Day: February 11, 2014

Government pension plans reliant on MVR1 billion investment return

The cabinet’s economic committee has announced President Abdulla Yameen will hand out the promised MVR5000 (US$ 324) to an estimated 17,000 pensioners starting in March.

Tourism Minister Ahmed Adeeb told the media during a press conference this afternoon: “I announce the happy news that the elderly will receive MVR5000 instead of MVR2000 at the end of this month.”

The government had allocated MVR470 million (US$ 30.5 million) in the state budget to give out an MVR2,300 (US$ 149) in cash handouts to individuals over the age of 65. These funds will now be invested in the retirement pension fund or in financial instruments such as T-bills to generate the monthly MVR5000 stipend, Adeeb said.

The government will need to generate an ambitious MVR1 billion (US$64.9 million) from investments this year to sustain the venture.

Although the government has not yet begun investments to generate the additional income for pensions, it will begin disbursing MVR5000 at the end of February as it is “certain” the required funds can be generated through future investments.

In the meantime, money will be redirected from within existing budgetary resources using “innovative methods” to pay out the pension this month, Minister of Fisheries and Agriculture Mohamed Shainee told Minivan News.

“This will not require additional expenditure from the budget. This will be done through investments made outside of the budget,” Adeeb told the press today.

“When we invest in the pension fund, this allowance will be given out without any breaks in the next five years. Even in the worst-case scenario, we will be able to generate that money. We can do this without any issues,” he said.

The cabinet’s economic committee is to meet tomorrow to discuss the most viable method of investment, Shainee told Minivan News.

Former President Mohamed Nasheed introduced the old age pension in 2008, while President Yameen pledged to increase the pension during last year’s presidential election campaign. On assuming office, Yameen said the government would not give cash handouts, but would provide the promised money through an insurance scheme.

The People’s Majlis subsequently passed a record MVR17.95 billion (US$ 1.6 billion) budget for 2014 with a deficit of MVR1.3 billion (US$84.3 million).

The deficit is expected to grow after the People’s Majlis failed to approve revenue-raising measures as proposed by the Ministry of Finance and Treasury.

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EC fines MDA for failing to hold a national congress

The Elections Commission has fined the Maldives Development Alliance (MDA) MVR30,000 for failing to hold the party’s national congress within the legally prescribed period.

The Political Parties Act states that such a congress should be held within nine months of registration. The MDA – lead by businessman and parliament member Ahmed ‘Sun Travel’ Shiyam – was registered on 20 December, 2012. The fine has to be paid within fifteen days.

The MDA is a member of the ruling Progressive Party of Maldives’ (PPM) governing coalition. It currently has two members in the parliament and will be running for seven seats in the upcoming parliamentary election.

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Government introduces Arabic lessons as part of Islamic education drive

The Ministry of Education yesterday introduced Arabic language as an optional subject for grades 1 – 12 in twelves schools.

At a inaugural ceremony held in Hiriyaa School yesterday, Vice President Dr Mohamed Jameel Ahmed said the government will mainstream Arabic education in the Maldives, focusing particularly on Islamic education and the study of Quran.

Jameel said the introduction of Arabic language will bring a ‘special happiness’ to the people of Maldives, will strengthen the Islamic faith, and will introduce good behavior.

Stating that different ideologies have to be introduced into the education system in order to ensure the peace and stability of the country, Jameel pledged to introduce Islamic ethics as a subject in all schools within the year.

Reading and writing of Arabic script have traditionally been taught in the Maldives at a very young age, either at home or from private teachers. Most people, however, have little or no understanding of the meanings of Arabic language – an issue of concern often raised by local religious scholars.

The schools in Malé city which have introduced the new subject were Thajuddeen School, Muhyuddin School, Dharumavantha School, Aminiya School, and Hiriya School.

In Addu city, the new lessons have been introduced at Maradhoo School, Feydhoo School, Hulhudhoo School, and Shamsuddin School. In Baa Atoll, pupils at Thulhaadhoo School and Naifaru Madrasatul Iftitah will also have the option of taking Arabic lessons.

The ministry has said that the first twelve schools were chosen based on the fact that Arabic teachers were already present within the schools’ staff, and that the subject would be introduced in all schools within the year.

Speaking at the ceremony yesterday, Minister of Education Dr Aishath Shiham said that Arabic language is “very close to our hearts” and that learning the language is very important.

Jameel, Ahmed, Education State Ministers Sheikh Abdul Aziz Hussain, Sheikh Ali Zahir and Dr Abdulla Nazeer took model Arabic classes for Hiriya Schools students yesterday.

The introduction of Arabic language in all schools of the Maldives is part of the government’s stated education policies. The government has also pledged to prepare a scheme for the introduction ‘economically beneficial’ foreign languages within the first hundred days of the government and to choose two islands within this period for the establishment of Arabic medium schools.

With the exception of Arabic-medium Madhrasatul Arabiyyathul Islamiyya, the medium of instruction in all Schools of Maldives is English language – local Dhivehi language and Islamic studies are taught in Dhivehi.

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Twelve deaths from road traffic accidents in 2013

In the year 2013 twelve people were killed in road traffic accidents, the Ministry of Transport and Communication has revealed.

Speaking to media, Minister Ameen Ibrahim said that action was taken against 25,000 people for various traffic violations. He said that this is an indication that the number of people breaking traffic rules are increasing.

The minister went on to announce that the ministry would begin a one-year awareness campaign tomorrow.

The campaign will focus on identifying and implementing immediate steps that can be taken to improve road safety.

According to Maldives Police Service 189 cases of traffic accidents were reported in January 2014.

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High Court rules that MPs’ police obstruction cases cannot be refiled

The High Court has today overruled a decision made by the Criminal Court to accept a previously withdrawn police obstruction case involving MPs Ali Waheed and Ahmed Mahloof.

The case was first filed in the Criminal Court by the Prosecutor General (PG) on 9 November 2010 before being withdrawn twenty days later.

The public prosecutor had argues that the initial case was only withdrawn temporarily while police investigated a related incident.

After the case was again filed in the Criminal Court, defense lawyers of Ali Waheed – which includes former Attorney General Husnu Suood – invoked procedural issues saying that the case could not be refiled.

According to the High Court, on 12 September 2012 the Criminal Court ruled it would proceed with the case, stating that the PG had full authority under the article 5 of the Prosecutor General’s Act to do so.

Ali Waheed subsequently appealed the decision at the High Court, arguing that the PG did not have the authority to re-submit a case without first bringing changes to it.

The High Court’s ruling stated that there were three situations where the PG could withdraw a case filed at a court: to revise the case, to withdraw a case without specifying any reason, or to withdraw a case after telling the court that that the office did not wish to proceed.

The ruling today said that the PG had sent a letter to the Criminal Court on November 29, 2010, asking it to send all the files concerning the case, and that the PG had not stated that the case was being withdrawn for revision.

The High Court said that PG lawyers had explained the withdrawal was because the PG had asked for police to investigate a case where a group of people stormed into the Civil Service Commission. Both cases were related, but the police had not concluded the investigation when hearings into the first case had started.

Ali Waheed was charged with obstruction of police duty during an anti-government protest he had participated in while a member of the then opposition Dhivehi Rayyithunge Party (DRP).  Waheed, who has since defected to the Maldivian Democratic Party in May 2011, was charged for breaching article 75 of Maldives Police Services Act.

During the hearings held at the High Court, Assistant Public Prosecutor Hussain Nashid claimed that the charges had only been dropped “temporarily” in a bid to respect the “fairness” of criminal trials.

Nashid also argued that the PG had the discretionary power to decide upon the procedures as to how criminal charges can be filed.

Both Waheed and Mahloof were elected to parliament as representatives of the DRP. However, following the split of the DRP into two factions, both Waheed and Mahloof chose to leave the party.

Mahloof went onto join the Progressive Party of Maldives, the party formed by followers of former President Maumoon Abdul Gayoom.

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Air Asia ex: low-cost carrier suspends Maldives operations due to “challenging” conditions

Air Asia X has announced it will be suspending all operations to and from the Maldives from March 1, citing “challenging business conditions” both in the country and in the wider region.

“Despite our efforts, external factors such as the depreciation of Asian currencies against the US dollar and the chronic lack of hotel room supply in Maldives resulted in cancellation of thousands of bookings by travel operators,” said Azran Osman-Rani, CEO of AirAsia X – the low-cost carrier of the AirAsia Group.

“As part of our strategy to operate more efficiently, the airline will deploy our aircraft to routes with the right level of demand to be financially viable.”

“We have been very grateful for the huge support rendered by Male Airport, Maldives Tourism and relevant authorities and would like to put on record our appreciation for all the cooperation that has been given to us,” concluded Azran.

Today’s decision comes just months after the brand expanded its services to the Maldives, with regular flights between Kuala Lumpur and Malé via Colombo announced last September. The airline has said that the Sri Lankan service will continue.

Air Asia has subsequently written to all of its customers offering the re-routing or refunding of pre-booked flights that will be affected.

The Maldives tourism industry currently contributes around 30 percent of the country’s GDP, with visitors to county passing the one million mark in 2013 – growing by 17 percent compared with the previous year.

Neither the Tourism Minister Ahmed Adeeb, the President of the Maldives Association of Travel Agents and Tour Operators Mohamed Khaleel, nor the Secretary General of the Maldives Association of Tourism Industries Ahmed Nazeer were answering calls at the time of press.

The most recent government figures – from July last year – show the operational bed capacity of the industry to have been just under 24,000 in the first seven months of the year, with an occupancy rate of 80 percent.

The Maldivian Rufiyaa currently follows a pegged exchange rate with the US Dollar, with a 20 percent band on either side of a central rate of 12.85 rufiyaa to the dollar. After the managed float was introduced in 2011, the official rate quickly rose to the maximum rate of 15.42 rufiyaa to the dollar where it has remained.

Soon after the Maldivian Monetary Authority (MMA) figures showed the government had printed over MVR1 billion (US$ 64,516,129) in the past year, MMA Governor Dr Fazeel Najeed tendered his resignation.

Before departing last month, Najeeb called upon the state to reduce expenditure and to stop printing rufiyaa, which he argued was exacerbating the country’s perennial dollar shortage.

President Abdulla Yameen’s new government has looked toward the tourism industry for new sources of revenue to finance this year’s budget.

The People’s Majlis last week agreed to hike Tourism Goods and Services Tax (T-GST) from eight to 12 percent in November, approved the immediate reintroduction of the discontinued US$8 bed tax, and will now require resort lease extension payments to be made within two years.

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Tourist arrivals rose 17 percent in 2013

Tourist arrivals to the Maldives rose 17 percent in 2013 compared to the previous year, according to the latest Maldives Monetary Authority (MMA) monthly economic review.

“This was mainly due to the large increase in tourist arrivals from China, coupled with a slight growth in arrivals from Europe. Reflecting this, the total bednights and occupancy rate also recorded an increase during the year,” the MMA’s review stated.

The review did note, however, that the average duration of stay declined in 2013 compared with the year before.

Statistics from the tourism ministry show that 331,719 Chinese tourists visited the Maldives last year, which was a 44.5 percent increase from the previous year.

Chinese tourists accounted for 29.5 percent of all tourist arrivals in 2013.

The central bank also noted that real GDP (Gross Domestic Product) was expected to “accelerate to 4.5 percent in 2014, driven mainly by the tourism sector.”

In November 2013, the finance ministry revealed that the tourism industry’s GDP growth in 2012 declined by 0.1 percent following 15.8 percent growth in 2010 and 9.2 percent in 2011.

Despite negative growth in 2012, the finance ministry estimated that the industry would have expanded 5.5 percent in 2013 and forecast a growth rate of 5.2 percent for this year.

The average duration of stay has however fallen from 8.6 days in 2009 to 6.7 days in 2012 and 6.3 days in 2013.

According to the annual tourism yearbook published by the Tourism Ministry, the average occupancy rate of all tourist establishments in 2012 was 2.5 percent below the previous year at 70.6 percent.

The Maldivian economy is largely dependent on tourism, which accounted for 28 percent of GDP on average in the past five years, and generated 38 percent of government revenue in 2012.

Meanwhile, in the fisheries industry – the second largest domestic industry – “the volume of fish exports increased by 48 percent while the earnings on fish exports rose by 14 percent” between January and November 2013 compared to the same period in 2012.

“This was contributed by the increase in both the volume and earnings on fresh, chilled or frozen tuna,” the MMA report stated.

It added that fish purchases rose by 21 percent from January to September 2013 compared to the same period the previous year.

Inflation

The monthly review noted that the International Monetary Fund (IMF) commodity price index increased by two percent in monthly terms during December 2013.

“This increase was due to the rise in food, metal and petroleum prices in the review period. In annual terms the IMF commodity price index increased by one percent, contributed by the increase in petroleum prices which off set the price declines in food and metal.The price of crude oil increased by three percent in monthly terms during December 2013, while prices rose by six percent in annual terms,” the review stated.

The rate of inflation in the capital Malé meanwhile decreased to 3.1 percent in December 2013, the MMA revealed, which was “largely due to the fall in fish prices.”

“Similarly, the rate of inflation in Male’ decelerated  marginally in monthly terms during December 2013, which was also due to the fall in fish prices,” the review stated.

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Man fined for brewing alcohol

The Criminal Court has handed an MVR1000 (US$64.9) to a Fuvahmulah Island man for brewing alcohol.

The Maldives Police Services arrested Mohamed Saeed on October 1, 2011 on a tip off while he was brewing alcohol in his house with another individual. The police discovered utensils used for alcohol brewing and a 500 ml bottle containing alcohol.

Saeed has been ordered to pay the fine within 7 days – by February 16.

According to the police, Saeed has a record of drug abuse, theft, mugging, and sexual harassment.

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