Month: May 2011

China’s top legislator visits parliament, President

China’s top legislator Chairman of the Standing Committee of the National People’s Congress (NPC) Wu Bangguo met today with his Maldivian counterpart, Speaker of the Majlis and Dhivehi Rayyithunge Party (DRP) MP Abdulla Shahid.

Wu is the highest ranking Chinese diplomat to visit the Maldives, and major streets in Male’ were lined with Maldivian and Chinese flags to mark his arrival.

During a meeting held inside the parliament, Shahid thanked Wu for the aid the Chinese government has offered to the Maldives over the past years, and spoke about strengthening diplomatic ties between the two countries.

Wu used the occasion to announce a doubling of Chinese aid to the Maldives to 100 million yuan (US$15.4 million), and said China would be opening an embassy in the country.

He also announced that China would offer 11 scholarships to Maldivian students in 2011 and 2012. Furthermore, Chinese flights would begin operating directly to the Maldives from different parts of China.

During his visit to the Majlis, Wu’s delegation presented parliament with 77 laptops (one for each MP), 50 cameras, and two 55-inch plasma TVs.

Wu also met President Mohamed Nasheed and signed an agreement on economic and technical cooperation between China and the Maldives.

Foreign Policy Advisor and former Foreign Minister Dr Ahmed Shaheed observed to Minivan News that the visit of such a senior Chinese dignitary represented a major development in the diplomatic and economic relationship between the two countries.

“The main interests China has in the Maldives are our support of the One China policy, and greater collaboration on climate change,” Dr Shaheed said, noting that next year would be the 40th year of Chinese engagement with the Maldives.

Chinese tourism arrivals in the Maldives last year exceeded those of the country’s traditional European market. Dr Shaheed explained that the Chinese government’s endorsement of the Maldives was integral to growing the market.

“It’s very important to have official approval – we had to ask and obtain permission to accept large groups [of Chinese tourists] to the Maldives,” Dr Shaheed said. “Even beyond tourism, China is a huge market and is increasingly visible in our region.”

He disputed that the Maldives had to balance its engagement with China with its diplomatic relationship with India.

“I don’t think we have to walk a tight-rope. We are firstly a SAARC member country, and China’s friendship is about broader global interest rather than regional,” he explained.

“The Maldives has been very active on the international stage in areas that are relevant to China, such as climate change and human rights, and China may see us as an important country to engage.”

While China had not lobbied the Maldives on issues relating to human rights, Dr Shaheed observed that Maldives last year declined to accept Chinese Guantanamo Bay detainees due to concerns expressed by China. Instead, the Maldives had switched its consideration to Palestinian detainees.

China has been very active in Sri Lanka, recently establishing a naval facility following the country’s defeat of Tamil separtists. Dr Shaheed said he did not believe the Maldives would follow suit.

“I do not think we are on the radar for a base,” he said. “We’ve made our position clear that we have longstanding policy not to host foreign troops in the Maldives. Sri Lanka has only recently been exposed to many other countries, whereas we have broader options.”

While Chinese involvement in the Maldives was unlikely to reach Sri Lankan levels, Dr Shaheed predicted that the doubling of Chinese aid would make its presence “much more visible.”

China’s aid specialities, he noted, were infrastructure projects such as roads and housing projects, which would likely increase with the country’s doubled commitment.

China has already donated the Foreign Ministry and the recently-opened Maldives National Museum – one of the biggest buildings in Male’.

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MNDF helping 39 homeless following Saamiliyya fire disaster

Maldives National Defense Force (MNDF) officials are providing assistance to 39 people who have become homeless after a serious fire incident that burned down Saamiliyya, a residential building in Galolhu ward.

After the incident last week, the landlord and those living in the property paying rent were left homeless and were relocated to the Social Centre in Maafannu, a building mostly used for sporting purposes and other recreational activities.

MNDF officials have set up partitions and provided mattresses and blankets for those left homeless after the fire.

Male’ City Council told local media that the council had decided provide all assistance possible to those affected by the fire, including financial assistance.

Saamiliyya was destroyed occurred last Thursday, and two people were hospitalised as the blaze burned the residential building to the ground.

Residents of neighboring houses and furniture store Allora were also impacted by smoke from the blaze.

MNDF Spokesperson Major Abdul-Raheem told Minivan News the residents of the destroyed down house were now being looked after by Male’ City Council.

‘’We provided them blankets, mattresses and other necessities to make the place adequate,’’ said Abdul-Raheem. ‘’The list of homeless people initially had  39 names on it, later some amendments were made.’’

He said the MNDF was  now doing a damage assessment.

‘’It will take like two more days to determine the total cost of the damage,’’ he said. ‘’The police are currently investigating the cause of the fire.’’

Meanwhile local newspaper Haveeru reported the landlord’s suspicions that the fire incident was an arson attack by a relative disputing how the property was to be divided.

A woman currently living in Social Centre told the paper that she had lost everything she had gained throughout her entire life.

‘’I was able to save nothing. Clothes, household items or documents – none whatsoever,’’ she told Haveeru.

Police Sub-Inspector Ahmed Shiyam said it was too early to state whether the incident was an arson attack.

‘’We are investigating the case and  waiting for the incident report from the MNDF. We will refer to it and determine the cause of the fire,’’ he said.

Few non-commercial properties in the Maldives are insured.

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IFM expresses concern over “increase in sinister crimes”

The Islamic Foundation of the Maldives (IFM), led by Ibrahim Fauzee, has expressed concern over the “increase in sinister crimes occurring in the Maldives’’ and has called for implement harsh penalties to be applied to those who commit such crimes.

The IFM said the reason for the rise in crime was that Islamic Sharia had not been implemented. Furthermore, verdicts delivered by the judges were not being applied, and convicted criminals remained at large, the IFM said.

“It is very concerning that many new-born babies are being found abandoned, many children are being abused, and crime against women is increasing as well as assault and murder,’’ said the IFM, condemning all such actions.

The IFM said the reason why theft, robbery, assault and murder cases were increasing was due to the easy availability of drugs in the Maldives, and called on the government to stop the importation of alcohol and other drugs.

The foundation also called on the government to administer the penalty, mentioned in the Islamic Sharia, to those who produce and sells drugs.

“We call on parents to be protective of their children and to keep them away from persons who have records of child abuse, and especially do not send female children anywhere without a parent,’’ said IFM.

The organisation assured that it would “fully cooperate to curb the rising crime rate.”

Three abandoned infants have been found dead in Male’, Hulhumale and Villingili this month, and three women arrested in connection with the deaths.

On May 5 a dead infant was found in a plastic bag in the swimming track area of Male’. A medical examination later concluded that the baby had sustained cuts, bruises and other wounds.

On May 21, the corpse of a premature baby boy was discovered inside a Coast Milk tin on the island of Villingli.

On May 22, the body of a newborn baby boy was discovered in a park in Hulhumale’. The infant was found with underwear tied tightly around his neck, the most likely cause of death according to the hospital.

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MATI claims tourism on track to maintain growth in 2011, despite Male’ protests

The Secretary General of the Maldives Association of Tourism Industry (MATI) claims the country’s tourism industry remains on track to maintain growth despite recent widely publicised clashes between police and protesters in Male’ during May.

The total number of tourist arrivals to the country between January to April 2011 amounted to 327,563 people, up 16.9 percent over the same period last year, according to official statistics provided by the Ministry of Tourism, Arts and Culture. Of this demand, Europe continued to dominate visitor market share during the period.

MATI’s ‘Sim’ Mohamed Ibrahim told Minivan News that, as with for a number of destinations across South Asia, the Maldivian tourism sector had begun to “recover” from the impacts of global financial uncertainty in recent years. Sim said he believed the industry, through the use of strategies such as discounting during the off-season, appeared well placed to continue to profit from growing tourist interest, even with perceived challenges facing the industry relating to taxation and recent protests between police and members of the public.

Sim’s comments were made as the government pledged to increase a 3.5 percent Tourism Goods and Services Tax introduced on January 1 to five percent as part of economic reforms that led to a week of protests and violent clashes in Male’ during the beginning of this month.

These protests, which were said to have been instigated as a “youth movement” despite the involvement of several opposition politicians, saw thousands of Maldivians campaigning on the streets leading to occasional violent clashes that drew international coverage, raising some concerns over tourism safety.

Sim claimed that despite these protest concerns – which the government alleged reflected an attempt by some opposition politicians to “mislead” foreign media over their scale – the demonstrations occurring in Male’ and some islands were completely isolated from the country’s island-based resorts.  He added that the demonstrations would not impact tourism despite some nations issuing travel warnings for the Maldives.

Despite these potential concerns shown by some tourism markets, Sim said that he did not expect a huge negative impact on tourism arrival figures for May 2011 when released by authorities.  The MATI Secretary General added that he was optimistic over the impact of the government’s plans to introduce and extend direct taxation on all travel industry services and goods.

“There was some concern over the [tourism goods and services charge], the government appears to be going in the right direction by pledging to do away with duties such as bed charges by focusing on direct taxes,” he said. “On the whole we believe the tax will be beneficial to the country and the industry.”

From MATI’s perspective, Sim said that the organisation believed that instead of various duties and charges currently imposed by the government, the industry would be better served by replacing these charges with one or two “solid” direct taxes like the existing goods and service charges – a policy he claimed the government were already pursuing.

“We believe this would present a healthier picture for finance [in the industry],” he said.

When addressing potential future growth for visitor numbers amidst the Maldives’ peak tourism season drawing to an end in April, Sim said that “quite a lot” of discounting has been occurring within the industry to try and bolster arrivals.  However, the tourism association secretary general said that the decision to discount was ultimately profitable for the industry.

“We must not lose sight that the Maldives is a good value for money destination. For hoteliers, the most important thing is to keep the [visitor] figures going. There is quite a lot of discounting occurring to try and ensure more confidence to the market,” he said. “We are seeing more Chinese coming and although they may not be as high yield – in terms of spending power – than visitors from markets like Russia, they are arriving in good numbers.”

According to the latest Tourism Ministry figures, during the first four months of the year, European tourists including travellers from destinations like Russia accounted for 67.8 percent of the total market share of visitors compared to the same time last year up by 10.6 percent over the same time in 2010.

Asia and the Pacific represented 28.1 percent of the total tourist market with China alone accounting for 15.3 percent of all tourism arrivals over the period. Over the same time in 2010, visitors from the region increased by 35.1 percent to 92,132 people.

Among other regions, the Americas were found to represent 2.4 percent of the tourism market between January to April 2011, the Middle East accounted for 1.1 percent of arrivals and Africa represented 0.6 percent of the total tourism market.

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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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