Climate change could cause annual economic losses of over 12% of the Maldives’ GDP by the end of this century, says a new Asian Development Bank (ADB) climate and economics report released today (August 19).
“A potential ocean rise of up to 1 meter by 2100 will have devastating consequences for this island archipelago, where the highest natural point is only a little over 2 meters above sea level,” said Bindu Lohani, ADB Vice-President for Knowledge Management and Sustainable Development.
The Maldives is the most at-risk country in South Asia from climate change impacts, said the report titled ‘Assessing the Costs of Climate Change and Adaptation in South Asia’.
Given the uncertainties of climate change, there is a slight possibility that the losses could swell to more than 38%. But if mitigation and adaptation steps are taken, the Maldives will benefit the most in the region, with annual losses limited to around 3.5% of GDP by 2100, the report concluded.
Programmes and Advocacy Manager at local environmental NGO Ecocare Maeed Mohamed Zahir, however, believes the government is currently far from taking such steps.
“There is no clear-cut adaptation strategy,” he added.
Energy supplies at risk
According to the report, the Maldives’ energy supplies are particularly at risk from climate change.
The Maldives’ energy vulnerabilities are related to the low elevation and small size of islands, the report explains. Their low elevation and narrow width makes powerhouses and associated infrastructure vulnerable to flooding and damage from severe weather events.
The report also notes that, with the commitment to become carbon neutral by 2020, the country is increasingly investing in renewable energy technologies, particularly solar power, for which there is abundant solar energy — 400 million MW per annum.
The environment ministry has recently announced a number of initiatives to minimise the country’s dependence on fossil fuels, including a pledge to convert 30 percent of all electrical use to renewable energy, and the Scaling-Up Renewable Energy Programme (SREP) set to “transform the Maldives energy sector.”
In addition, the report highlighted that vector-borne diseases could be a major public health concern for the Maldives in the future.
Dengue is now endemic in the country with seasonal outbreaks, observed the report. Epidemiological data shows changes in the seasonal nature of dengue, spreading across the atolls, and leading finally to epidemic proportions.
Morbidity from dengue by 2090 could increase to 34,539, with 324 deaths per year, the report stated.
Moreover, although malaria is not prevalent in the Maldives, it could be future concern if left unchecked said the ADB.
During 1990–2003, the number of malaria cases averaged 16 per year, with no fatalities. However, the report warns that annual morbidity due to malaria incidence by 2090 could reach more than 200.
Unprepared
Ecocare’s Zahir argued that the government is at best unclear, and at worst unprepared, for climate change. Speaking with Minivan News, Zahir appealed to the government to reveal their policy for adaptation in the face of climate change.
He went on to explain that in the last four to five years there has been no clear stance on climate change from the government.
“The number one priority is to make everyone aware if they have one,” he said.
Back in 2009, former president of the Maldives, Mohamed Nasheed, unveiled a plan to make the Maldives carbon-neutral within a decade. Zahir suggested that the following administration’s have been less clear on the issue.
“In the last two governments we don’t have a clear-cut climate change plans,” he argued. “From 2009 to now – it’s a disaster for us.”
Ecocare has previously accused the Maldives as being “not prepared at all” for the projected acceleration of sea level rise caused by the collapse of a glacier system in Western Antarctica.
Officials from the Ministry of Environment and Energy were not responding to Minivan News at the time of publishing.
The Maldives’ Inland Revenue Authority (MIRA) has released its figures for May, showing an increase of 9.5 percent in government revenue compared with the corresponding month in 2011.
The total revenue collected in the month of May is reported to have been Rf389.6 million (US$25.3million).
The report states that 35.6 percent of income came from the T-GST, a levy charged on all goods and services sold in the tourism sector, which itself has risen more than 119 percent compared with the corresponding period in 2011.
The yearly revenue collected by MIRA is now reported to be 74.2 percent more than at the same point in 2011.
The MIRA statistics do not, however, account for the loss of government revenue from import duties after amendments were made to the import-export act in November 2011. Import duties did not appear on MIRA’s books, even before these changes.
The changes to import duties were anticipated to reduce government import fees by Rf491.7million (US$31.9million) in 2012, according to the Maldives Monetary Authorities (MMA) projected figures.
This shortfall was expected to be more than matched by the introduction of the newly introduced Goods and Service Tax (GST) and an increase in T-GST to 6 percent starting from January 2012.
The MIRA figures show that the loss of the Rf491.7million in import duties has indeed been more than compensated for by an increased revenue of Rf418 million (US$27million) from new GST, and Rf429.1million (US$27.8million) from the raised T-GST.
While the MIRA figures show its own revenue growing exponentially, the wider budgetary picture shows the government is failing drastically to offset its budgetary commitments.
Governor of the MMA Dr Fazeel Najeeb was recently reported as saying that the Maldives was “now in a dangerous economic situation never before seen in recent history.”
The International Monetary Fund (IMF) has expressed its concern over the country’s dire balance of payments situation which has been estimated by the Majlis’s Financial Committee to be 27 percent of GDP this year.
The 2012 budget was initially estimated to be around 9.7 percent of GDP, but in May was revealed to be much larger after significantly reduced expenditure and increased expenditure was taken into account.
The deficit is now predicted to be Rf9.1 billion (US$590 million)this year. An extrapolation of MIRA’s figures for the whole year suggest that the increased revenue from the changes to the point at which goods are taxed could amount to just over Rf850 million in additional government revenue.
The IMF has suggested the government further raise T-GST from 6 to 12 percent as part of its efforts to plug the financial gap.
The Financial Committee have said added that the government’s deficit may get worse before it gets better with additional spending commitments yet to be made.
Head of the Financial Committee Ahmed Nazim has listed these expenses as including food subsidies worth Rf270 million (US$17.5 million), electricity subsidies worth Rf250 million (US$16.2 million), capital expenditure by government institutions Rf735 million (US$47.6 million) and an allocation of Rf200 million (US$12.9) to the Aasandha Health Insurance scheme’s budget.
President’s Office Spokesman Abbas Adil Riza has claimed that the previous administration left Rf3-4 billion in expenses hidden from the public accounts.
The policies of the current government have also resulted in losses, including around Rf123.2 million a quarter (US$8 million) a quarter in airport concession fees due to a Civil Court ruling blocking the levying of an airport development charge as well as up to Rf2 billion (US$135 million) in land lease payments due to policy reinterpretation.
MIRA’s figures are starting to give a better indication of the revenue being lost through this change in the land lease arrangements as this month’s figures show a 25.9 percent reduction in this area when compared with the same period last year, amounting to Rf59million (US$3.8million).
Current government spending for the year has meanwhile increased by almost 24 percent, to a total of US$1.13 billion. Spending unaccounted for in the 2012 budget following the controversial change of government of February 7 has included the promotion of a third of the police force, lump sum payments to military personnel, Rf100 million (US$6.5 million) in fishing subsidies, reimbursement of Rf443 million (US$28.8 million) in civil servant salaries following cuts by the previous administration, the creation of two new ministries, and the hiring of international PR firms to counter negative publicity.
The viability of the Maldivian tuna fishing industry is being threatened by the mass harvesting of fish stocks by foreign fishing vessels just outside the country’s exclusive economic zone (EEZ), Minivan News has learned.
Fishing is the Maldives’ second largest industry after tourism, and the country’s largest employer. The sustainability of centuries-old ‘pole and line’ fishing methods is not only considered a source of national pride, but also attracts buyers from premium supermarkets in the UK and Europe.
“We have noticed a decline in skipjack tuna due to the operation of purse seniers, mainly French and Spanish, along our EEZ,” Fisheries Minister Dr Ibrahim Didi tells Minivan News. “We have heard they are using FADS (Fish Aggregation Devices) across a very big area.”
Purse seining is a fishing method whereby a vessel deploys an enormous net to encircle and capture entire schools of fish at once. The method is very cost effective but indiscriminate, and generates a large amount of bycatch.
It is particularly efficient used in conjunction with FADs. Fish such as tuna are naturally attracted to the floating object, such as a buoy, typically fitted with a sonar device capable of determining the quantity of fish below, and a satellite uplink that communicates this to the nearby fishing vessel. The vessel’s net does not discriminate between the predators and scavengers attracted by the target fish population around the FAD.
“Nothing escapes,” says Solah Mohamed, Head of Production for the Maldives’ Felivaru fish cannery, which was opened in 1982 in collaboration with a Japanese company.
“Just outside the Maldivian EEZ are thousands of FADS, with sonar and live tracking systems. There are so many deployed that the natural migration of the skipjack is changing,” he says. “Fish that are supposed to migrate into Maldivian waters are being stopped because so many FADS are deployed.”
Solah claims the FADs are deployed by purse seines belonging “mainly to Spain, France and Japan, and also Iran.”
The Maldivian fishing fleet is simply unable to compete due to its reliance on pole and line fishing methods, says Solah, “one of the most sustainable methods of fishing.”
“The issue is that purse seines have become so efficient – and their sizes are becoming huge – as large as 100-400 tons. They say the sonar detects dolphins, but I don’t think it sounds very effective. Sharks, dolphins, turtles – they take everything. I doubt they can be bothered to sort it all out before pulling it on board.”
The under-resourced Maldivian coastguard is unable to monitor the vastness of the Maldivian EEZ, and local fishermen rarely go beyond the 100 nautical miles (the EEZ is 200 miles).
However the issue is not one of legality or of policing capacity. Many vessels at least in the EU fleet are fitted with vessel tracking devices ensuring they do not stray into Maldivian waters. But in international waters, almost anything goes – and seeking to hold foreign countries to account for over-exploitation is near impossible.
“We may as well be under siege,” a senior government source told Minivan News, of the ring of vessels surrounding the country.
Officially, the government is more diplomatic. “This is happening on the high seas and not in our EEZ, so there is very little we can do to raise our concerns,” says Fisheries Minister Dr Ibrahim Didi.
“Purse seiners are operating without limitation in the Indian Ocean near our EEZ, and the Indian Ocean Tuna Commission (IOTC) has not taken any measures against it.
“Since we became a full member of the IOTC we have tried to raise the issue and talk with neighbouring countries to take a joint stand. But the IOTC is dominated by European countries.”
Solah from Felivaru has observed the same problem: “We are just becoming a full member, but Japan, Spain and France are big players in the Commission. I have been to one of their conferences and I feel that their voices are heard more than those of the coastal islands. They have more expertise and they can put forward more resolutions, more numbers – we simply don’t have the expertise to beat them.”
A fish aggregation device, or FAD
Last gasps of the tuna catch
Meanwhile, the pole and line catch in the Maldives is in decline.
Felivaru’s Deputy General Manager Mohamed Waheed observes that the Maldivian tuna catch has fallen from “very high” figures in 2005-2006 “to now less than it was in 1995-1996.”
“The main thing is that the pattern of fishing changed. May to August is the low season, but we can usually still catch fish in the southern waters of the country. But this season it did not happen – we had hardly any fish in the north, and very little in the south.”
The foreign purse seines have not reported a declining catch, notes Solah.
“In commercial fishing we talk about ‘catch’ and ‘effort’,” he explains. “The Maldivian catch is going down but according to the IOTC, the purse seine catch is stable. This means the purse seines have hugely increased their effort.”
Value-adding means employment
Felivaru buys fish from local fishermen, canning, labelling and adding value to the commodity prior to export. The company has high demand for its product from upmarket UK supermarkets such as Waitrose, but has been forced to scale down its production lines because it just cannot buy enough fish.
“We are now processing 15 tonnes per day. We can go up to 50 tonnes if we can get the fish – but our cannery has had to scale down because we don’t get enough,” says Solah.
That has impacted employment: “At the beginning of 2008 we employed 1100 employees,” says Waheed. “Four years later we’re down to half that – 550 workers. And all these people are going to lose their jobs when the fisheries collapse.”
“Maybe tourism brings the most money to the country, but fisheries still provides most of the jobs. It accounts for more than half the employment of the entire country,” he explains.
A question of economics
Former head of the Maldives Industrial Fisheries Company (MIFCO), Adhil Saleem, now the country’s Transport Minister, attributes the decline in local fisheries to the industry’s struggle to meet global pressures and remain competitive.
He espouses a pragmatic, free market view. Marketing the Maldives’ pole and line fishing as a premium ‘eco’ brand pleases environmentalists and looks fine on paper, he explains, “But our gains in the market are eaten up by the supermarkets, because they are the only outlets marketing the product. ‘Maldivian fishermen saving the world’ does not fetch a premium, because as much as they talk about it, the world is not prepared to pay for eco-friendly fishing.”
Saleem contends that small rises in ocean surface temperatures due to climate change are driving fish deeper, further reducing the stocks within reach of the traditional pole and line method.
“Our method only works near the surface,” he says. “But with changes in weather and sea temperature, fish will not surface.”
“At the same time, look at the way we fish – most countries do multi-day trips, sticking with the same school of fish until it is fished out. Our fishermen fish for bait early in the morning, and then in the afternoon if they are lucky they find a school of tuna, fish it and then leave. The next day they make a wild guess as to where it has gone, and hope they get lucky.
“I also get the feeling that because of the high price we get, our fishermen are not putting in their best efforts. At Rf 25-30 (US$1.6-2) a kilogram, in the south it’s not uncommon for a fisherman to be on Rf 11,000 (US$720) a month. The mentality is: ‘I have enough for today, so I can relax. I don’t need to think about tomorrow.’”
Saleem believes the Maldives will eventually have no choice but to begin purse seining, augmenting traditional fishing know-how with technology such as aerial surveys to share with local fishermen sightings of birds circling the schools.
“The Maldives can certify pole and line fishing, while simultaneously conducting purse seining,” he says. “We need field officers to go on board and teach multi-day fishing techniques, such as using lights at night to catch squid and reef fish so that when they come back they have something to sell.”
Thailand tramples Maldives canning industry
As for Felivaru, the Maldives has to come to terms with the fact that it now competes in a global marketplace, and that maintaining such a level of industry is not economically competitive, Saleem suggests.
“If [Felivaru] is unable to compete in the global market it would be better to do something else. Do we ask why Airbus has not built a manufacturing plant in the Maldives? If [fish canning] is a matter of national pride, then so is having a nuclear plant.”
Based on an island in the north of the Maldives, Felivaru is faced with the high logistical costs of feeding and accommodating large numbers of staff, which other canneries in South Asia do not have to contend with.
“The main problem is that Felivaru is an old factory, and secondly the labour cost in the Maldives is very high compared to Sri Lanka or even Thailand,” adds the Fisheries Minister, Dr Didi.
“There is also a problem of quantity and [consistent supply]. If they are running a factory they require a certain amount of fish per day, which is not economic or feasible as the pole and line method means our fishing is seasonal. Felivaru has four production lines, but I doubt they have ever used more than 1-2 lines because not enough fish is available.”
Saleem adds that the Felivaru cannery “has expanded in the north, while the fish are in the south. It would be better for them to operate in Galle in Sri Lanka where they would not have pay the extra costs such as accommodation.”
The outsourced model has been embraced by Felivaru’s competitor, Kooddoo Fisheries, which now exports pole and line tuna caught in the Maldives to the Thai Union cannery in Thailand for processing and export to UK supermarkets such as Sainbury’s and Marks & Spencer (M&S). Kooddoo also buys cheaper purse seines-caught tuna, then processes and sells it to the Maldivian market at a cheaper price point, undercutting Felivaru. The company has recently opened a shop in Male’ and launched a marketing blitz.
“In Male’ we can buy fish caught one-by-one in an eco-friendly manner for Rf 18-19 (US$1.2). We can also buy an imported can of the same fish caught with purse seines for Rf 11 (US$0.70),” says Saleem.
“Instead we should eat the Rf 11 tin and export the Rf 19 tin to increase the amount of foreign currency available. The Maldives, Japan and India are not bothered about pole and line – it is only fashionable in Europe.”
Felivaru’s Solah complains that this approach forces the cannery to compete for the dwindling supply of fish with companies that are simply exporting the raw commodity without adding value.
“The government should be encouraging the fisheries industry to remain in the Maldives, because if the fish stay it means jobs and wealth stay in the country,” Solah argues.
“It is really sad to see the label on these cans that reads ‘Maldivian pole and line tuna’, complete with a picture of a Maldivian island, next to ‘Packed in Thailand’. Who is checking how much the Maldives supplies, compared to how many cans come out of Thailand? They can buy 1000 tons of Maldivian pole and line fish, and supply 2000 tons of Maldivian ‘pole and line fish’ to UK supermarkets. There is no regulatory board monitoring them.”
Saleem argues that Felivaru “cannot expect fish to be sold to it at a subsidised rate. Kooddoo is exporting because the price is better. The companies would not export if Felivaru was prepared to pay world market rates – they just wouldn’t, because of the increased cost of shipping.”
Solah concedes that the Thai Union cannery can afford to pay more for unprocessed fish, even including transport costs, because of the operation’s economies of scale, cheaper labour and lower overheads.
“People are willing to pay more for a premium pole and line product, but currently there is no disincentive to export unprocessed fish,” he says. “Government policy should be to add value while the fish is in the country, and to make sure there is enough fish available to run the factories inside the country at full capacity before exporting it.”
Maldives pole and line tuna, packed in Thailand
Sustainability sells, says Sainsbury’s
Minivan News contacted Sainsbury’s supermarket in the UK, which sells the Thai-processed product marketed as Maldivian pole and line tuna.
“The pole and line method is recognised as the most responsible fishing method for catching tuna mainly as a result of minimising bycatch in the fishery,” explained Sainsbury’s Aquaculture and Fisheries Manager, Ally Dingwall.
Media coverage around the issue of sustainability in fisheries meant it was “increasing in the public consciousness in the UK,” she said.
“The Maldives is associated with a pristine environment and clear, clean waters which deliver great quality tuna, and this is clearly attractive to consumers.”
The supermarket regularly audited its supply chain and was able to trace its products to the capture vessel via the batch code, she said.
“Sainsbury’s have had tuna products packed in the Maldives in the past but encountered logistical difficulties in supply. We are reviewing the situation at present with a view to recommencing an element of our supply from Maldivian canneries,” Dingwall explained. “Our suppliers of products such as sandwiches and sushi which contain tuna as an ingredient are already sourcing pouched, pole and line caught tuna from Maldivian processing establishments.”
Yet while the Maldivian fishing industry grapples with the pressures of climate change, globalisation and appeasing Big Grocery, the ring of foreign purse seines sieging the country’s EEZ are, according to the IOTC, scooping up tuna to the tune of US$2-3 billion a year.
“By catching fish one by one we are using a bucket to scoop from the well, while the rest of the world is pumping,” says Saleem. “It is going to finish – and we will not have got our share of the catch.”
On this, Solah agrees.
“If the Indian Ocean fisheries collapse, the European, Japanese, Chinese and Iranian vessels can go to other oceans. But what can we do? This is the only industry we know. We have to negotiate and beg other countries to please stop, because this is killing us.”
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