May 28, 2011 – Minivan News

Mahlouf alleges MDP offered him $US2 million to defect

Opposition Dhivehi Rayyithunge Party (DRP) MP Ahmed Mahlouf has hit out at opposition politicians switching their allegiances for financial gain, claiming he too was offered a bribe to defect.

Mahlouf claimed that he had been “personally told” that Ali Waheed would be switching his political allegiance for money, and further alleged that he had himself been offered US$2 million to join and vote in favour of the ruling Maldivian Democratic Party (MDP).

“I don’t believe selling myself is a choice, but ever since I have known some of these MPs they have always wanted money,” he said.

Mahlouf alleged that it was only Ali Waheed who had taken money to join the MDP – a move he claimed was a coup for the country’s governing party.

“[Waheed] was loved by the DRP, but now that he’s gone he is nobody,” Mahlouf said. “President Nasheed will have the same feeling, so this is a good deal.”

Mahouf said that although the defections, which come as a number of DRP parliamentarians have switched sides in parliament, was a sad development for opposition supporters. However he said he believed it was on the other hand a positive development in regards to the loyalty of the remaining politicians.

The DRP MP’s allegations of bribes being used to entice opposition politicians to switch parties were refuted by MDP spokesperson Ahmed Haleem, who claimed that Ali Waheed’s defection reflected political ambition and not financial concern.

Haleem added that although it remains essential for the MDP to obtain a political majority in parliament to pass a reform agenda blocked by partisan opposition majority, recent defections by MPs including the former DRP Deputy Leader were made on political principal and not bribes.

“Ali Waheed and Abdu Raheem – these are young ambitious people that are not part of the Gayoom regime. The MDP is the country’s only true democratic party, unlike the DRP which is more like a family organisation,” he claimed. “Waheed has a future in politics in this country and I believe he is a clean guy. So while we need a parliamentary majority for the MDP, we do not want to be spending money we don’t have to get it. This is politics, not a football transfer market.”

Questioned over whether some MDP supporters would be sceptical of the intentions of a former opposition MP like Ali Waheed, who in his first speech as an MDP member last week accepted he had been “critical” of President Nasheed and his government in the past, Haleem said he believed members were overall happy at the defection.

“I think all MDP supporters will be very happy, our members are determined in that they want change in this country,” he said.

The DRP has attracted significant local media attention in recent months with factional infighting between supporters of serving leader Ahmed Thasmeen Ali and his predecessor Maumoon Abdul Gayoom. One reason for the strife, according to Mahlouf, was division over how to respond to the government’s financial reform program and decision to devalue the rufiyaa against the US dollar.

Speaking at rallies and gatherings held this week against government economic reforms, following a week of protests earlier this month in Male’, Mahlouf, who is linked to the Z-DRP faction of the party, said that the so-called “youth movement” behind the protests had decided to give the government time to try and address financial concerns before resuming demonstrations.

Haleem meanwhile claimed that while the protests had lost momentum due to a growing public acceptance and understanding of the need for economic changes bought forward by President Mohamed Nasheed, as well as the “weakening” of the DRP.

“I think you will find that 99 percent of people are fed up with the DRP, even three of the party’s members have [defected],” Haleem said. “People are accepting that financial changes are needed and the president has been stating these aims more clearly. We are a civilised country and we need direct taxation – such as the tourism general service tax (TGST) – the President is not just changing the political but also the economic situation in the Maldives.”

Speaking last night during a rally held at the artificial beach area of Male’, Mahlouf claimed that demonstrations held over the last few days had been organised by Thasmeen’s supporters and a number of local NGOs rather than the “youth movement” that had instigated protests earlier in the month.

“We need to be responsible politicians right now and protesting every night is not the only solution to the economic issues,” he said. “We did a good job supporting the protesters, but it’s time to give some time to the government to try and make changes before we consider more protests.”

Addressing crowds of DRP supporters during last night’s gathering, which he said had drawn “huge crowds”, Mahlouf used his speech to attack the recent defection of a number of DRP politicians such as Ali Waheed to the MDP cause, as the party of President Nasheed seeks to entrench its long-sought parliamentary majority.

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Top Chinese legislator visiting Maldives

China’s top legislator, Chairman of the Standing Committee of the National People’s Congress (NPC) Wu Bangguo, is visiting the Maldives until May 31.

Wu is the most senior Chinese diplomat to ever visit the island nation, and Chinese and Maldivian flags have been set up along major streets of Male’.

Chinese news agency Xinhua interviewed Wu’s Maldivian counterpart Abdulla Shahid, who visited the chairman in China in January.

“It was a very fruitful meeting. The fact that the chairman is conducting a visit to Maldives so soon after my visit shows the importance that the chairman and China attach to Maldives,” Shahid told Xinhua.

“Next year we will celebrate the 40th anniversary of diplomatic relations between Maldives and China. Maldives and China have outstanding relations based on mutual trust, respect and friendship which is a solid foundation for any strong relationship. There are now direct flights between Maldives and China, which has increased the number of tourists from China to Maldives.”

Chinese tourist arrivals last year topped the Maldives’ traditional European market. Both the foreign ministry and the national museum were built with Chinese aid.

Chairman Wu will meet journalists tomorrow at the Maldives’ parliament building.

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Maldivian ship crew on strike claiming two years of unpaid wages

The Maldivian crew of the cargo ship Gateway Prestige have gone on strike, claiming to be owed Rf 1 million (US$64,800) for two years of unpaid salaries.

Managing Director of Gateway Shipping, Mohamed Shareef, told newspaper Haveeru that he had informed police his vessel had been hijacked by his crew and requested an investigation.

“They don’t want to leave the ship, or set off, or allow anyone else on the ship. How can they work on the ship if they were not paid for two years? They wouldn’t have stayed,” Shareef told Haveeru.

The newspaper spoke to the vessel’s captain, Ibrahim Zahir, who said that as of April 2011 he was owed Rf522,000, the chief engineer Rf400,000 and the helmsman Rf100,000. He said they had been stranded twice in an Indian port without food, but had decided to finally go on strike after they were ordered to sea again after unloading in Male’.

“We stayed on the ship despite not getting paid for two years because those who left their jobs didn’t get paid a single penny. Every time the owner says due to the current situation we can’t be paid, but that they’ll pay us when things settle down,” he told the newspaper.

Police are conducting negotiations.

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Government underestimating tourism economy by more than US billion, claims economist

The Maldives has significantly underestimated the value of tourism to the local economy by over a billion dollars, according to a report by economics lecturer and Assistant Manger of the Maldives Monetary Authority (MMA)’s Monetary policy and Research Division, Ibrahim Ameer.

In the first month following the introduction of 3.5 percent Tourism Goods and Services Tax on the tourism sector, the Maldives Inland Revenue Authority (MIRA) collected US$7.2 million from 800 of the 871 registered tax payers.

“This means the whole tourism industry’s revenue (market value) would amount to approximately US$210.0 million for the month of January and approximately US$2.5 billion for the whole year,” observes Ameer.

In comparison, the government’s official figure for the total market value of all goods and services produced in the country – not just tourism – is US$1.5 billion.

In his report, Ameer recalculates the budget deficit based on updated GDP figures and concludes that the deficit sits at nine percent, “as opposed to 17 percent of GDP in 2010 as per government authorities.”

“I suspect these underestimated figures are used by the authorities to prolong the preferential treatment Maldives has and in some cases continues to receive as a [former] Least Developed Country (LDC),” Ameer surmises, suggesting that “ our country’s problems are primarily a case of the state’s inability to collect revenue through taxation rather than a budget deficit.”

“It should be agreed that as the country marches towards full democratization, with new independent statutory institutions, local and atoll councils and increased civil service salaries, the country needs to rethink it tax policy,” Ameer states.

In an agreement reached with the International Monetary Fund (IMF) last week, the Maldives has committed to:

Raise import duties on pork, tobacco, alcohol and plastic products by August 2011 (requires Majlis approval);
Introduce a general goods and services tax (GST) of 5 percent applicable to all sectors other than tourism, electricity, health and water (requires Majlis approval);
Raise the Tourism Goods and Services Tax (TGST) from 3.5 percent to 6 percent from January 2012, and to 10 percent in January 2013 (requires Majlis approval);
Pass an income tax bill in the Majlis by no later than January 2012;
Ensure existing bed tax of US$8 dollars a night remains until end of 2013;
Reduce import duties on certain products from January 2011;
Freeze public sector wages and allowances until end of 2012;
Lower capital spending by 5 percent

Comparison figures Ameer provides for corporate, income and GST/VAT tax regimes regionally and around the world, show the proposed figures for the Maldives are substantially lower.

India, for example, has a 25 percent business profit tax (BPT), individual income taxes of 0-30 percent, and a GST of up to 12.5 percent. Pakistan has a 35 percent BPT, 7.5-35 percent income tax and a GST of 17 percent. Barbados, another tropical island tourism destination, collects a BPT of 25 percent, income tax of 25-25 percent and a GST of 15 percent.

In his conclusion, Ameer argues against substantial cuts of the Rf12 billion state budget, noting the impossibility of reducing that to match the government’s present RF7 billion in revenue, and presses for the careful introduction of taxation.

“We could save some expenditure through cutting waste, prioritising projects and eliminating corruption. On the other hand, we must all agree that in certain areas wage and salaries given are very low compared to many countries,” he suggests.

As a result, “it is difficult to retain skilled and highly educated people in the country. This is why we see so many bright Maldivians leaving the country to work abroad. In the education sector, where the future of the country is molded and where the bright and the best are needed to teach future generations, the remuneration is pathetically low. The average wage for leading teacher with a Master’s degree is Rf 8354 (US$540).”

“The academic and education sector should be highly competitive and more rewarding if we are to build a better future and save ourselves from the sort of ‘brain-drain’ that we cannot afford. The situation is more or less the same with the healthcare sector of this country, with many of the brightest doctors and nurses opting for work abroad in countries as diverse as New Zealand and Canada,” Ameer observes.

He notes that the disproportionately high rents in Male’ swallowed 70-80 percent of the income of many residents in the city, “and as a result, disposable income is lower than it should be to encourage a more competitive market place and economy.”

“Because only Male’ is equipped with all the necessary facilities, like education and health care, more than one third of the population is living here. This creates irreparable social and economic damage,” Ameer claims.

Much of the visible development in Male’ he claims is the a result of a “coffee-shop bubble, a smokescreen that is bound to burst dragging the economy into depression.”

“To achieve sustainable development we need to see past supermarkets, boutiques and coffee shops in every corner,” he suggests.

“The wealthy need to realize that it is more lucrative to have businesses that decline, over our dependence on imports. The present business model increases imports and puts more pressure on the foreign exchange. It only widens the disparity between the rich and the poor when there is a negative impact on the economy.”

Read the full report

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Elections Commission validates Thasmeen’s DRP leadership

The Elections Commission (EC) has reportedly ruled against claims by dismissed Dhivehi Rayyithunge Party’s (DRP) leader Umar Naseer that the appointment of the party’s leadership last year was invalid after it failed to submit official paperwork within a 15 day deadline.

Haveeru reported that the party’s leadership had been deemed valid by the EC after discussions with local legal experts, despite the DRP’s failure to comply with the Regulation of Political Parties and officially notify the commission of changes to its leadership. The party was required to submit official documentation and minutes of a congress held in February 2010 where Ahmed Thasmeen Ali was appointed as successor to Maumoon Abdul Gayoom as head of the DRP.

Earlier this month, EC Vice President Ahmed Hassan Fayaz told Minivan News that although he was aware of a clause in the party’s existing regulations relating to supplying official minutes to the commission, the EC did not have authority to strip a party leader of his position.

Fayaz claimed additionally that Thasmeen’s appointment at the congress, which was supported by Gayoom before he became openly critical of his successor earlier this year, had been witnessed by hundreds of party delegates as well as being covered by local media – ensuring that it was a well-documented decision.

According to Haveeru, Elections Commissioner Fuad Thaufeeq said this week that Thasmeen’s leadership of the DRP had been deemed valid following consultations with the Premier Chambers law firm.

The EC head was quoted in the report as deciding to accept official documents and minutes relating to the appointment of Thasmeen at last year’s DRP congress, despite the official 15 day deadline having long passed.

DRP MP Ahmed Nihan, supporter of the Z-DRP faction of the party that is critical of Thasmeen’s leadership, said earlier this month that he believed the deadline for submitting the leadership paperwork was not just an administrative error and had serious implications for the party.

Nihan, citing a SunFM report, claimed that under the EC’s own mandate, details and a recording of the national congress held by the party to approve its new leadership needed to be sent to the regulatory body within 15 days of the event being held.

The DRP MP claimed this still had not happened as of last month, representing a “clear breach” of party regulation by its leader.

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Sri Lanka to ban visa on arrivals for all except Singapore, Maldives

Sri Lanka will withdraw visa-on-arrival facilities in August for all visitors to the country except those from Singapore or the Maldives.

Foreigners wishing to visit Sri Lanka will be required to pay for a visa online, or visit a Sri Lankan mission.

A statement from the Sri Lankan government said tourists without internet access would need to apply for visas through private agencies.

The decision has raised concern in Sri Lanka’s booming tourism sector about the potential impact on arrivals.

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ADB head urges Maldives to focus on deficit

President of the Asian Development Bank (ADB) Haruhiko Kuroda has said that while the Maldives’ climate change goals are commendable, the government should focus on improving fiscal management.

“ADB is pleased to support the Government’s reform measures to address the large fiscal deficit. Recently announced retirement incentives would reduce fiscal expenditure in future. Private sector development, especially promotion of micro- small- and medium-sized enterprises, will further support the Government by creating job opportunities, especially in the outer atolls,” he said.

During a two day visit to the Maldives last week, the ADB President made field trips to the ADB-assisted Malé Commercial Harbor and Malé North Harbor projects, and addressed students of Maldives National University during his visit.

The Maldives, which joined ADB in 1978, has received loans, grants and technical assistance of $196 million, which support infrastructure, capacity development and expansion of the private sector.

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“A demoralised opposition, even divided, is not making things easy for the government”: Daily Mirror

A legislative deadlock involving the Executive and Parliament on the one hand, and the Executive and the Judiciary on the other, both leading to a serious and a series of constitutional crisis kept Maldivian politics and politicians on their toes for most of 2010, writes Sathiya Moorthy for Sri Lanka’s Daily Mirror.

“Now in the third year of its five-year term, the government of President Mohammed Nasheed ‘Anni’ has tied itself down in a fiscal situation through an IMF-driven ‘managed float’ of rufiyaa, the local currency. The government says that the consequent steep increase in prices was unavoidable but would stabilise within three months.

“A demoralised opposition, even when remaining divided, is not making things easy for the government. Their protest rallies drew crowds for a few days in a row with the police having to disperse them forcibly. Though the government blamed them on the opposition, particularly the divided Dhivehii Rayyithunghe Party (DRP) founded by former President Maumoon Gayoom, sections of the local media said apolitical youth were seen in good numbers.”

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