Day: June 19, 2012

President Dr Mohamed Waheed Hassan has today established the Fenaka Corporation Ltd by presidential decree.

The corporation will take over from the seven utility corporations established during the administration of former President Mohamed Nasheed, under its policy of decentralisation.

The objectives of the company, which has 100 percent government-owned shares, were detailed in a press release from Waheed’s office.

“The key objective of this company would be to ensure sustainable primary services to the populace in the regions of the country other than Male’; supply of clean water, sewerage and electricity, and to establish an environment friendly waste management system,” read the statement.

President’s Office Spokesman Abbas Adil Riza told Minivan News that the previous utility companies, each with its own board, had become totally dependent on government finances, weighing heavily on the state budget.

“The separate utility companies were not well governed. There has to be continuity, accountability, and manageability,” said Abbas.

“Fenaka will take over the the utility corporations – there will be no more boards – it is more transparent,” he continued.

Abbas had previously explained to Minivan News that the government’s policy was largely intended to eliminate these “political boards” which he argued were impeding service provision.

Abbas also explained that there would be an option for islanders to acquire shares in the corporation.

The decree comes the day after President Waheed stressed the importance of population centralisation as he spoke to the media before leaving for the Rio +20 summit.

“One solution to the challenges we face is to centralise communities to more densely population islands and shape our development goals in order to secure a better future for us all,” local newspaper Haveeru quoted Waheed as saying.

Abbas explained that the President wished to reaffirm the government’s commitment to developing urban centres with greater market potential, just as previous government’s have worked to do.

Centralisation and efficiency

The issue of service and welfare provision and population dispersal has long been an issue faced by Maldives governments.

Population consolidation plans originated in the 1980′s under the banner of ‘Selected Islands Development Project’.

Concerned by the inefficiency of the distribution of social services and basic infrastructure in islands with small populations, and to counter migration towards the capital Male’, former President Maumoon Abdul Gayoom’s administration embarked on a revised resettlement program called the ‘National Population Consolidation Strategy and Programme’, published in 2001.

In the foreword to the most recent National Development Plan, in 2006, Gayoom outlined some of the reasons for voluntary population movements.

“This policy aims to mitigate the risks posed by future tsunamis and rising sea levels, help realise economies of scale in the provision of public and private services in the atolls, strengthen service quality in the atolls and improve welfare of the people,” wrote Gayoom.

This document, the seventh such development plan, covered the years between 2006 and 2010. This document described, in depth, the issues concerning population dispersal and service provision.

“One of the most pressing challenges to the nation’s development [is] the wide dispersal of small communities,” read the report.

“Smaller communities are in an extremely vulnerable situation, as the unit cost of providing social infrastructure and facilities are high, and thus these islands do not have adequate facilities.”

Mohamed Waheed Deen used his first speech after being confirmed as Vice President in April to expound on the virtues of greater population consolidation.

“Without population consolidation we cannot achieve sustainable economic development…where is the economy of scale? If government continues to spend on small island populations, the expenditure will turn out to be a waste,” he said.

“I envision that people of Maldives will live in 25 to 30 islands. Each island will be of twice that of Hulhumale’. Around 60,000 to 70,000 will live on each island. This is a dream I see. I will try to make this dream come true,” said the Vice President.

The Nasheed government, led by the Maldivian Democratic Party (MDP), chose to focus on greater transportation and connectivity between island populations.

After the announcement in April of the government’s plans to centralise both utilities and health provision throughout the country, Policy Undersecretary for the former government Aminath Shauna, made the case for a decentralised policy of service provision.

“Maldives’ geographical fragmentation means one central board or company will find it impossible to effectively monitor and deliver services in an equitable manner,” Shauna said, before questioning the centralising tendencies of the current government.

“They want to re-establish a relationship of dependency between the islands and Malé. Their intent in this is to consolidate power. Islanders will once again have to come to Malé and beg for services,” she said.

Shauna explained that the policies of the Nasheed government had been intended to create reliable market-orientated policies, arguing that previous centrally run services were slow and corrupt.

Shauna acknowledged that the companies had not all been financially independent but argued that they were merely bolstered with state funds whilst they were “finding their feet”.

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