With plans to generate revenue to fund welfare services for the armed forces, the government and Maldives National Defense Force (MNDF) has registered a joint venture company aiming to invest in various businesses, including the tourism industry.
The “MNDF Welfare Company” registered at the Economic Ministry on Tuesday, is 10 percent government owned, and 90 percent by Sifco, MNDF ‘s cooperative society, which provides welfare services for defense force officers and their families, including subsidised products and loans.
Speaking to Minivan News about the company, MNDF Spokesperson Major Abdul Raheem said the MNDF have been discussing the idea of expanding the cooperative society’s works through a registered company over the past 10 years.
He observed that the main objective of registering the company was to invest and run businesses, which can subsequently generate revenues to contribute to welfare services provided to the 7000 strong-armed force body.
“The allocated state budget is not enough to fund the welfare services. We are facing several financial problems. Therefore, our plan is to register the joint venture with the government and increase profitable business activities,” Major Abdul Raheem explained.
He added that the MDNF Welfare company was registered within legal boundaries, and the company’s board and other necessary decisions will be taken legally and without discriminating between any officers.
MNDF joining tourism?
Asked about the sort of businesses the company intends to invest in, the MNDF spokersperson responded that the discussions are underway and will be announced soon.
Local media Sun meanwhile reported that the company was targeting investment in the country’s main industry, tourism, and claimed islands have been leased for resort development.
Raheem did not verify these reports but commented: “It is hard to confirm specifically which business it will do, but I cannot say tourism is not an option.”
Following reports suggesting the MNDF’ is venturing into the country’s tourism sector, government aligned Dhivehi Rayyithunge Party (DRP)’s parliamentary group member Dr Abdulla Mausoom updated his twitter saying: ” SIFCO (of MNDF) & Maldives government venturing into tourism business? This will not promote capitalism, tourism or democracy!”
Mausoom told Minivan News that it was “not visible in many places” for military personnel to form joint ventures with the government and start investing in businesses.
“It is a trend observed mostly in communist states, where everything is run by the state,” he added. “This also seems to be going more in that direction.”
“However, my main concern is that the tourism industry is already saturated,” said Dr Mausoom, who has previously served as the Minister of Tourism and Civil Aviation under Gayoom’s administration.
He explained the industry was already challenged by the excess supply of resorts, which he claimed had been approved for development without any proper plans.
While several resort islands are now under development at a time when several investors are going bankrupt in the industry, Mausoom suggested that it is “not a good idea for the state to increase injection into the sector through joint-ventures.”
“It may be legal for the MNDF cooperative society to go into joint venture with government and even lease islands without even an open bidding process under the law. However, just because it is legal it does not mean it is the right thing to do,” he contended.