incomes between Rf100,000 and Rf150,000; and 15 percent for Rf150,000 and higher.

The legislation specifies 15 sources of income that would be considered taxable, Ilyas continued, while Zakat funds (alms for the poor), pension contributions, interest payments and capital allowance or investment would be exempt from taxation.

Individuals would meanwhile be required to submit an annual personal income tax statement.

If passed, the income tax law will come into effect on January 1, 2012.

Ilyas observed that the introduction of a 3.5 percent tourism goods and services tax (TGST) in January this year had revealed that the country’s GDP per capita was closer to US$4,060 than the previous estimate of US$2,840.

“We learned that the Maldivian economy is such that each citizen should get close to Rf5,000 (US$300) a month,” Ilyas said. “[But] the country’s wealth is shared by disproportionately few people. One in four people do not make even Rf1,000 (US$60) a month.”

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Transport vehicles need renewable energy plan: Blue Peace

“Solar power is not the only source, and it is not enough. We have to pursue other sources as well,” said BluePeace founder Ali Rilwan about the Maldives’ recently proposed mission to cut emissions by 60 percent, using solar energy primarily.

The government’s plan was approved by the Cabinet last month, and a recent proposal from the Renewable Energy Investment Office (REIO) was submitted for crowdsourcing on the internet last week.

Rilwan called the mission admirable but incomplete. “Proposals have been made, but we haven’t seen anything in the Maldives in years,” he said. According to Rilwan, the Maldives is overlooking one of the most significant energy-consuming functions in the country: water transport.

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

“Wetlands and vegetation absorb carbon dioxide, and the oceans are being affected by boats’ daily diesel use. But nobody has studied the specifics of carbon sinking, to calculate that 60 percent emissions reduction we need to evaluate how much needs to be done,” he elaborated. “We don’t know, we might be carbon neutral already.”

When diesel was first introduced to boats in the Maldives in the 1970s, law required that sails be kept on boats, said Rilwan. Not only was this method energy efficient, it also had cultural value.

“The sail wasn’t just carbon-neutral, it was a cultural tradition. We also used to have sailing competitions as part of our tradition. But now the sails are no longer required, although you’d think they would be a good idea for a tourist destination like the Maldives.”

Rilwan said the Ministry for Human Resources and Sports last year supported a “not so carbon friendly” motorcycle competition last year, allegedly on Hulhumale.

In January 2010, the Maldives joined 137 countries in signing the Copenhagen Accord declaring their intention to go carbon neutral by 2020. The document is not legally binding but it recognises climate change as a leading issue worldwide.

A government official said the Maldives has since focused on decarbonising the electricity sector, which accounts for over 31 percent of industrial project expenses.

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

Earlier this week, the Maldives signed the Renewable Energy through Feed-In Tariff.

The tariff is expected to reduce electricity costs by promoting a shift from oil fuel to renewable energy sources.

Rilwan praised the government’s “political will and efforts to negotiate” renewable energy in the Maldives. But he said investment in renewable energy was expensive, and that the Maldives lacks expertise.

REIO’s crowdsourcing initiative aims to improve that shortfall.

“While we are working now on the initial production planning and development we will also be looking to use local and international expertise to develop storage capacity,” said Minister for Economic Development Mahmoud Razee.

The initial plan, which is up for debate on an on-line forum, does not account for night time energy and energy storage due to its high cost. A government official said today that limiting use of solar energy to the daytime would still reduce costs significantly. Meanwhile, storage costs are expected to drop to an affordable rate in the next five to ten years.

The official added that plans addressing land transport vehicles’ energy emissions will be announced in the coming months. He noted that not only are electricity-based motorcycles and cars affordable, but Male’s small size negates the concern of going too far from a recharge station.

Although water transport energy reductions have not yet been addressed at the government level, Renewable Energy Maldives (REM) Director Hudah Ahmed said today that the company will soon be testing one of the first hybrid dhonis.

“Solar power is a viable option for the Maldives,” said Ahmed. “But we always say that energy efficiency comes before renewable energy. Consider how to do the best with what you have and what you need before you try to reinvent the system with a whole new resource.”

The REM hybrid dhoni uses a converter, and could reduce diesel consumption by 30 percent. Ahmed said the big idea is to replace current ferries and fishing boats with hybrid dhonis.

Ahmed suggested the Maldives investigate ocean thermal energy conversation (OTEC), a method of generating energy from the temperature differences between deep and shallow waters. “It isn’t commercial yet, but REM says it shouldn’t be ruled out. I think there are some areas in this country where OTEC could be useful,” said Ahmed.

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Stigma against female employment in resorts confused, workers say

The stigma against female employment in resorts presents challenges for reducing the 32 percent unemployment rate, over two-thirds of which is accounted for by women.

Sources familiar with the issue, however, claim that the stigma is “fueled by misinformation and fear”.

A recent report from Sweden’s Lund University claimed that community perceptions of resort life as ‘western’ and offensive to Islam are giving the industry a negative reputation, and are preventing women from pursuing employment in the Maldives’ most lucrative sector.

Ima* recently spoke to Minivan News about her employment in the resort sector. She was one of the first Maldivian females to be hired at a resort ten years ago, and previously lived on a local island.

“It’s very much like a family,” she said. “I know of hardly any issues with harassment from guys, people look out for each other.”

By contrast, several women working in Male’ told Minivan News that they often face sexual discrimination and harassment in the workplace. One source said there is no support against such treatment.

According to Maldivian Democratic Party (MDP) MP Eva Abdulla, “I don’t know if we have made it comfortable for women to talk to each other here.”

The thesis, “Women in Tourism: Challenges of Including Women in the Maldivian Resort Sector” was prepared by Eva Alm and Susanna Johansson during their five-month stay in the Maldives in 2010. Their findings identify “culture, religion, and women’s role in the family, the role of the family, safety, geographical spread, transportation, education and awareness” as obstacles to female employment in resorts.

Parents play a significant role in a woman’s professional future. “In the Maldives, in our religion, we are not allowed to drink or be with just any guys and things like that. So our parents are scared about that,” said one young woman quoted in the thesis.

According to the thesis, resorts are widely believed to be threatening to traditional Muslim values. At the same time, growing religious fundamentalism is projected to prevent women from participating in the local economy.

Dhivehi Rayyithunge Party (DRP) MP Rozaina Adam said a rise in fundamentalism would be an economic setback: “Instead of working, women will be lying around. That is not constructive for a growing economy and country.”

Tourism directly accounts for 30 percent of the Maldives’ GDP, and for 70 percent indirectly. Maldivian women account for a mere three percent of resort employees.

Ima said most community anxiety is due to a lack of information.

“When I go home and tell people that I work at a resort, their first perception is that I must be a good cook. But you know, they also don’t have a good idea of what my job title means. And I think that that’s a big reason behind the misperceptions in many Maldivian island communities. Many people have never been to a resort, if there was more interaction then they would understand what the resort lifestyle is. As it is, most just can’t relate to the kind of work we do here.”

One resort manager quoted in the thesis said awareness is a major challenge to promoting female employment. “Convincing the parents is difficult. They are very possessive of the girls. The parent’s perception is that they will mix with the European culture and do bad things such as drinking alcohol.”

The Maldives has one of the world’s highest divorce rates, and girls often drop out of school and get married in their late teens. Aspiration rates among youth ages 17 to 25 were recently calculated at six percent.

These statistics do not refer to the resort community.

Ima says resort life has significant benefits. “For local islanders, it can be an easy transition to resort life. Many people leave home to live or work in Male’. I think that that’s much more dangerous than working at a resort. At a resort, the lifestyle is much healthier, safer, and there is more opportunity to save.”

A source familiar with the issue told Minivan News that saving is not common for Maldivian women. She gave the example of a cleaning lady who was proud that her daughter gave her entire salary as a family contribution. “I know you want to respect your family, but how can a woman save up for herself? What option does she have for herself?” she said.

The Maldives was recently criticised for lagging behind other countries in gender equality, as defined by the Millennium Development Goals (MDGs). At the UNDP’s Democracy Day ceremony earlier this month, advisor Ferdinand von Habsburg-Lothringen warned that with only half of the Maldives’ work force engaged in the economy, “growth would not flourish.”

Several resorts have tried to accommodate social preferences by outsourcing tasks to local islands and providing daily transportation so Maldivian women do not have to live away from home.

Ima said that at the end of the day, success depends on the individual’s self confidence.

“The way you perceive colleagues and portray yourself matters for anybody, male or female. It’s about how you value yourself and the beliefs you hold. If you can stick to that, and show people who you are and how to respect you, then you can succeed,” she said.

*Name changed on request

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Maldives appeals to world for technical help with carbon neutral plan

The Maldives has become the first country to crowdsource its renewable energy plan on the internet.

The current draft of the plan focuses on using solar energy to generate most of the country’s electricity and cut emissions by 60 percent before 2020.

The plan suggests that up to 80 percent of the electricity island communities use could be derived from renewable energy, without the cost of energy increasing.  The plan also proposes a shift to wind, batteries and biomass to complement solar power, retaining existing diesel generators for reserve power.

The Ministry of Economic Development revealed that economic modeling had shown that it was already cheaper to generate electricity from solar photovoltaic panels than from diesel on many Maldivian islands.

The direct cost of daytime solar PV is around US $0.21 per kilowatt hour, compared to $0.28 – $0.44 per kW/hour for existing diesel generators.

The cost of decarbonising the Maldives, which spends almost 25 percent of its GDP importing fuel, mostly on marine diesel, is estimated to be US$3-5 billion over the next 10 years.

“The investments will largely pay for themselves because the Maldives would save huge sums of money on oil imports,” the Ministry of Economic Development observed in a statement.

The Renewable Energy Investment Office, based in the Ministry of Economic Development, was established to help combat global warming. Last week it opened an internet forum for local and international groups and individuals to advise the Maldives’ plan to develop solar energy, which has been approved by the Cabinet.

“The government has limited experience working with renewable energies because these are relatively new technologies to the Maldives,” noted Minister for Economic Development, Mahmoud Razee.

“We have published our investment framework online and highlighted areas where we require feedback and help. We are crowd sourcing our energy plans and inviting the whole world to help us,” Razee said.

A more detailed plan will be submitted again in February, with details on investment strategies, explained Razee.

“Maldives is the first country to do this on a global scale and over the internet. This shows that we are innovative and willing to share by working with other countries on this issue, which affects everyone. Also, it shows that we are willing to be as transparent as we can,” Razee said.

Forum users must register with their real name and submit identification information before contributing, and they will be asked a series of questions to confirm that they are qualified to share their expertise. The forum rules encourage debate, but note that comments that “are deemed offensive or inappropriate, or don’t relate to the question” will not be published.

The forum rules further requests that “criticism of a proposal has to be supported by offering a better alternative, with a clear idea of cost and practicality,” in order to be useful.

The goals of the plan, Razee stated, were to free the country from the uncertainties and costs of its oil dependency, and to demonstrate global leadership in the fight against climate change.

“While we are working now on the initial production planning and development we will also be looking to use local and international expertise to develop storage capacity,” Razee said, acknowledging that storage was a primary concern.

While the Maldives has abundant sunlight during the day, the battery technology required for large-scale power generation at night is extremely expensive.

“Right now, we aren’t looking at storage because it would double the cost in this current economic environment. Technology is evolving reasonably rapidly though, and in five or ten years we think that providing storage will more affordable,” Razee said.

“Batteries are used at night, and as we know a lot of electricity is generated then. So we will need to address the issue of storage and how to provide energy at night within our larger goals.”

Forum topics in the comprehensive crowdsourcing project include solar and wind technology, energy storage, system control and demand management, novel technologies (including marine current and ocean thermal), biomass power generation, and finance.

Under each topic the Maldives appeals for expert assistance on several technical questions, around issues such as the use of solar panels in corrosive environments, the economics of tracking or fixed solar panel systems, and the viability of low velocity wind turbines.

Visit the forum (English)

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First international fast food chain opens in Maldives

President Mohamed Nasheed attended the official opening of Marrybrown, a halal Malaysian fast food chain and the first international fast food chain to come to the Maldives.

The Marrybrown franchise currently operates in 15 countries worldwide. The restaurant in the Maldives was established by Lily International Private Limited, a leading business venture in the Maldives.

In his speech at the opening ceremony, the president thanked Lily International for its various contributions to Maldivian businesses since the 1980s.

The president also noted that the Maldivian lifestyle is changing to accommodate businesses enterprises such as Marrybrown, and that steps are being taken by the government to facilitate competition in the open market. The president said necessary legal amendments such as tax and state income laws were being made, and hoped more service enterprises would be established in the Maldives.

Marrybrown Chairman Lawrence Liew said the chain caters to a general population. “We have something different for everyone at a reasonable price in a clean environment. Our kids play centre creates a positive family space,” he said.

President Nasheed eats the inaugural fried chicken burger

After a moment of technical difficulties, Marrybrown opened its doors to the president, the press and the public. The President tasted the chain’s first fried chicken burger in the Maldives alongside franchise and government officials, and was given a tour of the facility which includes an air conditioned interior dining and play area and an upper open air veranda.

Families flocked to the restaurant doors for the next few hours, eager to acquire the free fried chicken meals that were being distributed in honor of the occasion.  A chipmunk mascot in a signature pair of green overalls welcomed children to the event outside, while groups were let in in stages to avoid crowding.

“The menu for Maldives was specially designed over the last six months by our chefs, and is a combination of Malaysian and Maldivian cuisines,” Co-Founder and Group Management Director Nancy Leiw told Minivan News.

When asked about the health value of the fast food menu, Leiw claimed Marrybrown “delivered all the necessary nutrients.”

“It’s a very balanced diet. Think about a burger. You have your carbohydrates, your protein, the lettuce gives you valuable vitamins and minerals, you have everything you need.”

Burgers are served with tomato and chili sauce packets and soft drinks.

Liew said that the franchise owner is “an ambitious businessman”, and that Marrybrown will be expanding business in the Maldives. “We don’t just serve food, we serve people. We will be providing opportunities in employment, business management, and local development,” she said.

The Marrybrown opening was facilitated by Malaysian staff, who will train Maldivian employees to “pass on our expertise and style of customer service,” said Liew.

The franchise’s nationality bore special connotations for the Maldives. “Malaysia is Muslim, and the Maldives is Muslim. We share a special synergy in Islam,” said Liew. “This synergy will allow us to work together in productive ways to create new opportunities for growth in line with our shared cultural standards.”

Liew noted that Marrybrown is celebrating 30 years of operation this year, and will be holding promotions and fundraising events for local charities and businesses throughout the year.

Marrybrown plans to open several more restaurants in the Maldives in the near future.

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Finance Ministry appeals for cooperation with cost-cutting measures

The Finance Ministry has appealed for cooperation from all state institutions to the government’s cost-cutting measures by not hiring additional staff, creating new posts or replacing vacancies.

A budget circular issued by the ministry on Sunday notes that expenditure on state employees accounts for 35 percent of government spending in the 2011 budget while 49 percent of government expenditure so far this year (excluding foreign loans and free aid) was on salaries and allowances.

“Lately a number of institutions have been requesting permission from the ministry to add new posts in 2011 and hire employees for vacant posts,” reads the circular signed by Finance Minister Ahmed Inaz. “However since the ministry believes that, considering the state of the budget, there is no space to add employees or fill vacant posts this year, the ministry urges cooperation for controlling the number of employees.”

As part of the government’s belt-tightening measures to curb expenditure, the circular notes, the Finance Ministry requires offices and state institutions to seek authorisation in writing for capital expenditure and overseas trips as well as repair and maintenance work.

The ministry had previously informed all state institutions to not create new posts or fill vacancies, the circular noted.

“In addition, posts of employees who leave their government jobs under the ministry’s “voluntary redundancy programme” has been abolished,” it added. “The ministry believes that as a result of this programme expenditure on employees out of the state budget will be controlled to an extent.”

The Finance Ministry recently revealed that the country’s fiscal deficit in 2011 reached Rf1.3 billion (US$84 million) in the first week of September.

The circular meanwhile noted that the government has pledged not to raise nominal wages until the end of 2012 under the staff-level agreement with the International Monetary Fund (IMF).

In May, the IMF gave preliminary approval for a three year economic programme in the Maldives, after the government agreed to “a package of policy reforms that will help stabilise and strengthen the Maldives’ economy.”

“In sum, this package of proposed policy reforms will help stabilize and strengthen Maldives’s economy, and the mission thus reached a staff-level agreement with the Maldivian authorities on a three-year economic program that could be supported by a new IMF lending arrangement,” reads an IMF press statement in May. “The agreement reached, however, remains subject to review by IMF management and approval of the IMF’s Executive Board, which could consider a program request from Maldives in July. It is anticipated that an approved program would encourage key donors to contribute additional financial support.”

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