Day: December 9, 2014

Both Transparency Maldives and MDP call for greater transparency in water crisis fund

Transparency Maldives has called on the government to display more transparency in order to avoid “economic and political repercussions stemming from the water crisis”.

“The Government must publicly provide a breakdown of the estimated US$20 million (more than MVR300 million) needed to overcome the crisis, and how the government intends to spend it,” read a press release from the anti-corruption NGO.

Transparency’s statement follows the announcement this week that the government is seeking donations in order to meet the costs of the fire that crippled Malé’s sole desalination plant on December 4.

“Furthermore, the decision to seek donations from the public raises questions given that MWSC is a private, profit-making corporation with 80 per cent government shares,” said Transparency.

Minister of Tourism Ahmed Adeeb said today that the fund – which has already received support from both foreign and domestic donors – was not intended for the MWSC, but would be utilised by the government.

The opposition Maldivian Democratic Party (MDP) has also criticised the fund, stating that the government should only be able to demand US$20 million after they have decided how it is going to be spent.

“The MDP along with the people of the Maldives demands answers from the government regarding the US$ 20 million fund,” said party Vice Chairperson Ali Niyaz at a press conference today.

“Where is the money going to go to? Why have not seen a breakdown on how the money is going to be spent? Will this be a new ring in the chain of corruption of the government?” he asked.

Additionally, party lawyer Hassan Latheef expressed concern that unnamed donors were giving large amounts of money to the fund.

“Relevant details should be provided as per the law on money laundering and corruption prevention law. Money laundering and financing for terrorism through donors is something which exists in the Maldives.”

Transparency has also called for an independent technical investigation to be conducted, and results to be made public before effective and preventative mechanisms are put in place.

“The investigation must scrutinise MWSC’s risk mitigation policy and asset management plan,” said the NGO.

With 130,000 citizens of the capital left without water, the government has said it could take up to two weeks to fully repair the extensive damage. President Abdulla Yameen has said that there could have been no back up plan for a “disaster of this magnitude”.

Former President and opposition leader Mohamed Nasheed has also called for an inquiry into the fire, suggesting that the Danish government previously recommended keeping 21 days of reserves in the capital.

Transparency noted that the crisis had demonstrated “the interminable relationship between good governance and citizens’ right to essential human needs,” calling for greater regulation of state-owned enterprises.

“Transparency Maldives believes that it is the responsibility of the government to hold accountable and to ensure that MWSC and other companies that provide essential services, such as the State Electric Company Limited (STELCO) and FENAKA Corporation  Limited, have mechanisms in place to review their working procedures so that similar incidents can be avoided in the future.”

MDP lawyer Latheef also criticised what he perceived to be the government’s attempts to pass the constitutional responsibility for water provision to the MWSC.


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People’s Majlis disrupted after disorder over water crisis

Allegation of assault against opposition MPs followed disruption in the People’s Majlis today as MPs attempted to debate the ongoing Malé water crisis.

Water services have been cut off from the capital for six days following a fire at the capital’s sole desalination plant.

The Majlis convened today – with debate on the proposed 2015 state budget and an urgent motion of the water crisis on the agenda. But proceedings were prematurely concluded after numerous points of order were raised by the opposition MPs.

Maldivian Democratic Party (MDP) MP Mariya Didi expressed her discontent that the parliament was receiving running water while water services for Malé residents were disrupted.

“While there is no water for the general public, there is water in the parliament. There is even running water in the toilets,” local media reported Mariya as saying.

This subsequent commotion saw Mariya standing in front of the Speaker of the Parliament Abdulla Maseeh Mohamed in protest, while former Speaker of the Majlis and MDP MP Abdulla Shahid has alleged he was attacked by members of the ruling Progressive Party of Maldives (PPM).

Shahid had since submitted a letter addressed to the speaker urging an investigation, while the MDP released a statement condemning the attack on Shahid and alleging an additional attack on Mariya by a pro-government MP.

However, PPM Parliamentary Group Leader Ahmed Nihan has denied the attacks when speaking with local media.

“Shahid started calling for the resignation of the government during the commotion. Some of our younger MPs went near the table and then there were some disagreements,” Nihan told Haveeru.

Questioning the water fund

The MDP also raised several queries regarding the US$20 million ‘Malé water crisis management fund’ set up by the government in order to recover the cost of dealing with the situation.

Speaking at a press conference today, MDP Vice Chairperson Ali Niyaz said that the government’s demands for US$20 million without a detailed breakdown of how the money is going to be spent might lead to corruption.

“Even though MWSC managing director is present during the press conferences, he has not been given any opportunity to speak and we have not received any information on the damages from a technical viewpoint,” complained Niyaz.

Following calls from the defence minister not to politicise relief efforts, Niyaz said that the party is not trying to politicise the US$20 million fund but was demanding answers and correct information from the technical staff at the MWSC rather than the “political figures” in the president’s task force.

The team assigned by President Abdulla Yameen to deal with the crisis includes Minister of Defence Colonel (retired) Mohamed Nazim, Economic Development Minister Mohamed Saeed, Minister of Environment Thoriq Ibrahim, and Minister of Fisheries and Agriculture Dr Mohamed Shainee.

Meanwhile, 5 people were arrested last night at a protest voicing the public’s frustrations with the government’s handling of the water crisis.

A police media official told Minivan News that the people were arrested for disobeying police orders and that all have now been released.

The MDP denied involvement in the protests, saying that the protests did not feature any of the MDP flags and that it was merely people expressing their frustrations with the government.


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No fall back for disaster of this magnitude: President Yameen

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Three injured in police tow yard fire

Three people sustained minor injuries in a fire that broke out at the police tow yard in Malé during the early hours of the morning on Tuesday (December 9).

Police said the fire incident occurred at 5:54am and was controlled by 6:10am.

The fire damaged an expatriate residential quarter at the city council’s Thaisey Koshi on Boduthakurufaanu Magu, a police room at the tow yard, and impounded vehicles.

Speaking to the press today, Minister of Tourism Ahmed Adeeb suggested that the fire may have been a political attack against the government in response to the ongoing water crisis.

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Government scraps plan to impose import duty on staple foodstuff

The government has reversed its decision to impose a 10 percent import duty on staple foodstuff such as rice, flour, wheat and sugar, Minister of Tourism Ahmed Adeeb has revealed.

“Emergency economic council meeting ongoing where President [Abdulla] Yameen has just decided not to impose any duty on sugar, rice, flour (staple foods),” the council’s co-chair tweeted this morning.

Speaking at a press conference at the President’s Office later today, Adeeb said parliament and the Progressive Party of Maldives’ parliamentary group have since been informed of the decision.

“The president’s decision was made in light of requests from a lot of people as well as the current situation [with the capital’s water crisis] we are faced with,” he said.

Finance Minister Abdulla Jihad told parliament’s budget review committee last month that the government anticipated MVR533 million (US$34.5 million) in additional income from import duties.

The new duties were to represent 15 percent of the new revenue anticipated in the 2015 budget.

Revising import duties

Revising import duties was among several revenue raising measures in the record MVR24.3 billion (US$1.5 billion) state budget for 2015 currently before parliament.

Government-sponsored amendments (Dhivehi) to the Export-Import Act – which proposed raising custom duties from the current zero rate to 10 percent for staple foodstuffs – were subsequently submitted to parliament last month.

Scrapping plans to levy import duties on staple foodstuff from October 2015 was meanwhile among several amendments submitted to the budget by opposition Maldivian Democratic Party (MDP) MPs last week.

The minority party has issued a three-line whip for its MPs to vote against the budget if none of the proposed revisions are passed.

During last month’s parliamentary budget debate, opposition MPs strongly criticised the proposed tax hikes, contending that the burden of higher prices of goods and cost of living would be borne by the public.

The current administration’s economic policies – such as waiving import duties for construction material imported for resort development as well as luxury yachts – benefit the rich at the expense of the poor, MDP MPs argued.

In addition to a 10 percent tariff for oil, the government’s amendment bill also proposed raising custom duties for tobacco from 150 to 200 percent and raising the duty for a single cigarette to MVR1.25.

Additionally, a 20 percent custom duty would be imposed for luxury cosmetics and perfume and a 200 percent custom duty for land vehicles such as cars, jeeps, and vans.

The forecast for additional revenue for the 2015 budget was MVR3.4 billion (US$220 million), including US$100 million expected as acquisition fees for investments in special economic zones and MVR400 million (US$25.9 million) from the sale and lease of state-owned land.

The other measures included introducing a green tax of US$6 per night in November 2015 and leasing 10 islands for new resort development.

Tariffs were last revised in April this year after parliament approved import duty hikes for a range of goods proposed by the government as a revenue raising measure.

Targeting subsidies

Adeeb meanwhile told the press today that the government still planned to shift to a model of targeting government subsidies to the needy as part of efforts to consolidate public finances.

In his budget speech to parliament last month, Jihad also revealed plans to revise the electricity subsidy, which he said currently benefits the affluent more than the needy.

Targeting the electricity subsidy to low-income families or households would save 40 percent of the government’s expenditure on the subsidy, Jihad explained, and allow the government to provide a higher amount to the poor.

While Maldivians were not legally required to declare income and assets in the absence of an income tax, Adeeb said today that the National Social Protection Agency (NSPA) currently used criteria for means-testing for subsidies.

Minister of Economic Development Mohamed Saeed meanwhile noted that the International Monetary Fund (IMF) has recommended targeting subsidies and reducing recurrent expenditure to reign in the fiscal deficit.

“The electricity subsidy is one that goes to even the richest strata of society. Basic food subsidies are being enjoyed now by the resorts, and never mind the resorts, are being enjoyed by wealthy foreign visitors who stay at the resorts,” Dr Koshy Mathai, resident representative to Sri Lanka and Maldives, told MPs on the public accounts committee in February.

“That to us seems like a totally unnecessary policy.”

He added that “substantial savings” could be made from the budget by targeting subsidies to those most in need of assistance.

Meanwhile, in May, MMA Governor Dr Azeema Adam called for “bold decisions” to ensure macroeconomic stability by reducing expenditure – “especially the un-targeted subsidies.”

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