Economic dependency threatens Maldives’ independence, warns President Waheed

The Maldives has become financially and economically dependent on foreign parties to an extent that threatens the nation’s independence and sovereignty, President Dr Mohamed Waheed Hassan Manik warned in his address (Dhivehi) to the nation on Republic Day.

Speaking at a function at Dharubaaruge last night, President Waheed said the country has still not recovered from the devastation wrought by the tsunami in December 2004.

“The national debt has soared to levels it has never reached before. In the past four or five years, the country has become financially and economically dependent on foreign parties to an extent that undermines our domestic and economic independence,” he said.

The Maldives “faced challenges to domestic stability” with the post-2004 constitutional changes and democratic reforms, he added.

“During this time, the country’s constitutional framework was destroyed and the state started to function outside of legal bounds,” Dr Waheed said. “And in addition to this, after the events of February 7 this year, some people have created further challenges to the country’s economic development and diplomatic relations.”

Then-Vice President Waheed assumed office on February 7 following the resignation of former President Mohamed Nasheed in the wake of civil unrest and a police mutiny at Republic Square.

The Republic Day marks the abolishment of an 853-year-old monarchy and its replacement by a second republic under President Ibrahim Nasir on November 11, 1968.

President Waheed meanwhile said in his speech that the country was facing a trial “during hard economic times” to increase government revenue, improve services to the public, maintain diplomatic ties and “establish financial and economic freedom.”

These objectives had to be achieved in a “world without domestic walls, within a social fabric where protecting Islamic values and the nation’s independence has weakened,” Dr Waheed said.

In his speech at a ceremony to mark ‘Victory Day’ on November 3, President Waheed claimed that foreign parties were attempting to exert undue influence over the Maldives “in different ways, under different names and capacities, to exercise power over us.”

These foreign parties were “saying that we must turn to their ideologies and sending over waves of secularism [or secular ideologies]  to the country,” Dr Waheed had said.

Meanwhile, in his address on Sunday night, President Waheed said sacrifices “such as those of our ancestors” were needed for peace and security and to ensure that “the economy is not destroyed through differences of opinion” and that “the social fabric is not unwoven through political antagonism.”

Important decisions needed to be made for next year’s budget to reduce expenditure and increase government revenue, he added.

President Waheed also announced his intention to convene a “National Conference” as a forum to discuss development strategies.

Ideas and opinions would be sought at the forum to chart a roadmap for development, he said.

Politicians, entrepreneurs, tradesmen, scholars, students, women, youth, judges, lawyers and private parties would be invited to participate in the conference, Waheed said.

In late October, Finance Minister Abdulla Jihad told local media that the Maldives would be unable to pay salaries and meet recurrent expenditure for the rest of the year without a further US$25 million loan from the Indian government.

The US$25 million was agreed upon in September as part of the $US100 million standby credit facility signed with Prime Minister Manmohan Singh in November 2011.

Jihad told local media that he believed the loan was being delayed due to the ongoing controversy over Indian infrastructure company GMR’s development of the Ibrahim Nasir International Airport (INIA), which is opposed by all parties in the ruling coalition.

Since coming to power, Waheed’s government has committed to reimbursing civil servants for wage reductions made during the austerity measures of the previous government, amounting to MVR443.7 million (US$28.8 million), to be disbursed in monthly instalments over 12 months from July 2012.

As of November 4, the overall fiscal deficit has already reached over MVR 2 billion (US$129 million). Jihad told the Majlis’ Finance Committee that he expected this figure to rise to MVR 6 billion (US$387million) by year’s end – 28 percent of GDP – alleging that the previous government left unpaid bills equal to over one third of this anticipated deficit.

Former Minister of Economic Development Mahmood Razee told Minivan News that increased expenditure in the face of a pre-existing deficit represented the government “ignoring reality.”

A delegation from the International Monetary Fund (IMF) meanwhile urged parliament’s Finance Committee and Economic Committee last week to expedite legislation on fiscal responsibility.


9 thoughts on “Economic dependency threatens Maldives’ independence, warns President Waheed”

  1. Diplomacy is taking root where there is a conducive environment for investment and trade. Thus, it is economic diplomacy that is taking precedence over conventional mere "living abroad as a job" does not serve much to the host country.

    Protection of investments and expediting such investments would serve better to all. Foreign investments a re no longer an issue of "Company to company issue" but rather it is the vehicle and yardstick against which success of diplomacy is measured. The bilateral and multilateral trade volume. So protecting MGR and any other company would part and parcel of India's foreign policy. Maldives should be above such fray. This commotion does not reflect popular pulse but made up and concocted "public sentiments" generated through "supportive" media. Good past time for them all since there is nothing much to do.

  2. We live in an inter dependent world but whaheed is right about the point on economic insecurity. But every one know this

    As leaders Maldivian expect some creativity and imagination from whaheed and whaheedeen. Despite being a businessman the fact that Deen does not have a word to say on economy shows how fake his businesses empire is - which is headed by a Singapore tycoon Seng.

    Not exactly the way to create economic security. Is it?

  3. Has Waheed being living on the moon for the past decade or so? Has he not read any of the financial news or press in that time? Has he not observed the massive shift in global economics in that time?

    The world is no longer comprised of isolated "independent" economies. It's become a connected network of dependent entities. Geographical boundaries are no longer relevant when it comes to global commerce. Just like the flutter of a butterfly's wing in the Amazon jungle can create a typhoon in the South China Sea, an economic event in any part of the world has global consequences.

    The two largest economies in the world, i.e. the USA and China are intertwined, with the rest entangled in the whole graph of economic activity. The economics and politics of those nations have direct and reverberating impacts on the whole world. "Independence" and "economic-dependency" are not even remotely related anymore!

    If the Maldivian leader does not understand this elementary knowledge, then my worst fears for the country are confirmed. The country is being led by fools who think they're in paradise.

  4. The moronic self appointed president should stop talking rubbish about independence, Islam, nationalism and rather focus on the issues that the country faces economically. There is no foreign influence that is interested in Maldives, what is there in Maldives for anyone to be interested. No one cares Maldivian believing Islam, Why should anyone care about Maldivian as Muslims, and if you guys are so comfortable with your religion why you are so insecure and afraid of foreign influence. You talk all this rubbish because you know that you are worth nothing and trying to blame on others for your mischievousness. This is typical Islamic way to blame others for your downfall instead of accepting your miserable way of thinking.

    If you want solve the issues make policies that will help to overcome the problems, forget GMR and Islam and Mullahs and decide what is right for the economy. You don’t have to be guardian of Mullahs and Islam; it is for people to think what they should do about their faith.

    You know that GMR cannot be chased because you don’t have the financial capacity to do so than better tell the people stop harassing them because that is good for the country now. If you have that capacity than pay off what GMR has paid with interest and let them go for good.

    If you stop all dirty politics and concentrate on issues and do something to solve them, you would be better off. Your focus should be:
    Reduce public expenditure
    Cut down the size of government
    Privatize with transparency
    Get foreign investor confidence
    Introduce macroeconomics and train people for entrepreneurship and small business.
    These are the roll of governments today. People don’t care what country you are and what religion you follow it is all economy and social well-being that matters.

  5. Isn't it a few weeks ago Waheed said there are no major problems to Maldives and people are scare mongering? Did this guy not know the state of affairs of Maldives few weeks ago?

    Everyone else knows that the country is been looted left write and centre by the rich and powerful. Money keeps pouring in record numbers each year. Tourism numbers (the biggest earner) has been keeping up at worst. So why Maldives in this position? Huge public spending in the form of high salaries. Privatising of state revenue sources with vastly unfavourable conditions to the state... Just to name a couple.

  6. Until you bigoted morons learn how to do a full days work you have no chance at all of standing on your own two feet! "The Maldives Employment Act potentially grants 146 days annual paid leave to an employee, including 5 days "for a child's circumcision", and 10 days "for important obligations".

  7. And until you reduce govt size you remain doomed!: "Official statistics show that the government includes one Special Advisor to the President, 16 Ministers, 42 State Ministers, 58 Deputy Ministers, five Deputy Under Secretaries and ten Advisors to Ministers."

  8. The whole country is bankrupt, yet this idiot announced his intention to start a “National Conference” as a forum to discuss development strategies. Waheed you better stick to playing computer games in the president’s office like before, rather than giving idiotic prewritten speeches.


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