Day: August 9, 2014

New Zealand and Maldives discuss issues faced by small states

Murray McCully, Minister of Foreign Affairs of New Zealand met with Dunya Maumoon, Minister of Foreign Affairs on Thursday (August 7) to discuss security and environmental issues shared by small states.

Dunya noted New Zealand’s strong support of small states and the specific challenges in terms of security, environmental degradation, and political leverage that small states face in the international arena.

In return, McCully assured his commitment to working closely with the Maldives in strengthening the bilateral relations between the two countries and on global issues of mutual interest such as security of small states, renewable energy, and climate change.

In addition, Dunya thanked the Government of New Zealand for the scholarship opportunities provided by New Zealand for Maldivian students and expressed hope that such opportunities would increase in future.

Dunya has said noted previously that highlighting the challenges faced by small states would form an important part of the Maldives’ foreign policy.

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Chamber of commerce vice president slams economic development minister

Vice President of the Maldives National Chamber of Commerce and Industry (MNCCI) Ismail Asif has severely criticised Economic Development Minister Mohamed Saeed, questioning his “sincerity” and “competence”.

Asif told the press on Thursday (August 7) that Saeed lacked “vision,” discriminated among local businesses, and had not been able to attract foreign investment.

The relationship between the ministry and the chamber of commerce has deteriorated during Saeed’s tenure, Asif reportedly claimed.

Saeed has not provided necessary information regarding a loan scheme for small and medium-sized enterprises (SMEs), Asif added.

He went on to accuse the minister of “corruption” in appointing businessmen of his choosing to business-related committees formed by the ministry.

Declaring the chamber of commerce’s backing for the government’s flagship special economic zone (SEZ) bill, Asif, however, questioned Saeed’s ability to implement the legislation when it is signed into law.

He added that Saeed had not consulted local businessmen before the bill was drafted and submitted to parliament.

However, Asif praised the government for proposing the SEZ bill early in its five-year term and expressed support for its provisions, arguing that it would expand the domestic economy and spur growth.

If income generated from the SEZs was evenly distributed among the populace, Asif said it would benefit the public and raise standards of living.

He also dismissed criticism that SEZs could be used for money laundering and criminal enterprises, suggesting that it was not directly linked to the establishment of such zones and advised control measures.

Parliament’s economic affairs committee is currently reviewing the SEZ legislation and has set itself a deadline of October 10 to complete the assessment and possibly make revisions.

However, MP Abdulla Khaleel – chair of the committee – told newspaper Haveeru today that he expects the review process to be completed this month, after which the bill would be sent to the People’s Majlis floor for a vote.

Parliament breaks for a one-month recess at the end of August.

As the bill was a high priority for the government, the Progressive Party of Maldives MP for Faafu Nilandhoo said the committee has decided to hold two meetings for every day when there is a parliament sitting.

He stressed that stakeholders would be consulted and technical expertise would be sought.

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Environment minister inaugurates coastal protection project in Raa Maduvvari

Environment Minister Thoriq Ibrahim inaugurated a coastal protection project on the island of Maduvvari in Raa atoll on Thursday (August 7).

“Under this project a total length of 890 meters of coastal area will be protected in R.Maduvvari,” the ministry explained in a statement.

“This project is contracted to MTCC for MVR33 million from government budget. The government is taking measures of coastal protection in several islands throughout Maldives with the government budget and donor agencies.”

According to the environment ministry, island council members, senior officials from the Maldives Transport and Contracting Company (MTCC), and Maduvvari MP Mohamed Ameeth participated in the inauguration ceremony.

In his speech, Thoriq noted that 90 percent of islands in the Maldives was affected by coastal erosion and expressed hope that the successful implementation of the project in Maduvarri would mitigate the impact of erosion.

In July, Vaavu Fulidhoo and Lhaviyani Kurendhoo faced increased coastal erosion caused by ‘Udha’ swell waves during the south-west monsoon season.

Fulidhoo faced the loss of the island’s football stadium while the local graveyard on Kurendhoo was just 15 feet from the encroaching waves.

An official from the Kurendhoo island council told Minivan News at the time that a now- stalled harbour project of the island includes a 309-meter rock revetment, the construction of a 207 meter concrete quay-wall, and a 582 meter rock armour breakwater.

The MVR40 million (US$2.5 million) project was handed over to MTCC in March 2013 and was expected to be completed within a year.

The Environment Protection Agency’s (EPA) Senior Environment Analyst Rifath Naeem meanwhile explained that harbour construction was very likely to be an underlying reason for the increasing number of islands with chronic beach erosion.

Harbour construction could interfere with the natural movement of sand, Naeem said, which forms and sustains islands.

“Sometimes construction of harbours or other development activity could throw off the balance in this system. When the complex dynamics and equilibrium of sand movement are affected by such activity, it could increase accretion or erosion of beaches. What’s happening to the beach of one island could affect that of another island in that same reef,” he said.

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MMA reports increased business activity in second quarter

All sectors of the domestic economy with the exception of the tourism industry reported increased business activity in the second quarter (Q2) of 2014, according to the Maldives Monetary Authority’s (MMA) Quarterly Business Survey.

“With regard to the current level of employment, businesses across all sectors, except for those in the tourism sector, indicated an increase in Q2-2014 compared to Q1-2014,” the report observed.

“Looking ahead, all sectors anticipate an increase in employment in Q3-2014, reflecting the optimism shown by majority of businesses towards improved activity levels in this quarter.”

While businesses in the construction sector reported an increase in prices, the report noted that businesses in the wholesale and retail trade, manufacturing and tourism reported a fall in prices.

“As for business costs, businesses across all sectors experienced an increase in all labour related costs and other input costs in Q2-2014 when compared to Q1-2014, while they expect a further increase in costs in Q3-2014 as well.”

In the construction industry, the survey found that factors which limit growth opportunities included “delays in payment by clients and cost of raw materials.”

“Other significant factors include limited access to bank credit and foreign exchange, high cost of labour and finance; and shortage of materials,” the report noted.

The quarterly survey is conducted by the central bank for a “quick assessment of current business trends and expected future economy activity” by questioning senior managers “on the direction of change in various business variables such as sales, output, prices, exports, capacity utilisation and employment”.

“Survey forms were sent out to 135 large enterprises in four main sectors of the economy which are construction; manufacturing; tourism; wholesale and retail trade. A total of 65 enterprises responded to the survey which represents an overall response rate of 48 percent,” the report explained.

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Tourist arrivals increase 9 percent in June

Tourist arrivals increased 9 percent in June compared to the same period last year, reaching 83,347 guests, says the Maldives Monetary Authority’s (MMA) monthly economic review.

“However, this is a decline of 9 percent when compared to the previous month,” read the economic review for June.

“The annual increase in arrivals was contributed by the increase in the number of arrivals from both Asia and Europe. In June 2014, total bednights rose by 9 percent in annual terms while the average duration of stay remained unchanged at 5.6 days compared to June 2013.”

The occupancy rate meanwhile increased to 59 percent from 55 percent in June 2013.

Cash flow

The central bank also revealed that government securities – treasury bills and bonds – rose 18 percent in June compared to the same period last year, which was “contributed by the increase in the amount of T-bills issued by the government to manage its growing cash flow requirements.”

The monthly review noted that “the outstanding stock of T-bills held by commercial banks at the end of June 2014 increased both annually and monthly, whereas T-bills held by non-banks increased only annually.”

Finance Minister Abdulla Jihad had expressed concern last week with shortfalls in projected revenue posing difficulties “in managing the budget deficit” and affecting the government’s ability pay to civil servants.

“We try to make regular salary payments even if we have to take loans in order to do so,” he said, adding that the ministry was “trying to make the salary payments through any means possible.”

The MMA had previously warned that shortfalls in revenue and overruns in expenditure could jeopardise the country’s debt sustainability.

In May, MMA Governor Dr Azeema Adam called for “bold decisions” to ensure macroeconomic stability by reducing expenditure – “especially the untargeted subsidies” – and increasing revenue.

Fisheries, inflation and reserves

“During June 2014, both the volume and earnings from fish exports increased compared to June 2013,” the monthly review revealed.

“As such, the volume of fish exports increased by 33 percent, while the earnings on fish exports rose by 6 percent during this period. The increase in the volume and earnings of fish exports was contributed mainly by the increase in export of frozen yellowfin tuna.”

The rate of inflation in the capital Malé meanwhile “accelerated slightly to 3.5 percent in June 2014 from 3.3 percent in May 2014,” which was “largely contributed by the acceleration in the growth of food prices, especially fish prices.”

In monthly terms, however, the rate of inflation “fell marginally” in June, “largely due to the fall in prices charged for furnishing, household equipment and maintenance, which off set the increase in fish prices during the review month.”

With imports increasing 19 percent while exports declined by 22 percent, the MMA revealed that the trade deficit widened by 27 percent in May compared to the same period in 2013.

Gross international reserves meanwhile “rose in both monthly and annual terms by 12 percent and 39 percent, respectively, and reached US$477.6 million at the end of June 2014.”

“This mainly reflects the temporary increase in foreign currency transfers by the commercial banks in the review period. As for reserves in terms of months of imports, it also increased in both monthly and annual terms and reached 3.1 months during the review month,” the report explained.

Quarterly business survey

The MMA’s Quarterly Business Survey for the second quarter of 2014 meanwhile noted that a majority of respondents from the tourism sector “indicated a decrease in total revenue, resort bookings and average room rates” during the current off-peak season.

While 10 percent of respondents indicated a decline in hiring and 83 percent reported no change, a majority reported “a decline in their financial situation” during the quarter.

“In analysing the factors which limit growth opportunities for businesses in the tourism sector, most businesses noted competition within the sector, issues with the regulatory framework, shortage of skilled labour and the high cost of finance as the most significant factors,” the survey found.

However, respondents expected revenue and average room rates to increase in the third quarter – “reflecting seasonal variations” – while most respondents expected “business costs such as labour and other input prices to increase in the next quarter”.

More respondents planned to increase capital investments than those who expected a decline, the survey found.

In July, the Ministry of Tourism revealed that tourist arrivals had reached half a million at the end of May, which was an 11.9 percent increase compared to the same period last year.

Moreover, the MMA revealed in its quarterly economic bulletin that tourism receipts in the first three months of the year increased by 10 percent compared to the first quarter of 2013, reaching US$801.1 million.

The bulletin noted that the 10 percent annual increase in arrivals was “entirely driven by the significant increase (24 percent) in arrivals from the Chinese market.”

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Bank of Maldives operating profits up 65 percent

The Bank of Maldives (BML) has announced that operating profit in the second quarter of 2014 increased 65 percent from the previous quarter, reaching MVR353 million (US$23 million).

“The Bank continues to move in the right direction. We are steadily building a sustainable financial base to support our strategic pillars of financial inclusion, customer service and support for business,” CEO and Managing Director Andrew Healy was quoted as saying in a press release.

“Since announcing these strategic priorities at its AGM in May, the bank has made a number of positive changes including the introduction of free cash withdrawals at ATMs and free transfers from one branch to another,” the press release continued.

“It has also recommenced issuing Visa Debit cards for rufiyaa accounts. Furthermore, the bank has started a programme to bring banking services to all inhabited islands across the country.”

“As part of its strategy, Bank of Maldives is also heavily investing in state-of-the-art technology and went live with T24, one of the world’s most advanced Branch Banking Systems on last Sunday, 3rd August 2014.”
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Three suspects in 24kg drug bust released

Three suspects arrested in a 24kg drug bust in February have been released after the Prosecutor General’s (PG) Office decided there was insufficient evidence to prosecute the three Maldivian men, reports local media.

After taking 18 men into custody, police forwarded five cases for prosecution. However, the PG’s Office have decided to prosecute only two suspects – both Maldivians – identified as Abdulla Sofwath, from Henveiru Everpeace, and Ismail Moosa, from Galolhu Trustwood.

The Criminal Court has ordered that the pair be kept in remand detention pending the outcome of their trial.

Local media has meanwhile reported that the three locals released last week included a police officer arrested in connection with the drug bust as well as the captain of a dhoni (traditional Maldivian boat) that collected the heroin from an Iranian vessel.

Four Maldivians, three Bangladeshis, and 11 Pakistanis were taken into custody on March 10 with 24kg of heroin, which police said was “the largest amount of drugs seized in a police operation conducted in the Maldives so far.”

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Police seize drugs worth MVR525,000 in drug busts

Police have seized drugs with a street value in excess of MVR525,000 (US$34,046) in two drug bust in Malé last week.

According to police media, three Maldivian men aged 32, 33, and 34 were arrested near the Hulhumalé express jetty on Thursday morning (August 7) in an operation conducted by the Drug Enforcement Department (DED).

Drugs with an estimated street value of MVR480,000 (US$31,128) was found in the backpack of the 33-year-old.

The Criminal Court has since extended the remand detention of the suspects to 10 days.

In the second operation, a 52-year-old Maldivian man was arrested with drugs worth MVR45,000 (US$2,918) from a room in the Maafaru guest house Thursday night. The guest house was raided based on intelligence information.

Police also found two cellophane wrapping rolls and a small weighing device.

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