Tag: budget

Independent Bodies Committee reviews ACC, JSC, and others

Parliament’s Independent Bodies Committee is reviewing the activities of independent state groups, reports Haveeru. Among the groups reviewed are the Anti-Corruption Commission (ACC) and the Prosecutor General’s Office.

The committee, chaired by independent MP Mohamed Nasheed, is assessing the challenges to productivity among certain state groups. Nasheed said the committee will also review opportunities for growth.

The committee is said to have found some significant reasons for concern.

Nasheed said these issues would be addressed with budget reform measures and amendments to existing laws.

A report on the committee’s findings is due before parliament in October.

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China leads Maldives’ 18 percent tourism boom

Over 700,000 tourists visited the Maldives in the first seven months of 2011, the majority of visitors from China.

The Tourism Ministry has released data showing that the number of tourists who visited the Maldives between January and July 2011 increased by 18.3 percent to 520,483. This was compared to the 439,864 tourists who visited the Maldives during the same period last year.

Maldives Association of Travel Agents and Tour Operators (MATATO) Secretary General, Mohamed Maleeh Jamal, told Minivan News that the timing of Europe’s economic decline matches that of the growing Chinese market. Asia’s high season corresponds with Europe’s low season, he said, and resorts are now catering more to Chinese tourists to keep business up.

Jamal also noted that airlines such as Qatar Airways had increased direct service to the Maldives in the last 10 months. He also noted that more airports are being constructed closer to resort islands, such as in Baa Atoll.

“The President has also decided to increase the marketing budget from US$1.5 million to US$7 million, since we expect the industry’s growth to continue,” said the MATATO secretary general.

Statistics show that Chinese tourists dominated the market in the first seven months with 103,734 individuals, accounting for 19.9 percent of the total arrivals. The United Kingdom was the second-largest contributor to tourism arrivals, composing 11.7 percent of the market.

Jamal forecasted “phenomenal growth” in the Chinese market, and estimated that the Chinese would account for 40 percent of the total tourists in coming years.

The Maldives currently hosts over 100 resorts boasting a total of 22,000 beds. Jamal said 3-4 more resorts were currently under construction, and noted that it was important “to always have excess demand and limited rooms to keep the appeal of the Maldives up.”

Secretary General of the Maldives Association of the Tourism Industry (MATI), Ibrahim Mohamed Sim, was more guarded on the issue. Sim told Minivan News that “we are holding steady in growth, but the market looks mixed since the decline of the US economy could affect our traditional European markets.”

Italy and the UK, formerly leading contributors to the Maldivian tourism industry, have declined, said Sim, but Germany was holding steady.

Sim said the demand from China was significant, and that the Maldives “is in a very lucky position to have the chance to meet that demand.”

Sources in the Chinese media and Mandarin-language tourism forums have meanwhile noted the rise of practices such as segregation of Chinese visitors from other guests at meal times.

Sim commented that although he did not believe there was segregation, the Chinese “stand out, they come here for a different reason than most tourists. They do not come here to sun tan, they come here to see a different place.” He noted that some resorts were also designed to specifically appeal to different groups.

Another recent event in the Maldives’ tourism industry was its withdrawal from the New7Wonders competition.

Jamal told Minivan News, “we think it was a loss that the Maldives pulled out. New7Wonders was a marketing tool, and major tourism companies were competing for the award.”

However he said he did not think that the Maldives’ decision had affected the tourism industry.

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Government underestimating tourism economy by more than US billion, claims economist

The Maldives has significantly underestimated the value of tourism to the local economy by over a billion dollars, according to a report by economics lecturer and Assistant Manger of the Maldives Monetary Authority (MMA)’s Monetary policy and Research Division, Ibrahim Ameer.

In the first month following the introduction of 3.5 percent Tourism Goods and Services Tax on the tourism sector, the Maldives Inland Revenue Authority (MIRA) collected US$7.2 million from 800 of the 871 registered tax payers.

“This means the whole tourism industry’s revenue (market value) would amount to approximately US$210.0 million for the month of January and approximately US$2.5 billion for the whole year,” observes Ameer.

In comparison, the government’s official figure for the total market value of all goods and services produced in the country – not just tourism – is US$1.5 billion.

In his report, Ameer recalculates the budget deficit based on updated GDP figures and concludes that the deficit sits at nine percent, “as opposed to 17 percent of GDP in 2010 as per government authorities.”

“I suspect these underestimated figures are used by the authorities to prolong the preferential treatment Maldives has and in some cases continues to receive as a [former] Least Developed Country (LDC),” Ameer surmises, suggesting that “ our country’s problems are primarily a case of the state’s inability to collect revenue through taxation rather than a budget deficit.”

“It should be agreed that as the country marches towards full democratization, with new independent statutory institutions, local and atoll councils and increased civil service salaries, the country needs to rethink it tax policy,” Ameer states.

In an agreement reached with the International Monetary Fund (IMF) last week, the Maldives has committed to:

  • Raise import duties on pork, tobacco, alcohol and plastic products by August 2011 (requires Majlis approval);
  • Introduce a general goods and services tax (GST) of 5 percent applicable to all sectors other than tourism, electricity, health and water (requires Majlis approval);
  • Raise the Tourism Goods and Services Tax (TGST) from 3.5 percent to 6 percent from January 2012, and to 10 percent in January 2013 (requires Majlis approval);
  • Pass an income tax bill in the Majlis by no later than January 2012;
  • Ensure existing bed tax of US$8 dollars a night remains until end of 2013;
  • Reduce import duties on certain products from January 2011;
  • Freeze public sector wages and allowances until end of 2012;
  • Lower capital spending by 5 percent

Comparison figures Ameer provides for corporate, income and GST/VAT tax regimes regionally and around the world, show the proposed figures for the Maldives are substantially lower.

India, for example, has a 25 percent business profit tax (BPT), individual income taxes of 0-30 percent, and a GST of up to 12.5 percent. Pakistan has a 35 percent BPT, 7.5-35 percent income tax and a GST of 17 percent. Barbados, another tropical island tourism destination, collects a BPT of 25 percent, income tax of 25-25 percent and a GST of 15 percent.

In his conclusion, Ameer argues against substantial cuts of the Rf12 billion state budget, noting the impossibility of reducing that to match the government’s present RF7 billion in revenue, and presses for the careful introduction of taxation.

“We could save some expenditure through cutting waste, prioritising projects and eliminating corruption. On the other hand, we must all agree that in certain areas wage and salaries given are very low compared to many countries,” he suggests.

As a result, “it is difficult to retain skilled and highly educated people in the country. This is why we see so many bright Maldivians leaving the country to work abroad. In the education sector, where the future of the country is molded and where the bright and the best are needed to teach future generations, the remuneration is pathetically low. The average wage for leading teacher with a Master’s degree is Rf 8354 (US$540).”

“The academic and education sector should be highly competitive and more rewarding if we are to build a better future and save ourselves from the sort of ‘brain-drain’ that we cannot afford. The situation is more or less the same with the healthcare sector of this country, with many of the brightest doctors and nurses opting for work abroad in countries as diverse as New Zealand and Canada,” Ameer observes.

He notes that the disproportionately high rents in Male’ swallowed 70-80 percent of the income of many residents in the city, “and as a result, disposable income is lower than it should be to encourage a more competitive market place and economy.”

“Because only Male’ is equipped with all the necessary facilities, like education and health care, more than one third of the population is living here. This creates irreparable social and economic damage,” Ameer claims.

Much of the visible development in Male’ he claims is the a result of a “coffee-shop bubble, a smokescreen that is bound to burst dragging the economy into depression.”

“To achieve sustainable development we need to see past supermarkets, boutiques and coffee shops in every corner,” he suggests.

“The wealthy need to realize that it is more lucrative to have businesses that decline, over our dependence on imports. The present business model increases imports and puts more pressure on the foreign exchange. It only widens the disparity between the rich and the poor when there is a negative impact on the economy.”

Read the full report

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IMF pursues government and parliament cost cutting with Maldives mission

The Maldives government has claimed it remains committed to working with the International Monetary Fund (IMF) in addressing its concerns on cutting state expenditure, following protests claimed to have been instigated as part of a “youth movement” concerned over rising living costs.

Press Secretary for the President Mohamed Zuhair told Minivan News that the IMF had travelled to the Maldives this week to meet with various organisations and individuals, including President Mohamed Nasheed and the Majlis’ Public Finance Committee as part of a mission to oversee a national economic recovery plan.

“They were visiting as part of a wider mission in the country including meeting with the president where they retread concerns over plans to reduce state expenditure,” he said.

The government’s fiscal policy has become a major national issue after a week of consecutive protests held earlier this month across Male’, which organisers claimed had been instigated initially by young Maldivians and supported by opposition politicians.

Protesters are said to have been particularly concerned with the government’s controversial decision to last month devalue its currency, allowing the rufiya to be traded within 20 percent of the pegged rate of Rf12.85 to the dollar – a move welcomed by the IMF.

Amidst the backdrop of perceived public and political dissatisfaction with government finances, Zuhair said that the IMF’s meeting with the Public Finance Committee had aimed to encourage parliament to consider government initiatives to try and increase direct state revenues to balance budget deficits.

“There are several bills on taxation currently under consideration in parliament and an amendment to the Tourism Goods and Services Tax (GST) – implemented in January this year on all services and goods purchased by tourists – from 3.5 percent to five percent,” he said. “I think it is interesting to note that there are many resort owners in parliament.”

While supporting initiatives to reduce costs that have led to ongoing public protests in the country, the Treasurer of The Maldives National Chamber of Commerce and Industry (MNCCI), Ahmed Adheeb Abdul Gafoor, said that the the planned addition of a minimum wage and a Goods and Services Tax (GST) on all businesses operating in the country needed to be gradually implemented.

Speaking earlier this month, Abdul Gafoor claimed that gradual introduction would be vital to ensure the nation’s fledgling economy can cope with any potential changes.

Alongside a parallel aim to try and create new job opportunities for young people, Zuhair claimed that the government had in general been closely following the recommendations of the IMF in trying to cut the state’s wage bill for political appointees and civil servants.

To this end, he said that the government had moved to try and reduce the wages of political appointees by 20 percent and civil servants by 15 percent.

“In enacting these cuts we were hoping that the Majlis would follow and also cut wages. The institution failed to do this as well as the judiciary,” he claimed. “The government as a result had to move to reinstate the wages it had cut.”

Zuhair claimed that the government had been working in line with IMF recommendations and had even tried to perform additional cuts unrequested by the finance body in areas such as reducing appointee wage spending.

Despite pushing ahead with its attempted financial reforms, the government has said that it has opted to meet with some of the youth figures said to be at the heart of organising protests seen in Male’ this month.

However, the session held yesterday was reportedly cut short when Finance Minister Ahmed Inaz walked out at the meeting claiming that the youth delegation included the leader of the opposition-allied People’s Alliance (PA) sports wing, and two others he claimed were “new political figures” created by senior party officials.

“I waited in the meeting until we could address the real issues, but they kept on criticising the government policy and some of the government projects,’’ Inaz told Minivan News. ‘’I did not want to have a heated political debate – we went there to negotiate with the youth regarding the dollar issues, not for a political debate.’’

Mohamed Ahsan, a spokesperson from the youth delegation, said the group was unable to clarify information it wanted from the Finance Ministry as the minister had left the meeting, though senior representatives of the Maldives Monetary Authority remained.

“The MMA officials were very cooperative,” he said. “We found out that the government have not been implementing the MMA’s suggestions to its full extent,’’ said Ahsan. “The MMA clarified almost all the information we required.”

He also said the finance minister “took it politically” because a PA member was present at the meeting.

‘’We have decided to recommence the protests, but due to exams we have temporarily delayed it,’’ he said. ‘’Once the examinations are over we will restart the protests.’’

A first round of negotiations held last week were described as “very upsetting” by the opposition’s Gayoom faction after the delegation accused President’s Office representative Shauna Aminath of stating that the “political solution” to the country’s economic woes was the arrest for the former President.

“We met with four people who claimed to represent youth,” Shauna said. “They presented a piece of paper they said was a youth proposal, but there was almost no discussion of what was on it.
“They talked a little about youth unemployment, and the rising price of milk, cooking oil and petrol. They said that young people did not have enough money to pay for coffees or petrol for their motorbikes.”

The group of four had “repeated the same messages being aired by [opposition] political parties: that the government had sold the airport to GMR, Dhiraggu to [Cable and Wireless], and that six people had control of the entire economy.

“Then they said they understood that the government’s [managed float of the rufiya] was necessary, but were concerned the government had not spoken about it beforehand.”

Back in March, MP for the People’s Alliance (PA) party and a member of the Majlis’ Public Finance Committee said that he believed current government policy was ultimately stifling economic development, claiming administrative costs within the civil service remained a notable problem.

“We have small percentage [of funds] to invest in the economy. We cannot move finances to a higher level though as the government doesn’t have the right policies to do this,” he claimed. “For instance, we need to reduce the number of [inhabited] islands by linking them and cutting the overall number of cost centres required for decentralisation.

The comments were made as the IMF claimed that the Maldives economy remained “unsustainable” even after cuts made to the annual 2011 budget, as it concluded its Article IV consultation earlier during the year.

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Budget halted for Shaviyani Atoll council pending court order

The budget for the Shaviyani Atoll council has been frozen by the national office of the upper-north region until a court decides where the council secretariat should be established, reports Haveeru.

Assets belonging to the Atoll Office and Atoll House will be placed under the care of the police and national office until a court orders the transfer of the assets to another party, the Finance Ministry noted according to Haveeru.

In response, the council passed a resolution requesting the assets be transferred to the council, after passing a resolution to transfer the secretariat from Milandhoo to to Funadhoo.

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MP Nazim highlights decentralisation as budgetary concern on back of IMF findings

As the International Monetary Fund (IMF) this week released its latest update on the Maldives’ finances, prominent opposition MPs have criticised the government’s budget strategy in areas such as decentralisation, despite conceding the need for greater political cooperation from rival parties.

Ahmed Nazim, MP for the People’s Alliance (PA) party and a member of the Majlis’ Public Finance Committee, told Minivan News that he believed current government policy was ultimately stifling economic development, claiming administrative costs within the civil service remained a notable problem.

“We have small percentage [of funds] to invest in the economy.  We cannot move finances to a higher level though as the government doesn’t have the right policies to do this,” he claimed.  “For instance, we need to reduce the number of [inhabited] islands by linking them and cutting the overall number of cost centres required for decentralisation.”

The comments were made as the IMF claimed that the Maldives economy was currently “unsustainable” even after cuts made to the annual 2011 budget, as it concluded its Article IV consultation.

The IMF’s Mission Chief to the Maldives, Rodrigo Cubero, told Minivan News at the time, that while the government had introduced the core components of a modern tax regime that would begin generating revenue from this year, these achievements were offset by new spending on legislative reforms such as the decentralisation act.

Ultimately, the 2011 budget was passed on December 29, days ahead of a constitutionally-mandated New Year deadline, with 69 out of 77 MPs voting to pass the bill with five amendments.

Earlier during the same day, Mahmood Razee, acting Finance Minister of the time, said it would also be vital to try and ensure the predicted 2011 budget deficit remained at about 16 per cent, after coming under pressure institutions like the IMF to cut the 2010 figure of around 26.5 per cent.

While preliminary figures had pegged the 2010 fiscal deficit at 17.75 percent, “financing information points to a deficit of around 20-21 percent of GDP”, down from 29 percent in 2009, the IMF reported.

Ahmed Nazim, who was part of a multi-party evaluation of the draft 2011 State Budget before it was sent for Majlis approval, said that joint committee meetings to discuss the IMF’s findings were set for next week (9 March).

However, talking to Minivan News ahead of these consultations, the PA MP said that he believed one of the key concerns highlighted in the report was that of recurrent government expenditure.

According to Nazim, the costs, which he said resulted from use of electricity and other day-to-day needs, were accounting for about 17 percent of total government expenditure – charges, he claimed, that could have been cut further.

In line with these concerns, Nazim took the example of the number of decentralised administrative posts created through last month’s Local Council Elections as an example of unsustainable spending.

The PA MP claimed that present government policies based on building housing or harbours across a wide number of islands was creating further problems for future national cost cutting.  As a solution, Nazim, claimed that it would be important to consider depopulating and reducing the total number of inhabited islands by offering the population a choice of relocation possibilities.

“It [depopulation] is the only way to reduce the wage bill, otherwise every island will have to have services like health centres and councils,” he said.  “The only way to cut spending is to transfer small island populations to other habited islands of their choice.”

Nazim claimed that a government strategy of attempting to increase mobility of the population to find jobs and homes in other atolls and islands through an improved transport network had failed to achieve these goals so far.

However, the PA MP said that he believed some opposition groups such as the majority opposition the Dhivehi Rayyithunge Party (DRP) had been too “heavy handed” in their approach to working with government on decentralising the country.

“I was advocating that even now, we will work with the MDP to reduce the number of [island] councilors in small areas from five to three posts.  There is simply not enough work for all of them to do,” he said.  “Some opposition took a heavy handed approach meaning there was no need for compromise.  The DRP wanted it their way when it came to each of the wards.”

Nazim claimed that he still hoped to work with the Maldivian Democratic Party (MDP) on plans to reduce the number of posts on councils. He said this was particularly the case on smaller islands, boasting populations of less than 1000 people, which could be cut to just three council representatives instead of five.

State Minister for Finance Ahmed Assad said that he was ultimately encouraged by the role of parliament and political opposition in working to try and reduce the country’s budget deficit compared to last year.

“If we look back to the passing of the budget in 2010, this time parliament were much better [in evaluating the budget].  They just asked for some shuffling about of the figures,” he said.  “That tells us they tried to work within the framework and limits of the budget set by the treasury and finance ministry.”

However, in considering affordability of the overall budget and government financing in the year ahead, Assad claimed that he believed that cost cutting would have been easier with the support of legislative bodies and the judiciary.

As of January 1 2011, the government reinstated the wages of civil servants and political appointees to similar level before respective cuts of 15 per cent and 20 per cent were made back in 2009. The government claimed revenue expectations for the year would ensure the salaries were sustainable.

Addressing recent controversy, over issues such as a Privilege Bill for judges and parliamentary figures, Assad said that MPs and the judiciary also needed to bear the brunt of cost cutting.

“Civil servants understood the need for salary cuts, but at the same time why should only they have to face it.  It is a hardship everyone should share,” he added.  “It is a matter of sharing the responsibility.  The government was not followed by the judiciary on the issue of wages.”

While accepting that more cuts were needed to be made to the civil service in line with IMF expectations, Assad claimed that it was not possible to make redundancies in the civil service without creating additional jobs elsewhere.

“Obviously, we appreciate that we can’t just make lots of people unemployed from the civil service,” he said.  “But, we can’t go on like this.”

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Speaker calls on Majlis to speed up legislative duties as president opens parliament

As the People’s Majlis today reconvened for the first time in 2011, the Parliamentary Speaker Abdulla Shahid called on MPs to speed up the rate in which they worked to pass legislation with a very “busy” session ahead.

Shahid’s comments were made after President Mohamed Nasheed opened the year’s first parliamentary session with an address to MPs on the current state of national finances and developments.

Nasheed used his annual address in order to play up what he saw as “marked improvements“ in various national sectors, as well as warning of the need for further national budget cuts and unity amongst MPs in relation to recently formed local councils over the year ahead.

“The most important accomplishment is the establishment of local councils. Obviously, there are obstacles in the management of some of these councils,” Nasheed said during his opening remarks. “The government’s aim is to solve these complications in introducing decentralisation in a manner that does not compromise the features of a unitary state stipulated in the Constitution.”

The Presidential Address is required under the constitution to be given during the first meeting of the Majlis each year.

Nasheed claimed in the speech that he hoped that competitive parties would “not deliberately participate” in trying to sabotage the role of local councils, in reference to disputes over the location of some Atoll Council offices this week.

Speaking to Minivan News after the address, Abdulla Shahid, the Parliamentary Speaker and MP for the opposition Dhivehi Rayyithunge Party (DRP) said that today’s meeting of the Majlis was solely for delivery of the Presidential address. He added that no administrative duties were therefore carried out at the sitting.

Shahid claimed that DRP leader Ahmed Ali Thasmeen – as the head of the country’s largest political opposition – would be providing the response of his party to the president’s speech within 14 days as allowed under law.

However, in reflecting on the work ahead for Parliament when it meets next on 8 March, Shahid claimed that vital bills related to the country’s Penal Code and judiciary were among key early acts that he hoped to see passed within the Majlis.

Yet, the agenda for the next Majlis sitting expected to be unveiled within the next 24 hours, Shahid claimed that parliament had a full schedule ahead on the back of what he called a busy session last year.

As such, the parliamentary speaker added that parliament needed to speed up its work rate in the year ahead and could not afford to relax while a number of important bills had yet to be passed.

Shahid accepted however that there were challenges in passing laws, particularly in translating bills from their original English form, made in consultation with “overseas experts”, into Dhivehi to gain approval through the Majlis.

“When we look at the original English documents [of bills] they make a lot of sense,” he said. “Sometimes it is when these documents are translated into Dhivehi that they don’t always make much sense. There is a lot of work that needs to be done.”

Speaker encouragement

However, the speaker claimed that he was encouraged by the work of the parliament during 2010, despite partisan infighting that led to the resignation of the country’s cabinet at protest at so-called scorched earth politics adopted by some MPs.

“The amount of work concluded by parliament last year is quite remarkable,” Shahid claimed. “The passing of 42 bills out of a total of 52 that were submitted was quite good I think.”

The sentiments appeared to be shared by President Nasheed who believed the Majlis has helped bring about a number of improvements for infrastructure and development in the country despite overall differences.

“2010 was a year of achievement in many areas,” he said, during the speech.

Economy

Taking the economy as an example of the developments, the president claimed that after the previous budget was delivered back in December 2009, the country’s financial deficit was about Rf3.8 billion – amounting to 18.7 percent of the country’s Gross Domestic Product (GDP). Nasheed said that despite expenditure being higher than revenue on the back of recent budget cuts, the deficit as of the latest budget delivered in December 2010 was down 2.3 percent to 16.4 percent of total nationa GDP, amounting to Rf3.1 billion.

“By the end of 2010, the income revenue of the government amounted to Rf6 billion.” he said. “By 2010, the government had estimated recurrent revenue of Rf9.1 billion.”

While continuing to address financial developments, Nasheed said that the government would also aim to try and increase the value of Maldivian currency by strengthening existing monetary regulations.

“Additionally, we need long and mid-term measures for effective solutions to the economic infrastructure. According to the Strategic Action Plan, recurrent expenses and income are required to be kept in line with national income,” he said. “The government had made several efforts to achieve this target, including corporatising and privatising government services.”

In addressing the passing last year of taxation structures such as a Business Profit Tax and a Maldives Tourism Goods and Services Tax (GST), the president thanked parliament for supporting these bills.

Nasheed claimed in addition that small and medium enterprises would also continue to receive financial assistance from the government under a programme of soft loans and other financial packages designed to try and compliment schemes like business development centres.

These development centres – set up in Kulhudhuhfushi and Hithadhoo – were designed to offer training in fishing, guest houses, handicraft and agricultural training amongst other disciplines.

“Important steps taken to eliminate obstacles facing those wishing to start a business, include enabling vital information, trade licenses and permissions to be submitted and received via the Internet,” Nasheed claimed in the speech. “These will be facilitated this year.”

Agriculture

In areas such as agriculture the president said that the government was focusing on a number of regulations outlining new guidelines for catch and exporting products aimed at improving the income within the fisheries sector.

“Last year, much work was also done to develop agriculture in the Maldives. In this regard, agricultural products of 3 islands were brought out to the market, by contracting tourist resorts and food supply companies,” he said. “Moreover, efforts were made to raise the prices of poultry farming and agricultural yield through the production and marketing of locally produced goods. In addition, Rf1.7m worth of goods were made available to farmers at reasonable rates and 1,932 farmers were trained in various aspects of agriculture.“

The president claimed that this focus had also allowed for the establishment of subsidies totaling about Rf50m in order to allow 25 islands to be sufficiently capable of regularly marketing produce grown there. The focus was also expected to be backed by an Agricultural School in Laamu Atoll Gan, according to Nasheed.

Tourism

In addressing plans for the country’s tourism sector, Laamu Atoll was also highlighted as a zone that would be developed to additionally host three to four star resort properties as part of stated aims to cater for more middle-market tourism.

The president also focused on national developments in the form of land reclamation and the construction of a number of airports that were started during the previous year.

“This would introduce even greater opportunities to all the islands in the region, and multiply economic activities,” he said. “The construction of an airport in Fuvahmulah is underway and the airport in Baa Atoll Dharavandhoo is likely to reach the stage of completion by the end of 2012.”

Developments at Gan International Airport were also touched upon in the speech in relation to a local joint venture between the existing site’s management, the State Trading Organization (STO) and the Maldives Airports Company. The president expressed hope that the partnership would lead to a boost in services in and out of Addu Atoll.

Transport

The issue of transport networks was also raised during the speech, with Nasheed stating that modernisation of transport systems between the country’s numerous islands and atolls was still being planned as a vital development challenge for Maldivians.

Infrastructure

Among planned infrastructure developments, the president claimed that the government remained committed to pledges to try and provide sewerage and drinking water, along with affordable housing wider to wider numbers of the population.

“We have commenced the project of building a total of 10,000 housing units, of which 4,150 have been contracted and 1,750 of which are currently under construction,” he said. “In order to resolve the issues of congestion and lack of housing in Male’, under the first phase of Veshifahi Male’ programme, application forms are being issued for those wishing for housing. The second phase of the Gulhifalhu Project is underway and the reclamation of the 50-hectare land is scheduled to begin next month.”

A further 298 housing units were also said to be in the course of being supplied to people in areas such as Gaaf alif Atoll who still required shelter following the 2004 Indian Ocean tsunami.

Environment

Alongside these infrastructure developments, the president also used his speech to touch upon the environmental programmes that he had been a vocal campaigner of internationally – such as the Maldives becoming a carbon neutral nation by 2020.

“Various efforts were exerted by the government last year to transform the Maldives into a carbon-neutral nation. In this regard, auditing of carbon present in the Maldives and the measure of greenhouse gases emitted into the atmosphere were identified,” he claimed. “It is highly essential that we embrace renewable energy and diversify sources and techniques used to generate renewable energy. The environmental changes instigated by the emission of greenhouse gases into the atmosphere are directly linked to the life of every Maldivian.”

The tourism industry was not deemed immune to the need for greater attempts at providing sustainable initiatives, with the president claiming that sub divisionary offices of the Environment Protection Agency (EPA) would be also be established to expand their presence and influence around the country.

Health

Looking at areas such as health, the president said that over 56,000 Maldivians had been signed up to the state run health insurance scheme known as Madhana, a figure that was expected to grow during the coming year.

“The government expended over Rf144m on social protection last year in an effort to assuage the public plight of having to depend on handouts for healthcare,” he said. “Work will continue this year on increasing the number of people registered under Madhana. The government’s aim is to raise the number of Madhana clients to nearly 100,000 by the end of this year.”

Nasheed also played up the developments such as Telelmedicine in his speech, a service he claimed was currently introduced in five islands to alleviate potential strain on medical services, with a further 34 islands expected to adopt the system in 2011.

“This system would instead allow patients to benefit from the expertise and facilities of hospitals and doctors all across the world,” he said. “This service would be introduced in another 34 islands of the Maldives in the future.”

Two additional bills were also expected to be put in front of the Majlis during the coming year. According to the president, both the Health Service Bill and the Medical Negligence Bill were devised to bring important overhauls to the country’s medical services that he hoped would see them put in place as soon as possible.

Nasheed claimed that important breakthroughs had also been brought in by the Majlis in areas such as protecting rights for disabled people along with providing financial aid.

“In order to maintain social security costs at a sustainable level, a social security fund has been established and is being developed further to protect people from economic instability and insecurity,” he said. “A special budget has been allocated for this purpose.”

Education

The president claimed that “significant steps” had also been made by parliament during 2010 to finalise and roll out an amended national education programme including technical training and standards.

The measures, outlined under a new Education Bill had now been submitted to the Majlis. Despite the government’s intentions, Nasheed accepted that not all aims were as yet being made.

“Last year, I stated that our main goal for 2010 was to increase the percentage of graduates holding 5 [O-level] passes from 32 per cent to 41 per cent,” he said during the speech. “Even though this goal was not reached, the figure has now been increased to 35 percent. Performance improvements were achieved by 100 schools in 2010 over 2009. To sum up, the percentage of students who passed in 5 subjects has increased in those schools.”

The President also claimed that his government had also obtained the grandest achievement within the country’s academic history so far with the establishment of theMaldives National University.

“The university will serve the purpose of creating, preserving and disseminating knowledge and skills required for national development in cultural, social, economic and public spheres to safeguard the Maldives as a sovereign Islamic nation,” he said. “I take this moment to sincerely thank the honourable members of this Majlis for granting passage to the National University Act”

Religion

The president also used his speech to claim that 2010 had seen “notable achievements” within the Maldives in regards to strengthening religious awareness and rejuvenating Islam among the public.

To this end, Nasheed said that religious scholars had been used to provide sermons across the country, while additional mosques were constructed in 12 islands across the nation.

“Alms collection was also increased compared to last year, and the funds were used for major projects. 39 islands were selected for construction of new mosques this year, 21 of which would be funded by the state budget,” he said. “Construction of these mosques is set to begin this year, and work is being done to procure foreign assistance for the construction of another 18 mosques. In addition to those, I would like to highlight that the first Islamic bank to be established in the Maldives will be opened during this month.”

Crime

In relation to criminal activity in the Maldives, the president claimed that the number of crimes, at least reported, to the Maldives Police Service had fallen by eleven percent in 2011. Nasheed added that a new police strategy to run from this year until 2013 had also been put in place in order to try and focus additionally on emerging areas such as cyber crimes.  Drugs were said to remain a key focus for law enforcement officials.

“The efforts exerted by the government to prevent the illegal trafficking of narcotic drugs into the country have been rewarding,” said Nasheed. “This is evidenced by the reduction in the number of people reported for drug offences by 46 percent in 2010, compared with that of in 2009, according to recent Police records. Moreover, these records indicate a 40 percent reduction in the percentage of youth exposed and therefore, are highly susceptible to adopting the habit of drug abuse.”

Culture and sport

According to the president, another important area of focus for the country was deemed to be in the development of cultural and literary talent.

The inaugural Hay Festival Maldives, a sister event to the annual Hay Festival in Wales, UK, was seen as an important step in highlighting the works of local artists and writers alongside their international counterparts.

The president claimed that on the back of the event, the government was looking to try and develop local skills and talent with the aid of an Arts Council and Heritage Council during 2011.

Similarly, Nasheed praised developments made in the fields of national sports such as the success of the Maldives cricket team after its triumph in the ACC Trophy Challenge held in Thailand this year.

Gender

Raising the issue of equality, Nasheed said that significant steps had been taking to try and reduce gender discrimination.

“In this regard, a resort forum was held to promote products crafted by women and financial aid was rendered to organizations striving to encourage and emancipate women in our society to gain their rights and opportunities, and to extend and employ their potential in managing trade and businesses,” he said.

Security

Under plans outlined for the year ahead and beyond, the president said that the work of the country’s National Security Council was in the process of trying to be expanded. An office of a National Security Advisor had also been set up to extend this work including laying out marine security, identifying internal threats and improving bilateral relations.

“This action plan will be devised within 90 days forward,” the president added. “For the first time in the Maldivian history, Maldivian soldiers will participate in the UN Peace Keepers’ regiment under a contract to be signed this year.”

Political privileges

In discussing the controversial Privileges Bill that the Majlis had attempted to pass at the end of last year within the budget, the president said that he felt that revisions needed to be urgently considered in line with recommendations he had provided.

“I regard it as being highly important that the members of the Majlis receive their necessary privileges and protection,” Nasheed said. “During the history of 77 years of the Majlis, there have been several circumstances under which some respected members of the Majlis, either incumbent or resigned then, had to face various contemptible consequences concerning politics, justice and other controversies.”

In considering these potential difficulties, the president asked parliament to consider a Privilege Bill that was provided under an established and legitimate law.

Judiciary

Nasheed added that with democracy being a key aim of his government, ensuring efficient division of the different branches of the state were a key part of these goals. Amidst recent concerns addressed by some bodies like the International Commission of Jurists (ICJ) that the nation’s judiciary may not be working independently, Nasheed said he believed the role of the Majlis in trying to ensure this was increasingly important.

“A noteworthy example is the establishment of important offices that come under the judicial system in the Maldives last year,” he claimed.

“Today, my main appeal is for you endeavor to instill trust and faith in the judicial system of the Maldives and in the work of parliament. I appeal for unity in the national interests and prioritize constructive judgment and wisdom to allow for peace, progress and order in our country, without being associated with those seeking abrupt opportunities to disrupt and topple the government.”

The full address can be read here.

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Maldivian Democracy Network hits out at parliament’s privilege amendments

The Maldivian Democracy Network (MDN) has hit out at proposed amendments to the privileges afforded to MPs, the judiciary and independent organisations, calling them irresponsible at a time of supposed national cost cutting, as well as potentially setting back social security development in the country.

In a joint statement issued with the Democracy House group, the MDN said that parliament, under Article 102 of the Constitution, needed to act responsibly in setting out state salary structures and its own allowances;  a requirment the NGO claimed had not been the case in passing certain amendments in the 2011 annual budget.

“We note that the bill on parliamentary privileges has been passed in a manner that will further increase state expenses,” stated the MDN. “The bill also grants members of the People’s Majlis certain privileges in criminal matters. We note that these privileges are of a nature that are not granted to parliamentarians in other open democratic societies, and are not even granted to the President under the Maldivian legal system.”

The NGO also dismissed claims that individual MPs required additional benefits and financial remuneration to provide “welfare services” to constituents, claiming such patronage compromises democratic principles.

Speaking to Minivan News last week, both acting Finance Minister Mahmood Razee and parliamentary Deputy Speaker Ahmed Nazim said that the proposed hikes in parliamentary wages were still required to obtain approval from parliamentary committees and the president before being passed.

Nazim claimed that although MPs “have not taken pay increases”, parliament had considered amendments to the wage structure as part of attempts to test methods for improved “productivity” among the Majlis.

Regional salaries

However, in figures compiled from sources including the Asian Development Bank, the CIA Fact File, the Economist magazine and official government statistics, the Maldives was found to offer a significantly higher salary for its MPs than some of its South Asian neighbours such as India and Sri Lanka combined, at least on 2009 levels of income.

Combining both base earnings and allotted allowances, the monthly salary of a Maldivian MP was said to be equivalent to US$ 7,083; well above Sri Lanka and Indian levels, which during 2009 were found to be around US$877 and US$5,966 respectively. Based on 2009 levels, both Sri Lanka and India had much higher national rates of goods and services produced – recorded as Gross Domestic Product (GDP) of US$96.47 billion and US$3.6 trillion respectively. By comparison, the GDP of the Maldives over the same period was US$1.683bn.

In terms of MPs monthly salaries, the Maldives remained behind nations such as Singapore (US9,264), the UK (US$8,552) and Australia (US$9,687), however, the GDP of each of these nations was found to be significantly higher.

While the MDN said that it accepted some difference in the salaries and benefits afforded to state officials, was “necessary and inevitable”, the NGO claimed that economic burdens needed to be shared equally.

“It is unacceptable that this gap be widened by increasing the salaries and benefits given to high ranking state officials at a time when the average citizen faces financial difficulties,” the MDN stated.

The NGO also expressed concerns regarding the administration of social security within the country, which it said needed to be provided through fair, equitable and ultimately transparent systems rather than the private incomes of individual MPs.

Welfare systems

Speaking to Minivan News, MDN Executive Director Ahmed Irfan claimed there was strong concern that members of the Majlis were undermining democratic principles by creating dependency among constituents for financial assistance from local MPs.

“Unfortunately, it does seem that the practice of MPs providing financial and other such support to constituents is a common and accepted practice in the Maldives,” said Irfan. “Rectifying this will require both a more robust welfare system and a change in culture and attitudes among all stakeholders.”

While praising the work of the Majlis in passing a number of “important bills” during recent sessions, Irfan said the MDN did not support proposals to extend benefits and privileges for state employees within the 2011 annual budget.

“The MDN hopes that the increase in expenditure on senior state officials will not be implemented,” he said.

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Development to speed up under new budget: President Nasheed

The passing of the 2011 state budget will allow for much faster development of infrastructure projects across the Maldives, President Mohamed Nasheed has said, as street protests by NGOs, civil servants and private citizens took place last week over concerns about the finance plan.

Miadhu reported that the president used his radio address on Friday to claim that the country’s finances for 2011 represented “a different type of budget” following multi-party consultation. Nasheed also said that he was hopeful the “objectives” of this year’s budget could all be achieved by 2012.

Miadhu reported that the budget has been said to be designed for the first time around various government programmes mandated by the Maldivian Democratic Party’s (MDP) own manifesto.

“As the budget is implemented, it will show how much we achieve or how much we fail to achieve,” Nasheed was quoted as saying in the paper’s online edition. “The budget is based on programmes, which are government pledges. The budget’s objective is to fulfil those pledges.”

On Thursday, hundreds of protestors took to the streets around the Majlis to show their frustration at amendments included within the budget that could lead to increased salaries and other privileges for MPs.

According to the new bill, parliamentarians could receive up to an additional Rf20,000 in their salaries for attending committees, while also being allowed to import vehicles without paying any duty on them.   Parliament also approved measures to reinstate the salaries of independent commissions, while failing to address the reduced salaries of civil servants.

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