Milton Friedman, one of the most influential economists of 20th century, once said “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand”.
While it has been proved time and again that Governments have no business being in business, the issue is still widely debated and will probably linger on in eternity. However, in the Maldives, this issue of state ownership of businesses takes a totally different dimension. When Mr Friedman made this, now legendary, comment he referred to only the inefficiencies in decision making and economic management that most governments and politicians are riddled with. In the Maldivian context, one has to take into account the mala fide intent as well as narrow self-interests of people in the government as well.
An unfortunate example of how the Government of the day not only destroys value but systematically works against the interest of the people is our prized national asset – Ibrahim Nasir International Airport.
Caught in the middle of political wriggling and costly lawsuits, politicisation of the airport by everyone across the political spectrum and the mullahs typifies all that is wrong with our economy, our businesses and our government.
Ever since the ousting of GMR, whatever progress that had been made at the airport is now being undone – reversal of employees benefits such as employee insurance which was given by GMR to stalling of development works at the airport are just a few examples.
I have been told of way too many stories of flight delays due to systems outages, long unmanageable queues and leaking roofs to be convinced all over again of the Government’s inefficiencies in managing enterprises.
But I do not intend to focus on Government’s inefficiency in managing our national airport in this article. I would rather highlight the systematic manner in which the current Government seems to have taken control of the airport to serves its and its cronies’ own narrow self-interests rather than let it be run in a professional manner that is best for the passengers as well as the nation.
First, Dr Waheed’s government wanted to create a new airport company (MIAL) to take over management of Ibrahim Nasir International Airport with a new MD and a new Board of Directors with the intent of setting up tight control on the airport management. When the AG advised them of legal impossibilities related to this action, he appointed the same set of cronies to the MACL board to ensure he controls the board and all important commercial decisions at the airport.
Of course, at the time of cancelling the agreement, Government did say that new and professional management will be brought to manage the airport within 3 months and there will be no political influence in managing it going forward. Whatever happened to Dr Waheed’s ideas of ‘professional management’, Dr Hassan Saeed’s idea of ‘internationally experienced foreign CEO and CFO’ and Sheikh Imran’s ‘national consultations for deciding the future of the airport’.
On political appointees and lack of professional management, it is interesting to note that Dr. Waheed’s political appointee as the MD of MACL– Bandhu Saleem has at least started making some noises around what are all the challenges that are facing the airport – lack of funds, no master plan and hardships & sacrifices for 3-4 years in each phase of airport’s development. He said these things in an interview to a local daily and what is most painful is that whatever he said only highlights the stupidity of the decision to oust GMR.
If it was that easy for a government company to get US$350 million funding for the airport, then why would anyone anywhere across the world privatise airports in the first place?
And by that logic, even Dr Waheed would have got his US$500 million loans from China and US$350 million grant from Saudi Arabia for budgetary support by now surely? As for the master plan for development, it was to be announced within 3 months of GMR’s ouster and we haven’t heard a word from anyone on this yet. There are bigger battles for all the politicians to fight, within themselves, in two months.
It’s clear by now that all these lofty promises always sound good to the general public and Bandhu Saleem’s game plan seems to be the same for now, even though reality it is most important to first take care of the basics. I have been told by sources that in one of the first meetings that he called after moving to his office at the airport, his authority was challenged and thwarted directly by the attendees. He intended to undertake frivolous discussions on the “Vision & Mission” for the airport when all the other attendees didn’t even have permanent contracts or medical insurance covers, something that they enjoyed under GMR management.
While airport’s development by MACL is an elusive dream that may never see the light of day, the fear really is that since it is back under MACL (effectively government) control, systematic corruption will rise like never before. What is most interesting for us to note is that all of these moves to take control of the airport operations come at a time when the Presidential elections race is heating up by the day.
Campaign funding is the need of the hour and we know that most elections are won or lost on the level of funding that is available to a candidate. With his allies deserting him thick and fast, what may still keep Dr Waheed in the hunt for the election is the money that his cronies are willing to bet on him while he is still in power.
It is well known that the likes of MVK Shafeeg and Najah have their eyes set on more airport concessions. MVK Shafeeg has been funding most of the anti-GMR protests and has been providing campaign funding aggressively to Dr. Waheed’s coalition.
So, I’ll not be surprised if we see MVK shops coming up in duty free section of the airport soon. A refurbished and world class duty free offering was one of the best things that GMR had done at the airport. MACL’s previous MD Mafooz had publicly stated that duty free is one of the best profit earners for the airport. It will only be in return for securing his campaign funding that Dr. Waheed’s government will allow MVK to get duty free shops at the airport for peanuts.
After all, securing massive amount of funds may be half the battle won in the presidential race of September 2013. Whatever happens to the airport and its development after that can be put on the backburner like it had been for each of the last 25 years – except for the two when GMR managed it!
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5 thoughts on “Comment: The unfortunate reality of an island airport”
Just one comment from me. Ibrahim Nasir (cold blooded murderer of Maldivians, and thief of their money) International Airport will never be a regional leader, never mind a world class airport.
Nice to see new names, fresh ideas. Found the Friedman quote interesting.
To quote the extreme liberal Milton Friedman in 2013, while the wolrd is still struggling to recover from the economic down turn due to excessively liberal policies shows that u have a long way to go. If minivan is your personal blog, that's fine
@ Margaret Thatcher
Since when is giving bankers a free rein a "liberal policy"?
Appreciate your feedback. However, I would suggest that you think through your comments to help an educated discussion.
First of all, the quote talks about inefficiencies when Governments are in business and none of what has happened in the banking crisis has made Governments think about reducing private sector and bringing everything under public sector. The world is not going back to days of big government presence in business but towards more healthy and watchful regulation. This is something that I don't mind and neither do I comment on in my article. Hence, your logic in challenging the use of my quote is doubtful.
Secondly, as I said, point of my article is not to discuss the concept of whether Government's should run businesses but to highlight what I see as ill-intended moves related to the airport. I would encourage you to think about that rather than challenging my competence to write an opinion piece on this column.
Since this column is called Comments & Opinion piece, I respect and look forward to more discussion with you and others on this topic.
@Ahmed - Interesting comment, I would like to hear more on that from you since I have just heard hearsay here and there around what you have said.
@Ben - Thanks.
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