Day: January 13, 2011

Maldives one of the world’s most economically-repressed countries: report

The Maldives has been ranked as one of the world’s most economically-repressed countries, in the 2011 Index of Economic Freedom report produced by the Wall Street Journal and Washington think-tank The Heritage Foundation.

The Maldives is ranked 154th out of the 183 countries ranked, a slight drop on last year but still significantly below the global and regional average, placing 34th out of 41 countries in the Asia Pacific region.

Economic freedom, as defined by the report, “is the fundamental right of every human to control his or her own labor and property.”

The Maldives scored well for several indices, including business, fiscal, trade and labour freedom, but scored poorly for government spending, corruption and property rights.

“The Maldives’ weaknesses include chronically high government spending, inefficiency of the outsized public sector, and widespread corruption,” the report observed.

The government’s role in the economy through state-owned enterprises – and employment of over a third of the country’s total labour force – was “crowding out private-sector activity.”

Furthermore, “public-sector graft remains a challenge for foreign firms operating in the Maldives”, while “bureaucracy can be non-transparent and prone to corruption. Dispute resolution can be slow, complicated, and burdensome.”

Minister of Economic Development Mahmoud Razee noted that with regard to corruption, “in the past the country has not had the institutions to monitor and provide transparency, but now the information is available. It’s the difference between having a dirty or a clean window – one lets you see inside to the full picture.”

Several companies investing in the Maldives – including Indian infrastructure giant GMR and Malaysian security technology firm Nexbis – have had their share prices become collateral in local political rivalries following accusations of corruption.

“It’s one thing to be accused of something,” Razee said. “I’m sure most companies think about this [problem], but we have not seen it become a huge issue.”

Development of the private sector was stymied by “costly credit and limited access to financial services” the report noted, and while labour regulations were flexible, “enforcement is not effective in the absence of a dynamic labor market.”

The International Monetary Fund (IMF) has consistently urged the Maldives to reduce the size of its bloated civil service wage spend, which ballooned 400 percent between 2004 and 2009.

“With the government borrowing at the rate it has, it reduces the amount of credit available to the private sector, and that constrains the ability of the private sector to provide jobs and employment,” leader of the Maldives IMF delegation, Rodrigo Cubero, said in November last year.

“That then constrains economic growth. Furthermore, by spending more than it earns, the government is putting pressure on imports and the exchange rate.”

Razee noted that the introduction of new tax regulation such as the GST and Business Profit Tax, “while not the panacea to everything, shows the government’s willingness to come to terms with [the country’s economic condition].”

“If you look at the level of companies interested and investing in the Maldives, it has not lessened,” he said.

On a positive note, the report observed the potential of the government’s mobile phone banking project, dubbed ‘Keesa’, to enhance development in the private sector. Keesa is being jointed developed by the Maldives Monetary Authority and Dhiraagu, with World Bank assistance.

Summarising, the report observed that higher levels of economic freedom “correlated strongly to a country’s overall well-being, taking into account factors such as health, education, security and personal freedom.”

Hong Kong and Singapore were ranked top, followed by Australia, New Zealand, Switzerland and Canada. North Korea, Zimbabwe and Cuba were ranked at the bottom.

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India and Sri Lanka to be added to Maldives ferry network, says Transport Minister

The government will connect neighbouring countries including Sri Lanka and India to its growing ferry transport network, Minister for Transport and Communication Adhil Saleem said today.

The government is in discussions with the South Asian Association for Regional Cooperation (SAARC) to add its member countries to Maldives Transportation Network, under phase two of the rollout of the ferry network.

There is currently no scheduled passenger ferry service between the Maldives and other countries, with travellers forced to fly to their destinations.

Domestically, all provinces have at least a skeletal ferry service in place, Minivan News understands, while the Ministry’s statistics show that the new ferry transportation network has completed over 311,000 ferry trips since it began operation last year. A government bus service has completed an additional 49,204 trips.

Inter-island ferry transportation in the Maldives has historically been limited to private operators working to sporadic timetables. More commonly, passengers to an island such as Maalhos in Alif Atoll would travel on an unscheduled vessel owned by someone on the island, such as a shop owner, for a variable price. Chartering a local vessel could cost up to Rf 1000 (US$77).

Now, a government ferry from Male’ to Maalhos costs a fixed Rf 50 (US$3.90). Inter-atoll island hopping is set at Rf 20 (US$1.50).

Speaking at the Transport Ministry today, Adhil said that the transportation network had proven to be “very successful”, with “much more demand than we estimated.”

The service was intended to commence after three years, he said, but upon request by the government the ferries had commenced with the best available service possible.

”This year the work of establishing ferry terminals will commence, and in some areas has already begun while in others has been completed,” he said.

”Today we can see short eats made on one island sold in another islands of that atoll, we can see mangoes produced in one island sold in other islands of the atoll, we can see horse mackerel caught in Thinadhoo’s reef sold and eaten in Fuvamulah,” he said. ”Many of the people are benefiting economically and socially through this ferry system.”

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Religious Unity Act in hands of Ibra, claims Adhaalath Party

The Adhaalath Party, led by State Islamic Minister Sheikh Hussein Rasheed, has claimed that the Religious Unity Act is in the hands of the leader of the Social Liberal Party (SLP), Ibrahim ‘Ibra’ Ismail.

”The Religious Unity Act, which the government has obstructed from being [published in the gazette] was drafted with the assistance of three Attorney Generals,” the Adhaalath Party said.

”According to the information we have, the Act was first drafted with the full assistance of former Attorney General Dhiyana Saeed, during the former administration.”

The Act was refined by Islamic Minister Dr Abdul Majeed Abdul Baari, Sheikh Hussein Rasheed, Head of Fiqh Academy Sheikh Ali Zahir Bin Saeed Gasim, Sheikh Ahmed Zahir, Sheikh Ahmed Saleem, the Maldivian Democratic Party (MDP) Religious Council’s former leader Sheikh ‘BA’ Naseem and Deputy Islamic Minister Mohamed Farooq before sending it to the President’s Office.

After receiving the draft Act, President Mohamed Nasheed held a meeting with Commissioner of Police Ahmed Faseeh, Sheikh Shaheem, Dr Baari and Sheikh Hussein Rasheed and recommended that the Act should be sent to then-Attorney General Husnu Suood before publishing in the gazette, said Adhaalath Party.

”Suood referred to the Act and brought some amendments, and removed many articles. He then said it was fine and sent it to be published on the gazette,” Adhaalth said. ”But then the President said there were some policy issues, discussed the matter in the cabinet, and sent it back to the Islamic Ministry requesting they solve those policy issues.”

After amending the draft, the Islamic ministry sent it to the current AG, Dr Ahmed Ali Sawad. The Ministry held a meeting with Sawad and again sent the draft to be published in the government’s gazette after adding his comments.

”While we were waiting for it to be published in the gazette, Ibra called from the President’s Office and said that he was now in charge of the Religious Unity Act, and that there were some amendments that should be brought to it,” the party said. ”Except for a few, he proposed amendments to all the articles in it.”

”This is now the status of the Religious Unity Act that was drafted by many religious experts and three attorney generals of the state.”

Press Secretary for the President, Mohamed Zuhair, said today that the new regulations would be published in the gazette ”hopefully by next week.”

”Ibra is now discussing the draft with the Islamic Ministry and other concerned authorities,” said Zuhair. ”There are many government authorities that are related to the new regulations.”

The government have to research whether there will be any obstacle in implementing any regulation in three ways, Zuhair said.

”We have to study whether there will be any legal, social or economic obstacles to its implementation,” he said, insisting that Ibra was not deliberately delaying publication of the Act in the government’s gazette.

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Herathera resort to be rebranded by Thai developer Amari Estates

Herathera Island resort will be rebranded under the Amari Estates Company, Property Report has revealed, after the Thai-based hotel group ONYX Hospitality were appointed managers of the resort in November 2010.

Onyx Hospitality is a joint venture in which Amari Estates holds a minority stake.

Refurbishing and rebranding the resort will cost US$3.31 million, the Amari said, adding that the group would sign the official agreement on January 15, 2011.

A long-running legal dispute over the Herathera Island Resort between the Maldives Tourism Development Corporation (MTDC) and Yacht Tours Maldives (YTM) concluded in January 2010.

MTDC had claimed that YTM had been running Herathera Island Resort without paying rent and took the company to court. In May 2009 YTM was ordered to pay US$8 million in outstanding rent to MTDC.

YTM stopped paying rent in December 2008, claiming MTDC had failed to fulfil a contractual obligation to build a channel between Herethere Resort and Hulhudhoo, an adjoining inhabited island, by 30 November 2008.

In January 2009 MTDC agreed to pay Yacht Tours US$3.5 million to end the court dispute, and regain control of the resort.

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President tours Baa Atoll on campaign trail

President Mohamed Nasheed has toured islands in Baa Atoll as part of the ruling Maldivian Democratic Party (MDP)’s campaign in the local council elections.

Visiting Hithaadhoo yesterday, President Nasheed emphasised the importance of creating employment opportunities in the islands to further regional development.

Nasheed also visited Dharavandhoo, where he spoke on the merits of decentralisation and delegating authority to people, as well as the provision of social security services.

On Kendhoo island, Nasheed noted that 157 people on the island had been registered in the Madhana health insurance scheme while 42 people over 65 years of age were enlisted for the old-age pension of Rf 2000. A waste management system for the island was included in the 2011 budget, he said.

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MJA calls for end to protests outside media organisations

The Maldives Journalists Association (MJA) has expressed concern that protesting outside media organisations ”to threaten interviews” was becoming common and has warned that it might cause the media to back down from coverage.

”Under the constitution, every citizen is guaranteed the two fundamental rights of freedom of expression and freedom of assembly,” the MJA said in a statement. ”MJA calls on people not to misuse these fundamental rights by threatening and intimidating interviewees for a political gain.”

The MJA claimed that every time a person arrived for an interview at a media outlet, “he has to be taken home under police protection.”

Protesters recently gathered near private television station Villa TV (VTV) when Imad Solih of the Dhivehi Qaumee Party (DQP) entered the studio for an interview regarding its successful Civil Court bid to overturn the President’s declaration that Addu was to become a city.

”The tendency of protesting outside media organisations has now gone to an extreme level in which the medias is prevented from performing its responsibility to make the government accountable,” the statement said. ”MJA wants to note that recently such two protests were organised outside VTV station, and earlier protests were also held outside DhiTV station and MNBC One.”

The organisation suggested that expressing opinion in the media and responding to opinions people disagreed with through the media would be “much more fair and diplomatic” than protesting.

”As with freedom of expression, we recognise that freedom of assembly is a fundamental right,” the MJA said. ”But we call for an environment safeguarding both these fundamental rights at the same time.”

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