Low-wage expatriate workers in the Maldives are becoming increasingly desperate in the wake of a government crackdown on the blackmarket exchange of rufiya into US dollars.
Many of the country’s 100,000 foreign workers, particularly a large percentage of labourers from Bangladesh, are paid in Maldivian rufiya by their employers and are forced to change the money on the blackmarket at rates often several rufiya higher than the government’s pegged rate of Rf12.85, before sending the money to their families.
Banks have been reluctant to sell dollars at the pegged rate in more than token quotas for much of the last year, a symptom of the ongoing dollar shortage – even those with dollar accounts have reported difficultly withdrawing cash at the counters without appropriate connections within financial institution.
Several expatriate workers Minivan News spoke to expressed frustration that banks were refusing to exchange rufiya to dollars, only to hand over money to local residents next in the queue.
A well-known figure in the Bangadeshi community, Saiful Islam, who has been in the country for 28 years, told Minivan News that many people were becoming “very desperate.”
“They are struggling to get money remitted to relatives and parents at the other end. This is a very desperate situation for them,” he said.
“There are some people who work in resorts and who are paid in US dollars who travel to Male’ and sell them at a much higher price than the government’s [pegged rate] of Rf12.85, sometimes as high as Rf14 or Rf15. There are people who are so desperate they will buy dollars at any price because they have no other choice,” Islam said.
“Without taking this demand into consideration, I don’t think a crackdown will work. I don’t think it is unfair to abide by the rules when you are in another country, however that changes when people become desperate – look at people in Libya, do you think they will apply by the government’s rules and regulations?”
“There needs to be an outlet where they money can be changed to US dollars, even 50 percent of it. Otherwise, why are they here? They have a big family at the other end who depend on their income.”
Unable to change money legitimately and under pressure to provide for families at home, and unable to leave due to the expense of air travel, debts owed to unscrupulous recruiters or common practices such as employers holding workers’ passports until the conclusion of their contract, many workers are functionally left without options other than to risk arrest.
Bangladesh’s High Commissioner to the Maldives, Rear Admiral Abu Saeed Mohamed Abdul Awal, acknowledged the problem was one that ”all expatriates face, because all their revenue is earned in local currency, but when they go to pay remittances it must be paid in dollars.”
The crackdown, Awal said, was the government’s prerogative, “however our concern is the payment of expats in local currency. There needs to be a proper government arrangement for repatriating salary.”
“This has become a pressing problem and a serious concern, however the availability of dollars is a longstanding issue. The issue of dollar scarcity is an internal matter for the Maldives.”
The President’s Press Secretary Mohamed Zuhair told Minivan News that there was an “expatriate element” to the dollar shortage faced by the Maldives due to the high numbers of “illegally-employed workers buying dollars on the blackmarket and transferring them overseas.”
Zuhair claimed that every expatriate arriving in the Maldives came in on a contract “stating what currency he would be paid in. The onus is on the employer to pay in US dollars.”
“If [the worker] accepted a contract paid in rufiyaa, then if he wants to send dollars back to his country he will have to change it at the bank when and if that is possible, or on the blackmarket [and risk arrest]. Banks have a quota at which they sell dollars based on need and supply.”
Zuhair said the police crackdown targeting the illegal sale of dollars by both licensed and unlicensed vendors had made “considerable progress, with two arrests.”
“The government hopes [the crackdown] will stabilise the dollar market, black or otherwise, and create a scenario whereby the dollar dips so anyone hoarding dollars will release their reserves,” he said. “We have the numbers and the numbers are clear: we have enough dollars in the country.”
Meanwhile, Zuhair said, the government was seeking to replace the Governor of the Maldives Monetary Authority, Fazeel Najeeb, “who has not effected any changes to rectify this situation.”
“Najeeb is known to be affiliated with the People’s Alliance (PA) party and its leader, Abdulla Yameen, the former Minister of Trade and half brother of the former President. He is said to be a guarantor of the former regime and retains tight control of the MMA,” Zuhair alleged.
“From the government’s point-of-view the MMA needs to be much more involved in the current situation, rather than the Governor being away on study leave. It has not released a single piece of regulation to address this issue.”
Islam meanwhile pointed out that the government had long been stating it intended to reduce the number of expatriates working in the Maldives – currently a third of the total population – “but we do not see this happening in practice.”
“Every day a lot of people are still coming into the country, on tourist visas from countries such as Sri Lanka and India,” he said. “There are very few genuine tourists arriving from Bangladesh, mostly they are on work permits. Why are they being allowed in without any work being attached to the work permits?”
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Excellent article.
Cracking down on the black market cannot possibly help the situation if there are no legitimate ways for expats to convert Rufiyaa into Dollars. This is only going to make the black market rate even higher !
I have little clue how these things work internationally, but why simply can't the banks here Fedex in paper dollars by the bucket load ? Or even more controversially - why don't we get rid of the Rufiyaa totally, that nobody seems to want, and just operate the whole country in Dollars ?
the employers should pay them in dollars and it will be solved. However if they do illegal work and try to send out more dollars than they earn from their jobs we should stop them from doing so. For instance some teachers run for tuition all day neglecting their school work and earn five times more from tuition. They should not be allowed to send this money out of country, but rather should spend it in the country.
Cracking the Dollar Black Market needs a sincere and forceful effort from MMA and Government to uphold the existing Law and Regulations! Government and MMA needs to stand up and enforce the regulations to the Dollar earners namely 98 resorts and couple of Fish exporters who are MPs of the parliament, Opposition and government Political heavy weights and rich elites who are creating this black market and greedily consuming all the illegal profits!! GOVERNMENT AND MMA NEEDS SHUT DOWN THE MONEY CHANGERS AND OTHER BUSINESSES WHO ARE VIOLATING THE RULES!! INCLUDING THE HOME MINISTER'S RESORT IF IT NEED BE!! Minivan News don't try to dilute the issue and bring sympathizer's to the issue to make the already humble servants of rich and influential elites! GOVERNMENT NEEDS TO STAND UP TO ITS RESPONSIBILITY!! REMEMBER A GOVERNMENT IS A FAILED GOVERNMENT IF IT CANNOT PROVIDE JUSTICE TO THE MOST POOR AND DISABLED CITIZENS!! WE CONSTANTLY SEE HISTORY IS REPEATING AND BOWING TO THE WIMPS AND WISHES OF ELITES AND PUT ORDINARY FOLKS ON THE MARGIN!!
"I have little clue how these things work internationally, but why simply can’t the banks here Fedex in paper dollars by the bucket load ?"
How are they going to pay for it? With bucket loads of fish? You have no clue at all.
It's quite clear that the expatriates are a big drain on the dollars circulating in the economy. They are acting like a huge sponge, absorbing the dollars and exporting them to Bangladesh or elsewhere.
More than 1/3 of the population are expat workers. That's a totally unsustainable drain on the economy. In terms of the pressure on the dollar, I think, the value of these expat workers have been far overestimated.
Together with the fight against the black marketeers, the government ought to bring immigration under control and repatriate illegals immediately. Otherwise, it's must more patchwork without fixing the underlying problem.
Looks like the only thing that will happen out of this is that the poor Bangladeshi families of the illegal expats here will starve.
Why can't the goverment be a little more sympathetic towards those unfortunate people who have been misled by their employment agencies?
Why can't the government deport the illegal expats instead of prohibiting food for their families back home?
"A well-known figure in the Bangadeshi community, Saiful Islam, who has been in the country for 28 years, told Minivan News that many people were becoming “very desperate.”"
Obviously, no.
Ask Saiful Islam what 50 percent of his friends are going through and what led to their misery.
"Zuhair claimed that every expatriate arriving in the Maldives came in on a contract “stating what currency he would be paid in. The onus is on the employer to pay in US dollars.”"
But I thought the Monetray Authority Gavaidhu says all jobs done in Maldives should be paid in Maldivian Rufiyaa. Where is the gaviadhu now?
First of all, i do not support the black market and how the money changers operate.
But when that is said, i do support that foreign workers who come here to do the work that Maldivians either do not want to do themselves or are too expensive to hire - they should be paid in dollar.
They come here to do the "dirty work" being away from their family and homes - for the resorts, for the tourists and Maldivians. They should be assisted to send their well earned money home to their families who depends on their income. It is the money they can earn who brought them here in the first place.
If Maldives did not have the tourist industry, it would be Maldivians in the same situation abroad somewhere - remember that.
But it is not only foreign workers from Bangladesh who is in need of dollars - Maldivians too...
As long as Rufiyaa is non trade currency outside Maldives - not even in Sri Lanka - unless you find some rear dealer....
Then i observe also long lines of Maldivians outside BOM waiting and hoping to get some dollars.
If the need for dollar is bigger than what the banks can provide - well, then the banks and this country should MAKE SURE that dollars is traded and made available - to both Maldivians and foreigners.
And by the way.....what is the point of opening a dollar account, depositing our own money and when we need it we cant get it????
This is the biggest mystery and most outrageous situation that MUST be solved!
Unsolved - dealers and black markets will always find a way....
Black Market is operated by Tourism Industry Tycoons and Fish Exporters , Everyone Knows this , then why are police running after small Bangaalhees ?
this is a Bogus Cabinet Decision .
Its time to completely clamp down on low level expatriate worker inflow. Maldivians needs to humble themselves and take up some of these jobs, will they, doubt it. Even the recent revelations of jobs in excess with no applicants while half of Greater Male' region is unemployed.
Maldives isn't the oil rich Arabia Maldivians need to get past that.
Are all expats or just Bagladeshi's who gets dollar from the blackmarket.
Does Minivan staff gets dollar from Blackmarket too or from a whitemarket?
Its time for another revolution! this country is hijacked by few Tourism tycoons (namely Champa, Universal, Gasim..etc) who were/are the shareholders of the so called Maldives Pvt ltd. Previous CEO Gayoom and current CEO Mohamed Nasheed are mere puppets of this "gangters"!! They need to be always fed with money money..greedy B*****DS! we can see CEO Nasheed trying to losen a bit from these shareholders, but time and time again he is too afraid to piss them! We wish he would the courage! Dollar issue, Gang volence, drug trafficing, booming sex industry and other social ills are stemming from these few tycoons who are take as examples by the smaller shareholders. Lets us all rise up again to peacefull outset the power of these greedy shareholders and clean the system! Other wise there is no change!!..Nasheed we are still hoping you will deliver this change!!
The Rufiya needs to be floated which will reflect the true value. This will bring financial misery in the short term but we will reap benefits in the future. The benefits being, Maldivians will have to start working for a living. 22,00 in the civil service is a big joke. These workers do do add any value to the economy. A civil service is needed but we don't need to pay 3 people to do the job of one person. The other two need to buck up and do some useful work in the private sector.
The way to reduce $ remittances out of the country is to treat foreign workers right. Force employers to give them a proper wage, accommodation, medical etc. This will make hiring Maldivian more attractive, as they cost the same as a Bangladeshi. Another plus is we can actually live to our "100%" Muslim ideals.
"If the need for dollar is bigger than what the banks can provide – well, then the banks and this country should MAKE SURE that dollars is traded and made available – to both Maldivians and foreigners."
You and many others fail to understand a SMIPLE problem. The Maldives simply DO NOT have the dollars or the means to acquire those dollars! Let me explain.
In order to acquire dollars, you need another hard currency. We earn hard currency by exporting goods and services. We all know that tourism industry dollars do not circulate in the main economy.
Like the warning on Cigarette packets, this should be a warning to anyone employing a foreinger:
"EMPLOYING A FOREIGNER CAN LEAD TO DOLLAR SHORTAGES"
There are nearly 150,000 foreigners here. The business and people who employ them do so because it's cheap. What they fail to realise is, it is backfiring on themselves. When those businesses look for dollars in the market, they are no longer there. They've been sponged up and exported to Bangladesh, Sri Lanka, India etc.
I have no issue with expatriate workers and I understand they are often working in very poor conditions. That's not the point. The country CANNOT afford to employ these people! No amount of Police control is going to stop the dollar shortages. Address the fundamental problem first! Reduce the expat workforce. Beat the locals into taking up jobs!
Listen, employers of foreigners like Bangladeshis, Indians etc are not bringing them here out of the goodness of their heart. They are bringing them here to do a job and that's it. They agree a salary paid in Maldivian Rufiyaa.
No one is obliged to provide them with US dollars. I, as a Maldivian don't have a God given right to acquire dollars. I have families to feed too. I need dollars to keep my business running so I can feed my family. Stop the hypocricy.
Why don't we allow trading of Indian Rupees, Sri Lankan Rupees and Bangladesh Taka? They are freely convertible currencies internationally. That would certainly ease up the demand for USD, if the banks sell these currencies.
Hard steps are need of the hour. If required bring in finance experts from India.
Dollar crisis need to be addressed. But, here again, Minivan News is acting as the "mouth piece" of the Bangladeshi High Commission. Rather than addressing the Dollar crisis the Minivan is concerned with the effect it have on the Bangladeshis. Do you think it is not a crisis for other nationalities too (including Maldivians)?
@ Mohamed Rasheed - good idea
If the government thinks they can find a solution to the dollar crisis by simply crushing the helpless and the poor citizens of this county, they are abosulutly insane. The biggest criminals are the resort owners and the business elite of this country. It is a shame that the authorities don't have the guts to go after them.There is brain drainage along with dollar drainage and the country will be left only with criminals and poor people.Politician will be using the criminals to terrarise the poor. This has already started happening. There are signs that this country is collpasing from inside and out. I wish we will not end up like Somalia.
Agree with Baazu.
This whole situation does not only affect those in maldives but also the huge number of students studying abroad. Think of them before you talk about bangladesh people.
People of this country needs to go on street to outset the Elite group that is still in control of this country and wealth!! People (young and old ) needs to speak up!! These elite group are well position in all parties like DRP, MDP and even silly Dr.Hassan Party toO! RISE UP!! STAND UP!! GIVE THIS COUNTRY TO ITS RIGHTFUL OWNERS!! WE NEED THE RICH PEOPLE TOO..BUT RICH NEED TO BACK OFF A BIT NOW AND LET THE PRESIDENT CREATE A SOCIALLY, POLITICALLY AND ECONOMICALLY JUST SOCIETY!! PRESIDENT NEEDS TO STRATEGICALLY THINK!!
"Why don’t we allow trading of Indian Rupees, Sri Lankan Rupees and Bangladesh Taka?"
That doesn't solve the problem. You still need to have a convertible Maldivian Rufiyaa. The whole issue is that the Maldivian economy and the Rufiyaa are in a perilous situation.
The Maldivian Rufiyaa is incovertible to ANY currency! If you don't the basic economics, it's hard to explain this.
A simple explanation of the trouble we have:
(1) The government is printing more money each month (I consider T-Bills as printing money indirectly).
(2) Wages are rising and there are more Rufiyaa in circulation.
(3) We import more and more foreigners to do work which we are too lazy to do.
(4) We demand more and more goods from our shops.
Now, the guys we imported in (3) are madly converting all these extra Rufiyaa into dollars daily and exporting them to their home countries.
As a result of (4) business need dollars to import goods. Both (3) and (4) are fighting for a limited dollar circulation.
Where is the god damned MMA Governor in all this? Why is he still in his job, when he clearly has failed to do his job?
MMA governor is pursuing his PhD in UK. What a shame. We kicked out auditor General just because he bought a tie and took a speed boat ferry to Baa Atoll and asked to send invoices to his office. I think MMA governor is doing much laarge scale malpractice then AG. Still opposition MPs think he should remain in his post. We should check his UK travels and visa and if he has been absent for more than what he is entitled from his leave, he should be ousted. The F***** Majilis should investigate this
@ibrahim Mohamed
I agree with you. If the President went on a study leave abroad, will everyone standby until he returned. If a Cabinet Minister did that, will everyone standby?
Of course not.
The MMA Governor's position is equivalent to a Ministerial post. So how can he be allowed to remain in his job AND take a study leave? That just doesn't add up!
great photo. But man, where's the health and safety department!?
Where is the monetary authority in all this???? practising ignorance still????? ........ j ..
The abused, exploited and misused Banglas need someone acting on their behalf............. little chance i fear........... j .....
Home run! Great slugging with that awnesr!