August 2012 – Page 11 – Minivan News

Government’s proposed revenue raising measures excessive, warn resort managers

Several resort managers have voiced concern that revenue raising measures proposed by the Finance Ministry will affect the financial viability of the tourism industry while providing little improvement in service or support in return.

The proposed measures were part of an ‘austerity’ package sent to parliament’s Finance Committee last week in a bid to address the country’s crippled financial condition.

Increased government spending – such as the repayment of civil service salaries cut during the former administration, and promotions and lump sum payments to the police and military – has not been offset by additional income.

As a result, the government has sought a succession of loans this year to pay its expenses at a time it is facing political challenges to its legitimacy, and country is facing plummeting investor confidence, a drop-off in foreign aid, an ongoing foreign currency crisis, and the challenges of its 2011 graduation to the UN’s definition of ‘middle income’.

As well as a raft of austerity measures, including the cancellation of electricity subsidies for citizens in Male’ and “reform” of the universal healthcare scheme, proposed revenue raising measures include plans to:

Raise import duty on oil to 3 percent
Impose import duty on items whose value exceeds MVR6.4 million
Raise import duties for liquor
Introduce GST for telecom services and sale of flats (both are now GST-exempt)
Raise GST rate for luxury items
Raise T-GST to 15 percent
Raise airport service charge for foreigners to $30
Increase visa fee for foreigners by MVR150

Minivan News spoke to several resort managers about the potential impact of such measures on the tourism industry. Of particular concern was the proposed increase in Tourism GST from 6 percent to 15 percent.

“That would be the biggest hit along with the liquor duty,” observed one manager.

“With the standard 10 percent service charge we’d be talking 25 percent on top. That’s too much,” he said.

Furthermore, a sudden increase in T-GST would force resorts to absorb the increase, due to contractual obligations.

“If such an announcement came after [the] contracts are signed, many operators would be forced to absorb the additional percent again,” the manager observed.

“Higher duty on liquor would be the most directly felt increase in guests’ daily extras. Our sales would take a hit,” he added.

An increase in already high oil prices due to government import duty would further increase prices.

“Oil has become more and more expensive since oil was first used. Another rise in prices would be just another rise, which, in the case of oil, would come anyway. Of course extra costs will eventually be passed on also from suppliers and will at one point always end up on the client’s bill. How much more of such a hike our clients will take, I couldn’t say. Already now the low- and mid-priced market segments are moaning,” he said.

The increase in airport charges to US$30 for foreigners would also increase the overall cost of the destination for potential visitors.

“Many other places charge one as well and I guess it has come to be accepted. If this is then garnished with higher visa fees, taxes of 25 percent, an eco-tax, bed-tax and the whole lot, it might quickly get too much though,” the manager warned.

Another resort manager told Minivan News that given the country’s almost total reliance on tourism, the government “needs to see itself as a tourism body as much as a government of a nation.”

“Tourism bodies in a general have five key responsibilities in order to increase the economic benefit of tourism for a nation,” he said: “Attract guests to the destination, have them stay as long as possible, have them invest back as much as possible into the local economy, have them recommend the destination to their friends and/or return themselves, and encourage balanced tourism development.”

The Finance Ministry’s proposed revenue raising measures “have negative implications for all five points of any basic tourism body plan,” he observed.

“As seen in the past 2-3 years, most countries have based their austerity strategies on reduced government expenditure and encouraging increases in revenue growth. This has been completed by efficiency plans for civil servants and key strategies to increase revenue,” the manager noted.

“In its actions over the last five months, the Maldives’ government has increased civil servants’ salaries, increased other costs, and are now looking at taking action that will compromise their main revenue stream. This is very different to other countries with similar financial challenges,” he stated.

“Whilst I understand that there is a need for a major revision on the Maldives economy, I would hope that cost reduction measures are implemented within the government that will balance the need for increased taxes on Maldives’ tourists. Areas of increased taxation such as oil and customs duty would be more acceptable psychologically for the tourism economy rather than an increase in direct tourists taxes and charges,” the manager added.

According to a survey conducted by the Tourism Ministry in 2011, 46 percent of tourists to the Maldives believed that the accommodation was too expensive.

Soft drinks, alcohol were also rated expensive by 42 percent, while food, water and souvenirs received a similar ranking from 41 percent of tourists polled.

Tourism Minister Ahmed Adheeb and Deputy Tourism Minister Mohamed Maleeh Jamal were not responding at time of press.

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High Court orders reinstatement of Police Chief Inspector Risheef Thoha

The High Court has overruled a decision made by the Civil Court regarding a suit filed against Police Chief Inspector Risheef Thoha, after he was dismissed by the Police Disciplinary Board over allegations that he raped a woman in a police car.

The court ordered that Chief Inspector Thoha be reinstated.

In August last year, a woman filed a case at police headquarters alleging she was sexually abused by a group of police officers, including the chief inspector.

In December 2010 Thoha appealed the decision of the Disciplinary Board at the Civil Court, which ruled that the Board’s decision was lawful and that there was enough evidence to dismiss Thoha from police duty.

The Civil Court noted at the time that Thoha’s call records showed he had contacted the other accused officers several times, and that the officers had also contacted him.

When the locations of the phones were determined, they showed that the car had travelled the routes the woman had said, the Civil Court’s ruling stated.

The ruling also said that the girl was thrown out of the car naked near Thoha ‘s house, Mainz in Maafannu, and that Thoha had admitted to being in the area a few minutes later.

However the High Court today ruled that Thoha be reinstated at the position of Chief Inspector of Police, and paid the salary he had not received during the time he was dismissed.

In August 2011 a close friend of the alleged victim told Minivan News the incident had occurred near Seahouse restaurant in Henveiru.

“She would not be older than 22 years, she was friends with the police inspector,’’ the source said. “According to what she told me, she was partying with a group of four police officers, including a senior inspector, and they were all drunk.’’

He alleged that the incident occurred inside a police car.

“She said they threw her onto the street after sexually abusing her,’’ the source added.

Former ‘Mr Maldives’ Police Constable Husham Hameed was also dismissed after being accused of the same crime, but in April last year the Civil Court ruled that his position also be reinstated.

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Nasheed reneging on commitment to respect CNI: Dunya

State Minister of Foreign Affairs Dunya Maumoon has accused former President Mohamed Nasheed and his Maldivian Democratic Party (MDP) of “threats and intimidation tactics” over the outcome of the CNI report, due at the end of August.

“The Government of Maldives is committed to the resolution of political differences through peaceful dialogue and the democratic boulevard [sic] and institutions available in the country,” Dunya said in the statement.

However Nasheed “is going back on his own words and commitment to the international community that he would respect the outcome of the CoNI.”

Former President was speaking during an event commemorating ‘Black Friday’, the brutal crackdown on pro-democracy activists by the former regime in 2004.

Dunya expressed concern at Nasheed’s apparent determination to bring members of the police and military to justice for their illegal roles in the transfer of power, no matter the final verdict of the inquiry commission.

“President Nasheed had threatened violence on the streets of Male’ in order to ensure justice,” said Dunya during the press conference, the details of which have been distributed by the Foreign Ministry as a media release.

A translation for Minivan News of the pertinent section of Nasheed’s Monday speech is as follows:

“I am certain beyond doubt that the commission’s report would note that many officers of the security forces committed a number of unlawful acts. Our demand, our protest, our request will be for these [officers] to be brought to justice. Our work will be to bring them to face justice. We should only go back home after CoNI’s report after bringing them to justice and establishing justice in this country. For a certainty, I definitely will not go back home otherwise.”

Nasheed’s intentions were clarified the following day in a proposal submitted to the government by the MDP . The document mapped out the steps the party expected to see taken following the CNI’s conclusion.

This proposal stated the MDP’s willingness to cease its calls for early presidential elections and wait for the constitutionally mandated polls in 2013 should the final report show no evidence of any unlawful activity in the transfer of power.

However, should the report find that the transfer included illegal acts on the part of any individual, the MDP proposed that those implicated be brought to trial and that all parties agree to early elections.

In the event that the CNI rules the departure of Nasheed from the President’s Office to have been unconstitutional, the MDP proposed that his government be fully reinstated.

The party had hoped for a response from the government before the end of Ramadan this weekend and appeared to receive it today when President’s Office spokesman Abbas Adil Riza told local media today that the government would not discuss the report’s outcome before its release.

“CNI’s report will not act as a final verdict. The purpose of the report is to assist the relevant institutions. So, there’s no need to make the report a ‘political carnival’,” Riza reportedly told Sun Online.

At its meeting on Tuesday, the MDP’s executive council had agreed to call a meeting of its National Council in order to determine the party’s next course of action.

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Gayoom’s half-brother acquitted of three-year old corruption charges

The Criminal Court on Thursday morning acquitted Abdulla Algeen Abdul Gayoom, half-brother of former President Maumoon Abdul Gayoom, of corruption charges more than three years after the trial began.

Algeen, younger brother of MP Abdulla Yameen, was accused of embezzling US$177,460 of Japanese funding from the Department of Meteorology (DOM), where he was the Director.

Algeen allegedly sent three separate invoices to the Japan Agency for Marine-Earth Science and Technology (JAMSTEC) between May 2006 and April 2007 on behalf of DOM.

All three invoices demanded payment to Algeen’s personal Bank of Maldives account.

In the verdict (Dhivehi) acquitting Algeen today, Judge Abdulla Didi ruled that the state could not prove that the money in question was owed by JAMSTEC to the government.

History

The first hearing of the corruption case was held on June 9, 2009 with Chief Judge Abdulla Mohamed presiding. The second hearing took place over a year later on July 1, 2010.

Newspaper Haveeru reported on March 4 this year that the case was further delayed after the presiding judge was changed for a third time.

After the case changed hands from Judge Abdulla Mohamed to Judge Zubair Mohamed, it ended up with Judge Abdulla Didi, who held his first hearing of the case on March 4.

The local daily reported the judge as saying that although the trial had been completed and witnesses heard, he wished to hear the case again as there were certain points to clear up.

Prior to Judge Didi restarting the case, the last hearing was held on October 19, 2011 where the trial was concluded with closing statements.

Concluding the new hearings on April 11, 2012, Judge Didi had said he would issue a verdict in two weeks.

The case against Algeen

In August 2007, Minivan News reported leaked documents showing JAMSTEC was funding a two year DOM research project into the oceanography and meteorology of the Indian Ocean.

In a Memorandum of Understanding signed in early May 2006, JAMSTEC agreed to meet “all expenses incurred in connection” with the project.

Later that month an agreement was signed requiring JAMSTEC to transfer $92,000 dollars to the DOM. In April 2007, the agreement was renewed for a year, with a payment of $70,000 required.

Both the 2006 and 2007 agreements require JAMSTEC to transfer money to a “bank account… designated by DOM.”

Algeen was the sole signatory on behalf of DOM for both agreements.

He issued the $92,000 dollar invoice on May 22, three days after signing the 2006 agreement, and the $70,000 dollar invoice on April 8, 2007, the same day he signed the 2007 agreement. A third invoice for a balance amount of $13,248.34 was issued on 22 December, 2006.

All three invoices were issued on DOM letterheads and the two most recent had Government of Maldives stamps. The bank account quoted was Algeen’s personal one.

“Wiping the slate clean”

Following the controversial transfer of power on February 7, the Criminal Court dismissed corruption charges against Deputy Speaker of Parliament Ahmed Nazim and Eydhafushi MP Ahmed ‘Redwave’ Saleem.

On February 20, the Criminal Court ruled that Nazim could not be prosecuted on charges of defrauding the now-defunct Ministry of Atolls Development, in the purchase of 220 harbour lights worth MVR1.95 million (US$126,000) in 2004.

Nazim, leader of the People Alliance (PA), along with MP Ahmed ‘Redwave’ Saleem (then-finance director at the ministry) and Abdullah Hameed, former Atolls Minister and half brother of Gayoom were charged in late 2009 on multiple counts of conspiracy to defraud the Atolls Ministry.

Eight days after Nazim’s case was dismissed, the Criminal Court acquitted MP Saleem – now a member of former President Gayoom’s Progressive Party of Maldives (PPM) – of involvement in the scam.

Following the verdict, the formerly ruling Maldivian Democratic Party (MDP) accused President Mohamed Waheed Hassan Manik of being controlled by supporters of former President Gayoom, who were “intent on purging the People’s Majlis of MDP MPs and MDP-leaning MPs in order to secure a controlling majority.”

“Recent days have seen cases against three MDP-supporting MPs fast-tracked in order to disqualify them from parliament while serious corruption charges have been dropped for opposition leaning MPs,” the party said in a statement, noting that MP Saleem’s case had been “unreasonably delayed in the court process since 2009.”

On February 20, the Supreme Court in a 4-3 ruling disqualified MDP MP for Thimarafushi constituency, Mohamed Musthafa over a decreed debt and stripped him of his seat.

“While in government, MDP consistently maintained that key parts of the judiciary are in the hands of the supporters of former President Gayoom. Now we are seeing the truth of that claim. Dr Waheed regime is using the courts to settle old scores, to reduce MDP’s parliamentary majority and to wipe the slate clean for government supporters,” MDP spokesperson Hamid Abdul Ghafoor said at the time.

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Surfing association attacks MNDF resort proposal over fears for local access: “Like England selling off Wembley Stadium”

The Maldives Surfing Association (MSA) has hit out at a proposed resort development on a Maldives National Defense Force (MNDF) training island, claiming it will substantially reduce local access to an already limited number of high-profile waves in the country.

Ahmed Rifaee, a member of the MSA’s Steering Committee, claimed that while Maldivians were largely unaware of the significance of the waters around the island of Thanburudhoo to the country’s sporting heritage, the proposed resort development threatened to leave local people with access to just two world-class surf points.

Rifaee said that tourism laws presently prohibit non-guests from using prominent surf points based at the country’s resorts – legislation that threatens the future development of a sport he noted had gained the Maldives its greatest athletic successes and recognition internationally.

The resort proposal, first discussed under the previous government as part of plans to fund a state-of-the-art military training complex, was forwarded to the Anti-Corruption Commission (ACC) this week to determine the legality of an island set aside for the military being leased for commercial purposes.

However, the private group linked to the development, Telos Investment, told Minivan News that a “robust development plan” was being put in place for local surfers, adding that discussions were already under way with surf authorities – including the MSA – over the issue.

Earlier this week, the MNDF confirmed to Minivan News that it would be leasing Thanburudhoo to a third-party that would develop the site as a surf resort. The island is currently used by officers for training and recreational purposes.

The country’s military authorities this month registered the MNDF Welfare Company in a bid to generate income to fund welfare services for the armed forces by investing in various businesses, including the tourism sector.

With an ACC investigation set to be tabled in the coming days, the development proposal was slammed by Rifaee, who claimed that the waters around the island were a unique experience for local and international surfers alike. He added that the waters housed two world class waves that had been used for generations to allow local surfers to hone their skills – no matter their levels of experience.

“We have been surfing these waves for a long time, they are one of the best training grounds for local surfers,” Rifaee said. “Outside the local community, it is little known by the wider Maldivian people about what a loss this would be to the country. I would say it was equivalent in England to selling off Wembley stadium to a foreign company.”

Former government proposal

In a proposal said to have been discussed last year between the government of former President Mohamed Nasheed, then senior MNDF figures, and Telos Investment, Thanburudhoo was to be leased for an initial 50 year period for development as a “boutique surf resort” to secure US$5 million in funding for an MNDF training facility.

The resort development plan was initially submitted by Telos Investment President Dr Gunnar Lee-Miller, who is said in the proposal to have experience “serving the Ministry of Human Resource, Youth & Sport, the Maldivian Olympic Committee, and several associations in a sports development capacity.”

MNDF spokesperson Lieutenant Abdulla Ali said this week that the concept of development of its training island as a tourist resort was approved by the former government in 2010, but that work had stalled “for various reasons”.

“However, we have started that process again, and the discussions are continuing,” Lieutenant Ali said.

No agreement at the time was reached on the proposals, which included a clause to allow local Maldivians “in good standing” with the MSA to have access to the waves around the resort twice a month, on every other Friday and Saturday.

While accepting that even limited access to local surf points was a less restrictive policy compared to other resorts in the country, Rifaee said even allowing access twice a month would be a major setback for national surfing.

“By allowing us to surf only on Saturday or Friday morning , when the waves are not always going to be there, this might not be too helpful,” he said. “It’s not just local surf spots that would be affected by such a proposal either. I’ve been told that there are one or two top dive spots in the waters. However, any resort development would need reclaimed land and a harbour, which will endanger these spots.”

Rifaee contended that while the MSA had yet to take a formal stance to oppose the resort development, discussions were ongoing over how to proceed.

“We are going to protest this if we have to. It’s part of our culture and has been for many years. Even my grandfather used to surf.”

Responding to the claims, Telos Investment told Minivan News that it would be issuing a statement soon regarding the project and the potential impacts on national surf development.

“To be sure, there is a robust surf development plan for local surfers and fruitful discussions with Maldivian Surf Association Leaders have already commenced,” Dr Lee-Miller responded by SMS at time of press. “We care greatly about the development of Maldivian surfers both in Male’ and the outer atolls.”

Minivan News was awaiting a full statement from Telos Investment at time of press.

Minister of Tourism, Arts and Culture Ahmed Adheeb was not responding.

Proposal

In a proposal submitted in July 2011 by Telos Investment and senior Ministry of Defence figures, Telos Investment would pay US$5 million dollars for a 50 year master lease for Thanburudhoo to develop a surf property for tourists. The money would be used to fund the development of a ‘Leadership and Management Centre for Excellence’ at the MNDF’s Girifushi facility.

The proposal stated that Thanburudhoo had originally been given to the MNDF to carry out combat training exercises – a purpose that it could no longer maintain due to the number of surrounding resorts.

“So rather than letting an under-utilised island continue, MNDF believes that Thanburudhoo can be utilised to give a new lease and life and strong future to Girifushi and the emerging leadership of MNDF and the country,” the proposal stated.

The proposal was not an attempt by the MNDF to enter the tourism market, collect a yearly lease from an island, or form a joint venture with a foreign investor.

Former Economic Development Minister Mahmoud Razee, who was acknowledged in the same proposal as having provided “constructive counsel” to Telos Invesment and senior MNDF officials, confirmed to Minivan News that discussions over the proposal had taken place. However no agreement was reached with the Nasheed government, Razee said.

Razee claimed the decision to not move ahead with the proposal was “partly due to timing”, but also concern over providing access to the surfing areas around the island for “young people”.

The government of the time had checked the offer in line with its wider Corporate Social Responsibility (CSR) programme and found it comparable to other privatisation projects, Razee said.

“However, what we didn’t do was make the project a joint venture with the MNDF,” Razee added.

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Nominations open for Special Achievement award

Nominations for this year’s National Award for Special Achievement opened today and will close at 3:00pm on September 20.

The award is given by the President in recognition of those who achieve distinction for the country. Details of the award were provided during a press conference at the President’s Office today.

The awards’ technical committee comprises of Dr Hassan Hameed, Dr Abdul Muhsin Mohamed, Dr Ibrahim Zakariyya Moosa, Aminath Reena and Hussain Amir.

Nomination forms are available via the President’s Office website or can be collected in person during office hours.

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President to meet public on Eid

President Dr Mohamed Waheed Hassan will meet with members of the public at Muleeage on the morning of Eid-Ul-Fitr day.

The President’s Office website has announced that all members of the public are welcome as well as foreigners from diplomatic missions and international organisations.

Specific invitation is not required for attendance at the event which will be between 9:30am and 10:30am on Sunday.

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MDP to hold mass rally ahead of CNI report, but will “accept findings”

The steering committee of the Maldivian Democratic Party (MDP) has decided to stage a mass rally before the publication of the Commission of National Inquiry’s (CNI) report, but has also committed to accepting the commission’s conclusion should it find there was no illegal activity involved in the ousting of former President Mohamed Nasheed on February 7.

A successful resolution proposed that should the CNI conclude February’s transfer of power was illegal, former members of the government should be reinstated, early elections scheduled, and legal proceedings initiated against those implicated.

However, should the CNI conclude that there was no coup in February, the steering committee decided it would wait for constitutionally scheduled presidential elections in 2013.

Deputy Leader of the Progressive Party of Maldives (PPM) Umar Naseer has responded to the MDP’s “amusing” proposals by stating his party’s intention to take the matter to the Supreme Court should the CNI’s findings indict the current government.

Local paper Haveeru reported on August 2 that Naseer, after refusing to testify a second time before the CNI, had argued the reconstituted commission represented an attempt by “foreigners to enter into the country’s internal affairs through the backdoor”.

Following his own statement to the committee last month, the interim leader of the PPM and former President Maumoon Adbul Gayoom told the press that he would not accept that the ousting of Nasheed amounted to a coup, regardless of the CNI’s findings.

Current President Dr Mohamed Waheed Hassan, during an interview with the BBC in June, stated his belief that he would not feel compelled to resign if he was found to have played no role in any alleged coup.

“If [the commission] find out that I had a role in bringing about a coup, then I would definitely resign,” he said. “But if I have no role – if somebody else has done it – it doesn’t mean I have to resign, according to the law of the Maldives.”

In the interview, Waheed argued that premature elections would be far more harmful to the country than his continuing presence in the President’s Office.

The CNI, originally created in February by presidential decree to investigate the events leading up to and including Nasheed’s resignation, was reconstituted in June following concerns, both domestic and international, that the committee lacked independence and impartiality.

The revised commission includes the addition of a Nasheed nominee as well as a retired Singaporean judge as co-chair.

Calm before the storm?

Last week, the MDP announced its decision to suspend its ‘direct action’ protests for the remainder of the Ramazan period in order to foster an atmosphere in which inter-party dialogue might progress.

Prior to this, the party had intensified its anti-government campaign during July, spending consecutive nights demonstrating on Chaandanhee Magu near the political and military headquarters of the capital, Male’.

The concurrent raising of tension in Male’ brought clashes between police and protesters. Injuries on both sides of the barricades brought claim and counter claim of police brutality and violent protests.

High-level parliament-initiated talks were scheduled to take place yesterday morning but appeared to stall after a number of senior party figures failed to attend.

There was apparent confusion regarding the aims of yesterday’s meetings. Jumhoree Party (JP) leader Gasim Ibrahim told local media that the meeting was “meaningless” unless the issue of resuming Majlis sittings was discussed.

The Majlis has not met since the end of July following Speaker Abdulla Shahid’s decision to suspend sittings owing to escalating tensions in the house.

Alternatively, the MDP’s representative at the meeting left the President’s Office yesterday speaking of early elections and the course of action to be taken after the CNI report’s publication.

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Eight islands experiencing water shortages

Emergency Operations Manager of National Disaster Management Centre, Mohamed Didi, has told Haveeru that eight islands in the country were currently experiencing water shortages.

Didi said that relief efforts were underway to provide drinking water to the islands from within their atolls although emergency reserve funds been severely depleted during the North East Monsoon season.

“MVR 4 million from the emergency relief fund for water shortages has almost been used up. Hence Finance ministry approval is required to spend over the allocated funds,” said Didi.

“A request will be sent tomorrow. There has been no water shortage during the South-West Monsoon within the last four years,” he said.

Surface fresh water is generally lacking in the Maldives due to increasingly variable rainfall patterns induced by climatic change and the management of saline groundwater.

Groundwater was previously used for drinking, however, following the 2004 tsunami, underground wells in most islands are contaminated by sewage, waste and salt-water.

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