Bank of Ceylon to arrange US$500 million credit exposure

The Sri Lankan government has agreed to provide a US$500 million credit exposure to the Maldives through the Bank of Ceylon (BoC), according to Maldives Development Alliance (MDA) Leader Ahmed ‘Sun Travel’ Shiyam Mohamed.

Briefing the press Thursday night on President Abdulla Yameen’s maiden state visit to Sri Lanka last week, the MP for Dhaalu Meedhoo revealed that the new administration had requested raising the credit exposure to US$1 billion to alleviate foreign currency exchange difficulties.

“They said they will arrange for US$500 million. So when that is arranged, God willing, it will make it very easy for us to [solve] our foreign exchange issues and that will benefit Maldivian citizens,” Shiyam said.

Along with the Jumhooree Party (JP) led by business tycoon Gasim Ibrahim, the MDA is a coalition partner of the Progressive Party of Maldives-led (PPM) government.

Flanking the president, Gasim told reporters that the Maldivian delegation met ambassadors of Arab nations in Colombo and discussed establishing banking facilities in the country as well as securing loans.

President Yameen added that Vice President Dr Mohamed Jameel Ahmed would leave on an official visit to Arab countries including Qatar, Kuwait, and Saudi Arabia in the near future.

On mutual cooperation, Yameen said discussions on areas such as health, education, and the economy would resume in the existing joint commission this year.

Characterising Sri Lanka as a “second home” for Maldivians, Yameen said official talks with Sri Lankan counterparts mainly focused on issues of concern for the approximately 14,000 Maldivian citizens residing in the neighbouring country.

The issues discussed included education, healthcare, consular services and difficulties obtaining dependency visas, Yameen noted.

Detailed discussions on the visa issue would take place during followup visits by the foreign ministry, he added.

The foreign ministry would also commence joint efforts with the Sri Lankan government to compile a registry of Maldivians living in Sri Lanka, Yameen said.

Following completion of the registry, Yameen added, the Maldivian embassy and its improved consular department would adopt a proactive approach to assisting Maldivians.

Ties strengthened

Moreover, agreements concerning transnational crime, developing police cooperation, vocational training and youth skills development, and sports cooperation were signed during the trip.

An understanding was reached on “avoidance of double taxation” for businesses operating in both countries, Yameen said, such as the corporate profit tax.

A business delegation from the Maldives participated in a business forum with the Sri Lankan chamber of commerce to discuss “the scope for investing in the country,” Yameen said.

Gasim noted that the Maldivian delegation invited Sri Lankan companies to invest in the local tourism industry.

Yameen also revealed that the government has decided to provide a plot of land in Malé for the Sri Lankan embassy.

“God willing, President Rajapaksa will visit the Maldives on our invitation very soon,” he said.

Close bilateral relations between the two countries were strengthened as a result of the trip, Yameen said.

Yameen further noted that the Maldives would back Sri Lanka in the international arena concerning its human rights record and placement in the Commonwealth Ministerial Action Group’s (CMAG) agenda.

“We have raised our voice very positively for Ceylon in these international matters. And they acknowledge it with appreciation,” he said.

Foreign Minister Dunya Maumoon – daughter of former President Maumoon Abdul Gayoom – told reporters that the ministry would provide details of the agreements reached during the president’s visit.

President Yameen also met Maldivians living in Sri Lanka during his visit, discussing the introduction of Quran classes for children and the renovation of the embassy building, said Dunya.

Sea sand

Shiyam also revealed that the Sri Lankan government had given assurances on providing sea sand as a substitute to the river sand aggregate required by the construction industry.

“God willing, we made unexpected progress during the president’s visit,” he said.

Sea sand contains fewer impurities than Indian river sand, Shiyam added, which was mined from mountains and could not provide strength for large buildings.

Difficulties in importing construction material, such as river sand and reinforcement rock boulders from India last year led to a shortage of the supply and subsequent rising costs for construction companies.

On February 15, 2013, the Indian government revoked a special quota afforded to the Maldives for the import of aggregate and river sand.

The Indian government’s decision followed a diplomatic row with Maldives over the previous administration’s termination of a concession agreement with Indian infrastructure giant GMR to upgrade and develop the Ibrahim Nasir International Airport (INIA).


4 thoughts on “Bank of Ceylon to arrange US$500 million credit exposure”

  1. Unlike Shiyam, most Maldivians are not retards and very well educated. Hence, a half billion dollar CREDIT facility is not going to solve the foreign exchange issues of the country. It's a stop gap measure to stop dollar supply from drying up completely.

    Resort owners such as Shiyam and Gasim are collectively responsible for the lack of dollars in the first place. Dollars that should enter the country through tourism never do. Who is responsible for that? Even if the dollars did enter, there's simply too many Rufiyaa chasing those few dollars. Who created that mess? Remember Gasim's inflated budgets of the past?

    Maldivians may regard Sri Lanka as a "second home", but Sri Lankans do not see it that way. Just ask the "Bodu Bala Sena" group. Sinhala people see this immigration as a dilution of their race and culture and a threat to them! No one in Sri Lanka wants more Hambaya!

    The irony here is that Maldivian children are being allowed Quran classes in a predominantly Buddhist country, whilst Maldives doesn't even acknowledge the right to freedom of religion. Sri Lankans have a very dim view of that.

  2. Dollar issues is partly created by Gaasim and this has gone to worse because of stupid increase on exchange rate by Nasheed.

    Since Nasheed know how foreign exchanges works in an economy he went ahead and changed the rates over night juts to pocket some cash for his friends

    If this parliament stops wasting our money, and if those unnecessary commissions are deuced and their fat big salaries are reduced then we will see immediately a positive cash flow and there bvy reducing deficit and then come to extend where we will be able to have surplus budget.

  3. Correct fish, and not completely correct Hero.

    The increase of the exchange rate is not stupid, it's the market. It's not a problem "stupid Nasheed" has created, although his government could have done a better and more fair job in handling this problem.

    It's because the value of the rufiyaa is kept higher than it's real market value. Simply put: if the real value of 15.42 rufiyaa would be 1 dollar, then there wouldn't be a foreign currency problem. And if you're already in a debt you cannot repay, another loan only makes it worse. Strange Ahmed Shiyam's business isn't bankrupt yet if the reasoning he shows here is his actual competence level.


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