Society & Culture – Page 158 – Minivan News

Maldives facing worst economic situation in recent history: MMA Governor

The Maldives is facing its worst economic crisis in recent memory, the governor of the country’s central bank said earlier this week.

“The Maldives is now in a dangerous economic situation never before seen in recent history,” local media reported Governor of the Maldives Monetary Authority (MMA), Dr Fazeel Najeeb, as saying during a ‘Finance Forum’ held by the Pension Administration office on Bandos Island Resort.

“Expenditure in the country has exceeded income, and as a result the budget deficit is increasing. From November 2010 inflation has also been going up,” he said.

The country last year spent 63.1 percent of its GDP on state expenses, Dr Najeeb claimed, adding that only four countries had worse percentages, including Cuba and Zimbabwe.

Parliament’s Finance Committee revealed earlier this month that expected revenue for 2012 had plunged 23 percent – a shortfall of US$168.6 million, leaving the country with a budget deficit of 27 percent. Key unaccounted losses include up to US$135 million in land lease payments due to policy reinterpretation, and around US$8 million a quarter in airport concession fees due to a Civil Court ruling blocking the levying of an airport development charge.

Government spending for the year has meanwhile increased by almost 24 percent, to a total of US$1.13 billion. Spending unaccounted for in the 2012 budget following the controversial change of government of February 7 has included the promotion of a third of the police force, lump sum payments to military personnel, US$6.5 million in fishing subsidies, reimbursement of US$28.8 in civil servant salaries following cuts by the previous administration, the creation of two new ministries, and the hiring of international PR firms to counter negative publicity.

President Dr Mohamed Waheed Hassan meanwhile reported this week that India had granted the Maldives a US$25 million increase in credit facility, on top of a US$100 million facility extended in November 2011.

Figures from the MMA’s monthly economic review in April show projected GDP growth of 5.5 percent this year, down from 7.5 percent last year, but are drawn from the 2012 budget and do not account for the increase in expenditure highlighted by the Finance Committee.

However, “key indicators of the tourism sector showed declines as tourist arrivals fell in both monthly and annual terms during the month of March 2012. The decrease in arrivals mainly came from China although arrivals from Europe were also slightly lower,” the MMA noted, observing that tourist bed nights also declined.

The government said earlier this month it would hold industry consultations with the tourism sector as to how the additional revenue might be raised, and present recommendations from the International Monetary Fund (IMF), which included doubling the Tourism Goods and Services Tax (TGST) to 12 percent, according to Tourism Minister Ahmed Adheeb.

Minivan News spoke to several resort managers, who reacted poorly to the proposal.

“If we were to increase now, we’d – again – have to absorb all of it until new contracts with tour operators set in, some time in March 2013,” one manager told Minivan News.

“An increase on sales prices on the resort by way of adding on the GST – as any other increase – will be felt a lot more by resorts such as ours with a more price sensitive clientele, than by many of the upper market properties. How this will affect the country as a whole – rising prices, inflation, etc – and its effect also on tourism, is anybody’s guess,” the manager added.

The situation had led to a “feeling of insecurity” among many stakeholders in the industry, the manager said.

“Taxes, charges, rent-fees – nobody will dare a prediction for in two months from now let alone for next year,” he said. “This is not limited to possible financial burdens but is also true for other areas: infrastructure, industry projections, etc.”

Another resort manager said that any increase to the TGST, particularly if it was sudden, would have “serious ramifications on many of the markets.”

“Some operators will not accept the increase mid-contract and hence resorts will have to absorb this from revenue,” the manager explained. ”The additional costs will need to be balanced somewhere in the operation.”

The manager expressed frustration that resorts were being asked to shoulder the country’s financial burdens without any commitment from the government to reduce expenditure.

“We have seen an increase in some public services salaries and a reduction of working hours in many government departments who are meant to serve the resorts. Many of these government departments already make it difficult for the resorts to do their jobs, with bureaucracy and rules to keep extra people in a job rather than making it easier to support the resorts in order to do their job: build more business, increase revenue and hence increase GST [revenue] in a positive manner. An increase in GST right now is the wrong solution.”

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Dhiraagu eyes fundraising push with 2012 road race launch

Dhiraagu has this week launched its 2012 Broadband Road Race, which will be held in Male’ on June 29 under the banner of the local telecoms group’s corporate social responsibility programme.

The road race, which organisers claim is the largest running event in the country’s athletic calender, is now in its sixth year.

According to the company, some 1,500 runners – made up of professional athletes, fun runners, local and multinational business, schools and sport teams – were estimated to have participated in last year’s race.

Speaking to media at the launch of this year’s event at Male’s Nasandhura Palace Hotel yesterday, Dhiraagu representatives said the company hoped for an even bigger turnout in 2012. The race is organised in collaboration with the Athletics Association of the Maldives.

Dhiraagu spokesperson Imjad Jaleel told Minivan News that aside from serving as an official event in the country’s athletic calender for both professional and amateur runners, the race was primarily devised by the company to support fund-raising initiatives for local issues.

“There are real concerns here about issues of domestic violence and child abuse, we hope that charities can use this event for fundraising as well as raising awareness of their work locally,” he said.

Jaleel stressed that the road race had been devised by the company in 2007 additionally as a means to promote healthier lifestyles in the country.

“Due to the lack of space in Male’, it was not possible to host an official marathon as participants would have to run around Male’ five or six times,” he added.

Company role

Communications Manager Mohamed Mirshan Hassan told local media that aside from devising and hosting the race, Dhiraagu’s fund raising commitments were based on encouraging its staff to play a more personal role.

“We see this event more as a social platform for NGO s to raise funds as well as awareness of their campaigns,” he said. “However, senior colleagues from Dhiraagu ran last years event raising about Rf80,000 between them. This is a good example for others in how the event can be used for fund-raising.”

The company estimated that about one hundred of its employees are expected to participate in the race this year, reflecting strong “personal support” for the event.

Dhiraagu claimed during yesterday’s launch that it was also looking to work with sponsors and athletic associations to further increase the scale of the event by increasing the number of participants taking part in the 2012 race.

Organisers said they will also be providing prizes in several different categories for both male and female amateur and professional runners. Schools, sports clubs, NGOs and resort operators are also being invited to take part in the race.

Professional and amateur runners will be competing for respective cash prises, with other awards being presented to the most successful teams and schools. Special accolades will also be given for the oldest participant in the run.

More information on the race, as well as online application forms for both individual and team participants can be found on the event’s official site.

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Weak fisheries sector could benefit from strong tourism

The Minister of Fisheries and Agriculture Ahmed Shafeeu has suggested that the tourism industry might be “tapped” to improve the fortunes of the ailing fisheries sector.

“The internal market is there for agriculture and fisheries. The local demand for fish is huge, including resorts,” he said.

Shafeeu noted that there was potential in closer links between resorts and local producers, and that there had already been suggestions from some island communities that such links be further cultivated.

“The [fisheries] sector needs to be re-prioritised. Recently, the focus has been mainly on tourism. We are very vulnerable if we depend only on tourism,” said Shafeeu.

The most recent statistics from the Maldives Monetary Authority (MMA) have revealed that the volume of fish exports dropped by 63 percent in the twelve months from January 2011 to January 2012. The value of these exports dropped by 33 percent during the same period.

The statistics, provided by the Department of National Planning, show that tourism constituted around thirty percent of real GDP last year and is projected to represent a similar figure in 2012.

The fisheries industry is predicted to contribute just 1.1 percent of Maldives’ real GDP this year, dropping nearly two thirds from its 2006 contribution. The national significance of the industry however remains huge, providing employment to more than half of the population.

Potential issues that may act as potential barriers to the consumption of local fisheries produce in the resorts seem to be transport and product quality.

Deputy Tourism Minister Mohamed Maleeh Jamaal said that the opening of local airports and the development of transport may make it easier to increase the consumption of local produce in resorts.

He said that there had not been any research done on the exact patterns of consumption on resorts. The MMA figures show that the Maldives exported an average of 43 percent of its fish catch over the five years up to 2011.

“Currently, there are many challenges in the transportation of products,” said Maleeh.

“We hope domestic products can be consumed in our resorts. Fisheries have a high potential. All resorts consume a lot of fish. I think the demand for locally caught fish is very high,” he added.

Maleeh said that the sustainability of Maldivian fishing techniques were a strong selling point of the nation as a tourist destination. He saw this as part of what makes the Maldives unique.

The sustainability of centuries-old ‘pole and line’ fishing methods is not only considered a source of national pride, but also attracts buyers from premium supermarkets in the UK and Europe.

Shafeeu said that the resorts often imported only local reef fish, choosing to import other high value fish products which could potentially be available domestically.

A senior management source at one resort told Minivan News that they did source local fisheries’ produce in their restaurants and in their staff canteen, owing to the low cost.

“We don’t buy from outside,” said the source, although they said the choice was often limited: “It’s not every day we can get what we want.”

They added that this arrangement was possible due to the location of their resort, in North Male’ Atoll. For more isolated resorts, they explained, it is not viable for local fishermen to bring fresh fish every day.

This issue was also touched upon by Maleeh: “Resorts need continuity and consistency of supply,” he said, adding, “The quality of products needs to be maintained.”

Describing alternative methods of improving the prospects of the industry which has suffered greatly from foreign competition in nearby waters, Shafeeu raised the issue of the impact the “major shortage” of fresh ice had on the quality of produce.

“One of the major concerns is getting good ice across the country,” said Shafeeu, explaining that the delays imposed while vessels waited for ice, as well as the potential impact on the quality of the catch, were “not acceptable”.

He added that with the budget being “very limited” he was exploring the possibility of converting funds from other projects to meet this need.

Investment in ice processing plants was described as one of the areas he hoped would benefit from the resumption of fishing subsidies was announced by President Dr Mohamed Waheed Hassan last month.

The subsidies, amounting to Rf100million a year (US$6.5million), are yet to receive official approval from the Majlis, although Shafeeu said that the chair of the Finance Committee had indicated that a consensus in favour of subsidies had been reached.

He said that he had instructed ministry staff to advertise the availability of the subsidies so that fishermen could register and receive their vouchers as soon as the Majlis reconvened.

When asked if he felt the fishing industry to be in terminal decline, Shafeeu replied that he did not think this was the case, believing that the industry could still play a prominent role in the country’s economy “if we give it enough attention”.

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Islamic Ministry requests MNDF, police officers be authorised to grow beards

The Ministry of Islamic Affairs has requested amendments to the uniform code of the security services to authorise army and police officers to grow facial hair.

A media official from the ministry confirmed that a letter was sent to the President’s Office this week officially requesting the policy change “to give permission to police and army officers to grow beards as in other Islamic countries, since our constitution is based on Islamic principles.”

Islamic Minister Sheikh Mohamed Shaheem Ali Saeed told local media this week that a number of army and police officers had appealed with the ministry for the change.

Shaheem argued that in spite of disagreement among scholars regarding the issue, the Maldivian constitution provides the freedom to adhere to Islamic codes.

He noted that other Islamic nations such as Qatar, Saudi Arabia, Kuwait and Pakistan permitted beards in the military while Sikhs in the Indian army were allowed to wear beards.

Shaheem explained to local daily Haveeru this week that the Islamic Ministry was not advocating in favour of making beards mandatory for the uniformed bodies, but rather to allow those who requested permission to wear beards.

“While our constitution offers that right, why has it been forbidden by some in an Islamic country?” he asked, adding that he had complete confidence that President Mohamed Waheed “would not turn his back on the request.”

“Mocking the Sunnah“

Shaheem’s religious conservative Adhaalath Party, part of the ruling coalition, put out a statement yesterday “condemning in the harshest terms” remarks made by two unnamed scholars in a lecture to police officers last week that the party contends “mocked” the Sunnah (way of life prescribed as normative for Muslims on the basis of the teachings and practices of Prophet Mohammed).

The press release did not identify the speakers by name. However, a police media official confirmed that the session was conducted by Dr Ibrahim Zakariyya Moosa and MP Afrashim Ali, a moderate scholar and council member of former President Maumoon Abdul Gayoom’s Progressive Party of Maldives (PPM).

According to police media, the pair spoke in detail about sources of disputes among religious scholars, including on the issue of beards.

“In his speech, Dr Afrashim Ali mainly explained the importance of knowing how the Prophet’s Sunnah is ranked,” reads the police news item.

MP Afrashim argued that issues on which scholars have not been able to reach a consensus could not be declared either compulsory or heretical as “there cannot be a definite conclusion regarding such problems.”

According to Adhaalath Party, one of the scholars told police officers that there was no benefit to society from an individual wearing a beard “even if, for example, it was established from the Prophet’s Sunnah.”

The remarks implied that growing a beard was not mandatory in the Sunnah and cast doubt on its purpose, the Adhaalath party statement argued.

“As some officers of the Maldives police institution wanted to wear beards, he attempted in his talk to convince them that there was no need to do something that was of no benefit to society,” the statement reads.

Adhaalath Party noted that there was consensus among Islamic scholars that wearing beards was part of the Sunnah. Scholars however disagreed as to whether the practice was obligatory upon all Muslim males.

“This is as clear as the midday sun,” the statement claimed, citing authentic hadith purporting to show that the Prophet “ordered all Muslims to trim their moustaches and grow out their beards.”

In its statement, the Adhaalath Party’s scholars council also urged all government departments and state institutions to “amend all regulations in conflict with Islamic principles.”

Article 10 of the constitution states that the religion of the state is Islam while “no law contrary to any tenet of Islam shall be enacted in the Maldives.”

Religious NGO Jammiyathul Salaf meanwhile released a statement yesterday signed by the group’s President Sheikh Abdulla bin Mohamed Ibrahim, Sheikh Hassan Moosa Fikry and Sheikh Ahmed Sameer bin Ibrahim insisting that beards were compulsory in Islam.

The Salaf statement further claimed that regulations prohibiting beards in the military were unconstitutional as it was contrary to a well-established tenet of Islam.

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No decision on Nasheed prosecution until police review charges: PG Muiz

Prosecutor General Ahmed Muizz has said there will be no decision on prosecuting former President Mohamed Nasheed until police review “aspects” of criminal charges forwarded against the one-time head of state.

Muiz told Minivan News today that after reviewing charges sent to his office on April 15, he had requested police “look into aspects” of the case they forwarded over certain concerns that had been “noted” at the time. Muiz was unable to specify the nature of the concerns sent to police regarding the charges facing Nasheed.

The former president potentially faces prosecution over charges relating to both the alleged discovery by police of alcohol at his former residence following his “resignation” from office and the controversial detention of Criminal Court Chief Judge Abdulla Mohamed during his administration.

Muiz himself added that despite expecting the PG’s Office to make a decision on whether to prosecute Nasheed by the end of last month, he was now waiting on the outcome of a police review. He added that the findings of an investigation by the Human Rights Commission of the Maldives (HRCM) would also be required before making a decision on prosecution.

HRCM investigation

The HRCM, which in March summoned Nasheed for questioning over his role in detaining Judge Abdulla, said it was presently finalising its own investigation into the incident.

HRCM spokesperson Jeehan Mahmoud told Minivan News today that its investigation into the judge’s detention had now been closed, though the findings were yet to be overlooked at a sitting of five senior commissioners representing the body.

“Once we have finalised the report, we will then look to send it to relevant authorities,” Jeehan said.

HRCM said in March that, along with its investigation into the detention of Judge Abdulla, Nasheed would also be directly involved and questioned in two additional cases. These cases were said to relate to alleged human rights abuses carried against Nasheed himself before and during February’s controversial transfer of power that saw him resign – a decision he later claimed was taken under “duress”.

Speaking last month after police forwarded the charges against Nasheed to the PG’s Office, Maldivian Democratic Party (MDP) MP Imthiyaz Fahmy claimed that the move was “pure injustice”, representing the “broken” state of the national criminal justice system.

Fahmy contended it was ironic that Nasheed, who had worked to foster a reputation for championing human rights in the country, could now potentially face prosecution by a judiciary that he himself alleged to be guilty of several of counts of corruption.

“This is injustice. Justice is not ensured simply by a judge’s verdict on an issue, it has to be publicly accepted that it is justice,” he argued.

Commonwealth role

Earlier this week, Attorney General (AG) Azima Shakoor denied the government had come under pressure from the Commonwealth to drop all criminal charges against Nasheed.

The AG added that the government were making no further comments until discussions being held with Commonwealth Special Envoy Sir Donald McKinnon were concluded.

Muiz said that he had not received any communications from the Commonwealth regarding the charges against Nasheed.

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AG denies Commonwealth pushing government to drop criminal charges against Nasheed

Attorney General (AG) Azima Shakoor has today denied reports that the Commonwealth is pressing the government to drop criminal charges against former President Mohamed Nasheed.

Local media reported yesterday that the Commonwealth had requested that President Dr Mohamed Waheed Hassan’s administration assure Nasheed’s freedom, citing a government official whose identity was not divulged.

Nasheed could face prosecution over charges relating to both the alleged discovery by police of alcohol at his former residence and the detention of Criminal Court Chief Judge Abdulla Mohamed. The Criminal Court issued a warrant for his arrest immediately after the controversial change of government on February 7, however this was not acted upon.

Pointing to a government statement, Shakoor claimed today that there had been no discussions with the Commonwealth over dropping these charges against Nasheed. She added there would be no further comment on matter until discussions with Commonwealth Special Envoy Sir Donald McKinnon were concluded.

Mckinnon has been holding talks with several government representatives including the attorney general, Home Minister Dr Mohamed Jameel Ahmed, Gender Minister Fathimath Dhiyana Saeed, Defence Minister Mohamed Nazim and Dr Hassan Saeed, Special Advisor to the President.

Nasheed alleged following his resignation that he had been deposed in a “coup” on February 7.

Criminal charges

Minivan News reported last month that former President Mohamed Nasheed could face separate criminal charges for his alleged role in the Maldives National Defense Force’s (MNDF) detention of Judge Abdulla and the alleged confiscation of alcohol bottles at his home.

Prosecutor General (PG) Ahmed Muizz said at the time that he had expected a decision to be made by his office on whether to prosecute Nasheed by the end of April. A decision on these charges has still yet to be taken.

Muizz was not responding to calls at the time of press.

Quoting an anonymous government source yesterday, local newspaper Haveeru reported that Commonwealth representatives had shown strong concerns that Nasheed not face charges.

“They (Commonwealth) want us to assure Nasheed’s freedom without any action or charges more than they want us to hold early presidential elections,” the official told the paper.

“We informed, [the Commonwealth] that we cannot impede or influence the justice system of this country. If a crime is committed than the guilty must be duly punished and that cannot be stopped even if the government wished to do so.”

In its statement March 15, the Commonwealth Ministerial Action Group (CMAG) expressed “continued concern” that “former President Nasheed receive the freedoms and privileges due to a former head of government. CMAG urged that all political parties and their leaders should be able to participate fully and freely in future electoral processes.”

“Pure injustice”

Speaking last month after police forwarded the Nasheed charges to the PG’s Office, Maldivian Democratic Party (MDP) MP Imthiyaz Fahmy claimed that the move was “pure injustice”, representing the “broken” state of the national criminal justice system.

“This is injustice. Justice is not ensured simply by a judge’s verdict on an issue, it has to be publicly accepted that it is justice,” he argued.

“For the last thirty long years, the regime [of former President Maumoon Abdul Gayoom] tortured and suppressed the people. They systematically tortured the people. Those that were at the helm of torture and corruption are made as clean as ‘pure white cotton’ by the crippled judiciary.”

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Gaamaadhoo prison bones not Abdulla Anees ‘Aibalhey’, say police

Police have reported that human bones discovered in the site of the former Gaamaadhoo prison on September 19, 2009 do not belong to Abdulla Anees ‘Aibalhey’.

Former President Mohamed Nasheed alleged that the human bones discovered in Gaamaadhoo prison matched the age and estimated period of death of Anees, who disappeared while he was serving a sentence in the prison.

Speaking to the press, Deputy Head of Specialist Command Mohamed Riyaz said that police had concluded the investigation into the case launched under former president Nasheed’s administration, and decided that Anees had not died while in prison. He had last been seen while he was on an island, sentenced to banishment.

Riyaz said the bones were analysed in Thailand and the US, and were found to be aged between 950-1050 years old.

During the investigation police travelled to different islands where Anees had been and met with his close friends, family members, cell mates and women that he had had relations with to gather information, and had tracked faxes and letters and other documents, Riyaz said.

According to Riyaz, Anees was in jail in early 1980 and was among the inmates that transferred to Gaamaadhoo prison in 1982. In 1983 he was banished to the island ‘Kondey’ in Gaafu Dhaalu Atoll.

In December 1983 he was brought back to jail, Riyaz said, and there were records that he had escaped prison several times.

In 1984 he was banished to some islands in the north of the Maldives and on several occasions had tried to flee by stealing a ‘Bokkura’ [small traditional boat]. He was last banished in July 1985 to the island of Dhiyadhoo in Gaafu Alifu Atoll, according to Riyaz.

In 1983 Anees was banished to Fuvamulah, but stole a boat and tried to flee before he was found near the waters of Fiyoari in Gaafu Dhaalu Atoll and brought back to hail.

That same year he was arrested again in a bokkura in the Vaadhoo Ocean, as a fugitive on the run who had escaped prison for the second time.

Prison documents show that Anees was in prison in December the same year and had escaped prison that time as well.

In July 1984 Anees was banished to Hoarafushi in Haa Alifu Atoll, and in September that year he stole a boat and fled to Molhadhoo in the same atoll.

The last information about Anees that police could obtain was that he was banished to Dhiyadhoo island in 1985, and on the evening of September 25 of the same year he stole a bokkura and left the island.

Police said the night Anees left was stormy, and that after he left there was no sign of the bokkura, his body or his clothes.

According to police, documents at the Dhiyadhoo island office and former prisons division showed that a search was conducted to find him, but it was unsuccessful.

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MNDF marks Children’s Day

The Maldives National Defence Force (MNDF) conducted equipment demonstrations and allowed children to handle firearms during an event on Saturday to mark Children’s Day.

MNDF Spokesperson Major Abdul Raheem said the National Library requested the MNDF set up a stall as part of the day’s events, “so we demonstrated our equipment, and people took photos with it.”

Some of those photos – of toddlers handling heavy machine guns and staring down the barrels of pistols – were met with concern by Maldivians on social media channels, who described the images as “just not right”, and “sick and wrong”. One Maldivian twitter user questioned whether the event was part of the new government’s civic education syllabus.

In response to concerns, Major Abdul Raheem emphasised that the event was “very safe”.

“When we took the weapons outside we did not take any ammunition,” he explained. “The weapons were technically disabled.”

There was no possibility of even an unloaded weapon falling into the hands of a member of the public, he said.

Mariya Ali, former Deputy Minister of Health and Family with a 20 year background in child welfare in the Maldives, questioned the objective of the exercise.

“These children have witnessed violence from the [police and army], and now they are being exposed to the tools of violence. If it is not explained correctly, it can have a longstanding effect on them,” she said. “It is not appropriate for children under the age of eight to be exposed to this.”

Mariya said research into how children perceived authority figures such as the police showed that “Children see them as protectors – in their minds they separate the act of protecting – violence – from the protective side.”

“It would have been better to focus on the protective side, rather than the guns – things like fire safety, and cleaning up after accidents,” she suggested. “Children look up to them, they are important role models.”

UNICEF Resident Representative to the Maldives Zeba Tanvir Bukhari said the organisation was “quite taken aback” and said she hoped the MNDF would consult it when organising future events.

“It’s really very worrying. Children are very fragile at that age – the focus needs to be on care, affection, education and health. There is a huge risk of influencing children,” she said.

Images courtesy Jaawid Naseem/Jade Photography. Republished with permission.

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Thai real-estate developer to withdraw from Hulhumale’ housing project

Thai newspaper The Nation has reported that Pruksa, Thailand’s largest real-estate developer, is withdrawing its investment in the Maldives after suffering a US$3.2 million loss.

In an interview last week with Pruksa CEO Thongma Vijitpongpun, The Nation reported that the company was pulling out of the Maldives after making losses of Bt (Thai Baht) 100million.

In 2010, Pruksa formed a joint venture agreement with the Housing Development Corporation (HDC), formerly the Hulhumale’ Development Corporation, to build over 1000 houses in Hulhumale’. That company, Pruksa-HDC Housing Pvt Ltd, began construction of the first phase of the project, consisting of around 180 units, in August 2010.

Mohamed Sharah, the Assistant Director of Corporate Affairs, Marketing and Business Development, was unable to confirm whether the company had withdrawn from the agreement. Sharah also acts as Pruksa’s Company Secretary in the Maldives.

“We have not been informed [of the decision], the work on the first phase still continues and will be completed by July,” said Sharah.

The first phase, explained Sharah, consisted of nine blocks containing 180 apartments, six of which have been completed, with four already having been handed over to customers. The first phase is scheduled for completion by July.

There were some initial problems with the quality of construction work on the first two of these buildings which caused some delays to the project while work was redone to the standards required by the quality control officer.

The 180 units were pre-sold in Maldivian rufiyaa before construction. In a previous interview with The Nation, a representative from Pruksa anticipated a profitable venture.

“We started to pre-book our project in the Maldives last month for the first phase of 180 units. Demand is for more than that amount and as a result we believe our presales in the Maldives will exceed our estimate,” the company’s Chief Business Officer was reported as saying in June 2010.

However, Sharah explained that this policy had “caused significant losses” for the company due to problems with the local currency.

“They have faced devolution of the currency and a shortage of dollars in the Maldives,” he added.

The price of rufiya at the time when most of the units were sold was pegged at Rf12.85 to the US dollar. However, in April 2011, the government made the decision to introduce a managed floatation of the currency. This decision allowed the rufiya to be traded within a 20percent margin of its previous rate. The result has been the devaluation of the currency to a rate of 15.42 to the US dollar – which still remains next to unexchangable outside the blackmarket, where rates can top Rf 17-18 to the dollar.

That problem is likely to continue after the government’s budget deficit was predicted to reach 27 percent of the country’s GDP in 2012, according to figures recently released by the Majlis Finance Committee.

The International Monetary Fund (IMF)’s head of mission to the Maldives, Jonathan Dunn, recently told Minivan News: “As long as the government continues to inject substantial amounts of new spending into the economy, the foreign exchange situation in the country will not be resolved.”

The net result of Pruksa’s exposure to rufiya may account for the US$3.2 million losses the company CEO reported to The Nation.

HDC told Minivan News that 90 percent of the units were sold using the pre-booking system. The initial value of the apartments was reported to have been between Rf0.9million and Rf1.6 million.

The change in exchange rates in the period following these sales means that between US$1.8million and US$3.3million from Pruksa’s projected income may have been lost from the sale of these units alone.

During the same interview in The Nation, the CEO explained that the company was restructuring to a more profitable model, in part due to the losses suffered during last year’s flooding which afflicted much of Thailand.

However, it was mentioned that the company was considering expansion into the ASEAN nations of Malaysia, Indonesia and the Phillipines. The CEO also announced that projects in Vietnam and India, temporarily suspended in the first half of this year, would continue.

A representative of Pruksa in the company’s Bangkok office was unable to confirm the cessation of the company’s dealing in the Maldives. He did confirm that a representative of the company would be visiting the Maldives later this month, at which time more details would be made available.

The spokesperson was able to confirm that the most of the apartment sales took place 18 months ago and were transacted in rufiya.

“There were some problems with that,” the spokesman noted.

The Hulhumale’ project is regarded as the most ambitious urban development project in the history of the country. The reclamation of land and the internal migration of Maldivians to the island, which lies adjacent to the capital Male’, is seen as vital in the country’s long term plans for economic development of the nation and for the easing of congestion in the capital city.

“If Pruksa withdraws, the HDC will have to find new investment,” said Sharah.

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