Maldives obtains US$20m from Saudi Arabia to manage cash flow

The Maldives has obtained a US$20 million grant from Saudi Arabia for budget support, despite official figures indicating record levels of income and the economic ministry saying it has authorised US$600 million worth of foreign investment this year.

Finance minister Abdulla Jihad told Minivan News today that the Saudi funds will be used to “manage cash flow” as revenue was lower than expected.

A large portion of forecast revenue is expected later in the year, he said, adding that shortfalls are currently plugged through sale of treasury bills.

The forecast for government income in this year’s record MVR24.3 billion (US$1.5 billion) budget is MVR21.5 billion (US$1.3 billion).

The projected revenue includes MVR3.4 billion (US$220 million) anticipated from new revenue raising measures, including revisions of import duty rates, the introduction of a “green tax”, acquisition fees from investments in special economic zones (SEZs), and leasing 10 islands for resort development.

Import duties hikes came into effect on April 1. However, three weeks later, the government reversed hikes for motorcycles and garments. Jihad said revenue from custom duties will be lower than expected as a result of the policy reversal.

Jihad also said acquisition fees from SEZs are expected during the second half of the year.

Tax revenue

The Maldives Inland Revenue Authority (MIRA) said today that the revenue collected in April was 6.5 percent above forecasts and 14.9 percent higher than the same period last year.

Total revenue last month reached MVR940.3 million (US$60.9 million), with goods and services tax accounting for 70 percent of income. Total revenue collected so far this year has reached MVR4.6 billion (US$298 million).

The customs authority also collected MVR574 million (US$37 million) during the first quarter of 2015 as import duties, fees, and fines, representing a 28 percent increase from the previous year.

Further figures by the MIRA show revenue from taxes have been higher than expected in the first quarter of 2015.

The central bank, the Maldives Monetary Authority, meanwhile says business activity in the tourism, construction, wholesale, and retail sectors increased during the first quarter of 2015, and expects further improvements in the second quarter.

Foreign investment

The economic development ministry revealed today that it has authorised foreign investments worth nearly US$600 million this year, and says it is expecting US$1.8 billion worth of foreign investments in the next five years

Registrar of companies Mariyam Wisham told the press that most foreign businesses registered between January and April were investors interested in the tourism, construction, and real estate sectors. The investors were mainly from the Middle East, South Asia, and China, she said.

Economic development minister Mohamed Saeed said the number of foreign businesses registered under the current administration showed investor confidence in the Maldives.

Wisham also revealed that 5,014 new small and medium-sized enterprises have been registered so far this year following the enactment of a new company registration law last year.

But the opposition has criticised the lack of significant foreign investments despite assurances from the government following the passage of its flagship SEZ legislation in August last year.

The government signed a Memorandum of Understanding in March with Dubai Ports World to develop a commercial port and free trade zone near Malé and said a joint venture agreement will be signed in a month.

However, Saeed told the press today that an extension has been agreed upon for negotiations, citing the government’s unwillingness to compromise “national issues” as the reason for the delay.

The main opposition Maldivian Democratic Party has alleged corruption in the deal.

Saudi-Maldives relations

The Saudi Arabian government had pledged the US$20 million during president Abdulla Yameen’s state visit to the kingdom in March.

Contrary to Jihad’s statement that the Saudi funds will be used to manage cash flow, fisheries minister Dr Mohamed Shainee told Haveeru today that the US$20 million in grant aid will be “spent through the budget on various projects the government wants.”

A delegation including officials from the Saudi Fund for Development as well as Saudi contractors meanwhile visited the Maldives last week and gathered information on the various projects for which the government is seeking loan assistance.

The projects included road construction at the airport, an airport hotel, and a road network for Hulhumalé, Shainee said.

Shainee has previously said the Saudi Arabian government also assured loan assistance to develop the international airport.

During the visit, President Yameen held talks with King Salman bin Abdulaziz Al-Saud and Saudi Arabian ministers for education, defence, petroleum and mineral resources, and finance.

Then-Crown Prince Salman had visited the Maldives in March last year. During the trip, he pledged US$1.2 million to build 10 mosques across the country and donated US$1.5 million and US$1 million, respectively, to the health sector and the Islamic ministry’s waqf fund.

Prince Salman also visited the Maldives in April 2010. He ascended to the Saudi throne in January following the death of King Abdullah bin Abdulaziz.

A joint communique issued during president Yameen’s visit stated that the two sides agreed to increase “their commercial exchange while expanding and enhancing investment between the two countries and extending invitations to their respective private sectors to explore the available investment opportunities in both countries.”

“The Saudi Fund for Development will continue to finance the development projects in the Republic of Maldives and will consider participating in the expansion of Malé airport and beach preservation in Hulhumalé,” it added.


Yameen pledges to end violent crime at ‘Successful 365 Days’ rally

With additional reporting by Ahmed Naish and Ismail Humaam Hamid

The Progressive Party of Maldives will rebuild a devastated nation through job opportunities for the youth and a crackdown on violent crime, said President Abdulla Yameen while celebrating one year in office.

Yameen urged young people to take advantage of the opportunities that would be created by growing tourism and large scale foreign-funded infrastructure projects, while pledging to bring peace and security to the nation.

“I want to say tonight as well in your presence, this government will have no mercy at all for those who slaughter Maldivian citizens with no mercy,” said Yameen at the ‘Successful 365 Days’ event held in Male’ this evening.

He pledged to implement the death penalty – reintroduced under his government, for the sake of human rights and dignity.

“Saving the Maldives from these big atrocities is the biggest aim of this government,” he said, stating that Maldivians by nature sought peace and stability.

Yameen said that proposed changes to legislation would remove violent crime which has blighted the country in recent months, suggesting the framers of the 2008 constitution wanted to create unrest and anarchy.

An estimated 3000 people attended the event at the carnival ground area to hear cabinet members and party colleagues detail the achievements of President Yameen’s anniversary.

While Islamic Minister Dr Mohamed Shaheem Ali Saeed said Yameen had united the nation, Speaker of the People’s Majlis Abdulla Maseeh Mohamed launched a book detailing the administration’s accomplishments.

Speaking earlier in the evening President’s Office Undersecretary Dr Hussain Faiz listed the achievements of the cabinet’s social council, which he said included a doctor for each island, opening 46 pharmacies, and introducing sea ambulance services in six atolls.

Faiz also noted that the government had introduced the unlimited Aasandha healthcare scheme for persons with chronic illnesses, as well as raising the old age pension to MVR5000.

Pledges to provide unlimited healthcare to all citizens as well as a doctor for every family were two of the administration’s aims for an ambitious 100 day programme twelve months ago, while nationwide sea ambulances had been promised within the first year.

Faiz also noted the feasibility studies carried out into an Islamic University in the Maldives, while saying that the role of Islam and Quran had been expanded in the new national curriculum.

Discussing the government’s record on development and the economy, Minister of Fisheries and Agriculture Dr Mohamed Shainee noted that the country’s dollar shortage had been alleviated, while MVR68 million worth of loans were issued.

Shainee claimed that, in addition to 1,700 new businesses being registered, and new resorts being put up for bidding, 19 foreign investors had registered a commitment of investing over US$600 million.

The government has introduced legislation for special economic zones – with a minimum investment of US$150 million – in an attempt to draw in new developers, though the only significant agreement signed as yet has been the Chinese deal to begin redevelopment of Ibrahim Nasir International Airport.

The fisheries minister suggested that President Yameen’s background as an economist had contributed to the administration achieving the equivalent of six year’s work in one.

Related to this story

President Yameen’s anniversary – The Year in Review

Analysis: President Yameen’s first year – Towards good governance?

MDP condemns insecurity as PPM celebrates peace and order


Fisheries minister reveals details of fishermen’s allowance

The Ministry of Fisheries and Agriculture has compiled procedures under which fishermen can apply for the government’s scheme for an allowance of MVR10,000 (USD 649) for fishermen during lean months.

Provision of MVR10,000 to fishermen ‘regardless of catch’ was a campaign pledge of the ruling Progressive Party of Maldives (PPM) during the 2013 presidential elections.

Speaking at a press conference held on Sunday, Minister of Fisheries and Agriculture Dr Mohamed Shainee stated that the scheme will commence from Tuesday, April 1.

“The objective of this scheme is to further aid the fisheries industry to become a main pillar in strengthening the country’s economy. We are trying to give support and assurance to fishermen that they can maintain their careers in fishing,” Shainee stated.

“More than a form of social protection, this scheme is more a means to further develop the fisheries industry economically. Through this scheme, we are assuring an income for the fishermen”.

The minister stated that only tuna and yellowfin tuna fishermen are eligible to participate in the scheme during its initial stages.

“However, we are at the moment unable to include other forms as we do not have the statistics on how much they generally earn. Nevertheless, other fishermen will also be able to participate in the scheme,” Shainee added.

Under the newly comprised procedures, the ministry categorised tuna and yellow fin tuna fishing vessels into three categories: vessels smaller than 45 feet in length, vessels between 45 and 65 feet in length, and vessels larger than 65 feet in length.

Under the scheme, fishermen working on vessels smaller than 45 feet in length are to get an allowance of MVR3500 (US$227) in return for a monthly premium of MVR350 (US$23) paid to the state.

Fishermen working on vessels between 45 and 65 feet in size are eligible to receive an allowance of MVR5000 (US$324), while needing to pay a monthly premium of MVR400 (US$26).

Those working on larger vessels – over 65 feet in length – will be given the full allowance of MVR10,000 (US$649), and are required to pay a premium of MVR500 (US$32).

The premium fees are to be paid up front for a year in order to participate in the scheme. The minister stated that the government is working to arrange the receipt of payments through island councils.

“As over 90 percent of Maldivian fishermen work in vessels of over 65 feet in size, we have targeted the full amount of MVR 10,000 for them,” Shainee told press today.

“However, this government has not neglected any fisherman. By this I mean that, although our pledge says MVR10,000 for fishermen on all lean months, we have made the scheme inclusive of even the remaining 10 percent of fishermen,” Shainee explained.

Minister Shainee expressed confidence that the scheme would encourage fishermen to engage in fishing even during the lean months.

It was further revealed that discussions are currently being held to hand over the management of the scheme to the National Social Protection Agency.

It was noted that 722 fishing vessels are currently in the state registry, while 11,894 fishermen are registered as working on these vessels – only 5 percent of them are listed as working on vessels less than 45 feet in length.

According to the ministry, over 80 percent of the registered fishermen work on vessels larger than 65 feet in length. In a previous interview with Minivan News, Dr Shainee had noted that encouraging fishermen to use for economically sized vessels would improve the industry’s profitability.

On Saturday, President Abdulla Yameen revealed at a political rally that application forms for the scheme will be available from April 1 onwards. He further stated that the allowance will be released to fishermen before the end of May.

Yameen further revealed that discussions are being held between the State Trading Organisation (STO) and the Indian government to arrange the supply of petroleum products at a lower price.


Government eyes alternative fish export markets, Maldives fish to be labelled ‘halal’

The government has said that the Maldives will look to alternative fish export markets, including the middle-eastern and the Malaysian market, after withdrawing its application for European Union (EU) duty-free status of imported fish from the country.

Earlier this November, the EU declined to extend the duty-free status on Maldivian fish exports under its Generalized System of Preferences (GSP) program – a non-reciprocal trade agreement extended to developing countries – as the government had not ratified all 27 required international conventions.

During a press conference held by three cabinet ministers on Thursday afternoon, Foreign Minister Dhunya Maumoon told the press that the decision to withdraw the application for extension under the ‘GSP+’ program was because the government was informed by the EU’s Brussels mission that the application would possibly be rejected.

“The matter with EU’s relief of duty to Maldivian fisheries exports relate to our reservations towards freedom of religion and other conventions.  These reservations were taken because it contradicts the fundamentals of Islam and our constitution,” Dhunya explained.

“If we get rejected that means the Maldives is getting a bad label. Such a rejection would be informed to all European nations in the EU. So to avoid the dire circumstances of that, which would affect the country’s reputation, we have decided to withdraw our application,” she added.

EU officials earlier confirmed to Minivan News that the transitional period of trade concessions for the Maldives was due to expire as the Maldives from 2011 was not longer considered a developing country.

The Maldives applied for an extension under the ‘GSP+’ program, a unilateral trade concession given to a limited number of countries on the basis of good implementation of human rights and labour conventions, officials said.

Officials stated that the Maldives did not qualify due to the country’s reservations to ICCPR on religious freedom and CEDAW concerning women’s rights.

Under the Maldivian constitution all citizens are required to be Sunni Muslim and the practice of other religions is criminalised. Customs authorities forbid the import of religious items and scan the baggage of tourists arriving at the airport.

Foreign Minister Dhunya however described the withdrawal as a silver lining, elaborating on the fact that the country’s fisheries export should not be dependant upon just one single market.

“I make it clear that we are not running out of friends in the international community,” Dhunya said.

Counter Measures

In a bid to counter a the impact of the decision the government announced the formation of a Fisheries Promotion Board (FPB) that will work on promoting Maldivian fisheries products to none-EU markets.

“I believe, if we can promote our products through the Fisheries Promotion Board, we can overcome the difficulties we would face from this change of arrangements” said the new Minister of Fisheries and Agriculture Dr Mohamed Shainee.

Secondly, the government announced that the Maldives’ fish products will be certified as a ‘Halal product’ in the future. Minister Shainee said that the government had been analysing other possible markets including middle-eastern markets and the Malaysian market.

“There are many markets around the world for us to export fisheries products. However, one of the main difficulties in penetrating such markets earlier was that we did not have a Halal certification on our products,” Shainee said.

“Today President Yameen has decided to give the legal mandate on issuing Halal certification to the Ministry of Islamic Affairs,” said Minister Shainee.

Minister Shainee also said that, although the Maldives will not be entitled to the GSP+ incentives, the fish exports to Europe will not come to a halt.

Rather, he described it as a change in the price of fish rather than an obstruction to exporting of Maldivian fisheries products.

“It is just that we will from now onwards be selling fish in a very competitive market,” Shainee said.

When inquired about involving foreign investors in developing the Maldivian Fisheries industry, Shainee said that the government did not wish to involve foreign investors as the fisheries sector formed part of Maldives’ primary industries and privatizing such could have detrimental effects on the economy.

The minister however said that that the government envisions diversification of the fisheries industry and the introduction of new forms of fishing that would further boost the industry.

“We want to diversify the market. There are varieties of sub-industries that we can develop including Mari-culture. However the government has not yet decided whether to seek foreign investments yet to develop those sub-industries,” Shainee said.

Meanwhile, the Economic Minister Mohamed Saeed said that apart from friendly Islamic countries and Malaysia, the government has held extensive talks with Russia and China regarding a possible entry into their markets.