Day: June 27, 2011

Foreign investors need “one-stop shop” to navigate Maldives bureaucracy: MNCCI

Local trade authorities must do more to simplify foreign investment procedures in the country as they attempt to increase income of dollar revenue, the Maldives National Chamber of Commerce and Industries (MNCCI) has claimed.

Ahmed Adheeb, an MNCCI member and Chief Operating Officer of the Millennium Capital Management (MCM) investment group, said he believed the country was failing to follow in the footsteps of markets like Sri Lanka by establishing a board of investment to help foreign companies navigate the complexities of local business culture.

“In order for the Maldives to build investor confidence I believe that firstly we need a board of investment like they have in Sri Lanka,” he said. “The Maldives has many different ministries that must be navigated to get licenses [to operate businesses]. We need a one-stop shop [for foreign business] if we are to bring international investors into different areas.”

Adheeb’s comments were made after members of the MNCCI recently met with their Pakistani counterparts in Male’ to discuss business and investment opportunities across the Maldives. Although no specific areas of interest for local investment were raised as yet during the meetings, Adheeb claimed that recommendations were made regarding potential opportunities for putting money into smaller and medium size tourism developments like guesthouses and safari boats.

The MNCCI said that it also acknowledged requests from the Pakistani representatives to host a single country forum here in Maldives to promote bringing certain food and pharmaceutical products to local markets.

With growing fears over the lack US dollars currently being circulated in the Maldives, generating additional foreign currency revenues has been identified as a key part of the government’s economic stabilisation strategy.

While calling for simplified investment procedures for businesses coming to the Maldives, Adheeb claimed that he hoped to see protection measures for local small and medium enterprises in the country.   One such example was in potentially setting caps on the minimum size of investments that could be made by foreign parties in the country.

“We should try to ensure that we are not endangering existing local small and medium enterprises,” he added.

However, amidst ongoing attempts by the government to try and devalue the rufiya to try and stabilise the Maldivian economy – under pressure from bodies such as the International Monetary Fund (IMF) – Economic Development Minister Mahmoud Razee claimed that recent financial uncertainties has not significantly impacted potential foreign investment in the Maldives.

“Generally the interest is still there. In the development of Hanimaadhoo for example we have seen 19 groups expressing interest in the project. Ten of these [parties] were foreign investors,” he said.

Razee claimed that he did not believe that recent financial upheaval in the country including fears over a shortage of US dollars finding their way into the local economy had not led to cases of “specific hesitation” from enterprises looking to invest in the country.

“Obviously [the country’s finances] are something investors will be looking into, but we believe this is not a significant setback as a result,” he added.

Razee said that the government had expressed interest in working with foreign business to develop national agriculture and aquaculture, as well as transport infrastructure.

President Mohamed Nasheed had stated last year that private sector investment was expected to bring US$1 billion to the local economy between 2010 and 2013.

However, aside from issues of financial stability, a former Australian Supreme Court Justice who spent several weeks in the Maldives this year analysing the functioning and impartiality of the country’s judiciary said that he believed legal reform had a key impact on economic performance.

After reporting that the Judicial Services Commission (JSC) – designed to serve as a legal watchdog – was compromising its accountability and obstructing the creation of an independent judiciary, Murray Kellam claimed that an impartial judicial system was a key factor in encouraging foreign investment.

Kellam said that Singapore was a perfect example of the long-term financial transformations possible with focused and impartial legal reform.

“[Singapore] understood the value of a civil system that is incorruptible and competent. They spent a lot of money on their judiciary and Transparency International now rates their civil legal system as one of the best in the world,” he told Minivan News in March this year.

“Singapore realised that one of the best ways to attract investment was to have a system whereby international investors knew they would get a fair go in domestic courts. If you look at the circumstances in other parts of the world where investors have no confidence in the judiciary, that deters investment and takes it offshore. They’ll go somewhere else.”

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Economy requires structural changes to address foreign currency crisis, Finance Minister tells parliament

Finance Minister Ahmed Inaz has told parliament that addressing the foreign currency crisis will require structural changes to the economy.

Increasing revenue and reducing expenditure to address the deficit – a legacy of years of printing money and high state expenditure relative to income – was the main solution, he said, as was strengthening regulations and enforcing the use of rufiya as a legal tender, “with no exception.”

The country’s lucrative tourism industry currently charges visitors in US dollars rather than the local rufiya currency, while the central bank’s regulation enforcing the use of legal tender has historically been routinely ignored and rarely enforced.

The rufiya was identified this week by financial news agency Bloomberg as the world’s second worst performing currency after the Suriname dollar,

“The Maldives was caught by the news,” Inaz noted to Minivan News. “It’s unlikely they would have any data on the rufiya before [the devaluation] on April 10.”

The state received US$16 in January, US$19 million in February, US$29 million in March, US$15 million in April and US$23 million in May – a total of US$115 million for the year so far, Inaz told parliament.

The government has indicated to the International Monetary Fund (IMF) that it intends to pass a raft of new taxation and economic reforms through parliament to modernise the economy, and a package of bills has been submitted by the government.

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Maldivians and expatriates arrested in human trafficking crackdown

Police have arrested a group of Maldivians and expatriates who allegedly attempted to traffic expatriate workers to the Maldives using forged documents.

Police Sub-Inspector Ahmed Shiyam confirmed that a  group was caught but declined to reveal further information, citing a larger investigation.

”Currently police are conducting a major investigation into the Immigration Department and in this case there might be information concerning the investigation,” Shiyam said. ”We will provide details to the press as soon as the investigations are concluded.”

President Mohamed Nasheed this week instructed the Maldives National Defence Force (MNDF) to temporarily take over the work of both the Immigration Department and elements of the Human Resources Ministry.

MNDF officers are currently staffing the immigration desks, in an effort to isolate the loopholes in the department that the government has alleged are being used to traffic expatriate workers.

Immigration staff have been asked to stay at home until further notice from the President’s Office.

Controller of Immigration Abdulla Shahid told newspaper Haveeru that illegal expatriate workers were costing the government Rf130 million (US$8.4 million) in lost visa fees.

“The investigations include determining whether foreigners have entered into the country illegally, whether people have entered into the country using forged travel documents, and whether the IT systems have been tricked or not,” Haveeru reported Shahid as saying.

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Bank turns to courts over judge’s alleged loan repayment failure

The Bank of Maldives has reportedly turned to the country’s Civil Court in a bid to reclaim Rf2.5 million it alleges was loaned to High Court Judge Abbas Shareef and his father but never paid back.

Haveeru has reported that lawyer Hussein Siraj, who will be representing BML during the trial, claimed at a hearing today that the judge had signed as a guarantor for a Rf 2.5million loan taken out in 2008 for his father Ali Shareef. The bank is now seeking Rf2.6 million in repayments from the original loan within a single transaction.

According to the news report, BML’s lawyer told the court that the finance group sought to sell a mortgaged boat, said to be owned by Judge Shareef and his father, if the requested payment could not be met in a single monetary transaction. Siraj requested that the defendants should also bare the brunt of any charges relating to the sale of the vessel.

Haveeru claimed that the trial is ongoing, though presiding Judge Abdulla Ali is reportedly yet to set a date to reconvene the case following the conclusion of today’s hearing.

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Parliament accepts Police Integrity Commission Act for vote

The parliament today accepted the Police Integrity Commission Act presented by People’s Alliance (PA) MP Abdu-Raheem Abdulla, with the objective of making the Police Integrity Commission an independent body.

Out of the 67 MPs present, 36 MPs voted to accept the bill for preliminary debate and decide whether or not to pass it into law.

According to the bill, members of political parties or political activists would be banned from being member of the commissions.

The father, mother, son, daughter, wife or husband of a police officer would also be blocked from being a member of the commission, according to the bill.

Appointing members to the commission would be parliament’s responsibility, and a member of the commission could be dismissed if a parliament majority found that person incompetent or incapable.

The President of the Commission also will be determined by the parliament in a sitting by popular vote.

The PIC currently operates under the Police Act, and the Commissioner appointed by the President.

According to the bill, it would be prohibited for the PIC to disclose any information a commission member receives in an investigation unless for the investigative purposes of a lawful body.

Parliament’s finance committee is responsible for determining the wages and allowances of the commission members, the bill states.

The police are obliged to inform the commission within 24 hours if anyone dies, attempts suicide or is seriously injured while under police charge, according to the Integrity Commission Act.

The bill also rescinds all articles concerning the Police Integrity Commission from the Police Act.

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Islam allows use of drugs for medical treatment, says Zuhair

Press Secretary for the President Mohamed Zuhair has said that Islam permits the use of narcotics under exceptional circumstances, such as in the treatment of drug addicts.

Speaking at a ceremony last night marking International Day Against Drug Abuse and Illicit Trafficking, prominent religious scholar Sheikh Ilyas Hussein said that even a small amount of drugs were not allowed in Islam, and claimed that illegal drugs “are no cure”.

‘’These religious scholars lack information on the topic, they don’t really have adequate information on drug abuse treatment,’’ Zuhair said. ‘’Scholars have to collect more information before they preach.’’

Zuhair explained that opiates were commonly used as pain killers, and questioned why illegal drugs would be disallowed under Islam if it permitted opiates to be injected into the body prior to painful operations.

‘’The government’s aim is to reduce the amount of new drug users, and we have seen progress,’’ he said. ‘’Police statistics show a 50 percent reduction in new drug users last year compared to previous years.’’

Zuhair credited the government’s decision to combine three sessions of school a day into one session with reducing the number of young people on the streets with nothing to do, placing them at risk of drugs and gang involvement.

‘’Formerly when we had three sessions, children studying in the first session would finish school at midday and go home. His mother and father would not be around and he had a lot of free time without anything to do,’’ Zuhair explained. ‘’Then he goes out and join the gangs and starts doing drugs.’’

Zuhair also said penalties and treatments for hard drugs and soft drugs in the Maldives were different in other countries, but said that in the Maldives users of both hard and soft drugs received the same penalties and treatment.

He signaled the government’s intention to seek amendment to these laws, but said this would depend on the level of public awareness and understanding of the issues.

Sheikh Ilyas in his speech last night said that is was impossible to combat the drug issue by administering drugs in increasingly small doses.

He said that the penalty for taking drugs was 40 lashes if it was the first time and more for second time, with harsher penalties also permitted under Islam.

A former drug addict told Minivan News that he agreed with Sheikh Ilyas and that the best method was “stopping it at once”.

‘’I myself tried to recover taking it little by little, and it did not work for me,’’ he said. ‘’There are some others who tried that method and succeeded, but most of the time it is successful only if you try to stop it at once.’’

He said the most important thing for addicts seeking to stop taking drugs was the support from people around him or her, “especially friends and family.”

‘’He has to understand that he is suffering the consequences of his own actions and has to go through the pain [or withdrawal], understanding that it does not last forever and that taking drugs again as a temporary cure is not a permanent solution,’’ he said.

He described the rehabilitation facilities in the Maldives as “useless places.”

“Firstly, the government needs to bring major amendments to the laws, categorising drugs and bringing in other changes to overcome the drug issue,’’ he said.

Society needed to be more aware of illegal drugs and how to cure addiction, he suggested.

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Comment: Building a modern justice system that is right for the Maldives

As we see in the stories carried daily in this newspaper, Maldives is deep into the difficult business of building a strong and democratic society. There is often an understandable impatience about the time it takes to see the fruits of democracy, but when you compare to other countries that have had to do the same thing, you realise that the Maldives is trying to achieve in a few years what others have taken decades or centuries to do.

This is possible, but the key to success continues to be mobilising everybody around issues that are in the national interest. This is particularly true in the area of justice, which is the foundation of all democratic societies and the development of any nation. Developing a strong and independent justice system needs a concerted effort from all three branches of government, and civil society.

Change in the Maldives has brought its own anxieties, and society is particularly concerned about increasing levels of crime. This lends new impetus to the reform of the Criminal Justice System.

A reliable and operational criminal justice delivery system is needed to sustain democracy and the rule of law, strengthen new democratic institutions, and protect security, economic development and foreign investment, based on the firmest of foundations of justice and human rights. Establishing a robust criminal justice system is a very complex, long and difficult exercise, requiring work across many areas.

A vital step, however, is ensuring that the legislative foundation is put in place as soon as possible. Of priority, therefore, is enactment of criminal reform legislation, particularly the Penal Code, Criminal Procedure Code (CrPC), Evidence Bill, and the Juvenile Justice Bill.

A solid and modern Penal Code gives consistency to legal systems and makes criminal law more understandable and transparent to people. The Penal Code defines the general principles of criminal responsibility, classifying crimes and their penalties. If there is a proper Penal Code, it is much less necessary to draft legislation defining every crime or procedure. The Criminal Procedure Code will define procedures in criminal matters, which then provide transparency and accountability.

Another important piece of legislation is the Juvenile Justice Bill. Statistics on crime demonstrate that children under 18 and youth are involved in a lot of the cases of violent crimes. However, currently there are no strategic crime prevention programmes or rehabilitation programmes specifically targeting juvenile offenders.

In addition, there is no detention facility that caters for juvenile offenders, and there are no separate spaces for juvenile offenders to be incarcerated. In light of the emerging challenges and the increase in juvenile crime, the current law does not adequately cover rights of children or address the need for proper treatment of children in conflict with the law to rehabilitate them back in to society.

Until August 2008, Maldives’ criminal justice depended heavily on confessions. However with Constitutional reform, we are moving from a confession based to an evidence-based system, which is in line with international standards. It is therefore vital that we have an Evidence legislation that is in line with the new Constitutional reform and best practice.

Strong and functioning criminal justice systems certainly depend on a solid foundation of law, and effective courts, police, prosecutors, prisons and other institutions and actors. But it is equally important that public confidence in the system is high – to know that criminal conduct will be investigated and prosecuted in accordance with the rule of law, that the streets will be safe, that rehabilitation of offenders is possible, that human rights will be protected. Public confidence is served by knowledge and certainty. This demands the process of investigation and prosecution to be independent of political pressure, that it is transparent and follows a process that is fair and just.

We have already seen this year that pressure to ‘do something’ about crime, combined with a lack of the legal and institutional foundations discussed in this Opinion Editorial, can lead to a tendency to find reactive short-term solutions to complex problems, and even violate human rights.

The Maldives, instead, needs a proper criminal legislative framework as a matter of urgency. A real opportunity is now before the Majlis, supported by the justice system and the Government, to deliver a unanimous and thorough response to crime. It is possible to pass these key pieces of legislation in this session of the Majlis.

Technical support is available, if it is needed, from the UN and others, but above all, it is now a matter of political will to take this important step, in the national interest, to finalise and pass these key legislations. I urge MPs of all parties to pass these Bills as a matter of priority, resolve areas of disagreement constructively, and present the Bills to the Majlis for passage.

Andrew Cox is the Resident Coordinator of the United Nations System in the Maldives.

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

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MNSL board approves company shutdown after settling debts

A proposal to dissolve the  Maldives National Shipping Limited (MNSL) has been approved by the company’s board members as the group looks to settle any outstanding debts before ceasing operations.

Haveeru reported that the MNSL board had decided to discontinue its operations after settling the outstanding debts as part of a two stage shut down of the company.

Group Managing Director Ahmed Hameed said that the company would cease to exist under its current name  once debts estimated to amount to US$8 million were settled through a sell-off of assets like cargo ships.

With the Maldives Star, MNSL’s only currently registered cargo ship on its way for India for a possible Rf2.1 million  sale, Hameed claimed that the debts were expected to settled, according to the paper.

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