The Tourism Employees Association of the Maldives (TEAM) has urged the government to implement a minimum wage, to address a growing gap between the rich and poor.
“TEAM believes that the most important thing to do in order to change the current situation of all persons working in the tourism industry is to implement a minimum wage,’’ said the organisation.
‘’A minimum wage is also important to avoid the potential bankruptcy of small and medium businesses and to eliminate the differentiation between the rich and poor.’’
TEAM urged the government to conduct a fair survey and to determine an adequate minimum wages, “instead of only listening to few influential big businessmen.’’
TEAM claimed the minimum wage for those working in the tourism sector should be at least Rf 5000 (US$325) per month.
Vice President of TEAM Maurrof Zakir said that Rf5000 for resort workers was determined after taking into considering the GDP of the country, salaries of civil servants and the amount of money tourism resorts make per month.
‘’Usually a tourism resort makes US$2-3 million every month,’’ he said. “But only US$200, 000 at the most is the amount spent on wages. Our estimates do not show that the tourist resorts will suffer any loss by paying their staff a minimum wage of Rf 5000 per month.’’
He also recommended the government set the minimum wage differently for each sectors.
In last week’s radio address, President Mohamed Nasheed promised that the government would set a minimum wage this year to ensure a decent living.
In January this year, a bill governing the minimum wage of people employed in the Maldives was sent to parliament by MDP Parliamentary Group Leader ‘Reeko’ Moosa Manik.
“It is important for everyone working in the Maldives to be certain of the minimum wage that can be given to them – that is a right of every citizen. That’s why this bill is being drafted,” Moosa said.
Press Secretary for the President Mohamed Zuhair did not respond to Minivan News at time of press.
European flight services to and from the Maldives have not been impacted by the release of volcanic ash from Iceland into the local atmosphere with business continuing as normal today, according to staff at Male’ International Airport.
The BBC reported that some 700 flights had been cancelled across Germany today over safety concerns concerning a buildup of ash in parts of European airspace that originated from Iceland’s Grimsvotn volcano. The report added that the situation is reported to already been returning to normal.
Last April, an eruption from Iceland’s Eyjafjallajokull volcano created a thick cloud of volcanic ash that grounded days of flights across Europe and Scandinavia. The ash impacted a number of the world’s leading airlines and their services to the Maldives, leaving tourists stranded in the country for days in some cases.
However, officials at Male’ International Airport said that the latest volcanic eruption occurring in Iceland this week had not at present had any severe impacts on arrival or departure schedules at the airport – claims that were shared by a number of airlines.
Speaking to Minivan News a spokesperson for British Airways, which operates direct flights from London to the Maldives, said the airline had experienced only a minor number of interruptions to its flights on certain services to Scotland and parts of northern Germany.
“At present we have not been made aware of any potentially significant impacts [from the ash] on our flight schedules,” the spokesperson added.
Darrell Soertsz, District Manager for Emirates’ operations in the Maldives, said services between Europe and the Maldives had similarly been untroubled.
“So far things have been operating normally and we certainly hope to keep things that way,” he said.
Tourism Minister Dr Mariyam Zulfa said she had not been fully informed of the exact impacts of travel disruptions, if any, to the country’s tourism industry.
Dr Zulfa added that the industry had suffered last year following difficulties with volcanic ash in European airspace. Nonetheless she said it was her belief that tourism in the country was strong enough to overcome any possible difficulties that could result from the latest eruption.
“Any possible flight disruptions will of course have an impact on tourism,” she said. “Overall [last year’s] eruptions were a major hassle for the country. However, as is always the case, resort operators and other members of the industry will work together to find solutions and these solutions will be found.”
Speaking to Minivan News last year whilst the Eyjafjallajokull volcano eruption bought European Airspace to a standstill, ‘Sim’ Mohamed Ibrahim of the Maldives Association of Tourism Industry (MATI) said the cancellation of flights highlighted the vulnerability of the country’s tourism industry to outside forces.
Sim said the most important thing to note from the situation was “how vulnerable and dependent we are on external influences” and how much “incidents that we can’t control” affect the industry.
He claimed that the eruptions had not been such a huge problem for resorts at the time, but noted people were not happy about the developments that left passengers stranded in the Maldives as well as all over the world. “Obviously, we are doing the best we can. The situation is very difficult to manage.”
Sim said although some resorts had taken the flight cancellations “very seriously and responsibly,” others did not do as much as they could to ensure their guests were kept as “happy and comfortable” as possible under the circumstances.
“There is very little we can do,” he said at the time. “There is no way anyone can leave or come [to the country].”
Finance Minister Ahmed Inaz was approved by parliament in late April 2011, replacing Ali Hashim who was among President Mohamed Nasheed’s cabinet ministers to be ousted by the opposition-majority parliament. He was approved just as the government implemented a managed float of the rufiya, and spoke to Minivan News about the recent and rapid changes to the country’s economy, the challenges it is facing and the future outlook.
JJ Robinson: An International Monetary Fund (IMF) mission is in town following the conclusion of the Article IV consultation last year. What is the current status of the government’s involvement with the IMF?
Ahmed Inaz: The IMF is discussing a new three program [with the government]. We are talking about structural adjustments that need to be brought in, and on the revenue side we are agreeing measures we foresee need to take in the next two years. We are trying to agree on the policy side.
They have their suggestions and recommendations and we have the policies the President is proposing, and we are trying to come a common agreement hopefully by the start of next week. I’m hopeful we will re-enter the program.
JJR: The IMF delayed the third tranche of funding in November last year citing “significant policy slippages” on behalf of the government. Did the third tranche get delivered?
AI: The question is not about that, the question is what can be practically done in this country. The new government came in with a new democratic setup, but not the budget to support that. The budget didn’t carry the cost of the new reforms.
It is not a matter of whether we can cut down expenditure – yes there are fat layers in the country, not only in the civil service, also in the judiciary and independent institutions. But the fundamental issue is that because of the democratic transition we have a state with recurrent expenditure higher than its revenue.
To make matters worse, the salaries of the state payroll are higher than our income. You can see where the problem lies.
What we foresee is that there are two ways in which we have to work to rectify this issue.
One is to trim the fat layer, by matching outputs with staff and increasing productivity.
The other thing is by increasing our revenue. We need to move from the current inefficient way of raising revenue – which bases revenue on import duties – to a more direct taxation policy.
We currently have the import duty which is a burden for businessmen, because they are taxed before they sell. We will abolish most duties, apart from those on items that are environmentally damaging, those that affect health, and other discouraged items.
The rest will be abolished and we will move into a direct taxation policy when the business profit tax starts in July. We have also started collecting revenue from a Tourism Goods and Services Tax (TGST), and we propose that we increase this as well as introducing a general GST for the public, and an income tax.
This would not be a payroll tax. It would be an income tax on people earning above Rf 30,000 (US$2300) per month. We think this is more justifiable.
Some may feel that this will collect only a very small amount of revenue – but this not just revenue from employment, but income from business dividends, house sales and so forth.
JJR: The former auditor general reported difficultly getting people to declare assets. Is this difficult with high net-worth individuals in the Maldives?
AI: One thing you have to understand is that this is a path other countries have walked. I remember when I was doing my graduate studies, even then we were talking about this. It was something the educated intellects were advocating. It never happened because there was no political willingness – willingness we now have.
I believe that once we start we will sort the rest of the issues. The TSGT is already being taken from big resorts as well as small guest houses on remote islands – very small businesses. They declare – amazingly, they declare.
I think this is something the country can take, and then we can move to rectify problems and perfect the system.
JJR: The general popularity of the idea seems quite sour with members of the opposition. How do you propose getting this tax through the opposition-majority parliament?
AI: All the businessmen I have met – all the reasonable businessmen I have met – believe that the country has to move to a much more structured, predictable and more coherent system of governance. And to do that we need an economic system that supports social change, and supports the change we have brought politically.
To sustain their businesses it is important that they have social and political stability. It would be a grave mistake if one stands up and says they don’t support [income tax], because that will bring instability to the country and harm businesses.
The other thing is that once you have a system of redistributing wealth through direct tax, such as we are proposing, this is spent on infrastructure, welfare, education, transport – all of these things that directly benefit wealthy businessmen, because they don’t have to pay for it on an individual basis. So the cost of doing business will be lowered.
I believe MPs, businessmen and business-MPs will support this. Those I have met have given their full support – they just want to be consulted first.
JJR: Don’t you think that as a potentially populist issue this may become a victim of the country’s adversarial politics?
AI: I think the opposition is very mature. When we were in the opposition, then the opposition was very mature. I think they will choose the best for the country. We are doing the tough job here – by 2013 the game will be easier. We are laying the foundation for the country, not only by changing the political scenario but bringing huge economic changes. I think they will support it.
JJR: Back to the IMF. A theme in their reports last year – and also those of the World Bank – was that while the Maldives’ income might be increased gradually, the country’s immediate problem was the inflated state budget, leading to a high deficit, while the country was at the same time insisting on a pegged currency. The government’s attempt to introduce cuts last year were scuttled – in your mind what were the reasons for this?
AI: One thing was that the business profit tax was delayed in parliament – for reasons I don’t think I have to elaborate. The TGST we proposed was higher than what are getting now, and that has also had an impact on us.
Also we have to remember that the redundancy of the civil service is not an easy thing – the country’s employment has been totally dependent on the government. It is a very big change, and we have said we want the government to be a policy maker, a regulator, but not doing business, so jobs are created in the private sector.
I’m happy to say our redundancy program – with assistance from the Asia Development Bank (ADB) – has to this date enrolled 800 people and already some of them have already been paid and moved out of the civil service. We hope over the next few weeks we will achieve our target of 1300 – the idea is that they will retrained and not return to the government for at least three years.
JJR: A key criticism of the government’s economic policy from the opposition is its spending on political appointees.
AI: Out of total government expenditure, 75 percent is paying the payroll. The political appointees are three percent of that payroll.
I believe that any appointee, whether political, civil service or judicial – any unproductive appointee – is a burden on our system and we should make them redundant.
JJR: Enmity between the Finance Ministry and the Civil Service Commission (CSC) last year led to the ministry filing charges with police against the CSC, just as the cuts issue entered the court system. What is the relationship like now between the Ministry and the CSC?
AI: We are working very closely with them and they have been very cooperative on the redundancy issue.
JJR: A number of private sector businesses have expressed concern that while the Maldives Monetary Authority (MMA)’s decision to enforce the use of the rufiya for all transactions is fine when you have a freely-convertable currency, it presents a serious problem when the banks refuse to sell dollars to them.
AI: The government doesn’t print dollars, and the government doesn’t earn dollars, except for fees and taxes, which is a very small percentage of the total demand for dollars in the country. The dollars are earned primarily by the resorts and fish exporters.
What we want is a system where the foreign exchange system operates as a market. We have introduced a banded float [within 20 percent of the pegged Rf12.85 to the dollar]. What we want is that the dollar earners will sell this to the market, and within the next three months an equilibrium will be achieved.
I don’t mean a low rate – I mean an equilibrium. Once that is set and the speculation and market adjustment has competed, we will have addressed the fundamental reason as to why the black-market existed.
Firstly, because the existing laws and regulations were not enforced, and existing legislation relating to money changers legislation was not being enforced – we cannot have 220 money changers in the country. I have not seen this in other countries. They have to be proper money changers who have invested a certain amount of capital, just like the banks.
I emphasise this but I still don’t get the commitment I need from stakeholders to address it.
Secondly, the monetary regulation states that rufiya is the legal tender for all transactions, with the exception of the government’s collection of taxes and fees. I think we should enforce this irrespective of the sector. We should have rufiya prices – what other country has prices in another country’s currency?
You can still pay in dollars – but this is the exchange rate. For [the customer] it may still seem as though you are paying in dollars, but the transactions are actually happening in rufiya. In Colombo you pay in local currency, even if you use your credit card. We need to have that enforcement irrespective of the sector.
In the medium term we need to address the budget deficit, especially recurrent spending, which has to be matched with income. A state cannot be operated without matching recurrent expenditure to its income – that is madness. A state has to have a prudent economic system – capital expenditure can still be borrowed, because future returns are there.
We working with the ministries to streamline and reduce the deficit in the budget. Next year we are hoping to have a balanced budget.
JJR: The opposition-majority parliament has substantially added to the last two budgets submitted by the government, and the President has been compelled to ratify these. How do you deal with this?
AI: We are trying to work on the legal side as well as the practical, and make sure this is enforced – at least that recurrent expenditure and income is matched, and that any additional bill passed during that particular year is supported with a revenue measure.
They can’t just simply tell us to pass a budget, and then pass bills giving us additional expenditure – every bill comes at a cost. What we propose is that they think about this and rectify it – this is very important.
The third long term goal is increasing productivity and exports, to make sure that whichever government is in power, our manifesto continues and the country can move forward. We need exports to be increased, and earn dollars. Long term, that is the only solution to counter this [economic situation]. In the long run there should be a regulatory framework that supports this.
JJR: Speaking of the regulator, where does the Maldives Monetary Authority (MMA) fit into this? It was only recently that the government was calling for the resignation of MMA Governor Fazeel Najeeb for failing to help address the situation.
AI: I don’t want to dwell on that. For me the governor – whoever is there – I should work with them. What I want is the regulations to be there. For example, the devaluation of the currency within this 20 percent band – that has to be supported.
Once we make a decision, such as the devaluation, we cannot go back. The fundamental health of the economy told us that we had to do this. The President met with the MMA Board, which advised, and a decision was made. It is not time for us to affect the confidence of the economy – an economy cannot survive without confidence. That is the crucial factor an economy needs – and state institutions need to ensure that confidence is there.
JJR: If the government was convinced that the value of the rufiya was going to fall somewhere within that band, why not float the currency altogether?
AI: The reason what that if we float the currency it would have short-term consequences and immediate jumps. A band means the government will defend that band – that is what we are doing with the weekly auction of dollars to the banks.
Secondly we have numbers from the TGST income that suggest we have been underestimating our economy. By having our policies in place – productivity increasing policies and growing additional exports – we are confident we can pull the value of the rufiya down to 10 in the long term – that is our aim. It is not a joke.
JJR: There is a lot of concern, particularly in resort circles, that the new policy restricting expatriate remittances will reduce the willingness of people to work in the Maldives. What was the logic behind that decision?
AI: We understand that expatriate employees are very important. We will never hurt them and we will ensure that their interests are protected. The regulation that the Ministry and MMA are working on will only limit repatriation of what they earn legally under their contract. If they remit more, obviously they will have been earning illegally.
They are living and spending in the Maldives as well – but they can still repatriate up to what they earn. What we are trying to do is limit illegal workers [remitting dollars out of the country].
JJR: If at the same time you are enforcing use of the rufiya when there is some doubt as to whether you can walk into a bank and exchange that into dollars to remit it overseas – does that not impact confidence in the economy?
AI: We believe the market is currently unstable because of the changes we have brought, and that these changes will take three months for the various variables to work. In that period the government will work with the MMA to ensure that stability exists.
There will be a lot of low confidence and instability, and that will not only be felt by the expatriates. All our imports and consumables, medicine, education – is imported. But we are confident we can get through this.
JJR: Potential foreign investors looking at the economy and observing the recent changes may be unsettled by this instability. How do you address this concern?
AI: The current government is a centre-right government, and we are opening our doors to an unimaginable level for foreign investment.
We will not be treating foreign investors different from local businesses. We will not put in unreasonable controls on the economy, and we will make sure foreign investors are consulted, as with the locals.
We have not done this in the past.because we have been very tightly focused on politics as well as the economy, and haven’t been able to communicate as much in English perhaps as we should have.
I believe [foreign investors] have confidence in our economy, and we will ensure their investments are protected in this country, and that wel continue to have policies to encourage further investment. This country does not have a solid financial sector so we need foreign investors very much. That is understood by the current government, and the policy is to attract foreign investors.
Cathy Waters is the new Chief Executive of Indira Gandhi Memorial Hospital (IGMH), the main hospital in the Maldives. She is one of three foreign medical experts brought out by the UK-based Friends of Maldives NGO and the Maldives High Commission to improve the country’s standard of medical treatment, alongside Medical Director Dr Rob Primhak and Nursing Director Liz Ambler.
JJ Robinson: How did your role at IGMH come about?
Cathy Waters: I’ve been on holiday to the Maldives many times, but it’s been a very different experience living and working here, compared to the sanitised version [of the country] you get at the resorts.
I knew nothing about Friends of Maldives – instead a friend of mine sent me an advert in the Health Services Journal, and said “This is the job for you.” I thought it was interesting, was interviewed in December and found myself out here very quickly, in February.
My background is 28 years working in the UK’s National Health Service (NHS), starting as a clinical nurse and working my way up. For the last 15 years I’ve been working in management, and the last eight as Chief Executive of a primary care trust, which commissions health care services.
I’ve had lot of exposure training and working in hospitals, as well as the broader healthcare system. I left the NHS three years ago and worked in a small management consultancy in the UK, which involved going into companies that were facing problems, and working with them to solve those and bring about change.
My last big contract involved working with big local authority in London than needed a transformational change. In reality it meant making significant savings – we had to make 80 people redundant.
JJR: What was your understanding and knowledge of what the position involved before you arrived?
CW: I understood that IGMH is one of five entities that comes under the umbrella of the Male’ Heath services Corporation (MHSC), IGMH being the largest entity, at about 90 percent.
I knew they needed to make significant changes to patient care, and the overall environment for patients. I knew IGMH needed change, which was part of attraction for me as it was somewhere I could utilise all the skills I had to bring about that change.
I also knew it was a hospital that people care passionately about. There’s a real sense that it belongs to the community and that we should be providing high quality services.
One of the things I noticed early on was that staff morale was very low, and people were unsure about what was happening with the organisation and had all sorts of concerns about the future. One of the things I did when I started was observe what going on and try to be very visible as a chief executive, spending time with the doctors and in the labour ward.
A new executive nurse director Liz Ambler is already here, and a Medical Director Dr Rob Primhak will be joining in July, so together we want to be able to demonstrate importance of management staff and clinical teams working closely together. We need to break down some of those barriers and reduce the divide between management and clinical services.
JJR: You arrived three months ago on the tail end of the collapse of the Apollo deal, a 15 year agreement signed in January 2010 with India’s Apollo Hospital Group to manage IGMH. What actually happened?
CW: I did read about Apollo. My understanding was that they wanted to bring about significant change but they wanted significant resources to do that, and that wasn’t an option. One of the things I’m very clear about is that we need to bring about significant change, but within the existing budget. That might involve reviewing everything we do as an organisation.
Unless we can find resources elsewhere we have to work within the budget we’ve got. That’s quite a challenge, because previously there may not have been the same budgetary controls [there are now]. We have to be careful how we utilise our very precious resources.
JJR: What parallels have there been so far with your earlier experience?
CW: Working in an organisation where there are significant financial challenges, and working in an organisation where patient needs are very clearly evident. The population is very vocal about what they want and need – some of that is about manging expectations.
One of the things I know we need address is that people can’t access doctors as quickly as they want. We need to increase outpatient appointments. At the same time there is no system of triage, or prioritisation of the emergency room, which we are now developing.
JJR: It’s true that many people claim the quickest way to get an appointment is to have the mobile number of a friendly doctor.
CW: We have a Maldivian ER consultant in training who is coming back to develop a triage system and ensure those patients who need to be urgently seen are seen straight away, or that those with minor ailments are seen by someone else, or not as quickly.
From what I understand there isn’t a word in Dhivehi that translates into ‘urgent’. We have quite a lot of work to do to make sure patients get to the right place at the right time.
One thing common to people working in the NHS and IGMH is that staff are passionate about what they do. We have to channel that in a positive way. We need to engage staff in decisions rather than it being a top-down management style.
This means helping them to be part of the decision making process, which can be difficult to get your head around. The key groups are patients and staff – happy patients mean staff are pleased they are doing a good job, equally, happy staff are more likely to perform well.
Sometimes it’s very simple stuff – such as saying ‘Thank you, well done.’ I don’t think that’s happened here very often. It doesn’t take a lot to say thank you.
The work that went into planning for mass causalities for the Friday of the recent protests was great. It was a really great example of working as a team and getting everything ready for an influx of casualties.
I recognised the hard work that had gone in so I made sure I came in on the Friday and was part of what was going on, so staff felt supported, and afterwards I wrote a thank you memo. Simple stuff like that makes people feel valued for what they are doing.
IGMH was gifted to the Maldives by the Indian government
JJR: What have been some of the key cultural challenges?
CW: There is a very, very different work ethic to the UK. Some of the things I’ve found very different and very frustrating are about how people manage their time, and motivating people to work. That’s a huge issue.
Getting people to plan ahead and put processes together is challenging. One exciting project is expanding the intensive care unit – I said we need a proper process and justification of the expansion, a proper plan about how we are going to do this. For me there’s a discipline to this, but it’s not always the way things have been done.
Also different and very distinct to IGMH is the lack of use of email – staff still attempt to use memos. I’m trying to encourage the use of email, and encourage people to think ahead and write agendas for meetings.
JJR: On other side of the cultural question, what has been the reaction among staff to a foreigner coming in as a top-level manager?
CW: Inevitably there’s been a degree of suspicion at someone new coming in, at someone from the UK coming in and imposing their views. For me what has been important is how we work with people and lead. I firmly believe that how you lead is important – working with staff, rather than telling them what to do. You do need boundaries and parameters, but people need a sense of direction, and permission to do things themselves.
The other issue is that my contract is for a year with the possibility of extending to two years. Whatever I do, I will feel I’ve failed if I haven’t managed to find someone in IGMH to transfer leadership skills to, and leave a positive legacy. The worst thing would be for me to do would be to go back to the UK and for things to tumble down. That would be an absolute failure on my part.
JJR: How did these obstacles come across? Were there initial difficulties?
CW: People have been very accommodating and very welcoming. I’ve convinced people that they don’t need to stand up when I walk into the room, which was very traditional, and I don’t expect people to call me “ma’am”. People generally been very welcoming. There’s been a few challenges with language barriers, although this has proved less of a problem than I thought it would be. I have very good support in meetings- I might do an overhead presentation, and it is translated into Dhivehi. Unfortunately I’m failing miserably at learn Dhivehi words. Generally people have been helpful and make sure I’m involved in what’s going on.
JJR: What are some of the unique characteristics of the Maldivian hospital-going public?
CW: They are very demanding, and very quick to blame the doctors if things go wrong. Inevitably in a hospital things go wrong, by the very nature of the work we do. And because IGMH is the country’s main hospital, we inevitably get the more complicated and high-risk cases. People are quick to be cutting.
Equally the general public should demand good care, and rightly get that care.
We need to work to enhance communication. One of the things I’ve noticed that is quite different from UK is that different departments still work in silos. We’re trying to break down these silos and get people to work across the organisation.
JJR: There has previously been conflict and misunderstandings between Maldivian doctors and foreign doctors working at the hospital, amid the cultural challenges of having a high turnover of foreign medical staff. Is this something you have observed?
CW: It fascinating that the hospitial talks about ‘Maldivian doctors’ and ‘foreign doctors’ as though they are completely different. Part of the problem I think for the Maldivian doctors who are very dedicated and are here for the duration is that they don’t get some of the benefits expatriate doctors get, such as support with their accommodation. Inevitably that brings some degree of conflict.
Expat doctors are also here for a short time, and I’m making a huge generalisation, but the commitment of some of them may not be as high as that of the Maldivian doctors. Some of that is the sort of contract we have for expatriate doctors, and that needs to be reviewed. Some of the expatriate doctors see IGMH as a staging post to get broader experience and go off to somewhere else, which must be quite annoying for the Maldivian doctors.
We’re trying to move to a position where as much of the workforce as possible is Maldivian, but inevitably that takes time.
JJR: What about the training of local staff, such as nurses?
CW: We have a good relationship with the Faculty of Health, and more Maldivian nurses are coming back into the system. Liz [Ambler] is very keen on in-service training to make sure we are training effectively, and Dr Rob [Primhak]’s background is in education so I’m sure he’ll be keen to ensure high standards of education and training when he starts in July. It’s an area we’re developing.
JJR: How have you found living in Male’?
CW: We’ve settled in well. My husband is semi-retired; he used to be a director of Mental Health Services. He’s made a decision not to work at the moment – he’s a diver and he’s doing his diver master training and really enjoying it.
One of my worries at the hospital is that we haven’t got the facilities to care for patients at the acute stages of mental health problems, and we haven’t necessarily got the right staff.
JJR: What do you think of the relationship the hospital has with the community, and what did the outcry over the widely reported ‘baby decapitation’ incident tell you about that relationship (the head of a deceased newborn had to be surgically removed during labour after its shoulders became stuck during delivery, endangering the mother).
CW: I had only been here a few weeks when that happened. Without going into the details, what surprised me was how quickly quite confidential details about the patient and the case were spreading like wildfire across Male’.
Understandably there was a lot of anger and concern, and fear generated. One of the key learning points for IGMH was how we need to handle that more effectively with the media – we didn’t handle that very well at all. It’s in the hands of lawyers now – it was a tragic and very unfortunate case, and a very emotive situation. From the hospital’s perspective we did all the necessary investigations that we needed to do.
JJR: Does it come back to this recurring mistrust of doctors?
CW: That’s one of the things I’ve picked up on – there is this mistrust. We still have to rebuild that, because we have some fantastic doctors and clinical staff in IGMH, and inevitably when we have high profile cases like that it creates more damage for the medical profession, which bore the brunt of that incident. We need to be more proactive about how we talk about some of the great things that happen in the hospital.
I’m not sure Male’ is ready for it, but I’d like to start a patient involvement group – a number of people from the community who work with us to improve what we do in the hospital. We do that a lot in the UK, but I’m not sure people here would be interested in doing that yet. It does help people understand the challenges we face as an organisation on a daily basis.
The President has appointed an envoy to work with the hospital. He has already brought through some significant changes in terms of the environment. It’s looking much better when people come in, and the outpatient area is now air-conditioned.
We need to focus on what we need to do to implement quality of care and improving access – there are hundreds of things need to do, but have to manage expectations.
One of the things we want to introduce is catering – at the moment patients’ relatives have to bring food in for them. That’s so different to the UK – nutrition is so important to a patient’s recovery. We want to try and introduce a catering service before the end of the year, so patients get a better service.
JJR: What are the hospital’s key strengths and weaknesses at the moment, aside from the shortage of mental health support you mentioned earlier?
CW: One area we do need to improve on is diagnostic capacity, and tools for helping diagnose. We are going to get a mammogram machine, which will have the facility to do biopsies, and we are going to get an MRI scanner which will improve diagnostics.
One of the key problems we have is access to equipment and medical consumables. We’ve put new processes and deals in place which will hopefully improve that, but I didn’t realise until I lived here that absolutely everything has to be imported. We are reliant on things coming in a timely way, and I don’t think that just affects us.
We also have a hospital kindly donated by the Indian government, but inevitably the building itself is in need of renovation. It was fit for purpose then but with the influx of people living in Male’ the need for services is huge. We have 500-600 patients a day, sometimes more, and the building is almost too small now. We have to look at how we take care of it and develop a more modern facility.
One of our big concerns in relation to the operating theatre is lack of anaesthetists. We have to pay a premium for them to come, as there’s international shortage. That’s a real problem for delivering key services.
Those are some of the key areas. We have a good team paediatricians, and a very busy but effective neonatal intensive care unit with 20 cots.
JJR: Is it difficult to attract people to come and live and work in the Maldives?
CW: I think it’s becoming more difficult now because of the dollar situation, and the cost of accommodation in Male’. The MHSC provides accommodation to doctors as part of their package, but nevertheless food prices and living expenses are going up.
A big problem is paying people in rufiya – the expats who come and work in the Maldives want to send part of their salary home but banks are struggling to enable them to send dollars. That seems to be a very major problem at the moment.
The big thing is making sure there is the right commitment from expatriates to stay and make a positive difference. There’s got to be some way of making the working conditions right for the Maldivian doctors as well. They are the life of the organisation, and we are dependent on making sure they don’t move elsewhere.
We are in the process of expanding inpatient facilities, and renovating the old staff quarters into more private facilities. We will have 56 beds finished in late summer, and we have also signed an agreement with the 11 storey building next to IGMH to provide 72 beds. This time next year we will have a significant increase in the number of beds, but that brings its own problems, such as where we are going to get staff. We’re trying to make sure there is joined-up thinking going on.
The Maldives government has claimed it remains committed to working with the International Monetary Fund (IMF) in addressing its concerns on cutting state expenditure, following protests claimed to have been instigated as part of a “youth movement” concerned over rising living costs.
Press Secretary for the President Mohamed Zuhair told Minivan News that the IMF had travelled to the Maldives this week to meet with various organisations and individuals, including President Mohamed Nasheed and the Majlis’ Public Finance Committee as part of a mission to oversee a national economic recovery plan.
“They were visiting as part of a wider mission in the country including meeting with the president where they retread concerns over plans to reduce state expenditure,” he said.
The government’s fiscal policy has become a major national issue after a week of consecutive protests held earlier this month across Male’, which organisers claimed had been instigated initially by young Maldivians and supported by opposition politicians.
Protesters are said to have been particularly concerned with the government’s controversial decision to last month devalue its currency, allowing the rufiya to be traded within 20 percent of the pegged rate of Rf12.85 to the dollar – a move welcomed by the IMF.
Amidst the backdrop of perceived public and political dissatisfaction with government finances, Zuhair said that the IMF’s meeting with the Public Finance Committee had aimed to encourage parliament to consider government initiatives to try and increase direct state revenues to balance budget deficits.
“There are several bills on taxation currently under consideration in parliament and an amendment to the Tourism Goods and Services Tax (GST) – implemented in January this year on all services and goods purchased by tourists – from 3.5 percent to five percent,” he said. “I think it is interesting to note that there are many resort owners in parliament.”
While supporting initiatives to reduce costs that have led to ongoing public protests in the country, the Treasurer of The Maldives National Chamber of Commerce and Industry (MNCCI), Ahmed Adheeb Abdul Gafoor, said that the the planned addition of a minimum wage and a Goods and Services Tax (GST) on all businesses operating in the country needed to be gradually implemented.
Speaking earlier this month, Abdul Gafoor claimed that gradual introduction would be vital to ensure the nation’s fledgling economy can cope with any potential changes.
Alongside a parallel aim to try and create new job opportunities for young people, Zuhair claimed that the government had in general been closely following the recommendations of the IMF in trying to cut the state’s wage bill for political appointees and civil servants.
To this end, he said that the government had moved to try and reduce the wages of political appointees by 20 percent and civil servants by 15 percent.
“In enacting these cuts we were hoping that the Majlis would follow and also cut wages. The institution failed to do this as well as the judiciary,” he claimed. “The government as a result had to move to reinstate the wages it had cut.”
Zuhair claimed that the government had been working in line with IMF recommendations and had even tried to perform additional cuts unrequested by the finance body in areas such as reducing appointee wage spending.
Despite pushing ahead with its attempted financial reforms, the government has said that it has opted to meet with some of the youth figures said to be at the heart of organising protests seen in Male’ this month.
However, the session held yesterday was reportedly cut short when Finance Minister Ahmed Inaz walked out at the meeting claiming that the youth delegation included the leader of the opposition-allied People’s Alliance (PA) sports wing, and two others he claimed were “new political figures” created by senior party officials.
“I waited in the meeting until we could address the real issues, but they kept on criticising the government policy and some of the government projects,’’ Inaz told Minivan News. ‘’I did not want to have a heated political debate – we went there to negotiate with the youth regarding the dollar issues, not for a political debate.’’
Mohamed Ahsan, a spokesperson from the youth delegation, said the group was unable to clarify information it wanted from the Finance Ministry as the minister had left the meeting, though senior representatives of the Maldives Monetary Authority remained.
“The MMA officials were very cooperative,” he said. “We found out that the government have not been implementing the MMA’s suggestions to its full extent,’’ said Ahsan. “The MMA clarified almost all the information we required.”
He also said the finance minister “took it politically” because a PA member was present at the meeting.
‘’We have decided to recommence the protests, but due to exams we have temporarily delayed it,’’ he said. ‘’Once the examinations are over we will restart the protests.’’
A first round of negotiations held last week were described as “very upsetting” by the opposition’s Gayoom faction after the delegation accused President’s Office representative Shauna Aminath of stating that the “political solution” to the country’s economic woes was the arrest for the former President.
“We met with four people who claimed to represent youth,” Shauna said. “They presented a piece of paper they said was a youth proposal, but there was almost no discussion of what was on it.
“They talked a little about youth unemployment, and the rising price of milk, cooking oil and petrol. They said that young people did not have enough money to pay for coffees or petrol for their motorbikes.”
The group of four had “repeated the same messages being aired by [opposition] political parties: that the government had sold the airport to GMR, Dhiraggu to [Cable and Wireless], and that six people had control of the entire economy.
“Then they said they understood that the government’s [managed float of the rufiya] was necessary, but were concerned the government had not spoken about it beforehand.”
Back in March, MP for the People’s Alliance (PA) party and a member of the Majlis’ Public Finance Committee said that he believed current government policy was ultimately stifling economic development, claiming administrative costs within the civil service remained a notable problem.
“We have small percentage [of funds] to invest in the economy. We cannot move finances to a higher level though as the government doesn’t have the right policies to do this,” he claimed. “For instance, we need to reduce the number of [inhabited] islands by linking them and cutting the overall number of cost centres required for decentralisation.
The comments were made as the IMF claimed that the Maldives economy remained “unsustainable” even after cuts made to the annual 2011 budget, as it concluded its Article IV consultation earlier during the year.
The private sector has expressed concern at the Maldives Monetary Authority (MMA)’s announcement last week that it it intends to enforce the use of rufiya for all transactions conducted in the country.
The move effectively outlaws dollar transactions in the Maldives, with the intention of funneling foreign currency through the local banking system in a bid to combat the country’s dollar shortage.
President Mohamed Nasheed backed the central bank’s move, and the prohibition of the use of any currency other than rufiya for payments including remuneration for work, services, fees or rent.
The ‘grey’ dollar economy has existed in parallel to the local currency, and has insulated businesses such as resorts from the inflation of the rufiya, pegged at 12.85 to the dollar for almost a decade despite the global economic recession, printing of currency and issuing of T-bills.
“This regulation has existed since 1987,” observed Ahmed Adheeb, a local financial expert working in the private sector, adding that the lack of enforcement had protected the private sector from the country’s monstrous deficit and spend-happy state budget.
The MMA’s announcement came at time when “the convertibility of rufiya [into dollars] is in question because of the deficit, and the pumping of rufiya into the system.”
“Is this the right time to enforce this regulation?” Adheeb asked. “We met with the government and told them clearly that that our industry will face a lot of consequences if this happens.”
Local travel agents were one example of businesses that would be affected, Adheeb said.
“They [earn dollars] and contribute a large inflow of dollars into the economy. If they have to pay resorts in rufiya, they will lose their competitive advantage.”
The enforcement would take “the openness and flexibility of out of the economy, when the real issue lies with the state budget,” he said. “This will make business so difficult – it is very dangerous to the economy for the government to start sorting out industry before the state budget. And what of the practicality of it?
“The government needs to address the deficit and cut down its expenditure. State income will increase gradually, but if we keep spending like this we are headed for disaster.”
Minivan News spoke to the manager of one import business, who relies on resort customers paying in dollars to be able to buy stock from overseas.
The MMA’s decision, he claimed, was “absolutely absurd.”
“They can do what they like – but does this mean resorts must pay in rufiya? At a time when there’s no currency stability? Will resorts have to post rufiya prices in tourist brochures? If the objective is to drive foreign investment out of the Maldives with a raft of new taxes and a confused and bizarre monetary policy, then they’re being quite successful,” he said.
Another manager of a commodity import business Minivan News spoke to bluntly stated that she would be unable to comply with the regulation “because we trade in dollars.”
She added that her business, which banks locally and was sorely hit by the dollar shortage and the reluctance of banks to convert local currency, had improved following the government’s decision implement a managed float of the rufiya.
“We found resorts were more willing to pay in dollars once we set our rate at Rf15.42,” she explained. “But unless the banks are going to exchange rufiya to dollars consistently and at a sensible rate, this is going to cause absolute uproar. And how on earth are they going to police things like payment of rent?”
Economic Development Minister Mahmoud Razee told Minivan News that the government was “trying to make sure that foreign currency goes through the banking system, by enforcing the legal tender.”
“The reason we are doing this is so importers can go to the bank and request dollars from the banking system,” he said. “This will not stop people having a dollar account, it will just stop transactions not in the legal tender.”
Every restaurant at tourist resorts would be obliged to change its menu to rufiya prices, he acknowledged, “but almost every resort and hotel already has a money changer.”
“The MMA will be able to take action if there is a transaction that does not take place in legal tender, and take [the parties] to court,” he said.
The MMA’s announcement came days after the government announced exchange control regulation on the salary of expatriates, legally limiting their ability to transfer money outside the country.
“We don’t want a lot of illegal workers sending foreign currency out of the country, working on the side and taking jobs from locals,” Razee said, explaining that expatriate workers would be obliged to prove they were working in the country legally at the point of transfer, and be restricted in the amount they could send overseas.
“The Ministry of Finance will set a percentage, say 90 percent, of the salary that can be remitted,” he said.
Adheeb was critical of the decision, suggesting that the government had chosen a critical time to impose exchange control.
“We have said it is not going to work as we have a small population and we need foreigners to work here,” he said. “[Issues concerning] non-skilled labour are a problem of regulation, but importing skilled labour gives us a competitive advantage at a time when there are issues converting the rufiya,” he said.
“I question the practicality off this – the banks are currently struggling to deliver services to their existing customers. How will they know if an expat is an illegal expat? This will just create a blackmarket for illegal banking transactions.”
Industry concerns that last week’s protests and Hong Kong’s subsequent travel alert would affect the growing Chinese tourism market in the Maldives have eased.
Sources at the Arabian Travel Market held in Dubai last week expressed concern at a number of cancellations from tour operators in the Asian region following the issue of the alert, which placed the Maldives alongside Israel, Iran, Indonesia, Russia and Pakistan.
A major Shanghai-based tour operator said today that despite 10 cancellations last week during the widely publicised protests, the situation had improved and bookings were improving this week.
However Minivan News understands that one major international airline operating to the Maldives suffered a 20 percent cancellation on booked and reserved tickets from several countries in the region last week, and expressed concern that communication with operators regarding future business had also suffered.
Locally, Manager of Traders Hotel Ester Marcaida said the hotel had received no cancellations as a result of the protests, “although it is possible it may have affected future bookings. So far so good.”
Traders is a bellweather as it accommodates many charter passengers from China transiting to seaplane after arriving from the Asian region – most international airlines arrive in the evening and passengers must overnight in Male.
“It’s a sizeable business for us,” Marcaida said, adding that “charters from Singapore and Malaysia haven’t been affected.”
The Maldives Ambassador to China, Ahmed Latheef, said he had been assured by Chinese tourism authorities that it did not intend to issue a travel alert for the Maldives, unless advised to do so by the country’s Ministry of Foreign Affairs.
“It is true there was some effect from media coverage of the protests in Male’,” he said, “but it was not as bad as it could have been. The travel alert was only for Hong Kong – there was no alert for mainland China.”
There had been some concern expressed by travel agencies sending tourists to the Maldives, he noted, although the numbers were down as it was not high season for Chinese travellers.
“One tour operator called to say he’d seen a travel alert in Hong Kong and wanted to find out the situation,” Latheef said. “We did what we could and sent out a circular explaining that the tourist resorts were far from Male’ where the protests were occurring.”
Rise of the dragon
China is a major emerging market for the Maldives and is now the country’s leading tourism market in terms of arrivals, eclipsing the UK last year and offsetting a slump in the European market due to the economic recession.
The Maldives received 120,000 Chinese visitors in 2010, an increase of 96 percent on 2009.
Most tourists from the region stay relatively briefly – four nights is the average stay – and spend an average of US$2500: a gross input to the economy of US$300 million.
“If you look at the numbers they speak for themselves,” Latheef told Minivan News. “The Chinese market will be very important – there is so much interest in the Maldives.”
Latheef explained that the Chinese market was attracted to the Maldives not only because of the beach and the sun – a major drawcard for those trapped in the European winter.
“It also carries a lot of prestige in China to say you have been to the Maldives,” he said. “It carries status. A lot of people have increasing spending power, and have been to many European countries. The Maldives is much sought-after and very popular.”
Resorts had been slow to react and cater to the market, but had noticeably increased efforts to hire Mandarin-speaking staff, he noted.
“The Chinese have specific requirements of which we have to be mindful,” he said. “They prefer Chinese food, and they feel safer if there are staff who speak Mandarin as many only speak their own language. There are a lot of things that need attention.”
The Trade Ministry will force the sale of staples including rice, flour and sugar according to a price control list.
The ministry said that businesses selling flour, sugar and rice higher than the price control list will be fined up to Rf 100,000 (US$6500).
‘’Items should be available at the specified prices at all venues trading in these items from May 16, 2011,’’ the ministry said, adding that the enforcement was justified under Article 7 (a) of the Consumer Protection Act (Act number 1/96).
According to the ministry’s price control list for the capital Male’, flour has to be sold at Rf3.28 per kilo, sugar Rf4.30 per kilo and normal rice Rf4.28 per kilo. For the rest of Kaafu Atoll, the price of flour per kilo is Rf3.56, sugar Rf4.58 per kilo and normal rice Rf4.56 per kilo. Meanwhile in Seenu Atoll in the country’s south flour must be sold for Rf3.98 per kilo, sugar Rf5 per kilo and normal rice Rf4.98 per kilo.
The control price of flour per kilo for Haa Alifu Atoll is Rf3.81, Sugar Rf4.83 and the price for normal rice is Rf4.81.
For Haa Dhaalu Atoll, the price of flour is Rf3.76 per kilo, Sugar Rf4.78 per kilo and normal rice Rf4.76 per kilo.
In Shaviyan Atoll flour has to be sold for Rf3.71 per kilo, Sugar Rf4.73 per kilo and normal rice Rf4.71 per kilo while in Noonu Atoll flour has to be sold for Rf3.66 per kilo, sugar Rf4.68 per kilo, normal rice Rf4.66 per kilo.
In Raa Atoll flour has to be Rf3.68 per kilo, sugar Rf 4.70 per kilo and normal rice has to be sold Rf4.68 per kilo.
As for Baa Atoll, price of flour mentioned in the control list is Rf3.61 per kilo, sugar Rf4.63 per kilo and normal rice Rf4.61 per kilo.
According to the list, price for flour in Lhaviyani Atoll has to be Rf3.61 per kilo, sugar Rf4.63 per kilo and normal rice Rf4.61 per kilo.
While in Fuvamulah flour has to be sold at Rf3.94 per kilo, sugar Rf4.96 per kilo and normal rice Rf4.94 per kilo.
Recently a group of youths along with some opposition political figures protested in the streets of Male’ calling for the government to reduce the price of products and reduce living costs, and opposed the government’s decision to implement a managed float of the rufiya within a 20 percent band of the pegged rate of Rf12.85 to the dollar.
The move comes on top of a decision last week to halve the import duty on diesel, used to fuel the country’s extensive dhoni fleet.
Official statistics supplied by the Department of National Planning have indicated a 4.42 percent increase in the rate of inflation last month compared to March 2011, as one opposition MP plans a referendum on President Mohamed Nasheed’s leadership over the dissatisfaction with living costs.
The new figures indicate increased prices for food and drink products last month, particularly for fish, on the basis of the Consumer Price Index (CPI) when compared to 2011 and April 2010.
The release of the statistics comes as MP Ahmed Mahlouf from the Z-DRP party, a spin-off of the main opposition Dhivehi Rayyithunge Party (DRP), claimed to be ready to forward a resolution to parliament this week calling for a referendum to test public support for the current president and his handling of the economy.
Figures such as the CPI are therefore an important issue following seven consecutive nights of protests in the streets of Male’, with demonstrators announcing they were now willing to negotiate with the government.
Protest organisers have claimed the demonstrations were a non-partisan “youth movement” in response to rising living costs on the back of government attempts to effectively devalue the rufyiya.
Aside from criticising the political opposition for politicising the demonstrations in the media for their own political gain, the country’s financial authorities last week claimed that to be providing some economic support to try and stabilise prices it said that while increasing, varied significantly between different stores.
According to the latest planning department stats, the cost of food and beverages when including fish was up by 20.35 percent during April 2011 compared to the same period the previous year. These costs were also up by 10.65 percent on the same terms compared to March 2011.
When excluding the price of fish, the average cost of food and drinks last month was up by 13.07 percent compared to over the same period of time last year. On the same terms, the statistics found that food and beverage costs last month rose by 4.44 percent compared to March 2011.
When comparing the overall change in CPI between April 2011 and April 2010, increases in costs were recorded across the board with the exception of recreation and culture, which was down by 3.11 percent.
As of late month, healthcare was up by 6.25 percent, transportation was up by 8.96 percent, education was up by 16.89 percent and fish was up by 58.32 percent when compared over the same period the previous year.
Between March to April this year, the statistics showed that the costs of healthcare were up by 1.21 percent, transport was up by 6.56 percent and fish prices were up 42.07 percent. The full statistics can be found here.
Halt to protests
In light of protests last week over rising costs, DRP MP Ahmed Mahlouf told Minivan News today that the party would be postponing any further demonstrations relating until next Friday after requests from police.
In the meantime, he claimed that young people who had initially organised the protests were negotiation with members of the government, a meeting that had been organised through the police to try and find some possible compromises on costs.
“The meetings were scheduled to take place with the government at 12:00pm today though I have not been informed yet of their progress. I imagine that they [the protest organisers] would be demanding some changes to government policy,” he said. “The police have asked us to stop the protests and as some of their members supported the march, we have wanted to keep good relations with them.”
Mahlouf added that he believed there had been a reluctance among organisers to stop the protests as the government were failing to address concerns about costs and “not believing” the financial realities Maldivians were facing.
However, amidst intense media scrutiny, the opposition MP said he believed the protesters had succeeded in their aims to attempt to change government policy on the economy.
However, ahead of the next scheduled protest on Friday, Mahlouf claimed he plans to forward a parliamentary motion for a referendum on whether President Nasheed had sufficient support from the public to enact his planned reforms.
Foreign Minister Ahmed Naseem last week criticised opposition parties like the DRP for “misleading” international media about the nature of the protests and failing to sit down and present their own alternatives for financial reforms in the country.
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