Maldives “ideally placed” to be international financial centre, says CMDA chief

CEO of the Capital Market Development Authority (CMDA) Fathimath Shafeega believes the Maldives to be “ideally placed” to play the role of an international financial centre.

Describing the country as strategically well-placed, the head of the independent regulatory authority noted that the country’s nascent financial framework was both a weakness and a strength.

“We don’t have regulations hindering a lot of things,” noted Shafeega. “We can start from a clean slate.”

“But parliament needs to be very much involved in it. We might need to provide the software – laws and regulations and other policy frameworks – while investors can bring the hardware.”

Senior members of both the previous and the current administration have considered the development of offshore banking services as a way to diversify an economy heavily reliant on tourism.

“It’s very much still on the agenda,” said Shafeega.

Shafeega spoke with Minivan News following the release of the CMDA’s first quarterly report in 2014, which revealed the authority’s work this year had focused on drafting legislation to further modernise the market, as well as amending the Corporate Governance Code in order to increase gender diversity on the boards of publicly listed companies.

Islamic Finance

Established by the Maldives Securites Act in 2006, the CMDA’s quarterly report for the first time included details of the Islamic Capital Market – an area the report describes as having an “ever-green future in the Maldives”.

Indeed, Shafeega argued that the successful establishment of an Islamic Capital Market – featuring Shariah compliant financial products – would also add to the Maldives appeal as a future financial hub.

Introducing the quarterly update on the Islamic Capital Market development, Deputy Islamic Minister Dr Aishath Muneeza, argued that there was now a “global movement towards the creation of financial transactions based on underlying activities or underlying assets.”

“Relying on real economic activities has been the success secret of Islamic finance and now we are being forced to find innovative ways to adopt this method,” said Dr Muneeza.

Under Islamic Shariah, any risk-free or guaranteed rate of return on a loan or investment is considered riba, which is prohibited in Islam.

Also chair of the Capital Market Shariáh Advisory Council (CMSAC), Dr Muneeza this quarter became the first person granted Shariah advisor registration status in the Maldives.

CMSAC was created in December 2013 in order to advise the CMDA on the development of an independent Islamic Capital Market.

The council’s activities this quarter included the formulation of a five year plan to increase the availability of Shariah compliant services, raise awareness of Islamic finance, and establish an Islamic Finance Centre in the Maldives.

Writing for the Islamic Finance News website in March, Dr Muneeza  described Islamic Finance as “spreading like wildfire” since the introduction of Islamic banking and capital market services in 2011.

“It is hoped that in the upcoming years the Maldives can be used as a global case study to prove the success of Islamic finance,” she wrote.


Shafeega also expressed confidence that the state pension fund – for which the CMDA plays a supervisory role – can soon successfully diversify its investment portfolio.

“As you know the pension system in Maldives has assumed that there will be a developed capital market. The development of the capital market has not kept pace with the pension development.”

Beginning in March this year, the government more than doubled the monthly pension – with individuals aged over 65 now receiving MVR5000.

The government had allocated MVR470 million (US$30.5 million) in the state budget to give out an MVR2,300 (US$149) in cash handouts, with head of the Cabinet’s Economic Council Ahmed Adeeb stating that “innovative” investment would prevent the need to divert funds from within the current budget.

The CMDA quarterly report noted that research had been carried out in order to ascertain potential avenues for investment beyond government or listed securities – the only options currently utilised.

“For the pension fund to be able to generate a good return for the members, we need to diversify the pension investment,” Shafeega told Minivan News.

“We need to find alternative investment that can generate a good return”

Shafeega also expressed confidence that the additional revenue could be realised, revealing that – following the authority’s recommendations – the government was planning to introduce changes to the Pensions Act during the 18th Majlis.


“Ideal” time to invest, says MNCCI as Maldives Investment Forum approaches

With additional reporting by Daniel Bosley

“The last 3 years there has been a lot of turmoil, but now is the ideal time to invest and talk about business,” suggests Ishmael Asif, Vice President  of the Maldives National Chamber of Commerce and Industries (MNCCI).

In light of the upcoming Maldives Investment Forum (MIF) in Singapore, Asif told Minivan News that the Maldives can offer a secure political backdrop for any potential foreign investments.

“From the chamber, we would like to give a message to foreign investors that political tension is over and there is room for investments. Maldives always welcomes foreign investments.”

The forum – set to take place on Friday (April 25) at the Marina Bay Sands hotel in Singapore – will aim to increase the interest of Asia-region investors, and will be the first forum of such a scale to be hosted by the Maldives in another country.

Investors will have the opportunity to submit proposals for five mega projects, including the following – whose details have been provided by the Ministry of Economic Development:

Ihavandhippolhu Integrated Development Project (iHavan) – This project aims to capitalise on the US$18 trillion worth of goods that pass through the channel to the north of the Maldives’ northernmost atoll each year.

The project is set to include a transshipment port facility, airport development, a cruise hub, yacht marina, bunkering services, a dock yard, real estate, and conventional tourism developments.

Citing growing east-west trade between China and India, the project also proposes to take advantage of more than 30 large cities which lie within a 4000km radius of the atoll. Moreover, the South Asian Free Trade Arrangement (SAFTA) means that export processing zones established in iHavan will enjoy duty free access to 1.7 billion people in the South Asian region.

Expansion of Ibrahim Nasir International Airport (INIA) Following the 2012 termination of the GMR concession agreement, the government is currently devising a new master plan for developing the country’s main international airport.

Around forty percent of the tourism industry’s bed capacity is currently situated in the same atoll as the airport, with 80 percent of tourists taking less than one hour to reach their destination from INIA. Furthermore, the government plans to increase tourist arrivals to 5 million per year during its current term.

“As such, the need to expand the airport’s capacity to cater to this additional demand and to provide value added commercial and high end retail services of highest international standards, is a key priority of the Government,” explains the forum’s website.

Hulhumale’ Phase II DevelopmentThe next stage of the development in the Maldives “first fully reclaimed, pre-planned city” will involve further reclamation to the north of the island.

Potential investors are being made aware of President Abdulla Yameen’s plans to develop the island into a ‘youth city’ with a population of 50,000, which will include a “technopolis park” to facilitate light industries.

The construction of the long-awaited bridge between Malé and Hulhumalé is planned to further open up economic opportunities in the reclaimed island city.

Relocation and expansion of the existing central portNoting that the country’s major port in Malé has reached its capacity, the MIF will hope to attract investors to assist in the relocation of the main port to the nearby industrial island of Thilafushi.

The project will include reclamation work on the island, the introduction of state-of-the-art facilities – including warehousing capacity, and marine harbour and support functions to cater to all types of vessel.

Exploration for oil and gas With oil imports accounting for 31 percent of the Maldives’ imports in 2012, the country is seeking to reduce reliance on foreign fuel with an oil and gas exploration projects, explains the event information.

Previous attempts to locate economically viable reserves were unsuccessful, though the government wishes to find investors who can undertake more extensive surveys in the country’s territory.

The proposed projects are due to be supported by the “relatively freer regulatory environment” provided by the special economic zones promised by the Yameen administration.

Creating a future for the Economy

Asif noted that the decision to hold the conference in Singapore sends a clear message to the international community that the Maldives is keen to discuss ideas with their potential partners, and to build bridges with countries they would like to work with in the future.

“It will create a better platform for Maldives when we do work in places like Singapore – it’s an ideal place to unveil something like this so we can go forward with that area.”

The operator’s of Singapore’s Changi Airport met with President Yameen last week, sparking rumours that they would provide consulting services on the development of INIA.

“Such a forum like this is organised to give a positive vibe, that we are open for foreign investment and willing to discuss [ideas],” he added.

A host of countries have already expressed their interest and are registered for the Maldives Investment Forum, President’s Office Spokesperson Ibrahim Muaz confirmed today.

“There is a lot of co-operation from business groups from other countries, like China, the US, Japan and from this area. There are a lot of participants registered on the forum,” said Muaz,

President Yameen will be leaving tomorrow afternoon to attend the forum, where he will give the keynote speech to the more than 300 investors from 15 countries who have reportedly registered to participate.

Following a presentation detailing the five projects, Tourism Minister and head of the cabinet’s Economic Council Ahmed Adeeb will give a speech, before a question and answer session regarding the proposed projects.

President Yameen’s vision for foreign investment was spelled out recently, during the inauguration of a housing project in Hulhumalé – part of the ‘youth city’ project.

“What we would like to confirm for the foreign investors who come to the Maldives is that foreign investors should feel that Maldives is your second home here,” said Yameen.

“We are going to open up the Maldives in a huge way to foreign investors. Our thirst cannot be quenched. The opportunity to foreign investors is going to be enormous.”


Addu City Council passes resolution to develop guest house tourism

Addu City Council has passed a resolution to create an ‘Addu Guest House Venture’ which will develop and expand the guest house tourism industry within the city, under the guidance of a a ‘Guest House Promotion Board’.

The resolution – passed on Tuesday (April 15) – states that it is important to have the opportunity to develop guest houses and city hotels on the large joined islands of the city, and that it will benefit the tourism industry in general.

Noting that it will create more jobs and new opportunities for start-ups, the resolution stated that it will also increase the number of tourist arrival for the country.

In the past few years the guest house businesses boomed on many islands – growing from just 22 registered businesses in 2009, to 171 currently listed – particularly in close proximity to the capital, Malé.

The list of guest houses available via the Tourism Ministry shows just one registered business in Seenu atoll – home to Addu City, the country’s second largest urban area.

Recent annual figures (2012) show Malé’s Kaafu atoll was home to 39.9 percent of the tourism industry’s bed capacity, while Seenu – the country’s southernmost – had just 3.6 percent.

Addu City Council this week declared that, in order to develop the industry, the Addu Guest House Venture has to be created jointly as a business transaction by the council, members of the public, businesses, and banks.

A five-member guest house promotion board is also to be created under this resolution to represent the council and to communicate on its behalf.

The council is expected to announce applications for the board membership very soon, which according to the council will comprise of technical and experienced persons.

Guest house development on inhabited islands was a key election pledge of the opposition Maldivian Democratic Party, to which all members of the Addu City Council belong.

The party also campaigned in all recent elections with the pledge to strengthen decentralisation, pushing to increase the role of councils in development.

Political supporters of guest houses have pointed out that mid-market tourism creates opportunities for small businesses while economically empowering local communities.

The current government, led by the Progressive Party of Maldives has announced alternative plans for developing mid-market tourism, with the prospect of  guest house islands replacing the idea of guest houses on inhabited islands.

Tourism Minister Ahmed Adeeb has said that various businesses will invest in providing different services on these islands.

“For example, common restaurants can be managed by one party, water sports by another party, twenty rooms by one company, another twenty rooms by another company and so on. In that way, we are creating numerous businesses there,” Adeeb told Minivan News earlier this year.

Adeeb explained that the government was reluctant to market mid-level tourism as it risked damaging the country’s image as a high-end destination.


Majlis elections: “Maldivians have said yes to President Yameen’s strong leadership” – Foreign Minister

Foreign Minister Dunya Maumoon has described the Progressive Coalition’s victory in the Majlis elections as vote of confidence in President Abdulla Yameen as well as a signal to foreign powers to stay out of the country’s affairs.

“Maldivians have said yes to President Yameen’s strong leadership,” said Dunya.

She also interpreted the coalition victory as a sign of voters’ faith in the leadership of her father, former President and Progressive Party of Maldives (PPM) leader Maumoon Abdul Gayoom – President Yameen’s half-brother.

Fellow cabinet member, Tourism Minsiter Ahmed Adeeb, reiterated Dunya’s comments during a press conference held today, adding that opposition MPs would now be unable to further “obstruct” the government’s efforts.

“This shows that the ideology of President Maumoon Abdul Gayoom and the policies of President Abdulla Yameen has the full support of the people as well as the extent of support for [Progressive Coalition partners] Honourable Gasim Ibrahim and Honourable Ahmed Siyam Mohamed,” said Adeeb.

Dunya’s press statement came as the results of the elections to the 18th People’s Majlis are being finalised. Preliminary reports suggest a clear victory for the PPM and its allies – the Elections Commission is expected to announce the preliminary results in the coming hours.

“I wish to congratulate the people of Maldives for their belief in the value of democracy. The world should not underestimate the perseverance of Maldivians. I also wish to congratulate the Elections Commission for holding the elections in an efficient, free, fair, and transparent manner,” she stated.

Dunya served as the State Minister for Foreign Affairs under former President Dr Mohamed Waheed Hassan, and was a key figure in defending the legitimacy of Dr Waheed’s cabinet in the international community following former President Nasheed’s allegations of coup d’état following his February 2012 exit from power.

Dunya further said “yes to the Government’s foreign policy that is aimed at building national resilience of the Maldives; and yes to the Government’s firm stand of helping Maldivians to shape their own destiny.”

“The Elections also shows that Maldivians have said a resounding ‘NO’ to the efforts of some to invite foreign interference in domestic politics through a number of statements issued telling Maldivians how to organise our own affairs”.

“I wish to congratulate the people of Maldives for their belief in the value of democracy. The world should not underestimate the perseverance of Maldivians. I also wish to congratulate the Elections Commission for holding the elections in an efficient, free, fair, and transparent manner”.

The foreign minister’s praise of the Maldivian people – whom she stated have shown  “tremendous determination” to resist attempts to cause “internal disharmony by inviting international pressure” – echoed statements issued earlier this month.

On March 3 – after the European Union and civil society groups had voiced concern over the actions of the Supreme Court – Dunya requested that international communities refrain from comment which “undermine” the Maldivian judicial system.

International concern at that time had come in response to court’s pursuit of contempt of court charges against the Elections Commission (EC) over comments made  in a privileged parliamentary committee regarding the annulment of last year’s presidential election first round.

The Supreme Court accused the EC of contempt, claiming it had criticised the verdict which had annulled the first round of presidential elections held in September 2013, as well as disobeying a Supreme Court order by dissolving eight political parties last month.

The Supreme Court subsequently dismissed the senior members of the Elections Commission just weeks before the parliamentary elections – a decision roundly condemned by the international community.

“We request our international partners to support us. We request you to contribute constructively in overcoming our challenges. We urge you not to undermine our judicial system,” said Dunya during the 25th session of the UN Human Rights Council.

“We call on all to respect our institutions, young though they may be. And we urge you to base your partnership with us on dialogue and cooperation, not on judgment and retribution,” she added.


Pensions office performs U-turn on benefit increase

After initially reporting that the promised pension increase from MVR2300 to MVR5000 could not be done this month, the Maldives Pension Administration Office (MPAO) today confirmed that it is working to transfer the MVR5000 by tomorrow.

The CEO of the office had yesterday told Haveeru that it had not received the additional funds for the increase and that it would therefore transfer the current MVR2300, giving the rest when the government released additional funds.

“They are doing this to fulfill a government pledge. This has nothing to do with the pension fund. We will not increase it to MVR5000 by taking money from that fund. What we will do is transfer it when the government provide us with it,” Manik was quoted as saying.

The state funded pension for all citizen’s above the age of 65 was introduced in 2009 at MVR2,000, and was later increased to MVR2,300 through an amendment to pension legislation.

A further increase to MVR5000 – starting from March 2014 – was an election pledge of President Abdulla Yameen, though changes to the amount disbursed from the existing pension funds will require another amendment to the act.

Cabinet minister Ahmed Adeeb has recently assured that the increase would take place in March as promised, saying that it can be funded through a sustainable model based on long term bonds and T-bills.

Adeeb also talked about the prospect of combining various funds such as housing, health insurance, and pension funds into a single fund.

The government had already allocated MVR470 million (US$ 30.5 million) in the state budget for the MVR2,300 allowance (US$149). These funds will now be invested in the retirement pension fund or in financial instruments such as T-bills in order to generate the monthly MVR5000 stipend, Adeeb has said.

Following Manik’s comments yesterday, Adeeb told Haveeru that the delay was due to the first of the month falling on the weekend and “because it is a new allowance”.

Yesterday, MPAO CEO Manik stated that eighty percent of the pension funds are already being invested in T-bills sold by the government to finance the budget deficit, and that discussions with the government are underway to invest the rest of the funds in bonds.

While the government maintains this to be a sustainable model of financing the increase in pensions, critics have argued that, with a MVR1.3 billion (US$84.3 million) deficit budget, the move will plunge the country further into debt.

“These are loans, and taking loans is acceptable to invest in to increasing productivity. But this is not such an investment, this is something the government is spending. Eventually people will have to bear the burden of this,” former Economic Development Minister Mahmud Razee has remarked.

Last December, the central bank and regulator – the Maldives Monetary Authority – advised the state to pay all due treasury bills and treasury bonds and to turn existing short-term debts into long-term ones.


President and cabinet members on scoresheet at opening of football pitch

A team including cabinet members and President Abdulla Yameen last night beat a team of Maldives National Defence Force (MNDF) officials in a match held to inaugurate the opening of the Villimalé futsal pitch.

Chief of Defense Force Major General Ahmed Shiyam, and Managing Director of the State Trading Organisation Adam Azim officially handed over the pitch to the Minister of Youth and Sports Mohamed Maleeh Jamaal before the game began.

Local media reported the final score as being 7-6 to the president’s team, with Home Minister Umar Naseer being named man of the match.

Naseer, President Yameen, and Tourism Minister were all on the scoresheet. The attorney general sustained a suspected sprained ankle in the second half, being replaced by the fisheries minister.


Government pension plans reliant on MVR1 billion investment return

The cabinet’s economic committee has announced President Abdulla Yameen will hand out the promised MVR5000 (US$ 324) to an estimated 17,000 pensioners starting in March.

Tourism Minister Ahmed Adeeb told the media during a press conference this afternoon: “I announce the happy news that the elderly will receive MVR5000 instead of MVR2000 at the end of this month.”

The government had allocated MVR470 million (US$ 30.5 million) in the state budget to give out an MVR2,300 (US$ 149) in cash handouts to individuals over the age of 65. These funds will now be invested in the retirement pension fund or in financial instruments such as T-bills to generate the monthly MVR5000 stipend, Adeeb said.

The government will need to generate an ambitious MVR1 billion (US$64.9 million) from investments this year to sustain the venture.

Although the government has not yet begun investments to generate the additional income for pensions, it will begin disbursing MVR5000 at the end of February as it is “certain” the required funds can be generated through future investments.

In the meantime, money will be redirected from within existing budgetary resources using “innovative methods” to pay out the pension this month, Minister of Fisheries and Agriculture Mohamed Shainee told Minivan News.

“This will not require additional expenditure from the budget. This will be done through investments made outside of the budget,” Adeeb told the press today.

“When we invest in the pension fund, this allowance will be given out without any breaks in the next five years. Even in the worst-case scenario, we will be able to generate that money. We can do this without any issues,” he said.

The cabinet’s economic committee is to meet tomorrow to discuss the most viable method of investment, Shainee told Minivan News.

Former President Mohamed Nasheed introduced the old age pension in 2008, while President Yameen pledged to increase the pension during last year’s presidential election campaign. On assuming office, Yameen said the government would not give cash handouts, but would provide the promised money through an insurance scheme.

The People’s Majlis subsequently passed a record MVR17.95 billion (US$ 1.6 billion) budget for 2014 with a deficit of MVR1.3 billion (US$84.3 million).

The deficit is expected to grow after the People’s Majlis failed to approve revenue-raising measures as proposed by the Ministry of Finance and Treasury.


President promises four bilateral agreements during Sri Lanka visit

President Abdulla Yameen and the First Lady Madam Fathimath Ibrahim have today departed on an official state visit to Sri Lanka, where Yameen anticipates four bilateral agreements will be signed.

The President’s Office reported Yameen as saying that the visit was intended to improve the already-strong ties between the two nations, and that the three-day visit would include one-to-one talks with President Mahinda Rajapaksa.

Yameen will be accompanied by a large delegation, including coalition partners Gasim Ibrahim and Ahmed Shiyam – of the Jumhooree Party and Maldives Development Alliance, respectively.

Also present on the trip will be Minister of Foreign Affairs Dunya Maumoon, Minister of Tourism Ahmed Adeeb, and Commissioner of Police Hussain Waheed.


Q&A: Minister of Tourism Ahmed Adeeb

Minister of Tourism Ahmed Adeeb Abdul Ghafoor speaks to Minivan News about his mandate, his aspirations for his five year term in the cabinet position, and his political career.

Adeeb served in the same cabinet post during the previous administration of former President Dr Mohamed Waheed. He is also currently the elected Deputy Leader of ruling Progressive Party of Maldives (PPM).

Political Career

Mariyath Mohamed: What are the main things you hope to achieve in these five years as Tourism Minister?

Ahmed Adheeb: As you know, I initially became Tourism Minister in the last government, with the endorsement of PPM, with about two years left of the term when I assumed office. At the time, we worked to complete some of the then-existing work, for example completion of the Fourth Tourism Masterplan.

There were also many other legislative issues. As an example there is the case where tourist resorts were being formed under the old law on uninhabited islands. Then there were other resorts which had not been completed as agreed, and many islands from which the government was not receiving due payments. I believe that I was able to sort out a lot of issues like this.

At the time, it was not a PPM agenda that we were following, and the government was a rather large mix. Our aim at the time was to sustain tourism. As you know tourism is a sector which is very much connected to the country’s economy. When I assumed office, the political turbulence had caused the cancellation of many bookings, including charter flights from China. Maldives is a place which usually has bookings made two or three months ahead of the estimated date of arrival, and so booking cancellations mean that the rate of arrivals were dropping.

I came and made a set up to deal with the issue. The civil service team at the Tourism Ministry has a lot of experienced personnel with long term institutional memory. They have a lot of practical experience, for example in how they tackled the 2004 tsunami disaster and the effects of the Gulf War, and many other such incidences.

As I see it, I assumed office in the middle of a crisis too, so I pulled together the crisis management team and we made a cell to deal with the matter. We had the resorts report back to us on a daily basis with records of how many booking they had made and how many bookings had got cancelled every single day. We used this as a barometer at the time, and commenced work. I went to the ITB fair in Germany as well as the WTM in London and held press conferences.

I believe it is crucial to face press and respond to their enquiries. At that time, the opposition was raising its voice, accusing us of having come to power through a coup d’etat and we addressed those allegations. What I mean by that is, I pointed out that a Commission of National Inquiry had been established with Commonwealth intervention on mutual agreement and called on the opposition to not draw conclusions while the investigation was pending. I called on them to give us time until the investigation was completed. And in any case, I don’t believe tourism must come to an end regardless of the political volatility, as it is something closely knit with the livelihood of all Maldivian citizens and the country’s economy. We said that more than a political agenda, our focus is on marketing tourism. It was well accepted and if you check headlines from then you will find our interviews in the Telegraph and other such news agencies.

I believe we were able to sustain the tourism industry within those two years. In 2012, I worked hard to reach a target of 1 million tourist arrivals, but were able to reach 965,000. However, last year we reached the target. I am happy with the 1.2 million arrivals, I believe we were able to reach a good target.

This government has recently come into effect and as PPM’s deputy leader, I too did a lot of work on our manifesto, mainly on the economic sector. Our plan is to create three special economic zones, and to develop even the tourism sector through these. The model in mid-Maldives, of Malé and the atolls connected within the seaplane’s zone, is a very ideal one to be replicated in North and South of the country. This can only be achieved by building certain infrastructure in these zones. A law on economic zones needs to be drafted.

Additionally, we need to explore what needs to be done to implement what is in the Tourism Masterplan. Whether we should increase beds, and how to do that, and so on. As you know, the current bed capacity of the country is 25,000 and I believe this needs a fast-paced increase. During the new year season, there was a fall of about 2000 beds due to overbooking. There’s also the Chinese New Year. So I believe we need to very quickly increase bed capacity, whether it be in resorts, city hotels or other new products.

I especially want to also note that the real estate market in Maldives is also something we can promote through tourism.

MM: After having previously worked in the Maldives Customs Services, and then the Chamber of Commerce, how did you enter the political arena?

AA: I worked in the Air Cargo department of Maldives Customs Services for three years. During my time there, I became familiar with trade and import. All imports into Maldives, including even seafood, is usually brought in by air freight. I became familiarised with trade and at the time decided to go abroad for further studies.

After completion of my degree, I worked in stock exchange in Sri Lanka. I then completed my Masters programme, returned to the Maldives and worked in private consultations. In 2009, on invitation of the existing board of Chamber of Commerce, I contested for a post on its board of directors. I served as a board member then, and as its treasurer. I stayed there since about 2011.

I believe that as people who research the economy, we all have our views and certain set principles on everything, including privatisation, foreign exchange, and how an economy must be moulded. That, I believe, is our ideology. I believe in openness, Maldives is a very open country. Maldives cannot develop at its best unless it is opened up for investments and we need to bring about certain economical reforms.

If we look at the last five years, it is mostly political reforms that have been brought, and that too at a very fast pace. Meaning, for example, we can now say Maldives is one of the countries where press freedom is granted most openly. However, in an economical perspective, reforms have not been brought yet. Being a country with a low population and with low savings, foreign investments are very important.

In that sense, the Chamber of Commerce is a very political organisation internally, in that we fight for businessmen’s rights, and lobby for changes. I was involved in this, and was often invited to TV shows and other media programmes. I often did research for various businesses, and this always includes economic research of the Maldives. With these updates, I was always outspoken about any issues we may have with the policies of the government then in power. I have always given opinions on these matters to media in my own name. For example, when the government implemented the change in dollar rates, I revealed my view in my own name in the media. Our prediction proved more true than the estimates of the government’s policy makers at the time, for example they were unable to solve the foreign currency issue by the introduction of a dollar band. We said even then that it was a wrong step and called on them to reverse the decision.

Although I am junior by age, I have conducted a lot of research and work. For example, back when current President [Abdulla] Yameen was in People’s Alliance, I did a lot of technical work for the party, including budget reviews, analysis, and providing details of these to the party’s parliamentarians. I used to debate a lot on economical matters with Yameen at the time. He is a very academic and technical person in the field.

It then led to Yameen inviting me to take on the responsibilities of a cabinet minister during the change in government in 2012. I responded that I cannot take on responsibilities of a cabinet minister unless it is in my field of expertise, i.e in the business area. That I would not know how to handle something like the health or education sector. That if it was in the business sector, I would know well to take policy decisions. So I accepted the post of tourism minister and took it as a challenge. I was 29 years of age then.

Many friends and family members advised me to not take up the position, owing to the political atmosphere of the time. However, as I see it, it is very easy to stand outside and criticise matters. But when one has to actually implement things within the legal framework, it is a completely different experience.

Every decision we must make in a position like this is a tough one, but needs to be taken firmly. It is impossible to please everyone with any decision we make. We must also be able to digest criticism levied against us by media or other sources.

There are certain things I have observed since I assumed this post. Cabinet ministers are policy makers. The policies we decide on must be implemented by the civil service, but it is the Permanent Secretary that will deal with the day to day management of civil servants. I will not engage in the hiring and firing of civil servants. I distinguish between the two.

The other thing is I believe every tourism minister must maintain good public relations. We cannot solve the existing issues without building rapport with all investors. I work to understand their concerns, and to get win-win results for the government through the understanding of these concerns. And in that way I gained their acceptance.

I also always ask elders and more experienced persons for advice, including policy makers and former presidents. I believe in treating them respectfully.

A lot of people were of the mindset that I would not be up for this challenge as I was appointed at such a young age. I took it up as a challenge and have been careful in my work. This is because I realise that if I fail, it will reflect not just on me alone, but there will be a reluctance to appoint young ministers in the future.

I do get a lot of criticism, but I believe getting criticism from the opposition is a success in its own right. I also strongly believe that criticism that comes for my decisions is not out of a dislike of me personally, but something that comes along with the cabinet position. So I take it all professionally, as it is an indication that I am doing something right. I have always been told that one will have enemies if they stand up for something.

I don’t differentiate between people of different political ideologies. I believe a person’s political affiliation is a very personal thing and we must be willing to work alike with everyone. I have been trained in politics through the democratic system, and so find it easy to handle the criticism and work through it all.

MM: How do you currently manage time between fulfilling the responsibilities of being both a cabinet minister, as well as the Deputy Leader of PPM?

AA: A deputy leader of a party is also a policy maker there. If the party’s president is unable to attend councils or larger committee meetings, I chair them. Council meetings are normally held once a month unless there is an election approaching. But in these we just decide on policies.

I always differentiate between policy making and implementation. Once we decide on policies to observe, and for example ways to obtain funds, it is the office staff and volunteers who will then work to implement these. I never micromanage things. So it is easy to manage time at a policy making level.

The difficulties arise because once you become a high level politician, either in state level or party level, a lot of individual citizens want to contact you directly. It is often difficult to respond to them in a timely manner, but I do attempt to call them back even if later. But I believe that this is something I need to improve on.

MM: Are you able to fulfill both responsibilities at your best capacity?

AA: I believe I do. If you ask other party members, or council members or parliamentarians, they too will tell you that since I adopted this position as deputy leader, I have taken up huge responsibilities within the party. Even if you ask the former president of other cabinet colleagues, they will tell you that I am a man who always stands up and remains firm even during difficult times and through chaotic times. As I see it, you have to be courageous in taking up responsibilities, and should not shy away from the repercussions that come your way.

MM: What are your future plans for your political career?

AA: A lot of people ask me that. I am only turning 32 this year. I am definitely not a presidential candidate. Even in 2013, a lot of people asked me if I was going to be a running mate or candidate of some party or other. I responded even then that I am not that ambitious. I only consider things as they come to me through given opportunity. I don’t proactively look for positions. My political career will be built on the next five years. Implementation of our economic policies is a huge dream of ours, and that is what will give me the most satisfaction. I see the achievement of this dream as far more important to me than attempting to get higher positions than the one I am in now. This is also the party president’s vision.

As I see it, we have only recently gained the opportunity to show our own results. It is through the results that we manage to show in these five years that my political career, too, will be shaped.

The country has a huge youth population. While there was a difference of opinions when I was appointed during the former administration, due to my young age. But Yameen well understands that with the huge youth population in this nation, it will be difficult to develop the country without youth inclusion.

What I have to say to youth is, if you have a dream, show your capacity and exploit your potential. Being a country with a small population, there is a lot of vast opportunity here.

Section Two: Tourism Policies

MM: The current cabinet is split into economic and social councils. What are your responsibilities on the Economic Council and which other colleagues sit on it?

AA: The economic council has five ministers, including the youth minister and is chaired by the President. I am the co-chair.

There is a Social Council and the Economic and Youth Council. Even in previous governments, there were separate committees, but the cabinet also met on a regular basis, which led to these committees meeting less frequently. But as the president wants to reach results at a fast speed, he holds the council meetings every single day. I believe that with about ten years of cabinet experience, this initiative by the president adds to added effectiveness and better time management. Now each cabinet minister can better focus on matters that directly involve them.

However, on major issues that involve the full cabinet, there are full cabinet meetings.

MM: What are the government’s plans for establishing guest islands? Are these to be on uninhabited islands alone? What then is the distinguishing factor between a guest island and a tourist resort?

AA: Yes, it is targeted mostly to uninhabited islands. The thing is, it is a huge infrastructure investment to build a tourist resort. It becomes an expensive place to go to when they invest in water set-ups, sewerage systems and all before building rooms. We at advanced stages of making a model where we are speaking with MWSC to make water set-ups, sewerage systems and electricity set ups in an island, after which we can give plots to individual businessmen. For example, common restaurants can be managed by one party, water sports by another party, twenty rooms by one company, another twenty rooms by another company and so on. In that way, we are creating numerous businesses there. We are planning to introduce this as a test model to see if many mid level businesses can co-exist and run a guest island in this manner. MWSC is already on board to set up the utilities, and the businesses will just need to pay monthly bills to them.

While it will be difficult for a small business to invest in a full resort, there are many small and midlevel businesses that can invest in small sections of an island. We can even replicate this in uninhabited areas of large inhabited islands. First we intend to test this on an uninhabited island. We plan to begin implementation around March this year.

MM: The government has also recently announced that permits to run guesthouses will only be given if the said guesthouse is to be built on an island with existing water and sewerage systems. Will this cause more income to islands which are already somewhat developed, while marginalising less developed islands which may perhaps even be better suited for tourism in other manners?

AA: There is a lot of confusion around this matter. There are four tourism sectors: tourist resorts, tourist hotels, guest houses, and yacht marinas. Under the Tourism Law, tourists are not allowed to spend nights at any place other than places registered under one of these sectors. This is not to say that one cannot invite a friend to stay over at their house, but it cannot be done commercially. This is also for the protection of tourists as well.

We often get proposals to build city hotels. What we are saying is, how can you build a city hotel without an investor also building a sewerage and water system there. How can it be managed otherwise?

What we are encouraging is for people like those councils from large islands that ask for state land to be leased to build a city hotel to also condition investors to build utility systems there. The opposition is, however, often confusing this with the guesthouse licenses which we already do authorise.

Under a law, we have to authorise the opening of guesthouses on any private land as long as it fits in with the set guidelines. Former President Nasheed had released about twenty licenses, and even I have released about a 160 licenses since then. That is going steadily forward and we encourage it.

We even assist in solving any issues that may have. For example, to assist the guesthouse community in Hulhumalé, we authorised some cars to carry tourists from the airport to Hulhumalé over the connecting road. Even in Maafushi, we have addressed many issues.

The thing is, we just don’t talk about guesthouses so much. The thing is, from a marketing perspective, we have positioned the Maldives as a high-end destination. A-category guests will continue coming for as long as we market the country as an A-category destination. Guests for B,C,D and E categories are something we automatically get. Even guesthouses are able to get guests to stay for 80 or 90 dollars because Maldives is marketed as a high end destination and for guests it is a dream come true to be able to stay here for that price. If the government begins to market tourism at guest house level, this will drop down drastically. This is the strategy we employ.

Even locally, culturally, people get disheartened when we talk about guesthouses. So although I don’t much talk about it, guesthouse owners are aware that they have my full cooperation. The circular was meant to let investors know that it is feasible to run a 20 room hotel only if the utility services are also set in place.

MM: What is the implication of the cancellation of charging bed tax, which has been in effect from January 1? What is the government’s plan of action to make up for this loss in revenue?

AA: The bed tax is supposed to be cancelled from January 1 this year, but this is not considered when the budget is expanded. We are asking for an extension until June.

Normally, budget and government revenue earning bills are passed together. But here, the parliament goes into recess after passing the budget, leaving the income bills pending for after that. And even then, they often just fail.

This causes the budget to expand, but there’s no way for the government to earn enough to implement it. The T-GST [Tourist Goods and Services Tax] matters even more to the state income. The state keeps expanding, the allowances and salaries keep increasing, but the income for all of this still depends on the 25,000 tourist beds. Unless we expand this, how can we increase what we earn? We can’t keep expanding the state, and then squeezing the existing tourism sector without expanding it.

MM: As a low lying island state, do you think climate change is a serious threat to the Maldives, and may have large adverse effects on tourism? Does this ministry have any existing plans to deal with these effects?

AA: After the 2004 tsunami, the country now has a good response system to disaster. Each resort has a high rise shelter in case of such an emergency and evacuation plans for all guests to see. The tourism sector, in developing resorts, pays attention to sustainable development and prioritises the environment.

The current government does not believe Maldives needs to be a guinea pig for the climate change cause. I mean, it is not the Maldives that conducts activities which are harmful to the environment.

However, we cannot go around saying Maldives will sink in 20 years and then ask for investments of 50 years in the tourism sector. This causes investors to be reluctant to invest in the Maldives. We do not believe we are at risk of suddenly sinking and think in a perspective of protecting investments.

Although we don’t speak about this at a marketing level, we do want to make Maldives a model in sustainability. We do take action on the matter though we do not speak of it much at a marketing level. We do not want investors to lose confidence, so we cannot do both. Let us first develop to this stage.