Category: Society & Culture

PPM candidate Ibrahim Ameen takes parliamentary seat in Ungoofaaru by-election

The Progressive Party of Madives (PPM) candidate Ibrahim Ameen has secured the parliamentary seat representing the Ungoofaaru constituency in Raa Atoll that was previously held by his brother, the murdered MP Dr Afrasheem Ali.

According to provisional results from the Elections Commission (EC), Ameen took the seat with 1159 votes in polling held on the islands of Ungoofaaru, Hulhuduffaaru, and Maakurathu, all in Raa Atoll, as well as a special polling station in Male’. He defeated Maldivian Democratic Party (MDP) candidate Dr Ahmed Ashraf who had 1078 votes.

There was some polling success however for the MDP during the day. The party’s candidate, Ashiya Hussain took the vacant island council seat for Keyodhoo in Vaavu Atoll with 221 votes, narrowly beating the Dhivehi Rayyithunge Party’s (DRP’s) candidate Ahmed Fayaz, who had 219 votes.

With 15 minutes left before polling booths were closed around the country, EC President Fuad Thaufeeq said an estimated 83 percent of eligible voters had turned out to cast their ballots. Voters in the queue to vote before the polls closure at 4:00pm this afternoon were still allowed to vote, according to the EC.

Thaufeeq claimed that voting had gone “quite smoothly” at all the corresponding polling stations, with the majority of complaints it had received concerned with campaigning tactics being used the previous day.

“We had received some complaints that campaigning was continuing to take place past 6:00pm yesterday,” he said, referring to a practice outlawed under elections rules. “Other than that everything is going smoothly in the atoll.”

The Ungoofaaru by-election had been scheduled earlier this year following the murder of PPM MP Dr Afrasheem in Male’ in early October.

Earlier this week, Commissioner of Police Abdulla Riyaz said the Maldives Police Service (MPS) believed it was “not the right time” to reveal the details behind the murder of Dr Afrasheem.

Speaking to Minivan News today, EC President Thaufeeq said that despite the circumstances behind the by-election for the Ungoofaaru constituency, the polls had been conducted in “more-or-less the same manner” as had been seen with two other parliamentary by-elections held since February’s controversial transfer of power.

“We have been getting the same types of complaints that we received with previous by-elections in Kaashidhoo and Thimarafushi. I would say it has gone a bit smoother than these,” he said. “There have been no major issues with the polls.”

The election itself was initially scheduled to be contested by three candidates after the PPM’s partners in the coalition government of President Dr Mohamed Waheed Hassan, such as the DRP, opted against fielding candidates.

However, an independent candidate, Najih Jinah, registered to stand against the PPM and MDP made a late withdrawal from the contest to lend support to Ameen’s campaign, according to local media.

Previous contests

In the local council elections of February 2011 for two atoll council seats in the Ungoofaru constituency, the MDP candidate Ibrahim Zayan received 1,024 votes while then-opposition Dhivehi Rayyithunge Party (DRP) candidate received 1,790 votes.

Meanwhile, in the May 2009 parliamentary election, then DRP candidate Dr Afrasheem Ali received 573 votes while MDP candidate Dr Ahmed Ashraf came second with 533 votes.

In Vaavu Keyodhoo, all five island council seats were won by DRP candidates in February 2011 with the first placed candidate garnering 267 votes.

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Kudafari provides free bicycles in ‘green transport’ initiative

A new environmental NGO based on Kudafari in Noonu Atoll was officially inaugurated on Thursday the former Youth Minister Hassan Latheef.

The organisation, Kaanu Green Peace, was created by a team of young volunteers in June this year, out of a desire to do something to help their local environment.

A number of environmental initiatives were launched as part of the event, the culmination of weeks of work by the committee and volunteers. Dozens of banners around the island displayed environmental and civic slogans in both English and Dhivehi, from “Be proud of my island” to “Freshwater aquifer depletion threatens water supplies”.

The island’s street lamps were switched off for the evening and all roads lined with coconut-shell lamps. A procession with bodu-beru drumming conducted the guest of honour to a new public square opened earlier in the day, in remembrance of the late mother of Ali Mauroof, one of Kaanu Green Peace’s founding patrons.

Green transport

The most eye-catching scheme launched at the event was the island’s new ‘Green Transport’ initiative. Bamboo cycle racks have been erected at 8 points around the island (more are planned), and 30 cycles donated by sponsors. Anyone can use a cycle freely at any time, taking it from one of the special racks and leaving it at another. In return, explains Sehenaz Moosa of the organising committee, it is hoped residents won’t feel a need to introduce polluting vehicles such as motorcycles to the small island of 740 people.

Another initiative launched was a grass-covered ‘green avenue’, an experimental alternative to the sand roads elsewhere, of which construction is under way. The avenue will lead to two new island resorts, among the first resorts on local islands in Maldives, including Green Village, owned by Mauroof, which aims to use eco-friendly construction techniques. Hassan Latheef ceremonially planted a tree in the avenue before inaugurating the cycle scheme by riding the first bicycle between two of the pick-up points.

Environmental award

In another initiative, a local community award was inaugurated in memory of Yusuf Kaleyfaanu (Kudafari Kaleyfaanu), Mauroof’s late father, commemorating his service to the environment and to the development of Kudafari during his 60-year rule as Katheeb or Island Chief. The first Kaleyfaanu Award was given to Mariyam Ibrahim, a founder of the Kudafari women’s committee and long-time active community volunteer.

A temporary jetty with a stage had been built, from which Latheef addressed the crowded beach. He said that environmental challenges do not exist in isolation from other policy areas such as economic, social, and educational questions. He cited recent findings of the ILO that a ‘green economy’ can out-compete a traditional economy, and said the MDP manifesto will include measures to subsidise green initiatives and create ‘green jobs’, tackling unemployment as well as environmental problems.

Local action

“Not all problems can be solved by government,” explained Sehenaz. “We believe environmental problems also call for local action.”

She expressed a hope that Kaanu Green Peace’s brand of localism would take root and that the organisation will spread and help train volunteers on other islands.

Though officially launched yesterday, Kaanu Green Peace already has some ongoing projects, notably the setting up of dustbins in the streets in an attempt to get a grip on the problem of waste management that plagues Kudafari as it does the rest of Maldives. They hope to get a crusher with which to compact metals for resale and plastics to send away for recycling or disposal.

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Male’ City Council accuses government of sabotaging Tatva Global waste management project

The government has announced is it in the process of renegotiating a waste management contract for the Male’ area with India-based Tatva Global Renewable Energy – leading to criticism by the opposition-dominated Male’ City Council (MCC) that the state is trying to sabotage the agreement for political gain.

Former President Mohamed Nasheed’s administration signed the original waste management agreement with Tatva in May 2011 in a deal that was supposed to have generated power from recycling waste. The scheme was also said to be part of attempts to improve the overall standards of waste management in Male’ and the nearby “garbage island”, Thilafushi.

The deal, like the airport development agreement with India-based GMR declared void by the government this week, was been backed by International Finance Corporation (IFC), an affiliate organisation of the World Bank, according to the Inter Press Service news agency.

However parts of the agreement were ordered halted by the country’s Anti-Corruption Commission (ACC) in August this year over alleged concerns about the contract, which was also signed under the former government.

The ACC received concerns that the project would lead to an anticipated loss of MVR 1 billion (US$64.8 million) in government finances over a 20 year operating period, according to local news service Haveeru.

ACC President Hassan Luthfee had phone switched off at the time of going to press.

In correspondence sent to Minivan News this week, Dr Mariyam Shakeela, who has served as Environment Minister for the last few months and was most recently appointed acting Human Rights Minister, announced that a previous contract agreed with Tatva was expected to be replaced with a “mutually beneficial” agreement.

“Provided they perform within the time frame given, the contract will remain with Tatva,” she said in response to whether the company would retain its role on the waste management project.

Dr Shakeela, who did not respond to a question on the nature of the government’s concerns with the previous contract, said the time frame for the deal was “under negotiation”.

“[The] whole agreement is being formulated,” she added.

A spokesperson for Tatva Global Renewable Energy was not responding to calls from Minivan News at time of press.

MCC criticism

However, the MCC has claimed that following a visit of senior officials from Tatva Global Renewable Energy between November 18 to November 20, a failure by the government to involve its councillors in the process and ongoing delays to commencing the project had let it to conclude that the deal would be eventually cancelled. The MCC said it expected the project to eventually be cancelled, despite increasing problems with waste management in the capital.

MCC councillor Mohamed Abdul Kareem told Minivan News that he had been informed senior Tatva executives had been invited to the Maldives for several days earlier this month to meet with ministers and stakeholders involved in the energy project.

“However, I don’t know what the discussions were focused on. Many groups were there; the Finance Ministry, other government departments, the Attorney General’s Office and the State Electricity Company (STELCO) were all there,” he said.

However, Kareem questioned why the MCC – as a major stakeholder in its own waste management project – had also not been invited to the discussions to express its concerns over the need for the waste management project.

“The issue has been continually delayed and the waste management problem is getting worse, while we don’t have the budget to meet our waste management needs,” he claimed.

Kareem alleged that while the government was providing small amounts of funding for waste management, he believed attempts were purposely being made to exacerbate the capital’s refuse problems in order to undermine the municipal council’s work. Kareem added that he was presently consulting lawyers over where the MCC stood on the waste management project.

“We don’t have enough budget to collect the waste, meanwhile the collection centres in Male’ are full and waste is openly being burnt on Thilafushi,” he claimed. “I think this is a game [for the government], I am certain they will cancel this contract.”

Kareem claimed that with an estimated 150,000 inhabitants in Male’ each generating a kilogram of waste per day on average, managing the capital’s waste management was the largest logistical operations in the entire country on a daily basis.

“We are dealing with 150,00 kg of waste everyday, we don’t have efficient enough operations for this. We don’t have enough boat fuel and the excavators we use are 20 to 30 years old. “[Wednesday] even, the starter motor failed on one of these,” he said.

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Police fail to bring murder suspect to court

Police on Thursday failed to bring murder suspect Mohamed Samah to the Criminal Court for sentencing.

A court official told local media that the verdict was due to be delivered at Thursday’s hearing, which was cancelled after police did not bring the accused to court despite repeated requests by the judge.

Samah is accused of stabbing police Lance Corporal Adam Haleem to death on the island of Kaashidhoo in Kaafu atoll on July 22.

Following his arrest, Samah confessed to the crime and asked for forgiveness, claiming that the incident occurred while he was under the influence of drugs.

At the last hearing in early November, Samah however told the judge that police extracted the confession through torture.

Samah reportedly told the judge that he would prefer to face the death sentence under Islamic shariah than endure torture in custody.

The judge revealed at the last hearing that three of Haleem’s heirs had opted for qisas (retaliation or death for death).

Following Thursday’s hearing, the Criminal Court – along with the Civil Court and High Court – broke for a 15-day recess. The murder trial will therefore resume after December 15.

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Immigration halts work permits to GMR, aviation authority to revoke aerodrome certificate

Additional reporting by Mariyath Mohamed.

The Department of Immigration has declared that it will cease renewing the visas of foreign employees working under GMR Male International Airport Limited (GMIAL), the Indian infrastructure giant’s side of the deal to manage and operate Ibrahim Nasir International Airport (INIA) signed with the former government.

“We have stopped issuing visas to GMR for the time being. This was decided since the cabinet has terminated the contract, and GMR has been given a seven day ultimatum to leave. If we went on processing visa requests, it would just be pointless work,” Deputy Chief Executive Officer of Immigration, Mohamed Khalid told Minivan News.

“We are just going along with the decisions made from the top, the President’s Office,” he said.

The Maldivian cabinet declared the agreement with GMR void on Tuesday evening, and gave the company a seven day ultimatum to leave the country.

“The government has given a seven day notice to GMR to leave the airport. The agreement states that GMR should be given a 30 day notice but the government believes that since the contract is void, it need not be followed,” said Attorney General (AG) Azima Shukoor at the time.

Deputy Controller of Immigration Hamid Fathuhullah told Minivan News that immigration had not yet made any decisions on how to proceed on dealing with the visas and permits obtained by GMR that were still active after the government’s seven day ultimatum.

However, Fathuhulla added that they would be making provisions in accordance with existing regulations to allow ample time for the employees to make arrangements to leave.

“Right now, we are not going to provide visas, quotas or work permits to any company associated with GMR. This is in line with the Immigration Act 1/2007 and International Law,” Fathuhulla stated.

President’s Office Spokesperson Masood Imad declined to comment on the matter.

“It is not part of our mandate to cancel visas, deport or arrest people. The President’s Office will do no such thing. The immigration department will decide this issue,” Imad said.

CEO of GMIAL, Andrew Harrison, said the company had received no communication or memo from the immigration department, as stated in several media reports, and had contacted the immigration to try and clarify the matter.

Of the company’s total 1760 staff, 140 are foreign employees on work permits, Harrison said.  He stressed 17 of there work permits were due to be renewed before the end of December.

“Our people are committed. They will stay and work until otherwise notified,” Harrison said.

He said it would be “premature” to discuss the implications of the Immigration Department’s announcement, given that GMR disputes the legality of the government’s termination of its contract, and that there was “still work to be done before statements are made”.

However, he said it was surprising that the notice was issued to the media before any discussion with the company.

“I don’t know why they are doing it this way,” Harrison said. “People are asking us about this, but we have no information apart from the conflicting reports in the media.”

“One report says the visas are being cancelled, another says they have not been cancelled, just the renewals,” said Harrison.

Minister of State for Home Affairs Mohamed Fayaz stated Thursday that the foreign employees of GMR would be “given protection” until they could arrange to leave the country.

Fayaz said that the ministry had extended an invitation to the management of GMR for a meeting following the termination of the contract.

Accepting the invitation, Harrison and Managing Director P Sripathi had met with the ministry representatives, he said.

“At the meeting, we requested that in these seven days, they proceed in a manner which would not disrupt any of the services being provided at the airport. We also assured them that they would remain safe and secure during their time in the country,” Fayaz said.

“We also told them that should they require it, we can provide security services through the police force,” he added.

The government-owned Maldives Airports Company Limited (MACL) has meanwhile issued a circular “opening opportunities for GMIAL staff who are keen to join the MACL team.”

In a statement, the company said it provided “assurance to employees that their present basic salary, allowances and other benefits, and training and development opportunities will be maintained under MACL management. MACL also guarantees that the employees currently sponsored by GMIAL will have the same opportunity to continue and complete their courses.”

CAA withdrawing aerodrome certificate

The Civil Aviation Authority (CAA) has meanwhile sent GMIAL a letter informing the company its aerodrome certificate will be withdrawn at 11:59 pm on December 7.

“That is the regulatory authority that permits us to operate an airport,” explained Harrison, “We cannot operate an airport without the certificate.”

Harrison emphasised that the withdrawal of the certificate did not mean the end of the company’s effort to seek legal redress.

“Reckless”

The government’s decision to declare GMR’s concession agreement void and evict the developer from the Maldives comes after a tough year for tourism, the sector indirectly responsible for up to 70 percent of the country’s economy. According to the 2013 budget presented to parliament on November 27 – the same day as cabinet announced GMR’s eviction – tourism growth in the Maldives has fallen from 15.8 percent in 2010 and 9.1 percent in 2011, to an expected 0.7 percent in 2012.

In a statement today, former President Mohamed Nasheed, under whose administration the GMR contract was signed, said the government’s “reckless decision to terminate GMR’s contract will scare off investors”, with “serious ramifications for the economy, at a time when we can ill-afford to see it falter.”

“Right across the board we are witnessing positive trends being dangerously reversed. Growth in tourism – the bedrock of our economy – has flat-lined; our GDP, which was 7 per cent last year, is projected to be just 3.4 per cent this year; and our deficit, which we had brought under control at the start of the year, is now ballooning at an alarming rate,” Nasheed said.

“If this continues, we risk setting back every aspect of our development. It is not those in government but the Maldivian people who stand to lose most from President Waheed’s economic mismanagement.”

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Police disclose details of raid on local drug network seizing nine kilograms of drugs

Police have discovered more than MVR 1 million during an operation to thwart a local drug network.

Police today held a press conference and disclosed details of a special operation conducted to disrupt the operation.

Drug Enforcement Department (DED) Deputy Head Sub-Inspector Fareed Ismail said that police and customs officials had followed the crew of ‘MSV Silver Cloud 49’ since it arrived to the Maldives.

The drugs were unloaded from the boat yesterday morning to deliver to six Maldivians waiting for them at Boduthakurufaanu Magu, police said. Police said the drugs included hashish oil and heroin.

Fareed told the press that five Maldivians and six expats were arrested in the raid.

According to police, one of the suspects was arrested on allegations that he was the ringleader responsible for trafficking illegal drugs into the Maldives.

Police said the man was arrested while he was inside a room ot Kunnumalaage in Maafannu ward.

When police officers searched Kunnumalaage they discovered more than MVR 1 million, US$11,318, EUR 39,725 and currencies of 11 other nations, police said.

Police searched other houses in connection with the case including Coconut House in Mahchangolhi Ward and Moonlight View in Galolhu Ward.

According to police, officers discovered a further MVR 134,050, US$2200 and tools used to pack drugs in Coconut House.

The police have also released the video footage of the operation.

Yesterday Deputy Police Commissioner Hussain Waheed tweeted that the street value of the drugs discovered during the operation would reach over MVR 10 million (US$648,000).

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HRCM calls for end to discrimination against foreign workers following murder of Bangladeshi

The murder of a Bangladeshi worker has prompted the Human Rights Commission of Maldives (HRCM) to call for an end to discrimination against foreign workers.

HRCM condemned the killing of 25-year-old Bangladeshi worker, Muneerul Islam, who was found stabbed to death on Monday (November 28).

A statement from HRCM pointed out that Maldivians fail to recognise the significant contribution foreign workers make to the economic development of the country.

HRCM further stated that all humans – regardless of country or race – have the right to human rights, and called for the authorities to bring those responsible to justice.

Muneerul Islam was found murdered in his apartment located on the sixth floor of a building on Chaandhanee Magu, Male’s main tourist strip.

Earlier this year a senior Indian diplomatic official in the Maldives expressed concern over the ongoing practice of confiscating passports of migrant workers arriving to the country from across South Asia – likening the practice to slavery.

The Maldives has come under strong criticism internationally in recent years over its record in trying to prevent people trafficking, with the country appearing on the US State Department’s Tier Two Watch List for Human Trafficking three years in a row.

In the report, the Maldives is mainly flagged as a destination country for victims of labour exploitation, particularly from Bangladesh and to a lesser extent, India, but was also noted as a destination for sex trafficking.

Police have said that the murder of the Bangladeshi national is a “serious case”, but said no arrests had been made.

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Cabinet voids US$511 million GMR contract, gives airport developer seven day ultimatum to leave

Additional reporting by Neil Merrett and Mohamed Naahii.

The Maldivian cabinet has declared the agreement with Indian infrastructure giant GMR to develop Ibrahim Nasir International Airport (INIA) void, and has given the company a seven day ultimatum to leave the country.

“The government has given a seven day notice to GMR to leave the airport. The agreement states that GMR should be given a 30 day notice but the government believes that since the contract is void, it need not be followed,” said Attorney General (AG) Azima Shukoor.

During a press conference on Tuesday evening, Shukoor stated that the government reached the decision after considering “technical, financial and economic” issues surrounding the agreement.

The attorney general claimed the government had obtained legal advice from “lawyers in both the UK and Singapore as well as prominent local lawyers – all who are in favour of the government’s legal grounds to terminate the contract.”

“We also got advice from both local and international lawyers in the Maldives Airports Company Limited (MACL),” she added.

Shukoor said the government had two legal grounds to terminate the contract: one in which the government believed the contract was ‘void ab initio’ – meaning to be treated as invalid from the outset; and the second being ‘frustration’, an English contract law doctrine which acts as a device to set aside contracts where an unforeseen event either renders contractual obligations impossible, or radically changes the party’s principal purpose for entering into the contract.

“The contract is governed by the English contract law. The government believes that the agreement is void ab initio meaning the contract was void from the beginning or the contract is frustrated,” she said.

She added the termination of the agreement was a “purely legal decision” and did not have any connection with the recent series of anti-GMR protests headed by the religious Adhaalath Party (AP).

The decision was, Shukoor insisted, made “professionally” and after “thorough research”.

Shukoor also claimed the government was going to initiate the arbitration process in Singaporean Courts and had already informed its decision to both GMR and MACL.

Asked how the government planned fund the estimated US$700 million in compensation for terminating the contract, Shukoor declined to speak of the sum of money but expressed “full confidence” in winning a court battle.

“We were advised by very professional lawyers including Queen’s Counsels (QC). We have full confidence in winning the case,” she said.

“We do not intend to share all our legal arguments in this press conference. Please do respect that decision,” she added.

“Completely irrational”: GMR

GMR has slammed cabinet’s decision as “unilateral and completely irrational”.

“This unlawful and premature notice on the pretext that the concession agreement is ‘void’ is completely devoid of any locus standi and is therefore being challenged by the company before the competent forums. The company disputes that the concession agreement is ‘void’,” GMR said in a statement.

“The company would further like to state that it has taken all measures to continue operations at the Ibrahim Nasir International Airport thereby ensuring that this vital gateway to Maldives is kept open.

“We would also like to inform all that this action by the government of the Maldives is in complete disregard of and has been done during the pendency of arbitration proceedings in the designated tribunal in Singapore. We are therefore taking all measures to ensure the safety of our employees and safeguard our assets. We are confident that the stand of the company will be vindicated in every way.”

Speaking to Minivan News, GMR Executive Vice President & Group Head of Corporate Communications, Arun Bhaghat, said the only reason for the decision as stated in the government’s letter was that the airport development charge had been ruled unleviable by the Civil Court, and therefore the entire contract was void.

In late 2011 the then-opposition Dhivehi Qaumee Party (DQP) filed a successful Civil Court case blocking GMR from charging an Airport Development Charge (ADC) – a US$25 charge for outgoing passengers stipulated in the concession agreement – on the grounds that it was a tax not authorised by parliament.

Nasheed’s administration chose to honour the original contract, and instructed GMR to deduct the ADC revenues from the concession fees due the government, while it sought to appeal the Civil Court ruling.

However, the Nasheed government fell a month later and the opposition inherited the result of its court victory, receiving a succession of bills from the airport developer throughout 2012, despite the government’s insistence that the January 5 letter from MACL outlining the arrangement was no longer valid.

In the first quarter of 2012 the government received US$525,355 of an expected US$8.7 million, after the deduction of the ADC. That was followed by a US$1.5 million bill for the second quarter, after the ADC payable eclipsed the revenue due the government.

Combined with the third quarter payment due, the government now owes the airport developer US$3.7 million.

“The net result of this is that the Maldivian government now has to pay GMR for running the airport. On this basis it is likely that the Maldivian government will end up paying about MVR 8 billion (US$519 million) to GMR for the duration of the contract,” wrote Dr Hassan Saeed, DQP Leader and President Mohamed Waheed’s Special Advisor, in a recent appeal to Indian Prime Minister Manmohan Singh calling on him to cancel the Maldives’ agreement with GMR and warning the Indian PM of “rising extremism” as a result of the GMR deal and anti-Indian sentiment.

GMR attempted to compromise by offering to exempt Maldivian nationals from the ADC, with GMR Chairman G M Rao personally mailing Waheed with the offer, but claimed to have received no response from the government.

“This is by far the single largest foreign investment in the Maldives at US$511 million – in today’s figures, 40-50 percent of the Maldives’ GDP,” observed Bhaghat, adding that the company was supremely confident of defending its legal position.

“We have no plans to go. We have 23 more years here,” he said, vowing that the cabinet’s decision would have “no effect” on the operation of the airport.

“The defence force in this wonderful country is well geared to ensure smooth operation of the airport,” Bhaghat told Minivan News.

India backs GMR: “All necessary measures”

The government of India “proposes to monitor the situation in Maldives closely and is prepared to take all necessary measures to ensure the safety and security of its interests and its nationals in the Maldives,” India’s Ministry of External Affairs has meanwhile said in a statement.

“We have noted the decision by the Government of Maldives to terminate the agreement with the GMR Group to manage the Male International Airport. It would be recalled that the consortium consisting of GMR and MAHB (Malaysian Airport Authority) had been awarded the contract to manage the Male’ International Airport concession through a global tender conducted by the International Finance Corporation (IFC), Washington, a member of the World Bank.

“As the Advisor to the Government of Maldives, the IFC has stated that it has complied with Maldivian laws and regulations and followed international best practices at each step of the bidding process to ensure the highest degree of competitiveness, transparency and credibility of the process,” the statement read.

“The investment by GMR represents the single largest foreign direct investment in the history of Maldives. The decision to terminate the contract with GMR without due consultation with the company or efforts at arbitration provided for under the agreement sends a very negative signal to foreign investors and the international community. The Government of India would continue to remain engaged with the Government of Maldives on this issue, and would expect that the Government of Maldives would fulfil all legal processes and requirements in accordance with the relevant contracts and agreement it has concluded with GMR in this regard.”

“Destabilising the country”: MDP

The Maldivian Democratic Party (MDP) has meanwhile accused cabinet of destabilising the country by attacking foreign investment and supporting “extremist” rhetoric.

“This decision is bad for tourism, bad for the economy and bad for the Maldivian people,” said former President Mohamed Nasheed.

“Waheed’s government has cynically used xenophobia, nationalism and religious extremism to attack GMR, the country’s largest foreign investor. This will put off potential investors for decades. Waheed is leading the Maldives down the path to economic ruin,” he stated.

MDP MP and Spokesperson Hamid Abdul Ghafoor told Minivan News that disputed contracts could be unravelled through a legal process, but said the executive’s decision to void the contract and evict the country’s single largest foreign investor was not backed by any law.

“If cabinet has now decided to revoke the contract, who is going to execute the order? The contract is bound under international law. The case is still being heard by a court of arbitration in Singapore,” Ghafoor said.

“Will police be executing this order to reclaim the airport, or will it be Islamist elements? This is an executive decision that is being taken without any legal or political backing.”

Maldives National Defence Force (MNDF) Spokesperson Colonel Abdul Raheem said the military was “not involved” in the airport issue: “We will however, continue to take care of security [at the site] and look after it,” he said.

Police Spokesperson Sub-Inspector Hassan Haneef told Minivan News that any decision to enforce the decision would have to be directed by the President’s Office.

Decision prompted by “extremists”

Ghafoor claimed that threats of direct attacks on foreign investors reflected what he was the growing role of extremist Islamic thinking within the most senior decision making of the present government.

Raising concerns over the legality of voiding the GMR contract, Ghafoor pointed to recent comments in local media by the government-aligned religious Adaalath party, whose president Sheikh Imran Abdulla was yesterday quoted as threatening to “invade the runway” should the government not renege on the airport agreement.

“The deal was done very transparently, and [the government] have never been able to prove any wrongdoing,” Ghafoor claimed. “Yet, what is most worrying is that we have the cabinet of what we believe is an illegitimate government that is being influenced by extremist influences.”

Ghafoor alleged that the government’s decision over the GMR issue was being driven by former President Maumoon Abdul Gayoom’s Progressive Party of Maldives (PPM), Adhalaath Party President Sheikh Imran and fellow party member and Minister of Islamic Affairs, Sheikh Mohamed Shaheem Ali Saeed.

“We are now seeing the government partnering with and backing the rhetoric of a movement led by an Islamist group, it is very apparent what is going on here,” he said.

MP Ghafoor further claimed that parliament had, as of this evening, received no information on the decision to renege on the GMR agreement, adding that several no-confidence motions against senior government figures including President Waheed were scheduled.

“What is going on right now is a shift in parliament,” he said.

Ghafoor also claimed that beyond the potential legal and economic ramifications of reneging on the sovereign agreement with GMR, rumours of a Chinese intermediary stepping in to cover possible financial consequences could significantly affect the Maldives internationally.

“In terms of geopolitics, we are hearing about a Chinese connection to the [airport issue] that does not put the country in a comfortable position,” Ghafoor claimed. “Ideologically and culturally we have much closer ties to India than China.”

Returning from a visit to China back in September, President Dr Mohamed Waheed Hassan told reporters that Chinese aid to the Maldives would not be limited to a US$500million (MVR7.7billion) loan finalised earlier this year.

Waheed revealed at the time that the Chinese government had pledged to make all necessary aid available to the Maldives, including assistance with road and shipping development, local media reported at the time.

Regarding China’s view on Maldivian politics, Waheed noted that the Chinese were amongst the first nations to recognise his unity government.

“The Chinese Prime Minister personally told me that he had full confidence and support for the Maldivian government,” Waheed was reported as saying.

However, the Maldives government this evening dismissed suggestions that China would be taking a role in any future airport development.

“On this matter, China is as far away from the airport development as is physically possible,” said Presidents Office Media Secretary Masood Imad.

Troubled airport agreement

The agreement with the GMR-Malaysia Airports Holdings Berhad consortium was signed on June 28, 2010 with the Nasheed administration, following a bidding process conducted by the World Bank’s International Finance Corporation (IFC).

The GMR-MAHB consortium narrowly beat Turkish-French consortium TAV Holdings-Aéroports de Paris Management (ADPM), scoring a final Net Present Value (NPV) score of 495.18 to the runner up’s 454.04 at conclusion of the bid.

GMR’s win was based on playing to the government’s highest-scoring factors – fuel share revenue and upfront payment – at the expense of non-fuel related airport revenue.

As part of its successful bid, GMR paid the government US$78 million and 1 percent of non-fuel revenue and 15 percent of fuel revenue for 2011-2014, increased to 10 percent and 27 percent respectively for 2015-2025. The developer at the time anticipated that additional services and duty free development for the country’s well-heeled clientele, as well as the Maldives’ tourism growth potential, would offset the risks of the higher fuel share.

Opposition parties at the time the agreement was signed – and are now in government following February 7’s controversial transfer of power – first opposed GMR’s development of the airport on nationalistic grounds, and then levelled numerous allegations against the company ranging from corruption to concerns that the deal would allow Israeli bombers to refuel en route to bombing Arab countries.

Further protests occurred in December 2011 after GMR ceased renewing lease agreements of several existing airport duty free operators, notably duty-free liquor store Alpha-MVKB.

The High Court upheld at the time that since GMR had given notice on March 1, 2011 and, as per the agreement, the contract had been terminated on March 31. The court concluded that MVK had no right to remain at the airport without approval from GMR, and began packing up the store’s contents on December 4. Following the eviction, MVK CEO Ibrahim Shafeeq accused GMR of breaking into his shop and stealing his stock, and then launched a ‘Go Home GMR’ protest.

As tension with the developer increased, President Waheed’s cabinet attacked the IFC as “irresponsible” and “negligent” in conducting the bidding process.

The IFC denied the accusations, stating that its advice was geared towards achieving the “objective of upgrading the airport and ensuring compliance with applicable international regulations” and providing the Maldives government “with the maximum possible revenue”.

The stand-off escalated in early August 2012 following a stop work order on the new terminal development, after the government alleged certain planning permissions had not been obtained from the Civil Aviation Authority.

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State budget of MVR 16.9 billion for 2013 presented to parliament

Finance Minister Abdulla Jihad submitted an annual state budget of MVR 16.9 billion (US$1 billion) for 2013 (Dhivehi) to parliament today, proposing a raft of measures to raise revenue and reduce spending.

Of the proposed MVR 16.9 billion of government spending, more than 70 percent was recurrent expenditure, Jihad noted in his budget speech (Dhivehi).

“As in other years, the highest portion of recurrent expenditure is expenditure on [salaries and allowances for government] employees,” Jihad explained. “That is 48 percent of total recurrent expenditure.”

As total expenditure would outstrip projected revenues of MVR 12.9 billion (US$836 million), Jihad said the resulting deficit would be plugged with MVR 971 million (US$62 million) as budget support and MVR 1.3 billion (US$84 million) from Treasury bill (T-bill) sales.

Of the MVR 971 million in budget support, MVR 671 million (US$43 million) was expected as foreign loan assistance, Jihad explained, with the rest to be made up from “domestic finance.”

New measures proposed to raise revenue is expected to account for MVR 1.8 billion (US$116 million) in income, Jihad said.

Jihad further claimed that the budget deficit at the end of 2013 would be MVR 2.3 billion (US$149 million), half the deficit in the current year.

On revenue forecasts, Jihad revealed that income from taxation would account for MVR 9.1 billion (US$590 million) while MVR 3 billion (US$194 million) was expected from other sources, such as resort lease rents, dividends from government companies and profits from the Maldives Monetary Authority (MMA).

On social and economic programmes, Jihad said MVR 2.5 billion (US$162 million) was allocated to the education sector, MVR 1.7 billion (US$110 million) for strengthening the judiciary, MVR 1.5 billion (US$97 million) for improving health services, MVR 2 billion (US$129 million) for social security and welfare and MVR 5.5 billion (US$356 million) for infrastructure projects in the atolls.

A public sector investment programme (PSIP) was formulated with MVR 3.1 billion (US$201 million), Jihad said, with MVR 1.5 billion (US$97 million) from the state budget, MVR 21 million (US$1.3 million) from domestic loans, MVR 1.2 billion (US$77 million) as foreign loans and MVR347.6 million (US$22.5 million) as free aid.

The PSIP projects include construction and repairs of harbours in 14 islands, establishing sewerage systems in 11 islands, water systems in three islands, 1,500 housing units in eight islands, 21 new mosques and upgrading the regional hospitals in Kulhudhufushi and Addu City to tertiary level.

Meanwhile, according to the latest figures from the Finance Ministry, government spending as of November 22 stands at MVR 10.9 billion (US$706 million), while revenues of MVR 8.5 billion (US$551 million) have been collected so far this year.

Jihad said in parliament today that total spending in 2012 is expected to be MVR 16.5 billion (US$1 billion) while revenues would be MVR9.4 billion (US$609 million).

The revenue forecast in the 2012 budget was however MVR 11 billion (US$713 million).

“At the end of 2012, the state’s budget deficit is estimated to be at MVR 4.3 billion (US$278 million). That is 12.6 percent of GDP,” Jihad revealed.

Revenue raising and cost-cutting measures

A recent mission from the International Monetary Fund (IMF) urged the government to implement a raft of measures to raise revenues, advising that strengthening government finances was “the most pressing macroeconomic priority for the Maldives.”

Finance Minister JihadEchoing the IMF concerns, Jihad told MPs that rising public debt was “a major challenge to the country’s economy,” revealing that the state’s debt would increase to MVR 31 billion (US$2 billion) by the end of 2013 – 82 percent of GDP.

If the deficit spending trend continues, Jihad warned that the Maldives would face severe difficulties in securing development loans and financial assistance.

Taking the IMF recommendations on board in formulating the budget, Jihad proposed a number of revenue raising and cost-cutting measures,

  • Review government subsidies to target assistance to the needy
  • Freeze hiring “as much as possible”
  • Reforming the universal health insurance programme ‘Aasandha’
  • Reducing the number of councillors and board members of government companies
  • Reducing expenditure for trips from government offices to the atolls
  • Reduce government expenditure on rent for government offices
  • Reduce overseas trips by government employees
  • Amending the Pension Act to abolish “double pension”
  • Reversing import duty reductions
  • Hiking T-GST (Tourism Good and Services Tax) to 15 percent from July 2013
  • Introducing GST for telecom services (currently exempt from the tax)
  • Introducing GST for oil
  • Increasing airport service charge for foreigners from $18 to $30
  • Amending the law on revenue stamps
  • Abolishing 22 loss-making government companies

Jihad appealed to MPs to approve the measures and warned of “bitter consequences for the whole nation” should deficit spending continue in the future.

The Finance Minister urged MPs to “put aside political differences and prioritise national interest” in recognising that the country could not “indefinitely” spend beyond its means.

“We have to accept that these measures will affect all of us to some extent,” he said. “However, if we do not begin taking these measures, we might have to face more severe difficulties as a result of steps we would be forced to take.”

Monetary policy

According to projections by the MMA, said Jihad, the current account deficit is expected be higher than 2012 by 15 percent.

The current account deficit is projected to widen to 28 percent of GDP in 2013, Jihad said.

Collaborative efforts from different sector would be needed to “solve the balance of payments problem facing the country,” Jihad added, as the imbalance in the foreign exchange market has been building for many years, resulting in a parallel or “black market” for dollars.

Policies have been proposed to increase exports and expand small businesses, Jihad said.

Following the submission of the budget today, a joint committee of the parliament’s Finance Committee and Economic Committee would convene to review the proposed budget before it is put for a vote.

The budget debate has meanwhile been scheduled for December 4, 5 and 6, Speaker Abdulla Shahid said today.

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