“The MDP is extremely worried about the deteriorating environment for investors and strongly condemns the continued threats posed by Dr Waheed’s administration to foreign investors,” read a press statement released by the party today.
The party’s spokesman, Hamid Abdul Ghafoor, stated that public-private partnerships (PPP) initiated under the MDP government have been suspended “in the interest of preserving the status and wealth of few local wealthy businessmen.”
The current government announced the suspension of any new PPP projects shortly after assuming power. The Minister of Economic Development, Ahmed Mohamed, whose department handles foreign investment in the Maldives, was not responding at the time of press. President’s Office Spokesperson Abbas Adil Riza was also not responding.
The MDP statement specifically mentions three projects which have encountered difficulties, claiming that they have been intentionally hindered by the current government, “causing irreparable damage to the foreign investment climate of Maldives.”
The World Bank’s ‘Ease of Doing Business Report’ shows that the Maldives has dropped one place in its overall list during the last twelve months, falling to 79th out of 183 countries ranked. In terms of protecting investors, the Maldives dropped five places in this year’s list.
Former Energy Advisor to President Nasheed Mike Mason told Minivan News in June that, before Nasheed’s controversial resignation, the World Bank had given verbal approval to a plan which would have brought an immediate US$200million of renewable energy investment to the country.
The resulting political instability caused the plan, which had been intended to wean the country off its dependency on oil imports, suspended indefinitely as potential investors backed away.
Meanwhile, proposed austerity measures sent to Parliament by the Finance Ministry last week include a three percent increase in oil import duty.
One of the most high profile foreign investments in the Maldives is the GMR-MAHB project to develop Ibrahim Nasir International Airport (INIA). This US$400 million deal for the upgrade and management of the airport represents the country’s biggest ever private investment contract.
The deal has foundered on a dispute over the implementation of an Airport Development Charge (ADC) of $25 per passenger which was agreed as part of the initial contract. This charge was opposed by the Dhivehi Qaumee Party (DQP), now a member of the coalition government, whilst in opposition. The party last year successfully sued for the blocking of the ADC, claiming that it represented an unauthorised tax.
The case led to an arrangement with the Mohamed Nasheed administration whereby the ADC money would be deducted from the concession fee payable to the government. The subsequent shortfall in funding for the project has seen the government’s anticipated US$14.3million in fees replaced this quarter with a bill from GMR for US$1.5million.
A number of pro-government parties, including the DQP, have renewed calls for the re-nationalisation of the airport. The dispute has now been referred to a court of arbitration in Singapore.
All three projects mentioned in today’s press release involve partnerships with Indian firms, the other two being a social housing development project with the TATA group, and a solid waste management project in Thilafushi with environmental engineering company UPL.
During President Dr Mohamed Waheed Hassan’s official state visit to India in May, he confirmed that all contracts with Indian investors would be honoured and was keen to discuss further Indian investment projects in the Maldives.
The MDP statement noted that its PPP projects would have generated revenue over MVR23.1billion (US$1.5billion) for the country.
The Finance Ministry’s austerity measures are an attempt to reduce this year’s budget deficit, which is forecast to reach MVR9.1billion (US$590million).
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Govt damaged the investments?
First talk about how the parliament damaged our currency, our credibility, our hope, our constitution.
Then open your dirty mouth.
Don't blame it on each other!! MDP, PPM, DRP, Adaalath, JP, QP ..etc needs to reflect internally to see where it all went wrong. With regard to MDP, it all went wrong when Nasheed became arrogant and only listening to Mariya and R Moosa.
The income that was generated was a fair tax system for a modern economy but is destroyed to allow the super rich to get richer. There is zero investment confidence because of the coup regime. We are like a failing African country now!
Well done Muley! I hope you're happy with your new client President!!!
I get paid in USD, the Bank Of Maldives told me employer they will not accept foreign staff USD accounts now. Easy, most of us have HSBC accounts and prefer that anyway. Is Bank of Maldives bankrupt and ca not find USD?
Foreign investment has been responsible for most of the development in the Maldives. Investment came in the form of aid as well as commercial investment. The two major hospitals, community schools, professional training, mechanizing of the fishing fleet are just a few example of benefits of aid. As we all know European investment is largely responsible for the developments in tourism.
It is fool hardy to think that we can survive as a nation without foreign investment. Maldives is a country that relies heavily on other countries for its goods and services. We need foreign investment funds to support this demand.
Politicians are playing a dangerous game scaring away foreign investors. A welcoming, trustworthy, and a reliable environment is a prerequisite for attracting foreign investment to any country. The current Government is failing in this regard and ordinary people will pay a price for this.
BML is not safe anymore!!!
ali saleem sounds like a baagee!!
@ baalu What is wrong with you people who say "Nasheed became arrogant and only listening to Mariya and R Moosa" Reeko moosa this and Maaria that.
Do you guys want to create division in MDP ranks tha, dude its never going to happen as long as Maria and Reeko Moosa are with the people and support the reformist agenda.
OR do you want president Nasheed to listen to Jangiyaa Nazim, Yaamyn and Golhaabo tha.
I took my all my money out of BML...its Golhaabo ge play bank. NOT SAFE TO BANK IN BANK OF MALDIVES.
One day Golhaabo may decide to give another 300 Million loan to one of his lapdog, just like he did to Thasneem in 2007.
Umar Naseer can break the back bone of GMR. And we Maldivians can watch the fireworks from the Indian armed forces. Long Live India. Short Live Golhaa boa.
Tactics of derailing democracy before it matures. What happens when democracy matures? Those addicted to pulling strings no longer have the strings to pull but rather well paid, happy system. This would deprive of the swindlers to manipulate the system to the disadvantage of their long established criminal background seeping with squandered money.
Peace to Maldivians with end to squandering of public coffers
@Ahmed
Of course a part of the current government is responsible in GMR case, as Waheed was the VP at that time when the deal with GMR was concluded.
Everyone has to be responsible for their actions, Nasheed for leasing airport to GMR (and many more things) specially concluding such a lousy contract, hello!!!
Waheed not doing anything about it back then and now also.
I mean how can you do something like that? and now Waheed took loan from India to pump into this years budget (maybe his budget). GMR has requested their government step in. so tomorrow big brother will tell what can and cannot do!!!!
Its sad to see that all my country men talk about democracy and in truth they have no idea what they are talking about, in fact its very sad that most of my country men are easily sold in this ever changing market of politics. I could say without a doubt that 99% Maldivian will not do anything for their so called democracy, unless their aren’t some personal gain in some way…
This is who we were…
This is who we are… and
This is who we will be…
Sad but true
someone
@Ahmed
“We are like a failing African country now!”
Please!!! Who are you trying to kid?
Are you also one of those who try’s to comfort himself by telling him that there are worse cases out there???
For many reasons in many ways most of the African courtiers are way better then us, just think about it.
We have failed so long ago, we just haven’t realised it.
Democracy is transparency and accountability - Without accountability and transparency, democracy is impossible.
Who was, who is and who will be transparent and accountable? I guess no one in Maldives, not in a decade. Not in Maldives
someone