Tag: Economic Development Minister Mohamed Saeed

Feasibility study underway for iHavan project

US-based Boston Consulting Group (BCG) has launched the first phase of the iHavan project feasibility study.

Economic development minister Mohamed Saeed said yesterday that a team of specialists from BCG has started the “traffic-modelling” for the project, which he said is one of seven components to be completed in three months.

The government hired BCG as a project consultant in November last year.

Saeed told Haveeru that the American company will conduct a detailed study to determine how the components proposed by the government could be developed. The company will consult with boat building, bunkering, and docking companies, he said.

“Then we will know how a cruise terminal, bunkering, and docking can be developed in the Ihavandhippolhu seven degree channel,” he was quoted as saying.

The Ihavandhippolhu Integrated Development Project (iHavan) envisions the development of a special economic zone (SEZ) with relaxed regulations and tax incentives in the Maldives’ northernmost atoll.

The project involves the development of a transhipment port, an airport, offshore docking and bunkering facilities, an export processing zone, real estate businesses, and tourism facilities.

The iHavan project is also one of the government’s five ‘mega projects’ launched at an investment forum in Singapore last year. Earlier this month, a group of Saudi Arabian investors reportedly visited Ihavandhippolhu.

The Saudi Arabian government has also provided US$1 million as grant aid to finance the feasibility project.

Saeed has previously said that he Maldives could capitalise on its strategic location and the “trillions of dollars” worth of trade that passes through the seven degree channel.

The project also proposes to take advantage of more than 30 large cities which lie within a 4000km radius of the atoll as an export processing zones established in iHavan will enjoy duty free access to 1.7 billion people under the South Asian region the South Asian Free Trade Arrangement (SAFTA).

In March, the government signed a Memorandum of Understanding with Dubai Ports World to relocate the central commercial port from Malé to the industrial island of Thilafushi and develop the port as a free trade zone.

The government said at the time that a joint venture agreement will be signed with the global marine terminal operator in a month, but negotiations appear to have stalled.

The opposition has criticised the government’s failure to attract significant foreign investment despite assurances with the passage of the SEZ Act in August last year.

The government estimates that it will collect US $100 million in acquisition fees from the SEZs by August 2015.

Tourism minister Ahmed Adeeb told Minivan News in April that the government is “looking for serious investors,” noting that the minimum investment for a SEZ stands at US$ 150 million.

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

The first SEZ project is likely to be the Thilafushi port project with Dubai Ports World, Adeeb said, followed by the iHavan project.

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China to fund Malé-Hulhulé bridge, says minister

An agreement was penned today during President Abdulla Yameen’s visit to China for carrying out the ongoing feasibility survey of the Malé-Hulhulé bridge project with Chinese grant aid.

The “agreement on the economic and technical cooperation of grant” was signed after a meeting between President Yameen and Chinese vice president Li Yuanchao, according to the president’s office.

Speaking to reporters prior to departing to China last night, president’s office minister Mohamed Hussain Shareef said “a large portion” of the bridge project will be financed through Chinese free aid and the rest through concessional and commercial loans.

Along with the feasibility report, Shareef said the Chinese government will present options for building the bridge as well as the estimated cost for each option.

The government has previously said the project will cost between US$100 million and US$150 million.

China has previously said it would ‘favorably consider financing’ the bridge if the design proves feasible. The economic council has said the six-mile bridge will have six lanes and will span from Malé’s eastern edge to the western corner of Hulhule, where the airport is located.

Last month, a team of Chinese technicians began drilling bore holes on the ocean floor to gather information for the feasibility survey.

Shareef said last night that in his meeting with the Chinese vice president, President Yameen will discuss financing for the bridge project, projects in the Maldives under the Chinese maritime ‘Silk Route’ initiative and expediting a US$40 million loan from the Chinese EXIM bank for developing the international airport.

The government has previously said a total of US$600million is needed for the project. Although the economic council first said they will borrow the funds from China and Japan, the fisheries minister in March said Saudi Arabia had assured loan assistance at a low interest rate for airport development.

Shareef is accompanying President Yameen during his visit to China along with economic development minister Mohamed Saeed and representatives from Maldivian businesses. The president departed on Wednesday morning to attend the 3rd China-South Asia Exposition, and the 23rd Kunming Import and Export Commodities Fair.

The president is due to deliver a keynote address at the joint opening of the fairs. The fairs will take place from June 12-16.

According to state broadcaster Television Maldives, a symposium was held at the Grand Park Hotel in Kunming today to share information with Chinese investors.

More than 80 companies from the Yunnan province participated in the ‘Invest Maldives Symposium,’ said economic development minister Saeed.

An ‘Invest Maldives’ page was launched on Chinese social media network Weibo during the symposium as part of “promotional efforts” for an investment forum to be held in Beijing, Saeed said.

Businesses in the Yunnan province expressed interest in carrying out renewable energy projects in the Maldives, he added.

Shareef meanwhile said the Chinese government will cover almost all of the expenses for organising the investment forum in October. While sponsors funded the first investment forum held in Singapore last year, Shareef said the government covered some costs.

Following an official state visit to China in August last year, President Yameen said the likelihood of the bridge project being awarded to a Chinese company was “99 percent” and that “a large portion” of the project would be financed through free or concessional aid from China.

In a historic visit the following month, Chinese President Xi Jinpeng said he hoped the government would call the bridge “the China-Maldives friendship bridge”.

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Government offers ‘corporate resident visas’ for foreign investors

The government has introduced corporate residence visas for foreign entrepreneurs who have invested more than US$50 million in the Maldives.

The new corporate resident Maldives scheme “aims to provide foreign investors in the Maldives with privileged and fast-track services,” according to the economic development ministry.

“My government will accord hospitality to all foreign investors who come here. We will accord safety and satisfaction to all of the foreign investors who are here. We would like foreign investors to feel like friends among friends, Maldivians among Maldivians,” said president Abdulla Yameen at a ceremony last night.

The government is seeking “to attract net worth high value investments” to the Maldives, he added.

The corporate resident visa holders will belong to “a privileged, elitist club,” Yameen said. Card holders will have permanent residency and will not have to wait in queues at immigration.

President Yameen handed out entitlement certificates under the scheme to the Bahrain Telecommunications Company (Batelco), Housing Development Finance Corporation, Seaplane Holdings, Mauritius Commercial Bank, and Hitachi.

Yameen said foreign investments are essential for the government to realise its ambition of “transforming the economy” through diversification and ‘mega projects.’

“This is the only way we believe third world countries, small countries like Maldives, can prosper and transform our economy,” Yameen said in his remarks in English.

The opposition has previously criticised the lack of significant foreign investments despite assurances from the government following the passage of its flagship special economic zones legislation in August last year.

The main opposition Maldivian Democratic Party recently alleged corruption in a deal with Dubai Ports World to develop a commercial port and free trade zone near Malé.

The opposition also contends that the previous administration’s abrupt termination of a contract with Indian company GMR to develop the international airport has irreparably damaged investor confidence. The Indian infrastructure giant is seeking US$803 million as compensation.

“New horizons”

Maldivians at first looked at foreign investments with “suspicion,” Yameen said, but “those days are long past gone.”

“We are looking at foreign investments as part and parcel of our economic development. We welcome foreign investments as partners in our developmental work,” he said.

Yameen said “the most important, most successful, thriving businesses flourishing across the Maldivian economy belong to foreign investors, either joint venture investors or 100 percent foreign investors.”

“There are no strings attached to foreign investments in the Maldives. Foreign investments can come in 100 percent foreign or it could be a collaborative effort with joint venture Maldivian partners,” he said.

“Foreign investors have naturally permeated into the Maldivian economy, that is why today we open our doors with gracious welcome to all the foreign investors.”

The government has invited foreign investors to consider “challenging and attractive investment opportunities” such as the iHavan transhipment port project.

Referring to the Hulhumalé bridge project, Yameen said the reclaimed island “is going to be an ample, resource-bound area for investors, be it housing or be it infrastructure provision.”

The government is also “looking at a brand new international airport that is capable of handling around seven million passengers” and exploring “new horizons of economic development.”

“Maldivian youth aspirations are tremendous. They are enormous. It is from housing to jobs and also to improving their wellbeing. The only way to do this is to attract our doors to all foreign investments who want to invest in major, major investments here,” he said.

The US$300 or US$400 million bridge project is “enormous” for the Maldives with its per capita income of about US$7,000, Yameen said.

“What it entails is not only growth, what it entails is assurance of jobs for Maldivian youth,” he said.

The government is committed to improving the livelihoods of the people, “no matter what you hear on the roads of Malé.”

Yameen also appealed to government staff to be “hospitable, speedy and efficient in delivery of service.”

Service provision should be “seamless,” he continued, “so no hiccups, no nonsense, that is the only way the so-called one-stop shop is going to work.”

Economic returns in the Maldives is “as good as any you can have,” he said, noting that investments in tourism can be recovered in four or five years.

The Maldives is also “a low tax country” with a comparatively low business profit tax, he said.

“This is a safe place for investments, this is safer than the safest place elsewhere on the earth,” Yameen said.

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EU demanded same sex marriage, freedom of religion, claim ministers

The European Union (EU) demanded legalisation of same sex marriage and freedom of religion in return for extending duty-free status to Maldivian exports of canned tuna, Economic Development Minister Mohamed Saeed and Fisheries Minister Dr Mohamed Shainee have claimed.

At a press conference this afternoon, Saeed said that the reason for the EU’s decision was the Maldives’ refusal to accept the condition for “allowing homosexual relations and the opportunity for people to follow any religion they want”.

“The Maldives is an Islamic state and will remain so. We will uphold Islam. We will not compromise on anything that conflicts with Islam,” he said.

Last year, the government’s application for a year’s extension under the ‘GSP Plus’ program was declined as it had not ratified all 27 required international conventions. The Maldives holds reservations concerning the freedom of religion component of the International Covenant on Civil and Political Rights (ICCPR).

Dr Shainee said there was consensus among the public that same sex marriage and freedom of religion should not be allowed in the Maldives.

The ministers accused the opposition of attempting to deceive the public and obstructing the government’s development efforts.

Shainee said the opposition was twisting and distorting statements from government officials to divert attention from the government’s achievements during its first year in office, attempting to cast a “shadow” on the government’s achievements.

He accused former President Mohamed Nasheed of providing false information to foreign parties with the intention of “creating distrust towards the Maldivian people” and turning foreign nations against the Maldives.

The Maldivian people would suffer the consequences of the opposition’s alleged attempts to worsen relations with India and Europe, he said.

India has suggested remarks made in the People’s Majlis by Dunya last week regarding Sino-Indian talks on the Maritime Silk Road project were misleading, prompting government politicians to suggest the MDP was behind the confusion.

After publishing what is claimed to be evidence of the supposed discussions having taken place yesterday, Indian High Commissioner Rajeev Shahare tweeted a link to the official joint statement released at the conclusion of September’s talks between President Xi Jinpeng and Narendra Modi.

The 28-point statement contained no mention of the silk road project, while the Chinese press release referred to by the Maldives government mentioned that the two governments “should” work within the silk road framework.

Looking East

In his Republic Day address yesterday, President Abdulla Yameen accused the EU of imposing trade restrictions on the Maldives for refusing to change or abandon Islamic principles.

Until January 2014, fish exports to the EU – the single largest export partner by value – were duty-free under the Generalised System of Preferences (GSP) programme, a non-reciprocal trade agreement extended to developing countries.

Thailand, Ecuador, and China also lost GSP benefits this year.

The Maldives was forced to apply for GSP Plus status as a result of its graduation from least developed country status – a change President Yameen has noted as bringing “enormous challenges and hardships”.

President Yameen said yesterday trade and economic cooperation with China does not involve the same challenges to remaining an Islamic state posed by “Western colonial powers.”

“Participating in business with China does not involve any such compulsion for us,” Yameen said.

Former Fisheries Minister Shafeeu told Minivan News in November 2013 that the Maldives would lose its competitive advantage over the larger fishing fleets of nearby Sri Lanka and Thailand with a 14-20 tariff on fish imports, and reduce profits to “a marginal value”.

President Yameen said there was “no way forward” for the country on the issue.

“The government’s thinking is changing towards the East,” he said. Under the Maldivian Constitution, all citizens are required to be Sunni Muslim and the practice of other religions as well as places of worship are prohibited.

Shainee noted that the EU was still the Maldives biggest partner for fish exports and stressed that closer ties with China does not entail worsening relations with India or other friendly nations.

The government has been looking for new markets for fish exports – such as China, the Middle East, and America – and have introduced longline fishing, he added.

Of the companies responding to request for proposals from the government for infrastructure projects, Saeed said today that a large percentage were from China.

An agreement has also been signed between China and Maldives to form a joint commission on trade and economic cooperation, he added, which would facilitate economic growth.

Saeed also noted that China represents 40 percent of tourist arrivals to the Maldives.

The government decided to participate in the Chinese 21st Century Maritime Silk Route initiative because China is currently the strongest and fastest growing economy in the world, President Yameen said yesterday.

As a result, Yameen continued, the government believes that the “multi-million dollar infrastructure investment” needed for economic development would “arrive through this door.”

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Political consensus necessary for success of SEZs, cautions MMA governor

Political consensus is necessary for special economic zones (SEZs) to be successful and beneficial to the nation, Maldives Monetary Authority (MMA) Governor Dr Azeema Adam has cautioned.

Speaking at a forum on state broadcaster Television Maldives (TVM) last night, Dr Azeema said one of the most important prerequisites for successful enactment of the SEZ Act was stability and consensus “on a political and national level.”

“If SEZ becomes caught up in political waves, it will not bear fruit,” she warned.

“Political confrontations must come to an end for investors to come to the country, to ensure investor confidence, and for jobs to be created for Maldivians.”

Political disputes should be resolved through “constructive, meaningful and academic debates,” she advised.

President Abdulla Yameen ratified the SEZ Act on Monday (September 1), which he has said would be a “landmark law” that would “transform” the economy through diversification and mitigate the reliance on the tourism industry.

The government has maintained that SEZs with relaxed regulations and tax concessions were necessary to attract foreign investors and launch ‘mega projects’ for economic diversification.

Opposition leader Mohamed Nasheed has, however, dismissed SEZs and the touted mega projects as “castles in the air” whilst his Maldivian Democratic Party (MDP) warned that the law would pave the way for money laundering and other criminal enterprises, undermine local councils, and authorise the president to “openly sell off the country” without parliamentary oversight.

Longterm plan

Dr Azeema went on to stay that SEZs should create wealth and employment opportunities for Maldivians.

School leavers and university graduates should have the necessary skills when they enter the job market, she added, noting that a high employment rate was required for sustainable growth.

Citing International Labour Organisation (ILO) figures, Azeema said over 3,500 zones of varying sizes have been created in 130 countries.

“Economists agree that special economic zones play a very important role in the economic development of a country. It is known that at least 40 million people work in such zones,” she said.

Studies have shown that SEZs increase national productivity and income, she continued, and the zones contribute at least US$200 billion worth of exports worldwide.

However, she stressed that a longterm plan and strategies – which “should be transparent to investors and the public” – would be needed for SEZs to be successful.

While SEZs have been beneficial in some countries, “the results have not been so good” in others, she noted.

She added that SEZs in Singapore and China created in the 1960s and 1970s, respectively, took foresight and years to become successful.

Forum

At last night’s forum – organised jointly by the Maldives Broadcasting Corporation and the Maldives National University business school’s student association – MDP MP Fayyaz Ismail said large investments could not be secured while foreign businesses did not have confidence in the judiciary.

Fayyaz argued that the SEZ law lacked provisions for oversight and adequate legal protection for investors, relying solely on the benevolence and integrity of the government.

Tourism Minister Ahmed Adeeb – co-chair of the economic council – said the law was designed to attract investments beyond the ‘seaplane zone’ close to Malé’s international airport.

Under the existing tourism law, a flat rate of US$8 per square meter was charged for development of tourist resorts, Adeeb explained, which led to investors choosing uninhabited islands closer to the capital.

The SEZ Act combines the government’s policies on population consolidation and foreign investments to expand the economy and develop infrastructure in the north and south, Adeeb said.

Economic Development Minister Mohamed Saeed said SEZs were “tried and tested” in many countries, including small island states in the caribbean, which had a thriving banking sector.

“A zone is created to establish infrastructure that we don’t have through foreign funds,” he said.

Referring to the the iHavan transhipment port project, Saeed said the Maldives could capitalise on its strategic location and the “trillions of dollars” worth of trade that passes through the seven degree channel.

Saeed explained that the Ihavandhippolhu integrated development project would include offshore docking, bunkering facilities, an export processing zone, real estate businesses, and non-convention tourism facilities.

He noted that the development of Singapore’s port saw establishment of banks, a hotel industry, and other subsidiary services.

Adeeb stressed that the SEZ law allows the government to offer incentives and “for the first time” negotiate directly with investors, who preferred “a one-stop solution” for applications, permits and licenses.

While US$5 billion has been invested in tourism since 1972, Adeeb suggested that even if one project such as iHavan “takes off” with US$1.3 billion worth of investment, the economy would be transformed through multiplier effects.

Mohamed Ali Janah, former president of the Maldives Association of Construction Industry, meanwhile said emulation of the SEZ model implemented in the Caribbean and the ‘tiger’ economies of East Asia could take the Maldivian economy to “the next level”.

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President seeks Chinese free aid for Hulhumalé bridge project

The government is seeking concessional or free aid from the Chinese government to finance “a large portion” of a project to build a bridge connecting the capital Malé and Hulhumalé, President Yameen has revealed.

Speaking to reporters on Thursday night (August 14) prior to departing for China to attend the opening ceremony of the Youth Olympic Games, Yameen explained that the Chinese government assured assistance and inquired ahead of the visit about “the most important project for our government.”

“So we discussed amongst ourselves and agreed that the most important project is the ‘youth city’ and the bridge between Malé and Hulhumalé as part of efforts to ease housing [shortage] for the people,” he said.

Yameen noted that as “all major Chinese companies are government companies” – referring to proposals submitted by Chinese companies expressing interest in the project – Chinese corporations would undertake the project with the “blessing” of the Chinese government and would be able to secure loan facilities through “generous concessional assistance”.

The government delayed awarding the project until after the China trip for this reason, he added, during which official talks would take place.

In addition to meeting the Chinese President, Yameen said the Chinese government has made “arrangements” for meetings with business leaders to discuss planned ‘mega projects.’

If the bridge project is to be awarded “under commercial terms,” Yameen said the government has “solid three proposals”.

However, Yameen expressed confidence of securing assistance for the project during the official talks.

Asked for an estimated date for commencement of the project, Yameen said that the talks so far had been “unofficial” but noted that an engineering team would arrive as soon as the Chinese government gives the “green signal” and a feasibility study would be conducted.

Yameen said he expected the project to begin before the end of the year.

Chinese assistance could be either in the form of grant aid or a loan facility from the Chinese EXIM Bank at a low interest rate, he explained.

According to the President’s Office, Yameen was greeted upon arrival at Nanjing Airport by the “‎Vice Governor of Jiangsu Province, ‎Mr. Fu Ziying, Protocol Ambassador of ‎Nanjing Youth Olympic Games, Mr. Gao Zhansheng, Deputy Secretary ‎General of Youth Olympic Games Organising Committee, Mr. Zhou Xu ‎and the Vice Director General of Jiangsu Province, Mr. Sun Yi.”

Yameen also attended a dinner hosted in his honour by the ‎MIND Group last night. ‎

Silk Route

In addition to the bridge project, the government also expects to upgrade the Ibrahim Nasir International Airport with a new runway and a new terminal, Yameen said.

The government has also formulated a project to provide electricity to the Greater Malé Region – including Hulhumalé, Vilimalé, Thilafushi, and Gulhifalhu – from a “single grid” and generate about 500 megawatts, he revealed.

A number of Chinese companies have meanwhile sought information regarding the ‘iHavan’ transhipment port project, Yameen said, adding that he believed various components of the project would be awarded to different parties.

Other projects that would be discussed with the Chinese include the establishment of “a data bank” through the “Smart Maldives Project,” he continued.

Referring to the Chinese ‘New Silk Road’ project, Yameen said the government was “very interested” in participating in the initiative.

Yameen also revealed that a number of bilateral agreements would be signed during the visit, including a framework agreement on trade assistance, while Chinese assistance in providing police vehicles would be “formalised”.

Chinese news agency Xinhua reported yesterday that China’s maritime ‘Silk Route’ would pass through the Ihavandhippolhu Integrated Development Project or ‘iHavan’ in the northernmost atoll in the Maldives.

“The design of the project seeks to capitalise on the location of the atoll, which lies on the seven-degree channel through which the main East-West shipping routes connecting Southeast Asia and China to the Middle East and Europe,” reported Xinhua.

A transhipment port in the northernmost atoll would benefit from “the growing trade volumes passing through the region in the wake of strong growth in China and India,” Xinhua noted, adding that an export processing zone in iHavan would enjoy “duty free access” to South Asia through the South Asian Free Trade Arrangement (SAFTA).

“Our positions at the UN and other key multilateral forums highlight the close cooperation between our two countries,” Yameen told Xinhua in an exclusive interview.

“Sino-Maldives relations have grown from strength to strength in recent decades, including high-level exchanges and mutual cooperation pacts to sustain regular exchanges.”

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Chamber of commerce vice president slams economic development minister

Vice President of the Maldives National Chamber of Commerce and Industry (MNCCI) Ismail Asif has severely criticised Economic Development Minister Mohamed Saeed, questioning his “sincerity” and “competence”.

Asif told the press on Thursday (August 7) that Saeed lacked “vision,” discriminated among local businesses, and had not been able to attract foreign investment.

The relationship between the ministry and the chamber of commerce has deteriorated during Saeed’s tenure, Asif reportedly claimed.

Saeed has not provided necessary information regarding a loan scheme for small and medium-sized enterprises (SMEs), Asif added.

He went on to accuse the minister of “corruption” in appointing businessmen of his choosing to business-related committees formed by the ministry.

Declaring the chamber of commerce’s backing for the government’s flagship special economic zone (SEZ) bill, Asif, however, questioned Saeed’s ability to implement the legislation when it is signed into law.

He added that Saeed had not consulted local businessmen before the bill was drafted and submitted to parliament.

However, Asif praised the government for proposing the SEZ bill early in its five-year term and expressed support for its provisions, arguing that it would expand the domestic economy and spur growth.

If income generated from the SEZs was evenly distributed among the populace, Asif said it would benefit the public and raise standards of living.

He also dismissed criticism that SEZs could be used for money laundering and criminal enterprises, suggesting that it was not directly linked to the establishment of such zones and advised control measures.

Parliament’s economic affairs committee is currently reviewing the SEZ legislation and has set itself a deadline of October 10 to complete the assessment and possibly make revisions.

However, MP Abdulla Khaleel – chair of the committee – told newspaper Haveeru today that he expects the review process to be completed this month, after which the bill would be sent to the People’s Majlis floor for a vote.

Parliament breaks for a one-month recess at the end of August.

As the bill was a high priority for the government, the Progressive Party of Maldives MP for Faafu Nilandhoo said the committee has decided to hold two meetings for every day when there is a parliament sitting.

He stressed that stakeholders would be consulted and technical expertise would be sought.

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SEZ bill designed to incentivise investment, says Economic Development Minister

The special economic zone (SEZ) bill submitted to parliament last week is designed to incentivise foreign investment with special privileges and tax exemptions, Economic Development Minister Mohamed Saeed has said.

Speaking at a press conference this morning, Saeed said the current administration’s objective was introducing new industries in order to overcome the dependence on the tourism industry, which was vulnerable to external shocks and global events.

The Maldives had to “outperform competitors” by offering incentives so that investors would choose the country over business hubs such as Dubai, Oman, Qatar, Singapore or Hong Kong, Saeed said.

According to the draft SEZ legislation (Dhivehi), investors would be exempted from paying either import duties for capital goods brought in for the development, supervision, and operation of the zone or business profit and withholding taxes.

Moreover, investors in the SEZ will be exempted from paying goods and services tax for a 10-year period.

Additionally, a board of investment – chaired by a minister – established by the law would have the authority to lease land to foreign companies for 66 years while local companies would be able to purchase land.

Saeed said he expects the SEZ bill to become the first piece of legislation to be passed by the 18th People’s Majlis, which began its five-year term last month.

Mega-projects

The Maldives became the number one destination worldwide for “lifestyle holidays” because resorts were developed in the early 1970s as “a kind of special economic zone,” Saeed contended.

While the tourism industry was the main source of foreign currency at the moment, Saeed said the government did not believe that other industries were “alien” or unsuited to the Maldives.

Saeed suggested that the turnover from new industries set up in the SEZs could be two or three times higher than tourism.

“That is because all the large developing economies of the world are near the Maldives. For example, China and India,” he said.

Referring to the government’s ‘iHavan’ transshipment port mega-project, Saeed noted that the Maldives is strategically located astride major sea lanes in the Indian Ocean, through which cargo ships carry US$79 trillion worth of goods from East to West and vice versa annually.

Nine ships an hour travel through these channels, he added.

“Lagoons with the natural depth needed to service those ships is found in this region only in the Maldives,” he said.

While other countries would have to dredge to build ports, Saeed said the Maldives has “wave-free natural ports” that could provide services such as offshore docking facilities throughout the year.

“If turnover from tourism is US$2.5 or US$3 billion [annually], when a shipping industry with offshore docking, bunkering and bulk-breaking facilities is set up in the Maldives – one of the world’s most spacious ports – then consider the benefits. For example, consider the turnover, the GST [goods and services tax] of the turnover, [and other] taxes,” he explained.

The iHavan or Ihavandhippolhu Integrated Development Project involves a transshipment port facility, airport development, a cruise hub, yacht marina, bunkering services, a dock yard, real estate, and conventional tourism developments.

“Freeholds”

The SEZ legislation envisions nine economic zones across the country, including an industrial estate zone, export processing zone, free trade zone, enterprise zone, free port zone, single factory export processing zone, offshore banking unit zone, offshore financial services centre zone, and a high technology park zone.

President Yameen had declared in April that the SEZ bill would become “a landmark law” that would strengthen the country’s foreign investment regime.

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

The SEZs would be “likened to cities in Dubai or the Emirates” and “the [business] environment we have in Singapore.”

The new law would enable investors to have “freeholds” in the country and allow investors “to engage in really, really long gestative projects,” Yameen said.

“We are embarking on an era of growth,” he said.

Moreover, addressing participants of the Maldives Investor Forum in April, Yameen had said his administration was “cognisant of the needs of our investors and the requirements to strengthen and redefine the legal and regulatory environment governing foreign investments.”

“To address investment climate and to facilitate mega investments with attractive incentive packages, a Special Economic Zone Bill will be tabled in the parliament soon. Additionally, the Foreign Investment Act and Companies Act are being revised to cater the ever increasing needs of the modern foreign investors,” he said.

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Government submits bill on special economic zones

A bill on establishing special economic zones (SEZ) to attract foreign investment has been submitted to parliament on behalf of the government by Progressive Party of Maldives (PPM) MP Ahmed Nihan.

The SEZ bill becomes the first piece of legislation to be proposed by President Abdulla Yameen’s administration to the 18th People’s Majlis, the newly-elected PPM parliamentary group leader tweeted on Thursday (June 5).

Speaking to reporters prior to departing to China on Wednesday night (June 4) to attend the Kunming Trade Fair, Economic Minister Mohamed Saeed explained that special economic zones would be established in the north, south and other “strategic locations.”

The SEZ bill is intended to expand the economy and could “bring an end to the dependence on tourism,” he said.

In addition to ports and light industries, Saeed said financial services and bunkering facilities would be made available at the zones.

“So the result of this would be the introduction of different industries to the Maldivian economy in addition to tourism,” he said, adding that the new enterprises could be more lucrative and beneficial than tourism.

Referring to the impact on the Maldives from the 2004 tsunami and the spread of the SARS virus, Saeed stressed the importance of diversification, as the Maldivian economy was vulnerable to external shocks due to the extreme dependence on the tourism industry.

He noted that economic development and job creation was the key focus of President Yameen’s election campaign.

The government conducted “a wide research” in drafting the bill, Saeed continued, and studied the practices of countries such as Dubai, South Korea, Mauritius, Cyprus, China, and Singapore.

The bill would “completely ensure investor protection,” he asserted.

Business-friendly laws were essential for attracting investors for mega-projects planned by the government, Saeed noted, such as the ‘iHavan’ transhipment port project.

The minister also expressed confidence that parliament would pass the bill without delay.

Vice President Dr Mohamed Jameel Ahmed meanwhile observed that the ruling party had a clear majority in parliament with a team of young MPs committed to the government’s economic agenda.

“Freeholds”

President Yameen had declared in April that the SEZ bill would become “a landmark law” that would strengthen the country’s foreign investment regime.

“What we would like to confirm for the foreign investors who come to the Maldives is that foreign investors should feel that Maldives is your second home here,” Yameen had said at a function in Hulhumale’.

The special economic zones would be “likened to cities in Dubai or the Emirates” and “the [business] environment we have in Singapore.”

The new law would enable investors to have “freeholds” in the country and allow investors “to engage in really, really long gestative projects,” Yameen said.

“We are embarking on an era of growth,” he said.

Other economic bills in the government’s legislative agenda include bills on foreign investment, insurance, consumer protection, corporate social responsibility and small claims as well as amendments to the Maldives Monetary Authority Act and the Pensions Act.

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