US invites Maldives delegation aboard USS John C Stennis aircraft carrier

Senior government officials were invited aboard a United States aircraft carrier on Wednesday (March 27) as it passed by the Maldives.

The visit was followed by the signing of a Memorandum of Understanding (MOU) between the Maldives and the US government on Thursday to install a free border control system in the country.

Tourism Minister Ahmed Adheeb, Defence Minister Mohamed Nazim, Home Minister Mohamed Jameel Ahmed, Police Commissioner Abdulla Riyaz and Vice President Mohamed Waheed Deen, were flown to the USS John C Stennis aircraft carrier as part of an arrangement between the US embassy and Maldives Defence Ministry.

The visit was documented by the ministers, who posted photographs on social media site Twitter.


Tourism budget for 2013 increased by MVR 60 million

The tourism budget for 2013 has been increased from MVR 20 million (US$1.2 million) to MVR 80 million (US$5.1 million), local media has reported.

The budget increase follows criticism from the Maldives Association of Tourism Industry (MATI), which last month called for the government to reconsider the MVR 20 million budget allocated for tourism marketing in 2013.

The initial sum of money allocated was the lowest in eight years, according to a statement from MATI, which highlighted concerns that the Maldives’ economy was mostly reliant on tourism.

Tourism Minister Ahmed Adheeb told local media that the ministry had initially requested a budget of MVR 200 million (US$12.9 million) to carry out tourism promotion for the year, however parliament had “erased a zero” from the figure when finalising the budget.

Adheeb noted that while tourism promotion is expensive, the revenue generated from the industry “drives the entire engine”.

“When we put down MVR 200 million, the government authorities don’t actually realise the priority that this requires. Parliament erased a zero from the MVR 200 million we proposed, and gave us MVR 20 million,” he told Sun Online.

“Then we had to work in all other different ways, and now the Finance Minister has committed to give us MVR 60 million more.”

Adheeb claimed that government institutions did not realise the importance of promoting tourism.

In 2012, the ministry set a target of welcoming one million tourists into the country.  It was allocated a MVR 70 million (US$4.5 million) budget to conduct marketing activities to help achieve that goal.

Figures released last month revealed that the tourism ministry failed to reach the one million mark by roughly 42,000 arrivals.

Despite the political turmoil that enveloped the country at the beginning of 2012, the figures showed that there had been a 2.9 percent increase on the total number of arrivals in 2011.

Tourism promotion efforts last year included a US$250,000 (MVR 3.8 million) advertising deal to promote the tourism industry on the BBC and a £93,000 per month (US$150,000) contract with public relations group Ruder Finn in an attempt to improve the country’s image following political unrest in 2012.

Despite the increased expenditure, tourism growth slowed to just 0.7 percent in 2012, compared to 15.8 percent in 2010 and 9.1 percent in 2011.

The government’s forecast for economic growth in 2013 is 4.3 percent.

Adheeb told local media yesterday that the government had “re-set” its sights on reaching the one million arrival target in 2013, and said there were plans to participate in a number of fairs and promotions  to attract more publicity.

“If we can fully establish the Maldives brand, we can promote Maldives and subsequently increase room rates. Every single dollar we spend on marketing will give a large amount of money in return,” he said.


Tourism Minister confident to meet 2013 one million tourist target

Tourism Minister Ahmed Adheeb has claimed the Maldives will post one million tourist arrivals in 2013 after falling narrowly short of the mark last year.

Adheeb told local media that the government had “re-set” its sights on the one million arrival target that was set in 2012.

Last year, a total of 958,027 tourists arrived in the Maldives, with visitor numbers showing an eventual improvement despite the negative impact on the industry from political uncertainty in February.

“I really believe we can bring one million tourists to Maldives. We can very much confirm that when January and February end,” he was quoted as saying in local newspaper Haveeru.

The Tourism Minister said that with Chinese New Year being celebrated this month, the Maldives would see an unprecedented boost in arrivals, local media reported.

“As the Maldives market is based in China, large numbers of tourists come here to celebrate the Chinese New Year. I will say that Maldives’ New Year is already here,” he added.


Yacht Tours to take legal action over resort termination

Yacht Tours, a company owned by Maldivian Democratic Party (MDP) MP Abdulla Jabir, has said it will take the government to court over the recent termination notice it has been sent in relation to unpaid rent.

At a press briefing held today, Yacht Tours Executive Director Ibrahim Rasheed explained that the company currently owed approximately US$5 million (MVR 77 million) to the state.  According to Rasheed,  one-third of this debt was actual rent payments, while the rest amounted to fines accumulated over recent years.

“We have previously paid USD 1.5 million dollars (MVR 23 million) to the state as an advance for our island Watavarreha. Just after we made the payment, a new law was passed and it came about that this was something our company did not really have to pay,” Rasheed explained.

“But then, keeping the financial status of this nation in mind, our company did not push too hard to get reimbursed. Instead, we requested the government to use this money for rent adjustment of our other resorts,” he said.

Rasheed also gave details of the company’s official communications with the government in regard to the request it had been sent, providing the media with copies of letters exchanged between the state and the company.

Yacht Tours had requested the then Minister of Tourism, Arts and Culture, Dr Mariyam Zulfa, to arrange rent adjustment of the resorts Kudarah and Alidhoo from the Watavarreha advance, which the company said it was owed by the government.

A follow-up letter, dated August 21, 2011, stated that according to the Maldives Inland Revenue Authority (MIRA), the government owed the company US$1,115,374 (MVR 17,176,760).  At the same time, the company was said to owe a total amount of US$1,300,418 (MVR 19.9 million) in charges for the three resorts to the state.

The former tourism minister had then sent a letter on August 21, 2011 to the Ministry of Finance and Treasury, asking the rent adjustment to be processed as was requested by the company.

In a letter dated 27 September, 2011, a letter exchanged between the President’s Office and the Ministry of Finance and Treasury stated that advance money paid by a company can be used as rent adjustments for another resort or tourist business owned by the same company.

Following the transfer of power in February, Yacht Tours had again approached the Tourism Ministry to settle the matter of rent. On 22 February 2012, Yacht Tours wrote to current Tourism Minister Ahmed Adheeb, once again detailing the issue and asking for rent adjustment.

According to the company, Adheeb has failed to respond to the letter.

At a press conference on held December 31, 2012, Adheeb said that Yacht Tours had been sent the termination notices for both the Alidhoo and Kudarah resorts, with a seven day period for handover.

He added that while the ministry had come to a payment system agreement with a number of other companies, Yacht Tours had sent no official written communication in regard to the payment of outstanding rents.

In response, Rasheed claimed he was deeply concerned about the comments, accusing the minister of making a false statement.

“We wrote to the ministry just after he was appointed. We still haven’t received a response to the letter sent back in February. We have also met him officially at a number of instances to discuss this matter. The last time, right after the termination notices were sent in late November, I personally went with Jabir to a meeting with the minister to discuss this issue. At the time, the Minister had said that he was working on it, to arrange rent adjustment,” Rasheed said.

“We are very saddened that the minister has gone and said there are no communications between Yacht Tours and the ministry.  If, let’s say, the current government considers all the letters we have exchanged with the previous governments to be void, then we should be notified of that. Makes me wonder if Adheeb thinks he is the first minister of tourism of the country. With the current actions in mind, it is hard to see Adheeb as a capable minister,” he added.

Yacht Tours Managing Director Ibrahim Shiham spoke about the huge loss the company was facing due to the government’s actions.

“Many of the bookings are getting cancelled. We are also experiencing delays from business partners and financiers. Foreign investors are very concerned about the government’s actions. The market value of the islands are at US$100 million (MVR 1.5 billion) now. And they are trying to terminate this over a value of US$5 million (MVR 77 million).

“Our wish is to settle the matter through dialogue, but now that we have been given seven days to handover the resorts, our legal team will respond to it. We will be taking the matter to court,” Shiham said.

Yacht Tours Chief Executive Officer (CEO) Mohamed Zuhair expressed concerns over the state’s treatment of companies in the tourism industry.

“It goes without saying that all companies in this same industry must be treated equitably and fairly. However, we deeply regret to say that today it is not how things are been carried on. Yacht Tours is not given the same treatment as other companies in the industry,” Zuhair said.

The company furthermore pointed out the silence on the matter of tourism related bodies like MATI and MATATO to be very concerning.

Minister of Tourism Ahmed Adheeb was not responding to calls at the time of press.

Abdulla Jabir is currently not in the country.  Jabir had recently rejoined the MDP from the government-aligned Jumhoree Party (JP).

Last month, staff at Alidhoo Resort alleged both Maldivian and foreign workers had not received pay for several months, despite complaints made to management and various external government organisations.  Minivan News understands some of these payments had since been made by the company.


Tourism Minister looks for alternative sources after loss from lease payments

Minister for Tourism Ahmed Adheeb has said that the Tourism Ministry will work on ways to increasing its revenue, acknowledging that income lost from changes to island lease payments would leave its earnings far short of those predicted in the budget.

“The expected amount from lease rent will not be acquired within the year. This is about Rf 500 million (US$32 million). We are looking for ways to compensate for the loss. Discussions on the issue will start next week,” Haveeru reported Adheeb as saying.

The current government recently re-interpreted a clause in the Tourism act, allowing the payment of island lease extensions to be made in installments rather than up front, as had previously been the case.

The Maldives Inland Revenue Authority’s (MIRA) figures for March revealed that the government received over Rf350 million (US$23 million)less that month than anticipated in the budget.

The IMF’s suggestions that the Tourism Goods and Services Tax (TGST) be raised to 12 percent would not be the only method discussed within the ministry to compensate for the lost income.

“The discussions are not to simply discuss increasing the amount of TGST charged from resorts. The government has not decided to increase TGST to 12 percent. The government wants to find out the ways from which the tourism industry can compensate for the amount of predicted loss,” Haveeru reported.

The Majlis Financial Committee revealed this week that the current budget deficit would reach 27 percent of GDP by the end of this year.

Head of the Majlis’s Financial Committee, Deputy Speaker and People’s Alliance (PA) MP Ahmed Nazim, revealed that government revenue for 2012 would be Rf2.6 billion (US$168.6 million) less than the projected amount of Rf10.87 billion (US$704 million) – a drop of 23 percent.


Revenue figures reveal economic impact of change in lease extension policy

The Maldives Inland Revenue Authority (MIRA) released figures earlier this week showing the extent to which the change in island lease payments has affected the Maldivian economy.

According to MIRA’s figures, the total revenue projected for March was Rf1044 million [US$ 68 million], but had received 37.9 percent lower than the projected revenue “mainly due to the unrealised revenue from the Lease Extension Period.”

MIRA had anticipated to receive a total of Rf375 million [US$ 24 million] for lease extensions – however, due to government’s recent decision to accept resort island’s lease extension payments in installments – the  income received dropped to nearly Rf23 million (US$1.5 million).

These figures were published the same week that the International Monetary Fund (IMF) warned the People’s Majlis that drastic measures must be made to reduce the government’s budget deficit. At the same time, the government announced that it was promoting a third of the police force and paying two years of allowances to defence personnel.

The IMF noted that the budget figures it had seen did not reflect the lost revenue resulting from the change in collection of lease payments.

Concluding the IMF’s visit to the country, the group’s representative suggested that the government reduce civil service pay and benefits, re-introduce recently removed import duties, increase the Goods and Services Tax (GST) and increase the bed tax by 50 percent.

The IMF’s expressed it fears that the government may exhaust its reserves if it did not resolve its budgetary imbalances: “Immediate steps have to be taken. This is the reality, we have to face it.”

MIRA’s figures appear to bear out the fears of the former Tourism Minister Dr Mariyam Zulfa, who predicted that the new government, having “over-interpreted” the repayment clauses in the Tourism Act, could expect to see up to $135 million taken from government revenues in the next year.

At the time of the Tourism Ministry’s announcement of the extension payment changes, the government had already received lump sum payments from 25 resorts equating to US$40 million and was expecting nearly US$135 more from 90 resorts.

“The lease extension is about increasing the asset value of the properties. In the Maldives, all the islands actually belong to the government and when the second amendment to the tourism law came into place it gave the option for resorts to extend the existing 25 year leases to 50 years,” explained Dr Zulfa, at the time.

“A time period was given and there is a clause [in tourism lease extension regulation] that stipulates that the payment must be done in completion before the lease period can be extended. So, the Nasheed government had interpreted that clause as the payment to be paid in full for the period extended. So, because the wording is such that the payment must be complete before the extension is granted, we interpreted it as the full payment.”

“But there is another clause [in Tourism Act] which says the manner in which the payment is calculated is on an annual basis. This [current] government has over-interpreted that clause and has said that the payment has to be made on an annual basis, but I have always insisted that the value of the government assets must not be allowed to decrease because the payments go to funding welfare services, housing projects, infrastructure projects, health services and so on that would benefit the local community,” she said.

“The current government has not only allowed payment to be made on an annual basis but allow for the payment to start at the end of the 25 year period, which is years away. It is a huge loss to the government treasury, about US$150 million, and I think as a result that a lot of people will be deprived of the many projects that we have started for the benefit of the communities across the atolls,” argued Zulfa.

Meanwhile, the Tourism Minister Ahmed Adheeb has said that the government would reimburse US$ 40, accepted as lease extension payments prior to the change in policy  by deducting the amount from the rent payments.

Explaining the decision at the time, Adheeb also said that the government was happy make things easier for the tourism industry wherever it could, after it had contributed so much to the economy through taxes.

He further claimed that the government was seeking to act in line with a December 2011 High Court ruling against Nasheed administration’s interpretation of the relevant clause in lease extension regulation.

After the ruling was made, and before it lost control of the government, the Maldivian Democratic Party (MDP), had stated its intention to appeal the High Court’s decision. Dr Zulfa reports that the current government has removed this appeal from the high court.


Chinese tourist arrivals drop 34.8%

Chinese tourist arrivals dropped by 34.8 percent to 12,237 in February compared to the same point last year, according to Asian travel trade newspaper TTG.  Around 6,500 fewer tourists arrived from China last month, largely due to the cancellation of charter flights, which are expected to resume in April.

Visitor numbers to the Maldives dropped by 4.7 percent year on year in February following the political crisis, the industry paper revealed. Arrivals fell from 87,392 to 83,252, after having grown by 13.4 percent when compared with the same period in 2010.

Arrivals from the UK also fell, while visitors from France and Germany rose by 4.9 percent and 25 percent, respectively.

Efforts including familiarisation trips arranged for the media and tour operators have been employed to reassure Chinese tour operators who appear to have been unnerved more than others by the upheavals following February 7.

The Chinese market makes up around a fifth of all tourist arrivals to the Maldives in a sector that indirectly contributes over 70 percent of the country’s GDP.

George Weinmann, Chief Executive of Mega Maldives Airlines, which charters flights between Male’ and multiple Chinese destinations, told the New York Times this week the full schedule of flights was to resume on April 4. He was confident that his business would continue to grow – its employee numbers have doubled in just over a year.

The Maldives sent a group of 200 to the recent ITB trade fair in Berlin, representing 65 companies, to reassure the international markets that the Maldives remained a safe travel destination.

The need for this public relations exercise was reflected by the words of Minister of State for the Foreign and Commonwealth Office (FCO), Lord Howell, who felt the need to defend the country‘s image during discussion of the Maldives’ situation in the House of Lords on March 22.

“The Maldives, as my noble friend has said, remains the paradise and attractive tourist area that it has always been and continues to be, because at the moment we do not judge that there is any danger in the tourist areas,” said Howell.

The FCO lifted all travel restrictions to the UK on March, as did Germany, though it has been reported that tourists in resorts have been prevented from taking trips to the capital.

Politics in paradise

The alleged involvement of tourist resort magnates in February’s changeover of power has seen attempts to politicise the tourism industry, in particular to put pressure on tourists to avoid certain resorts.

In the UK, a Maldives Travel Advisory website has been established, grading a number of resorts on a traffic light system, ranging from ‘green’ sites which the advisory urges tourists to visit, ‘amber’ which are under consideration regarding their alleged involvement in the changeover, and ‘red’ which the advisory urges against travel to.

The selective nature of the boycott is indicative of the desire of all sides to shield the image of the tourist industry from long term damage. Of the 107 resorts currently listed on the website, only 12 are listed in the ‘red’ category, with another 12 in the ‘amber’ category.

The Friends of Maldives (FOM) group has attempted to publicise this travel advisory, for example by handing out leaflets outside of a meeting held by the Tourism Minister Ahmed Adheeb Abdul Gafoor in London earlier this month.

This attempt did receive some coverage in the British Media, with prominent columnist for the The Daily Telegraph, Oliver Smith, writing, “The moral implications of visiting the Maldives have been called into question following the downfall of Mr Nasheed.”

Adheeb had earlier expressed concerns that the message of the political and geographical separation of the resorts from wider Maldivian society was not being made clear enough: “That message is not going out. People don’t know that the resorts are separate [from the rest of the Maldives], and international headlines have made people panic.”

The Maldives Marketing and Public Relations Corporation (MMPRC) has employed the services of a professional PR company, Rooster Creative Public Relations Ltd to represent its interests in the UK, explaining, “The purpose of having a full time PR and Marketing agency is to overcome the image that is continuously spoiling in the UK market due to the current political turbulence.”

Despite the presence of some Maldivian Democratic Party (MDP) supporters outside of the venue who distributed literature relating to police brutality, the party insists that politics should not impinge on tourism.

In a recent interview, the former Minister for Tourism Dr Mariyam Zulfa told Minivan News, “It has never been the MDPs intention or any other political party’s intention to harm the economy in any way.”

Concerns that politics will damage the image of the destination could be premature. In the days after the coup, a report on Reuters that tourists “barely put down their cocktails during the political crisis” appears emblematic of the attitude of those seeking relaxation in paradise.

In a February poll taken on the Chinese social networking site Weibo, only a third of over 8000 respondents said that the coup had affected them. Tourists at Ibrahim Nasir International Airport (INIA) who were recently asked their opinion about the politics in Male’ did not show concern.

A couple from London said they were unaware of any issues, whilst a Swiss tourist stated his belief that the problem was one for the state to deal with and should not concern tourists.


Tourism Minister holds London press conference to reassure travellers

While the Maldives Tourism Minister hosted a press conference in London to soothe the fears of the tourism industry over the ongoing political instability in the Maldives, opposition activists distributed leaflets outside.

Former Maldives High Commissioner to the UK Dr Farahanaz Faisal distributed leaflets highlighting police brutality in the crackdown on demonstrators on February 8, while the Friends of Maldives NGO distributed its travel advisory highlighting the involvement of several politicians and resort owners in the change of government on February 7.

Monday’s professionally managed event was attended by 25 journalists from a host of prominent UK travel publications.

The Maldives Marketing and Public Relations Corporation (MMPRC) recently appointed Rooster Creative Public Relations Ltd as its official PR agent in the UK. MMPRC Acting Managing Director Mohamed Adam explained this decision.

“The purpose of having a full time PR and Marketing agency is to overcome the image that is continuously spoiling in the UK market due to the current political turbulence,” Adam said.

Adam’s aims were stymied somewhat by the presence of former Maldives High Commissioner to the UK Dr Farahanaz Faisal and the former Deputy High Commissioner, and brother of President Dr Mohamed Waheed Hassan, Naushad Waheed.

MDP supporters Farahanaz and Naushad took the opportunity to distribute leaflets focussing on police brutality in the Maldives. The leaflet described the Maldives as undergoing “one of the most painful and brutal periods of its history”.

Business as usual?

Despite the demonstrations outside, Tourism Minister Ahmed Adheeb Abdul Gafoor remained upbeat about the prospects of the Maldives tourism industry. The minister told Travel Weekly that he was expecting one million tourists to visit the country in 2012, breaking previous records.

He spoke of having visited tour operators during his trip who are eager to launch charter flights to the Maldives and begin new projects.

Referring to the demonstrations, he said, “The press conference was not affected by that. The journalists did not seem bothered. The press conference was a success.”

Former Tourism MinisterDr Mariyam Zulfa has expressed confidence in the sector’s durability, saying, “I don’t think that the political situation is actually affecting the tourism industry as such because Maldives is a well-established destination.”

This current government’s veneer of confidence, however, is belied by the hiring of the professional PR group to protect its image and by reports that bookings were down six percent  in February, according to Travel Weekly.

Speaking with Minivan this week, Dr Zulfa made clear the importance the MDP attributes to protecting the tourism industry.

“It has never been the MDPs intention and it will never be the MDPs intention to obstruct the progress that we have made in the tourism industry,” said Zulfa. “It’s not in our agenda to affect the traveller’s decision to choose Maldives as a destination at all.”

“But I think the tourist industry has a responsibility to provide correct information about Maldivian life in general.”

The awareness-raising efforts of the government’s opponents, indeed, do not appear to be registering with those travelling to the Maldives at present, supporting the views of Tourism Ministers past and present.

Asking the opinions of tourists at Ibrahim Nasir International Airport yesterday, the most common response was a vague notion that the Maldives had been in the news recently, without any specific details being recalled.

This was perhaps typified by the response of a couple from the UK who were asked how they felt about what was happening in the Maldives at the moment: “What is happening?” came the response.

Travel advisory

Also outside the press conference was David Hardingham, founder of Friends of Maldives (FOM), who distributed a second set of leaflets publicising his group’s travel advisory.

FOM is a UK based NGO focusing on the protection of human rights, the promotion of social justice and democracy in the Maldives.

The content of the FOM leaflet was interpreted by the Maldivian media outlet Sun Online as claiming that the Maldives was an unsafe travel destination. Newspaper Haveeru also reported that the NGO was advocating a “tourism boycott”.

Referring to Sun’s article Hardingham said, “Responsible journalism involves getting both sides of the story – so we were disappointed not to be asked by Sun for our views as their article is one sided, has factual errors and is somewhat misleading – however it’s not entirely surprising as its owners are known to be supportive of the recent coup.”

Hardingham forwarded the leaflet distributed by the NGO (page one, two), which lists resorts and businesses owned by Jumhoree Party (JP) leader Gasim Ibrahim’s Villa Group, and Bandos Island Resort and Spa owned by Vice-President designate Waheed Deen, and urges “responsible” travellers to avoid these resorts specifically.

“The current political turmoil in the Maldives has deterred people from visiting the islands. Friends of Maldives urges tourists to continue to visit Maldives, as tourism is the mainstay of the economy. We feel the situation is not so bad, as the airport and resort islands are not linked to any population centres,” the leaflet notes.

The leaflet goes on to recommend the travel advice of the UK Foreign and Commonwealth Office (FCO), which currently has no restrictions in its Maldives travel notice.

The FOM leaflet continues to briefly outline recent events in the Maldives before asking that potential tourists “consider the idea of being a responsible traveller” by avoiding resorts that are allegedly involved in “the subversion of democracy, and human rights abuses in the Maldives”.


Rise in blackmarket exchange rate no setback for currency stability aims, claims Economic Development Minister

Two months after the government announced plans for greater economic stability by devaluing its currency against the US dollar, the Maldives’ Economic Development Minister has said increases in black market exchange rates are no setback to the country’s long-term financial aims.

Amidst local media reports that the value of the Maldivian rufiyaa – capped until April this year at Rf12.85 against the US dollar – was trading at Rf16.5 on the black market, Minister Mahmood Razee said that authorities would likely wait for an allotted three month-period to pass before considering any additional financial support measures.

Despite this approach, the Maldives National Chamber of Commerce and Industry (MNCCI) has claimed that local enterprise is not being supported by financial institutions like banks in terms its needs – particularly for importers reliant on foreign currency to bring in goods to the market.

However, sticking to earlier estimates that the managed float of the rufiyaa within 20 percent of the 12.85 exchange would require about three months to begin to bring stability, Razee claimed that it remained too early to say if additional support measures were needed from the government to bridge the dollar supply.

“I don’t see the black-market exchange rate as a setback as it is low [tourism] season right now, meaning we are earning fewer dollars,” he said. “Now it has been a couple of months since we changed the dollar rate. When [the currency float] was announced in April we said it will take around three months to see if the rate will stabilize. We do not know yet whether there is just a dip in [dollar] supply or something else.”

When addressing potential changes already bought about to the exchange rate since the dollar float was introduced, Razee said he believed it remained too early to speculate on what longer term impacts had taken place in regards to the availability of dollars.

The Economic Development Minister added that if there were no signs of stabilisation by next month, then he expected the Ministry of Finance to begin looking at additional measures to try and bring some market stability to the economy.

“I’m not privy to the exact information on what these measures could be right now,” he said. “What we have been doing is working with national authorities in markets like India to see what means of assistance there might be.”

The rufiyaa has sat at the maximum limit of Rf15.42 following the government’s managed float of the rufiyaa within a 20 percent band.

Treasurer of the Maldives National Chamber of Commerce and Industry (MNCCI), Ahmed Adheeb Abdul Gafoor, told Minivan News that he believed that the managed currency float had served only to exacerbate the difficulties facing local businesses that were being given little choice other than to rely on black market exchange rates.

“The banks are not providing dollars to businesses, especially for importer and traders who are the backbone of the economy and vital to distributing goods,” he claimed. “With Ramazan ahead, we have been told that the State Trading Organisation (STO) will be providing 27 goods and commodities at stable prices, but we will have to see if this is possible.”

Adheeb claimed that in the immediate term, banks had simply not been providing additional credit lines for businesses requiring foreign currency exchanges, a demand he said that was having to be satisfied through additional financial channels.

“The solution I believe is that banks will have to provide,” he said. “Credit card payments are being settled in rifuyaa, yet many importers are not being satisfied when it comes to their own needs.”

Speaking as a private citizen Adheeb said that more changes were needed in how banks dealt with business as well as how government were looking to encourage sustainable foreign finance.

“We have seen no encouraging signs [from the float] and I don’t think this is a good policy at this time,” he said.

The MNCCI treasurer said that he believed that alongside government talk of minimum wages, it would be wise to discuss maximum wages in certain cases to try and balance national; budget more effectively.

“I don’t understand why this is a policy not being discussed,” he added.