Pirate kidnapping did not occur within Maldivian waters, confirms MNDF

The alleged abduction by Somali pirates of a Danish family who set sail from the Maldives last month on their yacht is not thought to have occurred within the country’s territorial waters, defense officials have confirmed.

Denmark-based newspaper the Copenhagen Post today reported that seven Danish nationals – thought to include a family of five and two deckhands – were confirmed by the country’s Foreign Ministry to have been abducted on their way to the Red Sea by Somali pirates.

The Danish Foreign Ministry said it was unable to comment on the reports or clarify whether the alleged attack took place 300 kilometres off the coast of Somalia When contacted by Minivan News.

Major Abdul Raheem of the Maldives National Defense Force (MNDF) was nonetheless able to confirm that security officials in the country had not received any information concerning the kidnappings or any other kind of “terrorist activities” occurring within the territorial waters of the Maldives of late.

Raheem added that security services in the Maldives would not be reviewing maritime security measures or advice when sailing in and out of the country following the alleged kidnappings.

Experts suggest that a growing number of Somali pirates are moving deeper into the Indian Ocean as they come under increased pressure from international task-forces designed to try and limit piracy attacks around the horn of Africa. As a result of this movement, maritime security has become a notable security concern for the Maldives.

In December, a Minivan News investigation reported that although there had been no confirmed attacks or incidents of piracy in the Maldives, maritime protection groups and European security officials still believed the country has the potential to become a target for pirate vessels thought to have originated from Somalia.

However, despite the abducted party having reportedly set off from the Maldives in a 43-foot long yacht called ING around the middle of last month, Major Raheem said that the MNDF had not been provided with any information of the kidnappings or been asked as yet to assist within any potential investigation into the alleged attacks.

Both the Maldives Police Force and the President’s Office were unable to comment on the issue at the time of going to press.

According to the Copenhagen Post report, the eldest 17 year-old son of the kidnapped family wrote on a blog that their vessel was halfway between the Maldives and the Arabian Sea by Tuesday of last week (22 February) and there had been no problems during the voyage.

However, by the following morning, the paper claimed that the ship’s occupants had managed to issue an emergency call as they came under attack from suspected pirates. The Danish warship “Esbern Snare” is reported to have been sent to the area where they are thought to have gone missing.

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Economic stability threatened by “significant policy slippages”, warns IMF

The Maldives has suffered “significant policy slippages” that have undermined the country’s capacity to address its crippling budget deficit in 2011 and beyond, the International Monetary Fund (IMF) has warned, in a statement concluding its Article IV consultation with the Maldives.

“On the expenditure side, there have been no net fiscal savings from public employment restructuring, public sector wages will be restored to their September 2009 levels earlier than expected, and the new Decentralisation and Disability Bills will lead to considerable spending increases,” the IMF stated. “Also, the Business Profit Tax will come on stream eighteen months later than planned.”

The IMF warned that the Maldives economy was presently unsustainable, on the back of “expansionary fiscal policies” from 2004 which left the country especially vulnerable to the decline in tourism during the 2008-2009 recession.

The country’s financial deficit exploded on the back of a 400 percent increase in the government’s wage bill between 2004 and 2009, with tremendous growth between 2007 and 2009. On paper, the government increased average salaries from Rf3000 to Rf11,000 and boosted the size of the civil service from 24,000 to 32,000 people – 11 percent of the total population of the country – doubling government spending from 35 percent of GDP to 60 percent from 2004 to 2006.

While preliminary figures had pegged the 2010 fiscal deficit at 17.75 percent, “financing information points to a deficit of around 20-21 percent of GDP”, down from 29 percent in 2009, the IMF reported.

The IMF said that while it recognised “the difficult political situation facing the authorities”, “decisive and comprehensive adjustment measures” were required to stabilise the economy, allow sustainable growth and reduce poverty. In particular, it raised concern about the “lack of significant progress in public employment restructuring.”

“Efforts to strengthen the financial sector and improve the business climate will also be critical,” the IMF said, noting that private sector credit had all but stalled. However it generously conceded that the pace of adjustment “should take into account political constraints.”

The IMF’s Mission Chief to the Maldives, Rodrigo Cubero, told Minivan News that while the government had introduced the core components of a modern tax regime that would begin generating revenue from this year, these achievements were offset by new spending on legislative reforms such as the decentralisation act.

“We see bringing the fiscal deficit down as the key macroeconomic priority for the Maldives,” Cubero said. “A large fiscal deficit pushes up interest rates, thereby undermining private investment and growth, and also drives up imports, putting pressure on the exchange rate and inflation, all of which hurts the Maldivian people, particularly the poor.”

“Further efforts are still needed to reduce the fiscal deficit. Those efforts should comprise further tax reforms as well as measures to reduce expenditure and to improve the channelling of social expenditures to the needy.”

He would not be drawn into the politics of the Maldives’ economic situation, “but what we can say with confidence is that broad political support will clearly be needed both to design an economic programme and to carry it out as planned. That is why we also support as broad a spectrum of consultations with different stakeholders as possible.”

Graduation impact

The Maldives graduated in January 2011 from the UN’s ‘Less Developed Country’ designation to ‘Middle Income’, a move which reduces its access to certain concessional credit and donor aid.

Cubero said that as far as the IMF was concerned, “the Maldives remains eligible to the IMF’s concessional financing under the Poverty Reduction and Growth Trust (PRGT). The IMF follows its own rules and procedures to determine PRGT eligibility; the criteria include income per capita, market access, and short-term vulnerabilities.”

The Maldives had, he said, “made significant economic progress in recent decades, allowing it to reach middle-income status. However, given the large public debt and still very large fiscal deficit, it is very important that the financing terms for the Maldives’ public borrowing remain as favourable as possible. While reducing the fiscal deficit is imperative to maintain debt sustainability, favourable financing conditions would also help keep debt manageable.”

Confidence

In its report, the IMF was broadly confident that the Maldives could stabilise its economy in the medium term, due to the tight monetary policy of the Maldives Monetary Authority (MMA) in mopping up excess liquidity, as well as the passing of the Business Profit Tax and a Tourism Goods and Service Tax.

The economy had rebounded strongly after shrinking 2.25 percent in 2009, and GDP growth for 2010 was an estimated 4.75 percent, the IMF said, with an expected inflation rate of five percent in 2010.

As for the ongoing dollar shortage, while the IMF did not actively advocate a revision of the pegged exchange rate, it did call for “continued discussions between the authorities and the staff on this issue while being mindful of the risks involved and the impact on the poor.”

“The MMA continues to ration the supply of foreign exchange to banks, while fully meeting the demand from the central government and some state-owned enterprises,” the IMF stated. “Dollar shortages persist, and the parallel market premium has increased somewhat.”

In November 2010 the IMF delayed a disbursement under the second review of its program with the Maldives, ahead of the 2011 budget.

The delay, Cubero explained at the time, was due to the “fiscal slippages” caused by insufficient progress towards reducing the wage bill and passing tax legislation – most significantly, the Business Profit Tax.

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Adhaalath Party calls on Home Minister to withdraw Deputy Commissioner suspension

The Adhaalath Party (AP) led by Sheikh Hussein Rasheed has called on the country’s Home Minister to immediately withdraw the alleged suspension of Police Deputy Commissioner Mohamed Rishwan after media reports yesterday claimed that he had been punished for not following orders to take control of the Thulusdhoo Atoll Council’s office.

Both Police and Home Minister Hassan Afeef have yet to officially confirm whether reports of the suspension are true, yet politicians have now moved to criticize the alleged decision to reprimand Rishwan.

”We call on Hassan Afeef to leave the military dictatorship characteristics and to follow the feelings of the citizens,” said the Adhaalath Party in statement on their official website.

The reports relate to ongoing disputes between the government and some local councils over the legality of decisions to relocate their offices.

Beyond criticism of Home Minister Afeef, the party also praised Deputy Commissioner Rishwan for having shown “a great example.”

”The courage you [Rishwan] has shown for the sake of the citizens and to uphold the law is something that we will never forget,” said the Adhaalath Party in the statement.

”We call on the police not to let anything happen against the laws.”

Among changes occurring to the country, the Adhaalath Party said the most important of these was the decentralised administration ushered in by last month’s local council elections.

”As a matter of fact, it is a great change, however, the image we saw in some areas were totally different,” said the party. ”Home Minister Afeef has been trying to get police illegally involved in these issues occurring in some areas.”

The party accused the current government of manipulating the police for their own ends and violating human rights and laws.

However, Afeef yesterday told Minivan News that the position of Deputy Commissioner “is not given by me and [the matter] is not related to me.”

Police Sub-Inspector Ahmed Shiyam said he could not comment on the issue or confirm whether the reports appearing in local media were true.

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“Best solution” is to let court of law decide relocation controversy, says atoll council

Shaviyani Atoll Council Vice President Mohamed Arif has claimed that newly appointed councilors did not decide to move their administrative office to Funadhoo in Shaviyani Atoll by themselves, but rather they ”decided to do as the laws state.”

During the first meeting of Shaviyani Atoll Council held last Saturday (26 February), it was decided to move their administrative office to Funadhoo from Milandhoo in Shaviyani Atoll.

Arif said that the relocations were based on requirements outlined under national law regarding local councils and that only a superior court should rule on their legality.

However, the Home Ministry has stated that the council did not have the authority to decide where the administrative office will be held on the back of decision by other councilors also deciding to relocate an office based in Maafushi to Thulusdhoo.

Police have today sent officers to surround the Administrative Office in Funadhoo in order ”to watch over the building and any assets in it” according to Sub-Inspector Ahmed Shiyam.

”The councilors are inside the building. We are there to watch over the building,” he said. ”We also appeal everyone to respect the decision of the island court.”

Milandhoo Island court and Funadhoo Island court have each issued warrants regarding the issue.

Milandhoo Court yesterday ruled that the Administrative office of the Council should be in Milandhoo, while Funadhoo Court ruled in favor of having the Administrative Office in Funadhoo, a decision Mohamed Arif has asked police to uphold.

“Police have to respect the two court rulings, why do they have to follow only one ruling,” he said.

Arif added that the police were active in the island wearing full riot gear that he claimed had caused issues such as psychologically affecting children and women on the island.

”Just imagine what it would be like to see a huge police squad in riot gear for small children who have never witnessed something like this,” Arif said.

”They [the police] are not doing anything, they are just waiting outside the Atoll office in Funadhoo.”

Arif said the local council believes that the best way to solve the relocation issue will be to let a superior court of law solve the issue.

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Munawar claims president is hindering, not helping, political reform

Former Attorney General and one time head of the Maldivian Democratic Party (MDP) Dr Mohamed Munawar has denounced his successor and current national President Mohamed Nasheed for holding back important reforms he says are needed in the country.

Miadhu reported that Munawar last night called for the end of Nasheed’s tenure during the first meeting at Dhaarubaaruge of the newly formed political party, the Maldives Reform Movement (MRM), which he currently leads.

Munawar claimed that in order to bring unspecified reforms to the country, it was important to ensure that the president did not remain in office until the 2013 general election when his position is officially set to be contested.

According to the paper, the MRM leader was especially critical at what he saw as a lack of respect by the government for the rule of law and its failure to uphold constitutional rights.

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Piracy discussed during president’s India visit

Piracy within Indian and Maldivian waters was amongst the issues discussed by President Mohamed Nasheed during a three day visit to the country last week, according to local press reports.

India-based newspaper the Economic Times reported that Nasheed held discussions with local External Affairs Minister Somanahalli Mallaiah Krishna over issues such as trade, as well as methods to extend anti-piracy measures between the two countries to boost security within the Indian Ocean.

The report added that counter-terrorism issues and climate change were also touched upon in the talks with regards to mutual assistance between the two countries in the future.

The president returned from the India visit on Sunday (27 February).

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