Tag: Business & Tourism

BML makes first quarter profit of MVR 199 million

The Bank of Maldives (BML) has published it’s first quarter results with an operating profit of MVR 199 million, an increase of 35% over the previous quarter.

Income grew by 10% and costs were controlled, the BML said.

The loan book grew by MVR 199 million in the quarter and loan book quality continued to strengthen, and deposits were up 17%, their press statement read.

Speaking on their success, CEO and Managing Director Andrew Healy stated, “we must not get carried away, however. Our Bank still has work to do to build a sustainable earnings base – much of our growth in profits over recent times has been due to loan recoveries – and we know that customer service standards are not yet at the level that we and our customers expect.”

Referring to the Bank’s IT modernisation programme, Healy continued “We are in the middle of a major IT and Training investment programme which will help transform how we deliver our services, including in the Atolls. Much of our technology was outdated and inflexible and is being replaced.”

“The changes we are bringing about will take time to bed down and there will inevitably be some disruption to services as we implement new systems over the rest of 2014. However, ultimately we will have a much better bank that is capable of meeting the highest international standards in every way”.

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Politicians trivialising severity of economic problems, foreign investment: Chamber of Commerce

The Maldives National Chamber of Commerce and Industries (MNCCI) has accused senior politicians of trivialising the severity of the country’s economic problems, claiming parties are addressing financial concerns with negative slogans rather than actual policies.

The concerns were raised as the government-aligned Progressive Party of Maldives (PPM) claimed over the past week that foreign investors were now turning away from the Maldives due to concerns about political stability and safety in the country.

“Bad shape”

While accepting the present “bad shape” of the Maldives economy, the chamber of commerce criticised negative campaigning on the economy by senior figures in the last two governments – arguing they had done little to address an ongoing shortage of US dollars and a lack of investment banking opportunities and arbitration legislation in the country.

On Saturday (June 29), PPM presidential candidate Abdulla Yameen was quoted in local media as expressing concern that foreign businesses were shunning the Maldives in favour of financing projects in other countries in the region.

“With our present woes no one wants to invest here. They are looking at Seychelles and Caracas. No foreign investor wants to come to the Maldives,” Haveeru reported him as saying.

The concerns were shared by Yameen’s running mate, former Home Minister Dr Mohamed Jameel Ahmed, who told a campaign rally in Raa Atoll days earlier that the PPM was the only party able to secure peace and safety in the country required to boost foreign investor confidence.

Dr Jameel was dismissed as home minister by President Dr Mohamed Waheed in May this year after announcing his decision to stand as running mate for rival candidate Abdulla Yameen in September’s election.

Minivan News was awaiting a response from Dr Jameel about the party’s economic policies at time of press.

While MNCCI Vice President Ishmael Asif accepted that political stability was a key challenge to building foreign investor confidence, he added that senior political figures such as Dr Jameel had failed to implement much needed legislative reforms to aid investment while in power.

Asif argued that Dr Jameel was not the only government figure in the last five years guilty of failing to try and boost investor confidence in the Maldives.

“We are not happy. People are using the economy as a campaign slogan. All parties are looking to come to power and they will do or say anything to be in power,” he said.

Asif expressed particular concern over various parties’ using the country’s present economic difficulties to score points during campaigning without offering their own solutions.

“The economy is not healthy right now. We do not hear any solutions from these people. We want to hear positives about will they change,” Asif said.

“What exactly did Jameel do for the economy? What did Anni [former President Mohamed Nasheed] do? What also did Dr Waheed do? What did any of them do?”

Economic record

Asif argued that ahead of the upcoming presidential election scheduled for September, it was hugely important that voters evaluated all candidates on the basis of their recent economic record.

He said that the Maldives’ first multi-party democratic election in 2008, the country had failed to implement a number of legislative reforms required to provide greater freedom to foreign investors.

According to Asif, key economic reforms lacking included the establishment of investment banks to encourage foreign parties to borrow domestically, and arbitration law to ensure that investments were protected in the country’s courts.

He said that with rival parties and President Waheed all campaigning ahead of this year’s election, there appeared to be little consensus to try and deal with “huge issues” such as the dollar shortage.

Accountability

Asif said he believed that the majority of voters had failed to properly hold their leaders to account since the democratic transition in 2008, comparing the nation’s democratic freedoms over the last five years as being comparable to “a child with a new toy”.

“We have not really understood democracy here. Many have not grown up with the right to question that comes with democracy, so we don’t know how to test the capacity of our leaders,” he said.

Raising concerns that the loudest and most controversial figures had dominated the country’s political arena since 2008, Asif said fears of a lack of accountability were a significant difficulty for the economy.

“Take the Ministry of Trade for example. There is a huge issue over the supply of US dollars, yet instead everyone is focused on their own parties. There is no mandate to address this,” he said.

Opposition concerns

The opposition Maldivian Democratic Party (MDP) meanwhile rejected criticisms over its foreign investment record, claiming it had attempted to introduce a raft of economic reforms for the economy while in power, before the government was controversially changed on February 7, 2012.

The present government, made up entirely of former opposition parties, came to power after former President Mohamed Nasheed resigned from office during a mutiny by sections of the police and military.

MDP MP and Spokesperson Hamid Abdul Ghafoor said that it was hypocritical for the PPM, or any other party serving in the present government, to raise concerns about political stability, given that they had intentionally deposed the country’s first democratically-elected government.

On an economic level, Ghafoor claimed the former MDP government had sought to introduce an economic reform package aimed at encouraging investment not only in the country’s tourism industry, but in a wider number of sectors such as energy, communications and infrastructure.

He said that this investment focus had been seen in the introduction by the former administration of direct taxation, the restructuring of government finances and the reduction or elimination of import duties on a wide range of goods.

Before Nasheed came to power, Ghafoor said the country had been managed much like a “corner shop” – with no mechanisms to attract and keep investors in the country.

He argued that one legacy of this approach to foreign investment could be still be seen in the country’s courts, which he continued to remain a “mess”.

Judicial criticisms

Before his resignation, former President Nasheed controversially detained the Chief Judge of the Criminal Court Abdulla Mohamed, in a move he claimed was needed to prevent him from continuing to rule on cases while charges of misconduct against him were investigated.

In November 2011, the Civil Court ordered the Judicial Service Commission (JSC) to take no action against the chief judge over an investigation into his alleged misconduct until the country’s court reached a verdict in a case filed against him. The Civil Court case preventing action against Abdulla Mohamed was filed by the chief judge himself.

In the build up to the judge’s arrest, Nasheed continued to raise concerns over allegations of perjury and “increasingly blatant collusion” between senior judicial figures and politicians loyal to the former autocratic President Maumoon Abdul Gayoom.

Since Nasheed’s resignation, NGOs and independent experts including UN Special Rapporteur for the Independence of Judges and Lawyers, Gabriela Knaul have expressed concern over politicisation within the country’s court system.

Accusing the PPM – as part of the present coalition government –  of being directly involved in instigating a mutiny within the country’s security forces prior to the change of government last year, MDP MP Ghafoor alleged the party was also culpable for ruining interest in foreign investment.

He accused PPM presidential candidate Abdulla Yameen in particular of using President Waheed as a “pawn” last November to abruptly terminate a US$511 million contract with India-based GMR to develop and manage Ibrahim Nasir International Airport (INIA).

Indian infrastructure giant GMR recently filed a claim for US$1.4 billion in compensation from the Maldives, following the government’s sudden termination of its concession agreement citing  “wrongful termination” and loss of projected profits.

Meanwhile, the PPM accused President Waheed of ignoring the advice of his coalition government by terminating the agreement.

Waheed’s allies hit back by accusing the PPM of making “contradictory statements” regarding the decision to terminate GMR’s concession agreement, claiming the party’s senior leadership tried to terminate the deal without discussion or following due process.

The MNCCI claimed in September last year that legal wrangling between the government and India-based developer GMR over the multi-million dollar airport development contract was not anticipated to harm confidence in the country’s “challenging” investment climate.

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HSBC appoints new CEO for Sri Lanka, Maldives operations

Patrick Gallagher has assumed the role as Chief Executive Officer (CEO) of the HSBC bank group’s operations in Sri Lanka and the Maldives.

Gallagher is said to have began his new role with “immediate effect”, the Sunday Times of Sri Lanka newspaper reported today.

Gallagher, who since November 2009 has headed up HSBC’s operations in Bahrain, will be replacing Nick Nocolau as CEO for the company’s operations in Sri Lanka and the Maldives.

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Small and Medium Enterprises Bill ratified by president

The Small and Medium Enterprises Bill was ratified by President Dr Mohamed Waheed yesterday (April 14) after being approved by parliament last month.

The bill, now published in the Government Gazette, outlines policies targeted at developing small, medium and micro-scale businesses in the country.

According to the President’s Office website, the bill includes numerous measures such as, outlining how to promote and develop small to medium size business.  Methods for monitoring and evaluating the effectiveness of government policies to support small and medium business are also included.

Other key considerations in the bill include supporting the sector to become sufficiently “innovative” and broad, while also ensure long-term national and international competitiveness.

The bill also calls for the establishment of a government-backed centralised registration system for companies, according to the President’s Office.

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Bahrain Telecommunications Company acquires majority share in Dhiraagu

Bahrain Telecomunications Company (Batelco) has acquired the majority share of Dhivehi Raajjeyge Gulhun Public Limited (Dhiraagu), the largest telecommunications service provider in the Maldives, Dhiraagu announced Wednesday (April 3).

Previously, Cable & Wireless Communications (CWC), a British multinational telecommunications company, was the majority shareholder of Dhiraagu. Batelco purchased a majority of assets in Monaco & Islands Business Unit from CWC, resulting in its owning 52 percent of Dhiraagu shares.

Dhiraagu’s board of directors was altered following the purchase. The company’s leadership now includes Ibrahim Athif Shakoor as Chairperson and Government Director, and Ismail Waheed as CEO and Managing Director.

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Comment: The guesthouse enterprise

The following is a translation of an article by former President Mohamed Nasheed, written ahead of a public forum on Maafushi in South Male’ Atoll, to discuss the future of mid-market guesthouse tourism in the Maldives. It first appeared on Buzzmaldives.

What the average Maldivian wants is basic. We want a way to increase our income. We want to broaden our narrow financial horizons through development.

It is not that we lack this capacity to develop. We have plentiful natural resources. If we settle for the current economic status quo, believing that what we have now is the limit to what we are entitled to, it would mean that our true wealth potential remains untapped.

What the Maldivian Democratic Party and I have always pointed out is this basic fact: we want to develop. To upgrade beyond the current status quo. The ordinary Maldivian’s complaint is that of poverty, of financial anxiety. We want a wallet with the wads; we want to realise that financial progress is possible.

The political office is a place that should offer solutions to these complaints. This is its responsibility and obligation.

The most profitable industry in the Maldives is tourism. The country has ample natural resources that favour this. Maldivians have long since demonstrated the capacity, the insight and aptitude to manage this industry. In the last 40 years, Maldivian tourism has ballooned into a billion-dollar industry.

In those four decades, we have sold two types of tourism-related services: resort facilities and live-aboard facilities. According to industry experts, these two particular trades rake up [annual] invoices of up to three billion US dollars.

What we advocate through the MDP is that Maldivians deserve far more than this three billion. We could incorporate another facet in the tourist industry, one that would benefit a larger proportion of Maldivians: the venture towards guesthouses.

‘Guesthouses’, in this context means providing vacation facilities to tourists in the Maldivian inhabited islands. The main factors that entice tourists to our isles are its climate and its natural exquisiteness. And it is not just the desert islands that possess these qualities. The entire country is blessed with the same beauty and climate. Providing guesthouse services to tourists from inhabited islands would be no less profitable than resort islands, because the capital costs are lower for the former. While it costs about US$300,000 to create a bed in a resort, we claim it would not cost even US$10,000 per bed in a guesthouse business.

Until the MDP government came to power in 2008, Maldivians weren’t permitted to operate guesthouses on inhabited islands. It was mentioned in the amendments that were brought to the Tourism Act in January that year, but, without the regulations for the actual implementation under the Act in place, the avenues for implementing these businesses remained closed. Under MDP advocation, attempts were made to provide this choice for guesthouse businesses.

During the 16th People’s Majilis, in July 2008, the member for Male’, MP Mohamed Shihab, submitted a resolution to allow guesthouse services in inhabited islands. The resolution was passed with a Majilis majority. Again, due to there being no regulations, the avenues still remained shut.

During the rule of ‘the beloved leader’ Maumoon Abdul Gayoom, of the Progressive Party of the Maldives (PPM), it was not the government alone who vocalised against guesthouses in inhabited islands. It was the resort owners as well. The sentiment behind this insinuated that such a trade would be detrimental to the culture, lifestyle and the religious values of Maldivians. The religious Adhaalath Party’s founding further cemented this line of reasoning.

To this day, PPM, Adhaalath, and resort-owner Gasim Ibrahim’s Jumhoree Party continue their palaver against guesthouse businesses along the same lines.

Maldivians wish for progress. They do not wish to be bogged down in antiquity. If our lifestyles and traditions can only be vivified by keeping the country in this century-old mold, the development that we yearn for would be impossible.

Having tourists on inhabited islands is not going to result in the community facing any additional detrimental effects that do not already exist. On the contrary, having tourists will empower the islanders to overcome whatever objectionable issues that they may face. Maldivians will have to open their eyes to outside cultures, and allow for the increase in opportunities for development. In addition to direct employment and income generated by guesthouses, it will also boost other existing island businesses.

The demand for agriculture and fishing will increase as will the demand for island cafes and restaurants. It will pave the way for laundry services, and bakeries. The transport system will improve. Carpentry and woodwork services will progress. There will be an impetus for the general businesses on the islands.

For a larger proportion of Maldivians to benefit from the tourist industry, a set-up must be established that involves as many Maldivians in the tourist industry as possible. Building a resort is a costly affair. To obtain the hefty capital to develop a resort is a task that is next to impossible for those of us who are not big businessmen. Up to today, there are only about 50 people who directly profit from Maldivian resorts.

According to guesthouse operators, the cost for setting one up is less than what is needed for building a large dhoni. It only takes about two to three million rufiya to construct a four to five bedroom house. A great number of businessmen in inhabited islands are capable of providing this level of investment.

This much is evident from the boats, and the large mansions they have built. Along with them, there are so many people, in Male’ itself, who are capable of investing two to four million rufiya in small businesses.

Permission to operate guesthouses in inhabited islands for the Maldives was only granted as 2009 was ending. In 2010, there were 479 beds in 23 guesthouses. In 2010, 2011 and 2012, guesthouses increased at the rate of two to three guesthouses every month. Currently, there are 1117 beds in 76 guesthouses. The amount of Maldives operating guesthouses is increasing at a fairly rapid rate. Already the proportion of guesthouse operators is catching up to that of resort owners. In three years, there can be more than two thousand guesthouses in the Maldives increasing the amount of tourists coming into the Maldives twofold.

The tourists who come to guesthouses in the Maldives are slightly lower-end travellers, those whose daily budgets hover around the US$100 mark. The guesthouses in the Maldives are priced in similar manner, their rates usually not exceeding US$100. According to related research, there is a large market for this particular range of tourists, around the region in India, as well as in Europe and China.

Consider Maafushi in Male’ Atoll. There are currently 118 beds in 16 guesthouses. According to guesthouse owners, the occupancy rate at these guesthouses have maintained itself at over 70 percent.

Consider Maafushee Dhon Manik. A man I’ve known since childhood (since deceased) leaving behind five children. One of his children opened his first guesthouse in 2010. Since then, he has opened one every year. It has to be said now, that one of Maafushee Dhon Manik’s children is a DRP councilor, which warrants pointing out to refute the claim that these opportunities are available to only MDP members.

A large part of my deceased friend’s life was spent working at resorts, working as a foreman before he got sick. Dhon Manik and his children all understand the business of tourism. Now they are guesthouse owners. There are so many Dhon Maniks in the Maldives. And so many of his sons.

MDP’s forecast is to increase, twofold, the amount of tourists coming to the Maldives, by offering loans and training opportunities for potential business operators, combined with government aided marketing of this particular kind of tourism.

There are currently 22,889 tourist beds in operation in the Maldives. Considering the high costs for resort capital, to increase the amount of beds by 25,000 will take a lot of time. Even now there are more than 100 islands leased for resort development. It is difficult to estimate how long it will take for them to begin operating services. At the most, tourist resorts increase at only at the rate of two or three resorts annually.

To increase guesthouse beds to 25,000 will cost a maximum of US$250 million. If we are to spread this over five years, this is an amount the government could certainly guarantee. In order to develop the guesthouse industry, the basic facilities in inhabited islands should also be improved, such as water, sewerage and electricity. Likewise, health and waste disposal facilities. Roads and transport facilities. Airports, harbours and ferry terminals. Especially, developing skills and education.

The 2009 National development plan was compiled in a manner that paves the way for the guesthouse industry. God willing, in 2013, during my new term in office, the amount of tourist beds in the Maldives will increase twofold. Productivity will increase, along with the income for the citizen and the state. Financial horizons will broaden. The Maldivian island will develop. We will reach the destination of ‘the other Maldives’.

Mohamed Nasheed is the former President of the Maldives and the Maldivian Democratic Party (MDP) presidential candidate in the 2013 elections.

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

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MP involved in illegal drug business is attempting to frame me: Umar Naseer

Additional reporting by Mariyath Mohamed

Progressive Party of Maldives (PPM) presidential primary candidate Umar Naseer has claimed that an MP involved in the illegal drug business is attempting to “frame” him.

Speaking at a rally on Friday night (March 15), Naseer claimed that the unnamed MP had tried to ruin his reputation by sending police into his offices looking for contraband.

On Saturday night (March 16), Naseer then posted on both his Facebook and Twitter page that someone had tried to frame him “but I was not in the car I was delivering a speech in Miladhoo”.

Asked what Naseer was referring to, a police source told Minivan News today that a bottle of alcohol had been found in a car belonging to Naseer’s wife when searched by police yesterday.

“Last night the driver of the car had parked after there had been some sort of accident caused by someone on the back seat.

“At that time, the driver found a bottle of alcohol within the car and reported it to the police. We took the driver, questioned him and released him,” the source claimed.

Speaking in regard to the alcohol allegedly found in the car, Police Spokesperson Chief Inspector Hassan Haneef confirmed that a bottle had been found and the case was still under investigation.

“We received a report from a driver of a vehicle stating that there was a bottle of alcohol in the car. Police went to the car, searched it and took the vehicle,” Haneef said.

Last week, Naseer had posted on social media that he had received “intel” that an attempt would be made to assassinate his character by planting drugs in one of his offices.

Speaking in front of a giant display of a mosque set up for his campaign on Friday, Naseer said that he did not partake in acts involving illegal drugs.

“A serving parliament member who is involved in the illegal drug business is attempting to frame me.

“He tried to ruin my reputation by sending police to my business offices in the pretence of looking for illegal substances. I do not get involved in such acts,” he claimed.

Despite Naseer’s claims, when Minivan News asked Police Spokesperson Chief Inspector Hassan Haneef on Tuesday whether police had searched his offices, Haneef denied they had.

“I will not name the MP, I do not need to name him here. He is trying to hide the relations he has with gangs and his involvement in the illegal drug business,” Naseer claimed.

“If I, Umar Naseer, get elected, MPs cannot hide behind their privileges act and run illegal activities. I will take legal action against them,” he added.

Both Umar Naseer and Abdulla Yameen are currently campaigning to win the PPM’s presidential candidate slot for the upcoming presidential elections to be held in September this year.

People say Yameen bathes in mineral water: Umar Naseer

Speaking to crowds at the artificial beach in Male’ on Friday, Naseer claimed that “unlike Yameen” he is an ordinary citizen and not related to former President Maumoon Abdul Gayoom.

In regard to Abdulla Yameen – who is also contending in the PPM presidential primary – Naseer claimed that his fellow contender plays “80 percent in defence”.

“We heard our brother MP [Ahmed] Nihan speaking at Yameen’s campaign rally. All he did was try to denounce what the public says about Yameen.

“Nihan said that although people allege Yameen has ties with gangs and gang violence it is not true. He then said that although people say Yameen even bathes with mineral water, that isn’t true either,” Naseer stated.

In response to the PPM presidential primary candidate’s claims, a spokesperson for Abdulla Yameen’s ‘Yageen’ campaign team told local media on Saturday that Naseer had made slanderous and “blatantly untruthful” statements about Yameen during the rally.

The spokesperson, PPM MP Shifaq Mufeed, said that the purpose of such statements was to damage Yameen’s credibility amongst his supporters.

Umar Naseer was not responding to calls from Minivan News at time of press.

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Coalition divided over fate of STO/Addu Airport managing director

Representatives of several government-aligned parties are divided on whether to support removing Shahid Ali from his position as Managing Director (MD) of both the State Trading Organisation (STO) and Addu International Airport over his alleged political beliefs.

The Dhivehi Rayyithunge Party (DRP) said this week it not made any sort of decision over removing Shahid from the positions he presently held and had not been aware of any such motion to remove him, though added any eventual decision would need to be “justified”.  Jumhoree Party (JP) Deputy Leader Abdulla Jabir said his party would support the STO MD, while also warning against the politicisation of key business positions and deals across the nation.

The comments were made as the Interim Vice President of Progressive Party of Maldives (PPM) Abdul Raheem Abdulla told local media that parties within the present coalition government sought to remove Shahid from his posts for allegedly being a member of the opposition Maldivian Democratic Party (MDP).

Earlier this week, Jumhoree Party (JP) Leader and MP for Alif Dhaal Maamigili MP, Gasim Ibrahim warned Shahid that he would be sacked from his post at the STO if an agreement was signed to sell a 30 percent stake in the Addu International Airport Company Ltd (AIACL) to Kasa Holdings.  The sale was confirmed a day later.

During a televised appearance on private broadcaster Dhi TV on Wednesday, Abdul Raheem claimed that calls to replace Shahid were not related to the controversial sale of the shares in Addu International Airport (AIA), newspaper Haveeru reported.

Instead he said that the motion was based around concerns about having a figure he claimed was allegedly linked to the opposition MDP in a senior position of a state-owned company, claiming such an appointment was “unacceptable”, according to media reports.

Abdul Raheem went on to accuse Shahid of spending money to help fund a recent campaign trip by former President Mohamed Nasheed in Addu during the program.

PPM Deputy Leader Umar Naseer and Party Spokesperson Ahmed Mahloof were not answering calls at the time of press.

Independence

Responding to the PPM’s criticism, JP Deputy Leader Abdulla Jabir said that Shahid was a “professional” and “highly technical” MD, adding both he and his party would not back any attempts to remove him.

Jabir also played down claims Shahid was politically tainted or biased in his work.

“We should keep independent people in business as much as possible, we need good people like him right now,” he told Minivan News. “STO is a huge company with many employees and he has done a very good job, I support him and our party will support him.”

Jabir also requested that Maldivians avoid trying to politicise business and economic matters in the Maldives that could impact on the investment climate within the country.

Last month, Jabir also hit out at what he claimed were attempts by some of the JP’s coalition partners to try and “politicise” a dispute between the government and India-based GMR over an agreement to develop Ibrahim Nasir International Airport (INIA) – fearing a negative impact on foreign investment.

Meanwhile, DRP Deputy Leader Ibrahim Shareef told Minivan News today that it had not been made aware of any decision to remove Shahid from either of his MD posts.  He also expressed caution over making a potential scapegoat out of Shahed over concerns owing to the Addu airport sale.

Shareef said that before taken any potential position on the matter, the party would need to investigate if there was any possible reason to dismiss Shahid, claiming the party would not back any cause raised by coalition partners unless it was “justified”.

“However, I do not think a deal such as [selling shares] in Addu International Airport can be taken by one person alone,” he added, referring to Shahid.

Responding to the PPM’s reported concerns of potentially giving positions in government-owned companies to opposition figures or supporters, Shareef claimed that the coalition had been founded on a policy of not discriminating along party lines.

“It is important to remember that President Dr Mohamed Waheed Hassan invited the MDP to join his coalition government – an invite they declined,” he claimed. “However, that said, the government was to invite capable people from anywhere to join us even from MDP. We have nothing against the MDP.”

Dhivehi Qaumee Party (DQP) Leader Dr Hassan Saeed and Secretary general Abdulla Ameen were not responding to calls from Minivan News at time of press.

Coveted post

Back in August, an audio clip allegedly of Deputy CEO of Maldives Ports Limited, Ahmed Faiz, was leaked and then aired on opposition-aligned Raajje TV, alluding to significant interest in replacing Shahid Ali within the STO.

In the transcript, which Faiz confirmed was authentic but re-cut and edited together, he appeared to allege that PPM Parliamentary Group Leader Abdulla Yameen had offered financial incentives to replace the STO MD.

“The first post that was guaranteed to a person in this government was one that I had asked for, that is the post of Managing Director at STO, the one in which that Shahid Ali is. That is something I did in my interest, and I swear, it is something I myself did. There is no one who hasn’t been coveting that post. I was offered five hundred thousand dollars to get Shahid Ali replaced by a person of Yameen’s choice. I said to him… what he said to me even at the beginning is that if you are uncomfortable by this, then we shall treat this as a conversation that never happened, and I replied saying this never happened,” Faiz claims in the audio.

“I said this conversation never happened. Yameen said it never happened. And that was it, I got up and walked away. That (expletive) said to someone nearby that I am a very dangerous (expletive). Now I’ve told you of some of the problems in this government.”

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Government cannot pay state salaries without Indian cash: Finance Minister

Minister of Finance Abdulla Jihad has said the government is unprepared to meet its recurrent expenditure – including salaries – for the final three months of 2012 without the US$25million loan promised by the Indian government.

Jihad, who was not responding to calls at the time of press, told local media outlet Sun Online that he believed the loan  is being delayed due to the ongoing controversy over Indian infrastructure company GMR’s development of Ibrahim Nasir International Airport (INIA).

The Ministry’s Financial Controller Mohamed ‘Kuday’ Ahmed was also not responding to calls at time of press.

India’s High Commissioner to the Maldives DM Mulay told Minivan News that “India stands by every commitment and hopes Maldives will reciprocate. We have excellent rapport with the GOM [Government of Maldives] and issues, if any, are sorted out amicably.”

India’s Ministry of External Affairs publicly expressed concern over the political stability and the investment climate in the Maldives earlier this month.

Sun meanwhile reported Jihad as saying he had made repeated requests via the High Commission for the loan to be expedited.

Jihad’s comments come during a week in which President Dr Mohamed Waheed Hassan has been campaigning in Faafu and Dhaalu Atolls, reportedly reassuring the people that the economy was running smoothly whilst crticising those who he claimed sought to weaken it.

A concerted campaign by government-aligned parties to annul the US$511million concession agreement with GMR – the single largest foreign investment in the country’s history – has sparked concerns over investor confidence with damaging implications for the long term development of the economy.

Waheed is also reported as saying that he would not resort to borrowing from foreign governments in order to finance government activities.

“I will not try to run the government by securing huge loans from foreign parties. We are trying to spend from what we earn”, he was reported to have told the people of Nilandhoo.

“The Maldivian economy is fine. Don’t listen to whatever people say. We don’t have to [worry] about the Maldivian economy being in a slump,” he was quoted as saying during a rally in Meedhoo.

Minivan News was unable to obtain comment from President’s Office spokesmen on this issue before going to press.

The US$25 million was agreed upon last month as part of the $US100 million standby credit facility signed with Prime Minister Manmohan Singh in November 2011.

Unpaid bills

Despite Waheed’s reassurances, this month has seen a number of state owned institutions face disconnection from the capital’s power grid as bills amounting to around MVR150million (US$9.7million) were said to be owed to the State Electricity Company (STELCO).

Responding to the institutions’ blaming of his ministry, Jihad told Sun that the finances were simply not there.

“We are not receiving foreign aid as was included in the budget. How can we spend more than we receive? That’s why those bills are unpaid. We can’t spend money we don’t have,” he told the paper.

He mentioned that the government would have difficulties paying the salaries of civil servants in the final quarter of this year.

Since coming to power in February, the government has committed to reimbursing civil servants for wage reductions made during the austerity measures of the previous government, amounting to Rf443.7 million (US$28.8 million), to be disbursed in monthly installments over twelve months from July.

A MVR 100million (US$6.4 million) fuel subsidy for the fishing industry was also approved by the Majlis Finance Committee earlier this month, with the hope of stimulating the ailing sector.

The overall deficit for government expenditure has already reached over MVR2billion (US$129million). Jihad has told the Majlis’ Finance Committee that he expected this figure to rise to MVR6billion (US$387million) by year’s end – 28percent of GDP – alleging that the previous government left unpaid bills equal to over one third of this anticipated deficit.

Former Minister of Economic Development Mahmood Razee told Minivan News that this increased expenditure in the face of a pre-existing deficit represented the government “ignoring reality.”

“If they don’t get the loan, they will have to cut travel expenses, stop certain programs – take drastic measures or get another loan,” said Razee, claiming that the only alternative would be to sell treasury bills.

Following reports in August that the government was attempting to raise funds through the sale of treasury bills, former Finance Minister Ahmed Inaz said that this would not address the concerns of the IMF, prolonging economic uncertainty.

China has made large commitments towards the Maldives’ economic development in recent months, although Razee said he believed that current changes within the Chinese government in the upcoming month made this an inopportune time to look there for additional financial aid.

In August, the current Finance Ministry announced its own austerity measures intended to wipe over MVR2.2billion (US$143million) from this year’s budget deficit though few of these propositions have as yet been followed through.

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