Day: December 19, 2013

National debt set to rise to MVR92,196 per head warns MMA

The Maldives Monetary Authority – the country’s central bank and banking regulator – has published its professional opinion on the 2014 budget, painting a dark outlook and proposing urgent measures to prevent the economy from plunging further into debt.

The document was prepared upon an official request from the People’s Majlis, which is set to consider the spending plans when they emerge from committee on Saturday (December 21).

In the document, the MMA warned that the national debt is estimated to rise from MVR27.7 billion in 2013 to MVR31.5 billion in 2014 – equating to MVR92,196 per head.

Forecast GDP growth rate for 2014 is 4.5% – lower than the average of past ten years.

Inflation can be sustained at 4%, but this will depend on changes in the world market, stated the authority

Despite pledges to reduce state expenditure, the government returned a record MVR17.5 billion budget for consideration by the Majlis this month.

Subsequent recommendations in committee have seen the likely figure to rise to MVR18 billion.

Reducing government expenditure

Rising government expenditure was cited as the biggest challenge for the country right now. The agency advised the government to reduce recurrent expenditure to MVR10.2billion from its current level or MVR12billion, offering the following recommendations to do so:

  • Ensuring government subsidies are carefully targeted to the rightful persons.
  • Downsizing the state apparatus to one that’s appropriate for the Maldives’ size and income – including downsizing of parliament, councils, and independent institutions.
  • Finding ways of reducing recurrent expenditure and improving governance – suggesting the combination of local, parliamentary, and presidential elections was suggested.
  • Stop spending on government-run companies from the budget,  or dissolve such companies.
  • Don t proceed with projects (e.g. in contractor finance basis) unless funds have been secured or guaranteed.
  • Reduce debt, turn existing short-term debts in to long-term ones – for instance, by selling long-term foreign bonds at a small interest rate rather than depending on the domestic market for financing debt.
  • Prepare to implement the Fiscal Responsibility Act in 2014.

Finding better ways of financing the deficit

The document stated that the government had been financing the budget deficit mainly by taking short-term loans, selling treasury bills and treasury bonds, and by the MMA itself printing money. Instead of managing this deficit through a market mechanism, the government has resorted to dealing with it mainly through printing cash.

Overdrawing from the state’s Public Bank Account (PBA) to accommodate government spending has significantly increased the flow of the rufiyaa in the economy. The authority stated that this has reduced the foreign exchange reserves to dangerous levels – just two months of imports by the end of October 2013.

It was also noted that the increased flow makes it difficult to stabilise the foreign exchange rate.

According to the authority the PBA overdraft facility was misused by the government, using it to finance long term budget deficit even though it was intended to manage cash flow within a short period of time (a few weeks).

The amount overdrawn from PBA started increasing in October 2012 and reached MVR2.5 billion by 9 December 2013.

The MMA advised the state to pay all due treasury bills, treasury bonds and PBA overdrawing debts to the authority, whilst also noting that the MVR945 million required to pay for this had not been included in the proposed budget.

New revenue raising measures and legal changes

One of the key points highlighted throughout the document was the importance of implementing the new revenue raising measures – most of which is hoped to come from advance payments from resort lease extensions – which account for 23% of the total revenue in the budget.

If these measures are not implemented, the budget cannot cater for the recurrent expenditure and the estimated budget deficit for 2014 will increase from MVR886.6 million to 4.4 billion (11% of GDP), the MMA warned.

The MMA requested the state to proceed with amending the laws necessary for implementing new revenue increasing measures as soon as possible, and asked to find ways to generate an income from various industries instead of depending only on tourism for revenue.

Another notable recommendation was the reduction of the number of foreigners working in the country in order to create a more favorable balance of payments situation.

Read the full document (dhivehi) here.

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Rare albino turtle stolen from Sri Lanka may be in Maldives

A rare albino turtle stolen in Sri Lanka could have been smuggled in to Maldives, Sri Lankan media has reported.

The five year old turtle, weighing 9.5 kg, 60cm in length and 35cm in width was reportedly stolen from a private turtle conservation center in Kosgoda. It was reported as missing on Sunday night, and is said to be worth USD250,000 – 300,000.

Sri Lankan news website “Hiru News” quoted Wildlife Resources Conservation Minister Vijith Vijithamuni Soyza as saying that he believed the stolen turtle could have been smuggled into the Maldives.

Owner of the conservation center Chandrasiri Aabru suspects involvement of a Sri Lankan vocalist Amal Perera. According to Chandrasiri, Amal had shown an interest in buying it, visiting the turtle with a Maldivian friend to whom he requested it to be sold.

Sri Lankan police have summoned and questioned Amal on this matter. The Wildlife Conservation Department says Interpol help will be sought if it was in fact smuggled out of the country.

Catching, killing, importing and the sale of turtles and turtle products have been banned in the Maldives since mid-nineties. However, the implementation of these bans is weak.

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HRCM congratulates parliament for passing Anti-torture bill, calls for president to ratify

The Human Rights Commission of Maldives (HRCM) has congratulated the parliament for passing the Anti-torture Act [Dhivehi] which criminalises torture.

The act guarantees freedom from torture as a fundamental right of every individual even in circumstances of war or imminent war.

The HRCM has now called upon  President Abdulla Yameen to ratify it. The commission noted that the bill was passed including 17 of the 21 recommendations it had made.

Meeting with Yameen today, members of the commission received assurances of governmental support for their work after sharing details of the challenges they currently face.

The commission’s recently released benchmark guidelines for the protection of migrant workers was warmly received by state departments.

The Anti-Torture Act declares freedom from torture as a fundamental right, penalises torture, ensures respect for human rights of criminal suspects, and prohibits torture in state custody, detention in undisclosed locations, and solitary confinement.

According to the bill, any confession gained through the use of torture should be deemed invalid by the courts.

The new law defines torture as any action committed by a state official, or committed with the orders, consent or knowledge of a state official to cause physical or psychological pain to obtain information or a confession or to inflict punishment or to threaten or humiliate an individual.

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Ismail Zihan surrenders himself to police

Police have said that Ismail Zihan, 21, of Medo in Galolhu – one of two persons searched for by the police for their alleged involvement in a local network that was seized earlier this month – has surrendered himself to the police yesterday (18 December).

In a statement issued today, the police said that he turned himself in yesterday afternoon at about 4pm.

The police said that Faisal Ibrahim, 23 of Anooma in Mahchangolhi – the second person police are looking for – has not been found and that search is still ongoing.

On December 5, police searched the premises of Henveiru Fahaageaage after obtaining a search warrant, finding drugs and money inside the house.

Police said that persons believed to be involved in the network were apprehended inside the house during the operation.

According to police, a total four persons have been arrested in connection with the case including a Pakistani and a Sri Lankan national.

Police appealed the public to share any information they have regarding the whereabouts of Faisal Ibrahim, and asked people to contact the police hotline 3322111 or police emergency 119 or police Drug Enforcement Department at 9792498.

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World’s largest floating book fair docks in Malé

Additional reporting by Daniel Bosley

The Logos Hope – dubbed the “world’s largest floating book fair” – operated by the German Christian charitable organization GBA Ships is currently visiting the Maldives as part of the vessel’s tour around the world.

According to the Logos Hope website, the original Logos had visited the country forty years ago – in 1973.

“Many in the Maldives still remember stepping on board Logos as children in 1973 or the visit of Doulos in 1998,” read a statement released on the group’s website.

“It is very special that we can return after many years with a bigger ship,” Logos Hope Director Lloyd Nicholas was quoted as saying.

“It’s a newer ship but still with the same purpose, same good books and with a desire to serve in the countries Logos Hope visits.” He added.

Beginning life as a car ferry in 1973, the vessel spent its first 30 operating ferry services around northern Europe and Scandinvia, before being bought and refurbished by GBA Ships in 2003 .

After the completion of renovations in 2009, the Logos Hope has travelled the globe – taking in the Caribbean, the Middle East and South East Asia – promoting GBA’s goal of spreading education and quality literature.

GBA – Gute Bücher für Alle or ‘Good Books for All’ – claims to have welcomed over 42 million people in 150 countries aboard its numerous vessels since 1970, making 1400 ports of call, and offering training to around 10,000 young people.

An official reception was held yesterday to open the book fair which was attended by Minister of Youth & Sports, Mohamed Maleeh Jamal, as well as other senior government officials

A large number of Maldivians were seen boarding the ship and buying books as well as enjoying the cheap coffee available at the ship’s International Cafe’ – staffed by the Logos Hope’s all-volunteer crew.

Minivan News observed that all purchases made from the ship were checked by customs official present, before being taken out of the ship. According to an official on the Vessel, all purchases above MVR6,000 (US$389.10) were subject to custom duties.

Some book shelves on board had been sealed off, making their content unavailable to Maldivian visitors. GBA normally makes Christian literature available to shoppers, however, materials deemed “offensive to Islam” are prohibited in the Maldives.

According to the organisation’s website, Logos Hope’s book fair will be open to the public until the evening of Friday, December 20. The ship is docked in Malé’s commercial harbour area.

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Opposition MP files four misconduct cases against Judge Abdulla Mohamed

Opposition Maldivian Democratic Party (MDP) MP Hamid Abdul Ghafoor has filed four cases of judicial-misconduct against the former Chief Judge of Criminal Court Abdulla Mohamed at the Judicial Service Commission (JSC).

The MDP in a statement (dhivehi) published on its official website claimed that the four cases filed against the judge had been based upon his misconduct during Hamid’s recent criminal trial.

Last October, Judge Abdulla Mohamed handed Hamid a six-month imprisonment sentence for his failure to comply with court summons in a case in which he faced charges of refusing to cooperate with the police.

However, Hamid’s conviction was quashed on appeal by the High Court, which held that the Criminal Court had not followed the established procedures in attempting to summon the MP to the court.

The High Court, in overturning the case, also reiterated that the Parliamentary Privileges Act at the time of Criminal Court’s issuance of the guilty verdict did not allow an MP to be summoned to court while parliament was in session.

In late November, the Supreme Court annulled several articles of the Privileges Act, including the clause that required all MPs – regardless of criminal conviction – to be present during votes. The Supreme Court’s move had prompted Hamid’s relocation from house arrest to Maafushi jail.

In the misconduct cases filed at the JSC – the state’s judicial watchdog responsible for disciplining judges – the Henveiru-South constituency MP accused Abdulla Mohamed of displaying outright rudeness towards him, stereotyping him as a criminal, publicly defaming him, and attempting to “politically” destroy him.

The MDP’s statement meanwhile added that Hamid intends to file more cases concerning the judges alleged misdemeanors,  including the fact that he had refused to provide a copy of the arrest warrant issued against Hamid.

Ghafoor was quoted in the statement claiming that he had only been able to receive the arrest warrant three day after the expiry of the warrant.

He also accused of the Judge of assisting the police to publicly broadcast his photograph in the media and implying him as a hard-lined criminal on the loose.

Controversies surrounding Judge Abdulla Mohamed

Shortly after the case, the JSC announced the transfer of Judge Abdulla from his position as Chief Judge of Criminal Court to the Chief Judge of the Drug Court as part of the commission’s shuffling of nine superior court judges.

In January 2012 Judge Abdulla was taken into military detention during the final days of former President Mohamed Nasheed’s administration after then-Home Minister Hassan Afeef had accused him of “taking the entire criminal justice system in his fist”.

Nasheed’s administration listed 14 cases of judicial misconduct concerning the judge that included obstruction of police duty – including withholding warrants for up to four days, ordering police to conduct unlawful investigations, disregarding precedents set forth by higher courts, deliberately holding up cases involving then-opposition figures, and barring media from corruption trials.

He was also accused by the Nasheed government of releasing of suspects detained for serious crimes “without a single hearing” and maintaining “suspicious ties” with family members of convicts sentenced for dangerous crimes.

The controversial judge was also thrust into the media limelight after he released a murder suspect “in the name of holding the health minister accountable”. The suspect later went on to kill a witness to the case.

The JSC earlier in November 2011 found Judge Abdulla guilty of violating the Judges Code of Ethics by making a politically biased statement in an interview he gave to private broadcaster DhiTV.

However, the JSC’s attempt to take action against him ended in vain after the Civil Court overruled the decision – later supported by the High Court.

Minivan News was unable to get a confirmation from the JSC regarding Hamid’s case – Secretary General Abu Bakuru was not responding to calls at time of press.

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Germany grants €3million for climate protection project

The governments of the Maldives and Germany yesterday signed a climate protection agreement that will see the granting of €3million from the European partner.

Launching the scheme at the Ministry of Environment and Energy, the Minister of State for Environment and Energy Abdul Matheen Mohamed expressed his gratitude to Ms. Randa Kourieh-Ranarivelo – Sri Lanka Country Director for German development firm GIZ – who signed the agreement on behalf of the German government.

GIZ – ‘Deutsche Gesellschaft für Internationale Zusammenarbeit’ or the German Society for International Cooperation – is a corporation working in close alignment with the German Federal Ministry for Economic Cooperation and Development.

“The physical component under this project is to install photo voltaic (PV) systems in Raa atoll Ungoofaru island and Dhaalu atoll Kudahuvadhoo island,” a press release from the ministry explained.

“Under this project 119 kW of grid connected PV system will be installed in Ungoofaaru and 166 kW of grid connected PV system will be installed in Kudahuvadhoo.”

Whilst €800,000 is allocated for the solar panel project, the remaining allocation will go towards ‘soft components’ such as preparing a renewable energy investment guideline and developing low-carbon guidelines for resorts.

The ministry expects the physical component of the project to begin in February and for the work to be completed in 6 months.

The Maldives was pledged a further €4million from the European Union earlier this month to address climate change in the low-lying island nation.

In a recent report titled ‘Turn Down The Heat’, the World Bank reasserted the urgent need for concerted efforts to support the Maldives in adapting to climate change, due to a projected sea level rise of 115 centimetres by 2090.

In the document, a 4 degree Celsius (7.2 degrees Fahrenheit) global temperature increase was predicted by the end of the 21st century unless concerted action is taken immediately.

Based on the report’s findings, the World Bank has highlighted the urgent need for concerted efforts to support the Maldives in adapting to climate change.

As one of the lowest-lying countries in the world, with an average elevation of 1.5 meters above sea level, the Maldives is extremely vulnerable to the effects of climate change, such as sea level rise.

“The Maldives is one of the most vulnerable nations to climate change impacts and has set best practice examples in adapting to climate change consequences,” stated Ivan Rossignol, World Bank Acting Country Director for Sri Lanka and the Maldives.

The current administration, under recently elected President Abdulla Yameen, is in the process of formulating a series of 100-day goals, though it has yet to set-out clear policies on the environment.

Climate change failed to feature in either Yameen’s, nor this main challenger Mohamed Nasheed’s election campaigns.

Former President Nasheed’s efforts to raise awareness of climate change – most notably at the 2009 Climate Change Forum in Copenhagen –  brought international acclaim and significant donor aid to the Maldives.

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GMR chair expects arbitration proceedings to be concluded by May

GMR Group Chairman GM Rao expects arbitration proceedings in its dispute with the Government of Maldives to be concluded by May next year, India media has reported.

Rao was quoted whilst commenting on the infrastructure company’s bid to secure an airport development deal in the Phillipines.

A record-breaking US$5oo million deal to re-develop Malé’s Ibrahim Nasir International Airport was cancelled by the Maldives Government in late2012.

On November 27, then-President Dr Mohamed Waheed’s cabinet declared the agreement to be ‘void ab initio’ – invalid from the outset – ordering the developer to leave.

GMR subsequently took the case to a Singapore court of arbitration, claiming US$1.4billion in compensation – a figure that eclipses the Maldives’ state budget.

During the second round of procedural hearings in August this year, the tribunal acceded to GMR’s request to split the proceedings into firstly determining liability, before quantifying the amount of compensation to be paid separately.

Minivan News understands that the tribunal agreed this would simplify examination and quantification of what was effectively three claims being made in the hearing: GMR-MAHB’s claim for compensation as per the termination clause of its concession agreement, its parallel claim for loss of profits over the lifespan of the agreement due to its termination, and the government’s counter-claim for restitution should the tribunal decide in its favour.

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