Tag: Economic Council

Government to charge US$25,000 for SEZ applications

The government will charge a US$25,000 application fee from potential investors in its flagship Special Economic Zones.

Accepted applicants are also required to pay a US $1 million guarantee to a bank account of the board’s choice within 15 days of receiving the initial permit, under the new SEZ investment board regulations.

The regulations, published on April 2, set out the terms for a programme that the government hopes will bring in $100m by August. It has so far signed one memorandum of understanding for an SEZ.

The regulations give the President the authority to appoint the board’s chair, vice-chair and to dismiss board members at any time.

They also give the board the power to freeze potential investors’ local assets if the permit is terminated and the investor has any outstanding debt. The board will have the discretion to cancel all visas to migrant workers if a permit is terminated.

Speaking to Minivan News, Economic Council co-Chair and Tourism Minister Ahmed Adeeb said the government is “looking for serious investors”, pointing out that the minimum investment for a SEZ stands at US$ 150 million.

Adeeb said the application fee was set after consulting with investors, and that processing these proposals is hard work.

President Abdulla Yameen has previously declared that the SEZ act would become “a landmark law” that would strengthen the country’s foreign investment regime.

The only SEZ activity since the act was ratified by President Yameen in August 2014 has been a memorandum of understanding for a Dubai Ports World free trade port.

Adeeb said, however, that there is a lot of support for the SEZs, pointing out that Indian investors have shown interest in building a gold refinery after Maldives granted duty free status to gold.

The government estimates that it will be able to acquire over US $100 million in acquisition fees from the SEZs by August 2015.

The US$100 million figure has been included as one of three revenue-raising measures in the 2015 annual state budget, alongside increasing import duties and taxes.

“I think we will meet budget targets. Some investors are prepared to pay a US $100 million acquisition fee on a single project,” said the tourism minister.

The first SEZ project is likely to be the Dubai Ports World free trade port in Thilafushi in Male’ atoll, followed by the mega I-haven port project in the north, Adeeb added.

The government signed an MoU with the Dubai company on the port on March 19, while it is still seeking investors for the I-haven project on the northernmost Ihavandhihpolhu (Haa Alif) atoll.

During parliamentary proceedings, the opposition Maldivian Democratic Party (MDP) submitted more than 300 amendments to the SEZ bill.

The MDP claimed that the law would pave the way for money laundering and other criminal enterprises, while authorizing the president to “openly sell off the country” without parliamentary oversight.

The government, however, maintained that SEZs with relaxed regulations and tax concessions were necessary to attract foreign investors.

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Government to sign MoU with Dubai Ports World to develop port at Thilafushi

The government is planning to relocate the central commercial port from Malé to Thilafushi and sign a joint venture agreement with Dubai Ports (DP) World to develop the port as a free zone, the cabinet’s economic council has revealed.

Speaking at a press conference at the President’s Office yesterday, Tourism Minister Ahmed Adeeb said “advance discussions” have taken place with DP World about a joint venture with the government.

“In my view, such progress shows the confidence in the Maldives,” the co-chair of the economic council said.

Economic Development Minister Mohamed Saeed and Youth Minister Mohamed Maleeh Jamal would depart for Dubai on Wednesday night to sign a Memorandum of Understanding (MoU), Adeeb said.

DP World is one of the largest marine terminal operators in the world and currently manages more than 60 terminals across six continents.

The envisioned free zone at Thilafushi port would include facilities for bulk breaking and transhipment cargo handling, Adeeb said.

DP World has expressed interest in investing in the port project, he continued, and negotiations were ongoing concerning details of the joint venture between the Emirati company and the Maldives Ports Limited (MPL).

DP World would be required to keep existing local staff at MPL, bring Maldivians to the top management and provide training, Adeeb said.

The project would be divided into three phases with an estimated investment of between US$250 and US$300 million, he said.

Adeeb explained that DP World would be offered incentives under the government’s flagship Special Economic Zones (SEZ) Act with “a free trade zone area” and relaxed regulations.

A larger port was essential logistically if 50 new resorts were to be developed, he continued, noting difficulties at present in importing and clearing resort supplies through the central port.

The government would also hire a port expert for the negotiations to ensure the “best deal” for the Maldives, he added.

Economic Development Minister Saeed said the Maldives was ripe for “an ocean economy” and the current administration has undertaken unprecedented efforts to diversify the economy with a focus of maritime businesses.

Congestion was a serious problem at the Malé commercial port, which has space for about 60,000 containers, Saeed explained.

The SEZ investment board was in the process of finalising plans for establishing “a free zone or dedicated free trade zone” at the port, Saeed revealed.

During last year’s budget debate, opposition MPs expressed skepticism of the government’s forecast of US$100 million expected as acquisition fees for SEZs by August 2015.

The opposition has also criticised the lack of significant foreign investments despite assurances by President Abdulla Yameen’s administration with the passage of the SEZ law last year.

Saeed meanwhile noted that the seaport project was announced in April last year at an investor forum in Singapore.

“So in a very short period of time, we have steadied the economy, stabilised the currency, increased the gross reserve, increased investor confidence, and while solving issues in the domestic environment or arena, we are seeing today that what this government is doing is real governance,” he said.

“So citizens should rejoice. And I believe that the progress we are making is unprecedented in recent history.”

Adeeb also said projects to construct a new terminal and second runway at the Ibrahim Nasir International Airport (INIA) as well as a bridge connecting the capital to Hulhumalé would begin before the end of the year.

Related to this story

Economic growth relatively strong, but public debt ratio high: IMF

Foreign investments worth MVR9.8 billion expected in five years, says President Yameen

Tourism Minister Adeeb appointed chairman of SEZ investment board

PPM celebrates SEZ bill with fireworks

“Yonder lies the greener pastures”: President Yameen inaugurates investor forum in Singapore

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INIA capacity will increase threefold with new runway and terminal, says economic council

Additional reporting by Hassan Mohamed

The capacity of Ibrahim Nasir International Airport (INIA) will increase threefold to seven million passengers annually with the development of a new new runway alongside the previously announced new terminal, the cabinet’s economic council has revealed.

At a press briefing today, Minister of Economic Development Mohamed Saeed said efforts were underway under the direct supervision of President Abdulla Yameen to secure financing for the projects.

“The previous development concept was only for the development of the terminal,” says Saeed.

“But now we are talking of a whole new airport. We are going to build a second runway. President Yameen wants to build a second runway. That means there is no debate to this.”

After presenting a conceptual video of the airport depicting the envisioned developments, Saeed said the government’s target was completing a large portion of the project by 2017.

“We estimate that MACL [Maldives Airports Company Ltd] will earn MVR6.4 billion (US$ 410 million) in revenue in 2017 as a result of the redevelopment,” Saeed explained, adding that the income would be unprecedented in the government-owned company’s history.

Under the new master plan, Saeed said the project for the second runway has been awarded to Chinese Beijing Urban Construction Group (BUCG), which has since submitted BOQ (bill of quantities) and designs to the Chinese Exim Bank.

The project – to be financed by a concessionary loan – also involves building a fuel farm and expanding the cargo terminal as well as the runway apron, Saeed noted.

The development of the airport terminal was awarded to Japanese Taisei Corporation and is to be financed by the Japanese Bank for International Cooperation (JBIC), Saeed added.

Saeed revealed that he would be leaving for Tokyo in the coming weeks to fast-track the loan approval process, adding that construction could begin as soon as the loans are approved.

In December, MACL signed an agreement with Singapore’s Changi Airports International for consultancy in the development and expansion of INIA.

The estimated cost of the projects is US$845 million, Saeed continued, which includes improvements to the shore protection of Hulhulé Island, new seaplane facilities, new hangars, nine aero bridges, existing runway resurfacing and the relocation and demolition of existing facilities at the airport.

The redeveloped airport would also be connected to Hulhumalé via a new road, Saeed said.

Speaking at a ceremony last night, Saeed claimed that the Maldives will see US$600 million of foreign investment in the next five years.

Meanwhile, the United Kingdom, Germany and Canada has recently alerted tourists on travelling to the Maldives, citing political instability after former president Mohamed Nasheed was arrested on terrorism charges.

Asked if the current unrest could adversely affect the Maldivian economy, Saeed urged the opposition to refrain from engaging in activities that could harm the tourism industry and the economy.

GMR Compensation

In June last year, Indian infrastructure giant GMR won an arbitration case against the government for the premature termination of its airport development agreement in 2012.

A Singaporean tribunal deemed the airport development contract “valid and binding” and the MACL liable for damages after former president Dr Mohamed Waheed’s administration declared the deal void ab initio (invalid from the outset).

The exact amount owed by MACL is to be determined after the second phase of the arbitration case, with GMR seeking US$1.4 billion in damages – a figure which exceeds the state budget for 2014.

However, Attorney General Mohamed Anil has contended that the government was liable only for GMR’s initial outlay of US$7 8million, plus any costs for construction work completed after the 2010 deal was agreed.

The US$511 million agreement to manage and develop INIA – signed during the tenure of former President Nasheed – represented the largest foreign direct investment in the Maldives’ history.

Chinese arrivals

Saeed meanwhile noted that Chinese tourist arrivals account for 35 percent of all tourist arrivals to the Maldives, predicting further growth in the coming years.

However, according to statistics from the Tourism Ministry, Chinese arrivals have been slowing down in the past months, with negative growth recorded during December and January.

“January 2015 was recorded as the worst performed month for the Chinese market to the Maldives so far, with a strong negative growth of 33.1 percent,” the ministry noted in a statement last week.

“China being the number one market to the Maldives, the negative growth registered from the market was reflected in the total arrivals to the country.”

However, Saeed insisted that arrivals would pick up this month with the Chinese new year celebrations on February 19 and continue to rise with the growth of outbound Chinese tourists, which reached 109 million last year.

Related to this story

Government seeks US$600 million from China and Japan for airport development

Tourist arrivals decline in January as Chinese arrivals slow down

GMR wins arbitration case, tribunal deems airport deal was “valid and binding”

Police arrest former President Mohamed Nasheed ahead of terrorism trial

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Parliament approves import duty hikes

The People’s Majlis yesterday passed government-sponsored amendments to the Export-Import Act to raise import duties on 17 items from April 2015 onward.

The amendments (Dhivehi) submitted on behalf of the government by Maldives Development Alliance (MDA) MP Mohamed Ismail were approved with 49 votes in favour and 16 against.

Following ratification by the president, import duties for tobacco would be raised from 150 to 200 percent and from 90 laari to MVR1.25 for a single cigarette.

Finance Minister Abdulla Jihad told parliament’s budget review committee last month that the government anticipated MVR533 million (US$34.5 million) in additional income from import duties.

Among other items, custom duties for luxury cosmetics and perfume would increase from the current zero rate to 20 percent.

Additionally, duties for liquor and pork would be raised to 50 percent and a 200 percent custom duty would be levied for land vehicles such as cars, jeeps, and vans.

While the day prior to the budget’s approval the cabinet’s economic council reversed a decision to impose a 10 percent tariff on staple foodstuffs such as rice, flour, and sugar, the import duty for oil or petroleum products was raised from the current zero rate to 10 percent.

About 30 percent of the Maldives’ GDP is spent on importing fossil fuels. In 2012, US$486 million was spent on oil imports, and the figure is estimated to rise to US$700 million by 2020.

According to the Maldives Customs Service, of the MVR7.2 billion (US$466.9 million) worth of goods imported in the first quarter of 2014, one-third was spent on petroleum products.

The latest monthly economic review from the Maldives Monetary Authority noted that “the price of crude oil fell by 4 percent in monthly terms and by 12 percent in annual terms and stood at US$95.9 per barrel at the end of September 2014,”

Revising import duties was among several revenue raising measures in the record MVR24.3 billion (US$1.5 billion) state budget for 2015 currently before parliament.

The forecast for additional revenue for the 2015 budget was MVR3.4 billion (US$220 million), including US$100 million expected as acquisition fees for investments in special economic zones and MVR400 million (US$25.9 million) from the sale and lease of state-owned land.

The other measures included introducing a green tax of US$6 per night in November 2015 and leasing 10 islands for new resort development.

Tariffs were last revised in April this year after parliament approved import duty hikes for a range of goods proposed by the government as a revenue raising measure.

During last month’s parliamentary budget debate, opposition Maldivian Democratic Party (MDP) MPs strongly criticised the proposed tax hikes, contending that the burden of higher prices of goods and cost of living would be borne by the public.

The current administration’s economic policies – such as waiving import duties for construction material imported for resort development as well as luxury yachts – benefit the rich at the expense of the poor, MDP MPs argued.


Related to this story

Government scraps plan to impose import duty on staple foodstuff

Parliament approves state budget for 2015 with 60 votes in favour

Government proposes import duty hike for oil, staple foodstuffs

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Government scraps plan to impose import duty on staple foodstuff

The government has reversed its decision to impose a 10 percent import duty on staple foodstuff such as rice, flour, wheat and sugar, Minister of Tourism Ahmed Adeeb has revealed.

“Emergency economic council meeting ongoing where President [Abdulla] Yameen has just decided not to impose any duty on sugar, rice, flour (staple foods),” the council’s co-chair tweeted this morning.

Speaking at a press conference at the President’s Office later today, Adeeb said parliament and the Progressive Party of Maldives’ parliamentary group have since been informed of the decision.

“The president’s decision was made in light of requests from a lot of people as well as the current situation [with the capital’s water crisis] we are faced with,” he said.

Finance Minister Abdulla Jihad told parliament’s budget review committee last month that the government anticipated MVR533 million (US$34.5 million) in additional income from import duties.

The new duties were to represent 15 percent of the new revenue anticipated in the 2015 budget.

Revising import duties

Revising import duties was among several revenue raising measures in the record MVR24.3 billion (US$1.5 billion) state budget for 2015 currently before parliament.

Government-sponsored amendments (Dhivehi) to the Export-Import Act – which proposed raising custom duties from the current zero rate to 10 percent for staple foodstuffs – were subsequently submitted to parliament last month.

Scrapping plans to levy import duties on staple foodstuff from October 2015 was meanwhile among several amendments submitted to the budget by opposition Maldivian Democratic Party (MDP) MPs last week.

The minority party has issued a three-line whip for its MPs to vote against the budget if none of the proposed revisions are passed.

During last month’s parliamentary budget debate, opposition MPs strongly criticised the proposed tax hikes, contending that the burden of higher prices of goods and cost of living would be borne by the public.

The current administration’s economic policies – such as waiving import duties for construction material imported for resort development as well as luxury yachts – benefit the rich at the expense of the poor, MDP MPs argued.

In addition to a 10 percent tariff for oil, the government’s amendment bill also proposed raising custom duties for tobacco from 150 to 200 percent and raising the duty for a single cigarette to MVR1.25.

Additionally, a 20 percent custom duty would be imposed for luxury cosmetics and perfume and a 200 percent custom duty for land vehicles such as cars, jeeps, and vans.

The forecast for additional revenue for the 2015 budget was MVR3.4 billion (US$220 million), including US$100 million expected as acquisition fees for investments in special economic zones and MVR400 million (US$25.9 million) from the sale and lease of state-owned land.

The other measures included introducing a green tax of US$6 per night in November 2015 and leasing 10 islands for new resort development.

Tariffs were last revised in April this year after parliament approved import duty hikes for a range of goods proposed by the government as a revenue raising measure.

Targeting subsidies

Adeeb meanwhile told the press today that the government still planned to shift to a model of targeting government subsidies to the needy as part of efforts to consolidate public finances.

In his budget speech to parliament last month, Jihad also revealed plans to revise the electricity subsidy, which he said currently benefits the affluent more than the needy.

Targeting the electricity subsidy to low-income families or households would save 40 percent of the government’s expenditure on the subsidy, Jihad explained, and allow the government to provide a higher amount to the poor.

While Maldivians were not legally required to declare income and assets in the absence of an income tax, Adeeb said today that the National Social Protection Agency (NSPA) currently used criteria for means-testing for subsidies.

Minister of Economic Development Mohamed Saeed meanwhile noted that the International Monetary Fund (IMF) has recommended targeting subsidies and reducing recurrent expenditure to reign in the fiscal deficit.

“The electricity subsidy is one that goes to even the richest strata of society. Basic food subsidies are being enjoyed now by the resorts, and never mind the resorts, are being enjoyed by wealthy foreign visitors who stay at the resorts,” Dr Koshy Mathai, resident representative to Sri Lanka and Maldives, told MPs on the public accounts committee in February.

“That to us seems like a totally unnecessary policy.”

He added that “substantial savings” could be made from the budget by targeting subsidies to those most in need of assistance.

Meanwhile, in May, MMA Governor Dr Azeema Adam called for “bold decisions” to ensure macroeconomic stability by reducing expenditure – “especially the un-targeted subsidies.”

Related to this story

Finance minister presents record MVR24.3 billion state budget to parliament

Government proposes import duty hikes for oil, staple foodstuff

MDP, JP MPs propose 19 amendments to 2015 budget

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Government decides to implement a ‘green tax’ on tourists

Tourism minister Ahmed Adeeb has told local media that a bill detailing proposed ‘green tax’ for tourists will be sent to parliament this month.

“Levying this tax is necessary given Maldives’ fragile environment. Revenue generated from the tax will go into managing the waste from local resorts and other islands,” said Adeeb who also serves as the co- chair in the cabinet’s Economic Council.

The exact percentage to be levied will be decided after consultations with relevant stakeholders, he added.

Earlier this month, Adeeb said he would aim to resolve waste management issues within the next two years using state-owned companies, after announcing the termination of the deal with India based Tatva Global Renewable Energy.

Minister of Finance and Treasury Abdulla Jihad also spoke of the proposed green tax while submitting a record MVR24.3 billion (US$1.5 billion) state budget for parliamentary approval today.

Jihad noted that the tax will form part of revenue raising measures, which also include the addition of ten resorts to the current 112. The proposed changes are anticipated to raise MVR3.4 billion (US$220 million) in new revenue.

Levies on the tourism industry – which accounts indirectly for up to 90 percent of the country’s GDP – formed a major part of proposed revenue raising measures in 2014.

An IMF-recommended hike on Tourism Goods and Service Tax (T-GST) from eight to 12 percent was approved by parliament in February and came into force last Saturday (November 1), prompting concerns from industry insiders.

Speaking to Minivan News today, former Managing Director of Maldives Tourism Development Corporation (MTDC) Mohamed Matheen said that the budget issues could not be resolved without addressing the structural issues within the budget.

“The budget deficit cannot be resolved regardless of how the tax regime is set without addressing issues like the high recurrent expenditures of the government, which is a lot higher than the majority of the countries,” said Matheen.

One general manager from a prominent resort told Minivan News last weekend that bookings appeared to be down for November, with both guests and operators aware of the “double tax” as the T-GST increase combines with the bed tax – a measure also continued this year as a way to boost government coffers.

“November will be tough,” he explained. “Top end resorts will really feel this. There’s no way further increases could be stood.”

He also expressed concern that the resorts were being asked to carry the fiscal burden of the government’s failure to curb expenditure.

Former President Mohamed Nasheed has also criticised the hike in the T-GST saying that it would cause immense difficulties to the general public.

“Now a [ticket] to a flight to Addu has gotten more expensive than a flight to Colombo. This is not, in any situation, how it should be priced,” Nasheed told local media.

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STO to import oil, staples and pharmaceuticals only

State wholesaler State Trading Organization (STO) will focus solely on importing fuel, food staples and pharmaceuticals, the Economic Council has announced at a press conference today.

The move is part of the government’s decision to move STO out of the retail business in order to encourage private businesses, Economic Development Minister Mohamed Saeed said.

However, the STO has recently launched a new brand of groceries called Noofahi as well as announcing plans to expand the supermarket at the STO Trading Center in Malé.

Tourism Minister Ahmed Adeeb added that STO will be restructured and will build new fuel storage facilities, establish a shipping fleet to import oil and will take measures to increase fuel security.

Meanwhile, STO MD Adam Azim today announced a MVR1.25 reduction on a liter of petrol and diesel following a request by President Abdulla Yameen.

Adeeb at today’s press conference pledged to further decrease fuel prices and said the government is looking into ways to reduce prices on jet fuel for domestic transport

Minister of Youth Mohamed Maleeh Jamal said the “historic” reduction would address rising inflation.

The Economic Council also said a German research vessel has found hydrocarbon source rocks in the Maldives and said the government is working with a Japan’s Mitsui and Taisei, and China’s Beijing Urban Construction Group (BUCG) to upgrade the Ibrahim Nasir International Airport (INIA).

The Maldives intends to ask for a preferential trade mechanism with China following partnership in China’s maritime Silk Road.

Finance Minister Abdulla Jihad said the Economic Council will hold monthly meetings with state owned enterprises to address challenges, facilitate financing, and strengthen management.

Oil exploration

Fisheries Minister Dr Mohamed Shainee said a preliminary assessment of hydrocarbons by Germany’s Hamburg University had brought “happy signals.”

The research team will handover detailed assessment in the first quarter of 2015, he said.

Although the presence of hydrocarbon source rocks have been confirmed, further research and analysis is required to determine if there are hydrocarbon reservoirs in the Maldives and their exact locations, Shainee explained.

The inner atoll ocean basins and atoll slopes have been examined, and new 3D seismic data will provide a more complete picture of presence of hydrocarbons, he said.

The government is setting up renewable energy alternatives in Malé and Addu, but such sources can only cater to 30 percent of Maldivian energy requirements, Shainee said.

Meanwhile, Sri Lankan, Indian, Norwegian, and British companies have expressed interest in assisting Maldives in oil exploration.

Approximately 30 percent of Maldives GDP is spent on fuel imports.

Airport Development

Adeeb revealed today that the Maldives is working with Japan’s Mitsui and Taisei, and China’s BUCG on a master plan for airport development.

The government intends to secure a US$600 million loan from Japan Bank for International Cooperation (JBIC) and China Exim Bank for the venture.

Once loans are sanctioned, the work will be contracted out, he added. In the meantime, the government will rehabilitate the existing runway.

Economic Development Minister Mohamed Saeed noted an increase in Chinese imports to Maldives, especially in heavy machinery, and said the Economic Council is working on establishing a preferential trade mechanism.

A technical team from China is due to visit the Maldives to undertake a survey for the Malé – Hulhulé bridge in the near future, the council said.

The council also revealed that the Maldives has signed a maritime labor convention, and intends to establish an open ship registry in order to expand maritime businesses such as offshore shipping and to increase luxury cruise ship arrivals in the country.

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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.

Pensions

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.

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Economic Council to decide on how to proceed with TATA flats

Minister of Housing and Infrastructure Dr Mohamed Muizzu has stated on Monday that a decision on how to proceed with the flats constructed by Indian construction Company TATA can be made only after the Economic Council deliberates and decides on the matter.

The minister stated that it had been noticed that no physical work had been constructed at the site of the flats since the structure had been built. He said that the government has already held discussions with the subcontractor after work was halted.

“At the time, the concerns they raised had to do with agreements and amendments made to agreements before we started leading the ministry during the Waheed administration,” Muizzu is quoted as saying in local media.

“As the matters were raised outside the agreed contract, and the whole concept is a developer finance concept project, we were unable to accommodate their requests and we left it at that then.”

According to Muizzu, the current delays are due to the government’s refusal to conduct any work outside of the agreement.

“It is when the Economic Council decides on the manner that we will know how to proceed. We have even been deliberating with the Indian High Commission about the matter of work on these flats being halted,” he stated.

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