Police this morning dispersed a rally of several hundred anti-government demonstrators who gathered at Republican Square near the headquarters of the Maldives National Defence Force (MNDF), amid a somewhat carnival atmosphere that settled over other parts of the city on Friday.
Dismissed Deputy Leader of the opposition Dhivehi Rayyithunge Party (DRP), Umar Naseer, and MPs Ali Arif and Ahmed Mahlouf were detained for an hour after allegedly shoving police.
After a run of demonstrations across Male’ this week in protest against the government’s decision to implement a managed float of the rufiya, effectively devaluing the currency, police on Wednesday announced that any protests not held in the open artificial beach or tsunami monument areas would be immediately dispersed.
The DRP, which insists the protests are ‘youth-led’ despite the apparent leadership of its MPs, has tried to replicate the ‘Arab Spring’ protests across the Middle East, painting President Nasheed as a despot to the international media and dubbing a busy Male’ intersection ‘Youth Square’.
The DRP announced that the protest would continue this evening at the artificial beach from 8:45pm.
Meanwhile, the ruling Maldivian Democratic Party (MDP) held a counter-protest this afternoon, with several thousand people gathering near the tsunami monument carrying banners and waving yellow flags.
Speaking at the rally, President Mohamed Nasheed stated that the government’s currency decision was backed by the International Monetary Fund (IMF), and challenged the opposition to defeat him in an election rather than attempting to topple the government illegitimately.
Nasheed claimed that the budget deficit had improved since the government took power, and that it had also introduced state pensions, health insurance and benefits for single parents and the disabled.
A concert stage and a number of upturned and smashed vehicles in the area, part of a police ‘Speed Kills’ campaign, provided a surreal backdrop to the pro-government demonstration.
A number of foreign media outlets, including Al-Jazeera, have arrived in Male’ to cover the demonstrations after violent protests last week were widely publicised internationally.
Passing the DRP headquarters this afternoon and assumed to be foreign media, Minivan News was approached by an opposition supporter who compared the pro-government demonstrators to “pro-Mubarak supporters” who “beat us at night.”
Former Egyptian President of 30 years Hosni Mubarak was deposed by a democratic uprising in Egypt, leading to a tide of similar pro-democracy rallies across the Middle East.
Maldivian tourism representatives attending the Arabian Travel Market in Dubai, the region’s largest such expo, claimed this week to be receiving cancellations because of safety fears amid the ongoing demonstrations.
“Travel operators in Taiwan have said they are postponing and cancelling group bookings because of negative perceptions [of safety] in the Maldives,” a tourism source attending the expo told Minivan News.
“We just had another two confirmed bookings cancelled today because of reports of riots and instability. We worked hard to get these bookings and the potential domino effect is really worrying – people panic.”
An ongoing dollar shortage, reluctance of banks to exchange local currency, and a flourishing blackmarket that reached Rf 14.2-14.8 to the dollar, culminated in mid-April with the government finally acknowledging that the rufiya was overvalued – after a short-lived attempt to crack down on ‘illegal’ exchanges.
High demand immediately led to most banks and companies dealing in dollar commodities – such as airline ticketing agents – to immediately raise their rate of exchange to the maximum permitted rate Rf15.42.
With the Maldives almost totally reliant on outside imports, including fuel and basic staples such as rice, the government’s decision has effectively led to a 20 percent increase in the cost of living for most ordinary Maldivians.
In an article for Minivan News, Director of Structured Finance at the Royal Bank of Scotland Ali Imraan observed that ‘growth’ in the domestic economy had been driven by the public sector and “paid for by printing Maldivian rufiya and clever manoeuvres with T-Bills, which the government has used since 2009 to be able conveniently sidestep the charge of printing money. In simple terms: successive governments printed/created money to drive domestic economic growth.”
With the introduction this year of a 3.5 percent tourism goods and services tax, a business profit tax and a revision of the rents paid for resort islands, the government now has a number of economic levers it can pull to increase revenue in the future.
However, it has struggled to explain that to people now paying up to 20 percent extra for basic commodities – an affront to the MDP’s pledge to reduce the cost of living – and was caught unawares by this week’s populist protests.
Both factions of the opposition have seized the political opportunity to take the focus off the party’s internal troubles, but have offered few alternatives beyond demanding the government “reduce commodity prices”.