Day: July 20, 2011

Expenditure on political appointees two percent of state wage bill, says Finance Ministry

Expenditure on 244 political appointees in the executive branch is two percent of the state’s wage bill or Rf99 million (US$6.4 million) a year, according to official figures released by the Ministry of Finance and Treasury.

The Rf1.6 billion (US$103 million) of annual spending on 20,476 civil servants meanwhile accounts for 39 percent of total state expenditure on salaries and allowances, followed by 24 percent for uniformed bodies (5,949 police and army officers), 17 percent for local councils (1,091 elected councillors), 10 percent for independent institutions (1,904 employees) and five percent for the judiciary (1,461 employees).

Annual expenditure on parliament (211 employees) accounts for two percent while administrative staff at the President’s Office (186 employees) represent one percent of the total wage bill.

A press statement issued by the ministry today notes that the figures were made public because “misleading statements” were being made about government spending.

“The economy has been adversely affected as a result of the state budget deficit in past years,” it reads. “One thing to be noted is the significant increase of recurrent expenditure compared to revenue. Recurrent expenditure is 12 percent above the government income forecast for 2011. Moreover, 49 percent of the state’s recurrent expenditure is spent on salaries and allowances for state employees.”

“Tip of the iceberg”

Speaking to Minivan News today, MP Dr Abdulla Mausoom of the opposition Dhivehi Rayyithunge Party (DRP) said that expenditure on political appointees in the executive was “just the tip of the iceberg.”

“The whole country was corporatised,” he explained. “There’s a roads corporation and all sorts of corporations. The people appointed to the boards of these corporations are all purely political appointees. They were appointed directly by the President to promote a political agenda.”

He added that the corporations were created “to give political posts to [ruling Maldivian Democratic Party] MDP activists.”

Moreover, said Mausoom, the corporations have “taken millions of dollars in loans to give salaries to these MDP activists.”

“Some of these people are not qualified at all,” he claimed. “There are people who have been made Managing Directors who cannot even read an MoU [Memorandum of Understanding] written in English.”

Dr Mausoom argued that the majority of senior officials in the corporations were filling “useless posts.”

The Public Accounts Committee (PAC) of parliament had requested information about expenditure on corporations, he continued, but the figures had not been provided.

“Most of them don’t even show up at the office,” he said. “Every day between sunrise and sunset, a new post is created in these corporations.”

“Distortions”

Finance Minister Ahmed Inaz however dismissed Dr Mausoom’s contention as “an attempt to distort” the information made public today.

Inaz insisted that senior officials of corporatised entities were not paid salaries or allowances out of the government’s wage bill.

The Finance Minister explained that state-owned enterprises such as the State Trading Organisation (STO) were managed as businesses and paid their employees from income raised through their operations.

“Other corporations such as Dhiraagu pay dividends to the government,” he said.

While subsidies were granted to the State Electricity Company (STELCO), Inaz said that the government’s policy was to switch to targeted subsidies for the poor.

“What would happen if we suddenly brought a speeding motorcycle to a halt?” he asked, referring to public companies. “It will slide off the road and crash.”

On the cost of political appointees, the Finance Minister argued that two percent of the wage bill was “a negligible amount.”

“Say for example that we eliminated all political posts and only President Nasheed is left in the executive,” he said. “Reducing or eliminating two or three percent would not have a significant impact on state expenditure.”

Austerity battles

In August 2009, the government’s decision to introduce a raft of austerity measures – including unpopular pay cuts of up to 15 percent for civil servants to reign in the ballooning budget deficit – was met with fierce resistance from opposition parties.

The pay cuts sparked a protracted legal dispute between the Finance Ministry and the Civil Service Commission (CSC), which won a court case against the ministry in April 2010 to restore salaries to previous levels.

Meanwhile an internal World Bank report produced for the donor conference in May 2010 noted that increases to the salaries and allowances of government employees between 2006 and 2008 reached 66 percent, which was “by far the highest increase in compensation over a three year period to government employees of any country in the world.”

“Even before government revenues fell and when government revenues were at an all time high in 2008, the ratio of the wage bill to revenues at 46.5 percent was also at an all-time high (46.5 percent compared to an average of 38.1 percent between 2000 and 2007). When revenues plummeted in 2009, the share of the wage bill to revenues rose an astronomical 89 percent,” the report explains.

In April this year, the government launched a programme to incentive voluntary redundancy in the civil service.

Finance Minister Inaz told Minivan News in May that the programme “has to this date enrolled 800 people and already some of them have already been paid and moved out of the civil service. We hope over the next few weeks we will achieve our target of 1300.”

Inaz observed at the time that slimming down the civil service would not be easy: “The country’s employment has been totally dependent on the government. It is a very big change, and we have said we want the government to be a policy maker, a regulator, but not doing business, so jobs are created in the private sector.”

State wage expenditure Annual expenditure on salaries and allowances Percentage of total wage bill or expenditure on employees
Civil servants or employees under the executive (excluding political appointees and councillors) Rf1,596,029,007 39 %
Uniformed bodies Rf1,001,489,486 24 %
Political appointees in the executive branch Rf99,178,980 2 %
Administrative staff at the President’s Office Rf27,326,730 1 %
Councils Rf717,250,030 17 %
Judiciary Rf210,282,463 5 %
People’s Majlis or legislative branch Rf79,210,718 2 %
Institutions dependent on state budgets Rf393,620,943 10 %
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Tour giant funding project to raise resistance of coral reefs in the Maldives

Travel giant Kuoni, the International Union for the Conservation of Nature (IUCN) and local environmental consultancy Seamarc have launched a comprehensive project to protect coral reefs and address the impact of climate change in the Maldives.

Speaking at the launch of the project this week at the Nalahiya hotel in Male’, Kuoni’s Head of Corporate Responsibility Matthias Leisinger observed that “tourism is like fire. You can cook with it, but it can also burn your house down.”

Kuoni has conducted a similar project in Egypt, targeting the Red Sea. Such projects were, Leisinger said, investment by the company in the long-term sustainability of destinations and a tool well within the company’s business model.

The 100 year-old leisure travel operator employs 10,000 people across 40 countries, and had as a result of its breadth broadened its scope from travel and tour provision to “destination management”.

“Investment in corporate social responsibility is a long-term business tool,” Leisinger said. Tackling practices such as sex tourism, for instance, was also a way of protecting the company’s brand, he explained.

Ensuring that hotels had no waste on beach, that islands had infrastructure such as sewerage plants and that staff were treated fairly increased the quality of the company’s end product, which affected its bottom line, he explained.

One aspect of the project involves establishing waste management facilities on 10 inhabited islands near Kuoni resorts. According to the project synopsis, “islanders will be taught to segregate waste at household level and bins will be provided to store the waste separately until removal from the island. A once-off large clean up may need to be organised before implementation of the system as most islands have accumulated waste over time.”

As well as improving the environment of the local island and allowing the resort to tick one of its ‘corporate social responsibility’ boxes, the facilities will “reduce the waste that washes up on the shores of the resorts themselves.”

A key focus of the project is protection and management of the resorts’ housereefs, which are currently protected by law from all fishing activities apart from bait fishing, “and as such, these areas act as marine protected areas (MPA) by default.”

However few resorts employed marine biologists to manage the housereef and limit destructive activity, and many times the boundries were ambigious “which results in unacceptable use of the reefs by outsiders leading to conflicts between the resort and local people.”

Under the project, four resorts will trial an ‘MPA management plan’ involving ecologicial surveys and the use of a warden to “drive away intruders”.

The project will also include an extensive series of training sessions and workshops for resort staff and local communities, and including on the reporting and monitoring of coral bleaching.

Senior Advisor at IUCN Dr Ameer Abdulla explained that bleaching represented the expulsion of symbiotic plants from coral due to stress factors such as pollution, sudden changes in temperature and ocean acidification, making the coral vulnerable to algae.

“Eventually the reef disintegrates, with the loss of shoreline protection and tourism benefits,” he explained.

“A bleaching event in 1998 saw close to 100 percent mortality in some areas [of the Maldives],” he said. “It was 87 percent in the Great Barrier Reef in Australia, but because the area has been well managed the rate of recovery was very high.”

Tackling climate change was a broader problem requiring international effort, but local measures to reduce impacts and increase the resistance threshold of the reefs could “give the coral a fighting chance”, he explained.

Dr Abdulla noted concerns raised by dive staff at one resort that local fishermen had begun fishing for grouper on the resort’s house reef, but were unsure of their mandate and did not want to spark local conflicts.

A representative from the Ministry of Tourism, present at the launch, observed that such incidents were likely to increase “as stocks diminish elsewhere.”

The representative also noted new challenges arising with the changing market profile of tourism in the country – whereas visitors from European countries such as France and Germany responded well to requests to respect the natural environment, “the market is changing, and Chinese guests are walking on the reefs, catching and eating crabs… During a recent visit to Shanghai we tried to get the message across, but it’s a very different culture.”

A representative from the Marine Research Centre (MRC) retaliated that it was in the interests of the Tourism Ministry to legally mandate resorts “to take responsibility for the natural environment for the duration of the lease.”

Much of the country’s lucrative resort industry “remains very closed,” he observed.

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MP Yameen dismisses allegations of blackmarket oil trade with Burma

Minority opposition People’s Alliance (PA) Leader MP Abdulla Yameen called on the government today to investigate allegations of US$800 million worth of blackmarket oil trade by the State Trading Organisation (STO) while he was chairman of the state-owned enterprise.

During parliamentary debate on a resolution proposed by MP Mohamed Musthafa demanding an investigation into the allegations, Yameen conceded that STO did sell oil to Burma “but if you claim that the trade was illegal, you have to prove it first.”

“This was done by forming a company in a country where such matters are most closely monitored,” he said. “That company is audited by STO auditors. An illegal business would not be allowed to operate in Singapore. This was not a secret trade.”

Yameen added that STO senior officials alleged to be involved in the oil trade were still employed by the government: “They are now in high posts in the MDP,” he said.

“So if you dare to investigate this, by all means go ahead,” he continued. “I encourage that this be investigated. The other thing I want to say is that I have now become impatient. Even if they stack US$800 million worth of documents on one end of the scale, there is no way they would be able to prove [any wrongdoing].

“The documents are with the government. We did not take documents home with us when we left office,” he said.

Yameen, brother of former President Maumoon Abdul Gayoom and long-serving Trade Minister in his cabinet, claimed that the administration possessed a list of senior officials of the previous government who had purchased assets overseas.

“The government will have that list now,” he said. “Why is it that they won’t make it public? I know that this work was done under the World Bank’s stolen assets recovery programme [StAR]. This list will have people who are now helping this government, not anyone else. Why don’t you release the list?”

The MP for Mulaku claimed that the government has paid “over a million dollars” to forensic accounting firm Grant Thornton, without uncovering any evidence to implicate Yameen.

“In such investigations, forensic accountants are given two or  three weeks to complete their work,” he said. “[But] this has now been dragged out for over a year.”

Yameen said that he was “ready to sue” for defamation if a final report “under seal and signature of Grant Thornton” was made public.

“But there’s no way to file this suit because no official document has been released,” he continued. “All that’s been released are draft reports without any signature or seal that can be taken to court.”

Yameen added that “the US$800 million worth of trade was done with back-to-back LCs (lines of credit) in Singapore based on trust between one bank and another.”

“All the bank documentation is there,” he said, claiming that Grant Thornton had cleared out all the “invoices and documents” from STO Singapore so that “there’s not even one photocopy left.”

“How can eight or nine years worth of documents of a government company be taken like this?” he asked. “I know this for a fact.”

The right of individuals to be considered innocent until proven guilty was “a sacred provision” in the Maldivian constitution, he said.

During the heated debate that followed, Former Finance Minister Gasim Ibrahim urged the government to allow the allegations to be investigated either by police or the Anti-Corruption Commission (ACC) as “they are the institutions that are legally empowered to conduct investigations.”

“I don’t believe this case should be debated in parliament,” said Gasim, arguing that the constitution protected the rights of the accused.

MP Eva Abdulla of the ruling Maldivian Democratic Party (MDP) meanwhile observed that the audit report of the State Trading Organisation (STO) had noted that about Rf11 million (US$80,000) in local currency was released to Emerald Resort Pvt Ltd as loan facilities between April 1, 2003 to April 3, 2005 to be paid back in US dollars.

“The same report noted that STO imported medical equipment without a bidding process at a much higher price than [the equipment] was available for,” she continued.

Eva also referred to the audit reports of the Maldives Customs Service, which revealed that luxury yachting company Sultans of the Seas in 2007 had forged documents to evade import duties for a yacht.

“After that the audit report of the presidential palace Theemuge noted that Rf104 million was given out as assistance,” she said. “From that, 50,000 Singapore dollars were spent for medical assistance to the [former President’s] family members. And US$20,000 for a member of the People’s Majlis. And so on until Rf100 million was reached. It’s not just the US$800 million dollar case we want to investigate. We want this to be looked into.”

The MDP MP for Galolhu North revealed that the Presidential Commission was currently investigating over 25 similar cases of corruption and misappropriation of state funds by the former government.

“Honourable Speaker, whether it is me [facing corruption allegations], the Deputy Speaker, the leader of a fragmented and unraveling party, the brother of a deposed ruler, we want to make certain that these investigations will go ahead and that we can have justice,” she said. “We want to stop looking back as a nation and breathe freely. We can only do that when we face these cases of corruption and find out the truth.”

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Rock Paper Scissors to play in Olympus backyard on July 27

Well known local rock band ‘Rock Paper Scissors’ (RPS) are planning a music show with a slight difference.

The show to be held on July 27 at the Olympus backyard compound will be different to most music shows held in Male’, said band member Akif Rafeeq.

“We chose this venue because of its relative smaller size, we want to create a more intimate experience for our fans, and have a bit more crowd interaction,” he said.

The bands aims to have around 300 to 350 fans turn up for the show.

Another famous band in Male’ hugely popular with youth, ‘1 Knight Stand’ will also be playing on the night.

Rock Paper Scissors were formed in 2009 and are probably most well known for winning the 2009 Maldives Breakout Festival. The band has since played internationally including the 2010 O2 Arena showcase in the UK as well as headlining the 2010 Malaysian Breakout Festival.

Tickets will be available at Music World, Time Zone and at Olympus.

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Cabinet appoints sub-committee to investigate 2003 shooting at Maafushi jail

Cabinet has decided to investigate who gave the order to shoot inmates in Maafushi jail in September 2003, an incident in which three inmates died.

Further details were not mentioned, and Press Secretary for the President’s Office, Mohamed Zuhair, did not respond to Minivan News at time of press.

In June this year three of the 12 former prison guards sentenced to death – who were living at large – were arrested by police for the enforcement of their 25 year sentence.

During the trial, 13 guards were accused of murdering three inmates and all were found guilty of the crime and sentenced to death by the Criminal Court.

The 13th person, the head of the prison that time, was later pardoned by the High Court. Former President Maumoon Abdul Gayoom then used presidential privilege to commute the death sentences of the others to 25 year imprisonment.

Maafushi Jail ShootingState Home Minister Mohamed Naeem told Minivan News in June that the documents at the Home Ministry showed that the 12 officers were at first kept in Maafushi Prison until the new prison head sent a letter to the-then Home Minister Ahmed Thasmeen Ali – now the leader of the opposition – that it was unsafe for the 12 to be among the other inmates.

“They were then transferred to Dhoonidhoo prison, and after two months another letter was sent to Thasmeen from the then Deputy Police Commission saying that there were no lawful grounds for keeping convicts in Dhoonidhoo for the implementing of their verdicts,” he said. “And that was the end of the document trail. We do not know what Thasmeen said in reply, or how they managed to stay at large.”

Prison guards at Maafushi claimed to have shot the inmates to control a prison riot sparked by the custodial death of fellow inmate Evan Naseem, who allegedly died of injuries sustained during the brutal torture he was subjected to inside the prison. His death – and his family’s decision to display the body and his injuries – is considered a watershed moment in Maldivian politics that led to the ousting of the former President.

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Two men arrested for secretly filming a couple having sex

Police have arrested two islanders from Utheemu in Haa Alifu Atoll, after they allegedly filmed a husband and wife while they were inside their room having sex.

Police Sub-Inspector Ahmed Shiyam confirmed that the arrests was made.

“The two of them were arrested following a report received by police that they had secretly filmed and watched a husband and wife while they were inside their room having sex,” Shiyam said, adding that he could not reveal further information as the investigation was ongoing.

Councilor of Utheemu Asrar Adam told Minivan News that the men were “caught red-handed” at midnight on Monday.

“A person living in the house came out to have a cigarette and saw the two of them trying to watch the husband and wife,” Asrar said. “The next day police arrived on our island and arrested them.”

Asrar identified the men arrested as Mohamed Hassan, 26. and Ali Munaz, 21.

“Islanders of Utheemu have been suspicious that these men have been watching the toilets of houses in the island and have been secretly filming while girls are inside,” he said.

Asrar said police have not officially shared any information with the council regarding the incident, and the council was only aware of other allegations made by islanders.

“No one has officially reported it to the council,” he noted.

He added that one of the suspects, Mohamed Hassan, 26, was the vice president of Maldivian Democratic Party (MDP)’s Utheeemu Wing.

Asrar said that the detention period of the arrested pair had been extended by the court, according to information he had received.

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