Tourism growth slowed to less than one percent in 2012: Finance Ministry

The government’s forecast for economic growth in 2013 is 4.3 percent, following a slowdown to a projected 3.4 percent in 2012, according to an economic and fiscal outlook by the Finance Ministry introducing the state budget (Dhivehi) proposed for next year.

Tourism was especially hard hit in 2012, with growth falling from 15.8 percent in 2010 and 9.1 percent in 2011, to an expected 0.7 percent in 2012.

The original forecast for economic growth in 2012 was 5.5 percent.

An International Monetary Fund (IMF) mission said in a statement earlier this month that economic growth slowed to three and a half percent this year on the back of “depressed tourist arrivals earlier in the year and weak global conditions,” which have been “only partially offset by strong performance in construction and fisheries-related manufacturing.”

The IMF mission forecast “a modest recovery” for 2013 and beyond.

The Finance Ministry’s statement on the economic outlook for the next three years meanwhile explained that the Maldivian economy dipped into recession in 2009 following the global financial crisis in the previous year.

However, the economy rebounded with 7.1 percent growth in 2010 and 7 percent in 2011.

“While [real GDP] was projected to increase in 2012, the main cause of the economic slowdown compared to 2011 was the weakening of the tourism sector during the year,” the Finance Ministry stated.

While the tourism industry grew by 15.8 percent in 2010 and 9.1 percent in 2011, the industry’s growth in 2012 was expected to be 0.7 percent.

The two main reasons cited by the Finance Ministry for the anaemic growth were “the political turmoil the country faced in February” and a decline in the average number of nights tourists spend in the country “as a result of a decline in the average number of days a tourist spent in the Maldives.”

On average, tourism accounted for 28 percent of GDP during the past 10 years.

The main drivers of growth in 2012 were a booming construction industry and growth in manufacturing and fisheries.

Fisheries, manufacturing and construction

The volume of fish catch has been steadily declining for the past seven years. While approximately 185,000 tonnes of fish were caught in 2006, the number dropped to about 70,000 tonnes in 2011.

During the past five years, the value of the fisheries industry declined from MVR 489 million (US$31.7 million) to MVR 321 million (US$20.8 million) with a corresponding fall of 3.3 percent of the economy to 1.1 percent in 2012.

As a result of opening up the country’s Exclusive Economic Zone (EEZ), the industry’s productivity was expected to rise by 9.7 percent in 2012.

However, as fishing in the Indian Ocean was not expected to improve in coming years, the Finance Ministry has forecast the real GDP of the fisheries sector to decline by 1.3 percent in 2013.

Estimated real GDP for the manufacturing industry – fisheries products, foodstuff, furniture and cement – was meanwhile MVR 998 million (US$64.7 million) in 2012, up from MVR 850 million (US$55.1 million) the previous year.

Fisheries-related products accounted for the largest share of the manufacturing industry.

Following 19 percent growth in 2011, the construction industry was expected to have grown by 16 percent in 2012.

“The main reason for the large growth of the sector in 2011 and 2012 was the development of new resorts in 2011,” the Finance Ministry observed, adding that resort development accounted for 50 percent of construction in the Maldives.

Meanwhile, in the retail and import business sector, customs statistics for the first eight months of 2012 showed that the value of goods imported (adjusted for inflation) was 22 percent higher than the same period in 2011.

The real GDP of the business sector in 2012 was an estimated MVR 875 million (US$56.7 million).

Deficit and debt

The Finance Ministry also revealed that nominal GDP in 2011 was MVR31,447 million (US$2 billion) while the estimate for 2012 was MVR34,148 million (US$2.2 billion).

Real GDP in 2011 was MVR20,461 million (US$1.3 billion). Nominal GDP per capita in 2012 was estimated to be MVR 80,260 (US$5,206) per annum.

Real GDP measures the value of all goods and services produced in a country expressed in the prices of a base year – 2003 in the Maldives.

According to the Finance Ministry, the medium term target of the government was meanwhile reducing the fiscal deficit “to pave the way to conduct social and economic programmes” and regain the confidence of international financial institutions.

While a budget deficit of 9.7 percent was forecast 2012, the Finance Ministry said the figure was expected to reach 12.6 percent of GDP by the end of the year.

“The projected deficit in the estimated budget proposed for 2013 is 6.1 percent of GDP,” the Finance Ministry stated. “In the medium term, the budget deficit can be lowered to 1.9 percent of GDP in 2015.”

The Finance Ministry proposed MVR 1.1 billion (US$71.3 million) as foreign loans and MVR 1.1 billion (US$71.3 million) as domestic finance to plug the budget deficit in 2013.

While tax revenue from T-GST, GST and import duties collected in 2012 was lower than forecast, the Finance Ministry revealed that income from Business Profit Tax (BPT) was 80 percent higher than expected.

At the end of 2012, the government would have received MVR 1.3 billion (US$84 million) as BPT while the forecast was MVR763.6 million (US$49.5 million).

Presenting the 2013 budget to parliament on Monday, Finance Minister Abdulla Jihad said revenue forecast for 2013 was MVR 12.9 billion (US$836 million), including MVR 1.8 billion (US$116 million) expected as a result of implementing proposed revenue raising measures.

However, most of the proposed measures – such as hiking T-GST and introducing GST for telecom services – would have to be approved by parliament through amendments to the relevant laws.

More than MVR 200 million (US$12.9 million) was estimated as GST receipts from telecom services in 2013.

The Finance Ministry also revealed that the ‘total external public and public guaranteed debt’ was estimated to reach MVR 13.7 billion (US$888 million) in 2012.

Of the MVR 4.1 billion (US$330 million) of the loan assistance spent in 2012, more than 50 percent was from multilateral financial institutions and 28 percent from bilateral donors.

A total of MVR 1.9 billion (US$123 million) from loan assistance has been spent for various projects in 2012 while the rest was spent for budget support.

As of September 2012, MVR 561 million (US$36.4 million) has been received as budget support – US$16 million from the Asian Development Bank and US$20 million from a standby credit facility extended by the Indian government.

Moreover, the government spent more than MVR 1 billion (US$64.8 million) in 2011 and MVR 1.1 billion (US$71.3 million) in 2012 to service foreign debts as interest and repayments.

The figure was expected to remain the same in 2013.

In addition, the government spent MVR 660.5 million (US$42.8 million) in 2011 and MVR 2 billion (US$129.7 million) in 2012 to service domestic debts.

The figure for domestic debt was expected to decline to MVR 1.1 billion (US$71.3 million) in 2013 as payment for US$ 100 million of government bonds sold to the State Bank of India in Male’ – amounting to MVR 771 million (US$50 million) as repayment for a second tranche – has been pushed back to 2014.

Similarly, repayment of three ways and means treasury bonds to the Maldives Monetary Authority (MMA) or central bank amounting to MVR 951 million (US$61.6 million) has also been pushed back.

Government spending on loan repayment and interest payments was expected to reach MVR 3.1 billion (US$201 million) in 2012.

Including an estimated MVR 13 billion (US$843 million) in domestic debt, the total public debt is expected to reach MVR 27 billion (US$1.7 billion) in 2012 and MVR 31 billion (US$2 billion) in 2013 – 82 percent of GDP.


Marine biologist discovers turtle, shark slaughter in Maldives’ UNESCO biosphere reserve

A marine biologist working in the Baa Atoll UNESCO Biosphere Reserve has reported the discovery of the remains of a baby shark and endangered sea turtle barbecue on the uninhabited island of Funadhoo, one of the country’s 14 priority nesting beaches legally protected under Maldivian law.

Marine biologist with local environmental consultancy Seamarc, Sylvia Jagerroos, was participating in a beach clean up on August 24 with local people when the group came across the scene.

“We had removed fishing lines, nets, and other marine debris and of course all the garbage from the beach. This consisted mainly of plastic bottles, and that day we found many red bull cans,” she said.

The group then discovered the slaughtered remains of a large, one metre adult nesting green turtle and 2-3 newborn lemon sharks, “still smoking on the barbecue”, surrounded by smashed eggshells.

“We found where the killing took place, there was a lot of blood in the sand, and maybe what was the trace of the turtle crawling to try and nest. I don´t know if she was killed before or after the nesting. I didn’t find any nest, so if there was one then probably all the eggs were eaten already,” Jagerroos said.

“I went snorkeling and found the remains of the turtle in the nearby waters, including the head. Some bones and flippers, were discarded a couple of meters from the barbecue. I also found the remains of baby lemon sharks on the barbecue. The lemon sharks was a newborn sized only around 50-60 cm, the meat had been removed and eaten. My theory is that they saw the green turtle nesting and killed her immediately, while slaughtering and throwing in the pieces in the ocean. The baby sharks were attracted to the smell and since they swim in very shallow waters it’s a piece of cake to catch them.”

Jagerroos noted that the Maldives had proclaimed itself the world’s second shark sanctuary in March 2009.

“For a marine biologist to find a juvenile sickle fin lemon shark on the grill when this creature is listed as “Vulnerable on the red list” with the World Conservation Union (IUCN), and is already extinct in many nearby countries, hurts,” she said.

The catching and consumption of turtles is banned across the Maldives, and turtles – together with many other species – are especially protected in the biosphere reserve.

However turtle eggs are considered a local delicacy and can fetch up to MVR 10 each – a single nest can contain between 100-200. The practice is generally not illegal, but is prohibited on the country’s nesting islands.

Marine biologists working on resorts in the atoll have also privately complained of boatloads of local poachers sneaking onto the islands at night without lights or noisy engines, after hearing of the discovery of a nest of eggs. In some instances, resorts have been forced to post security guards to protect the nests from poachers.

Baa Atoll was in June 2011 added to the UN body’s global list of biosphere reserves after five years of lobbying by the government, placing it in the company of world famous sites such as the Komodo in Indonesia, Uluru (Ayer’s Rock) in Australia and the Galapagos Islands.

The Baa Atoll Biosphere Reserve was officially launched alongside with Baa Atoll Conservation Fund by President Mohamed Waheed in July 2012 at a ceremony in the atoll’s capital of Eydhafushi. At the ceremony, the UNDP presented a cheque for US$250,000 as a contribution to the fund, on behalf of the Global Environment Facility (GEF).

Jagerroos said the team had called the Environmental Protection Authority’s (EPA) ranger at Hanifaaru Bay – a world famous habitat for mantas and whale sharks – “and he said they’d look into it. But they’d have to patrol the whole area – it’s too big,” she acknowledged.

Director General of the Environmental Protection Authority (EPA) Ibrahim Naeem said he was not aware of the incident or that it had been reported to the Hanifaaru Bay ranger, and referred Minivan News to the Ministry of Fisheries which he said was responsible for sharks and turtles.

“It is not allowed to catch and eat turtles. There is no such ban for eggs. Even in the biosphere there are actions that are allowed,” Naeem said.

Minivan News is seeking comment from the Ministry of Fisheries.


Weak fisheries sector could benefit from strong tourism

The Minister of Fisheries and Agriculture Ahmed Shafeeu has suggested that the tourism industry might be “tapped” to improve the fortunes of the ailing fisheries sector.

“The internal market is there for agriculture and fisheries. The local demand for fish is huge, including resorts,” he said.

Shafeeu noted that there was potential in closer links between resorts and local producers, and that there had already been suggestions from some island communities that such links be further cultivated.

“The [fisheries] sector needs to be re-prioritised. Recently, the focus has been mainly on tourism. We are very vulnerable if we depend only on tourism,” said Shafeeu.

The most recent statistics from the Maldives Monetary Authority (MMA) have revealed that the volume of fish exports dropped by 63 percent in the twelve months from January 2011 to January 2012. The value of these exports dropped by 33 percent during the same period.

The statistics, provided by the Department of National Planning, show that tourism constituted around thirty percent of real GDP last year and is projected to represent a similar figure in 2012.

The fisheries industry is predicted to contribute just 1.1 percent of Maldives’ real GDP this year, dropping nearly two thirds from its 2006 contribution. The national significance of the industry however remains huge, providing employment to more than half of the population.

Potential issues that may act as potential barriers to the consumption of local fisheries produce in the resorts seem to be transport and product quality.

Deputy Tourism Minister Mohamed Maleeh Jamaal said that the opening of local airports and the development of transport may make it easier to increase the consumption of local produce in resorts.

He said that there had not been any research done on the exact patterns of consumption on resorts. The MMA figures show that the Maldives exported an average of 43 percent of its fish catch over the five years up to 2011.

“Currently, there are many challenges in the transportation of products,” said Maleeh.

“We hope domestic products can be consumed in our resorts. Fisheries have a high potential. All resorts consume a lot of fish. I think the demand for locally caught fish is very high,” he added.

Maleeh said that the sustainability of Maldivian fishing techniques were a strong selling point of the nation as a tourist destination. He saw this as part of what makes the Maldives unique.

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.

Shafeeu said that the resorts often imported only local reef fish, choosing to import other high value fish products which could potentially be available domestically.

A senior management source at one resort told Minivan News that they did source local fisheries’ produce in their restaurants and in their staff canteen, owing to the low cost.

“We don’t buy from outside,” said the source, although they said the choice was often limited: “It’s not every day we can get what we want.”

They added that this arrangement was possible due to the location of their resort, in North Male’ Atoll. For more isolated resorts, they explained, it is not viable for local fishermen to bring fresh fish every day.

This issue was also touched upon by Maleeh: “Resorts need continuity and consistency of supply,” he said, adding, “The quality of products needs to be maintained.”

Describing alternative methods of improving the prospects of the industry which has suffered greatly from foreign competition in nearby waters, Shafeeu raised the issue of the impact the “major shortage” of fresh ice had on the quality of produce.

“One of the major concerns is getting good ice across the country,” said Shafeeu, explaining that the delays imposed while vessels waited for ice, as well as the potential impact on the quality of the catch, were “not acceptable”.

He added that with the budget being “very limited” he was exploring the possibility of converting funds from other projects to meet this need.

Investment in ice processing plants was described as one of the areas he hoped would benefit from the resumption of fishing subsidies was announced by President Dr Mohamed Waheed Hassan last month.

The subsidies, amounting to Rf100million a year (US$6.5million), are yet to receive official approval from the Majlis, although Shafeeu said that the chair of the Finance Committee had indicated that a consensus in favour of subsidies had been reached.

He said that he had instructed ministry staff to advertise the availability of the subsidies so that fishermen could register and receive their vouchers as soon as the Majlis reconvened.

When asked if he felt the fishing industry to be in terminal decline, Shafeeu replied that he did not think this was the case, believing that the industry could still play a prominent role in the country’s economy “if we give it enough attention”.


President announces resumption of fishing subsidies

President Dr Mohamed Waheed Hassan has said he intends to begin resuming the payment of subsidies to fishermen within days. The President added that he would try to provide fish at better prices by increasing the promotion of pole and line fishing in other countries.

President’s Office spokesman Abbas Adil Riza has said that the money was badly needed as the industry was in “real economic trouble,” despite the government coming under pressure to cut state expenditure.

Speaking to Minivan News today, Minister for Fisheries and Agriculture Ahmed Shafeeu said that the subsidy had not been paid at all in 2011. He added that this year’s subsidies this year had not been reserved exclusively for fuel,  with funding being set aside for measures to encourage investment in ice plants – for which there was apparently a high demand.

Shafeeu also spoke of the ministry’s plans, unrelated to these particular subsidies, to improve access to loans to encourage investment in the industry.

“In terms of the economics of the sector, since 2006 we have seen a decline in fish numbers. In terms of total exports, it has gone down. There are many factors – a lot of them to do with management of the budget. Also there are risks due to the world economic crisis,” said Shafeeu.

The local industry is also thought to have been affected by the mass harvesting of fish stocks by foreign vessels in and around Maldivian waters. Traditional pole and line techniques struggle to compete with the more sophisticated technology and less environmentally considerate practices used by some competitors.

Deputy Minister for Fisheries and Agriculture Ali Solih explained that the proposed subsidies amounted to Rf100 million for the year, and would be disbursed once approval came from the Majlis. He added that the current members of the ministry had been working towards this goal since assuming their posts.


The use of the traditional pole and line method being encouraged in the president’s speech have been used in the Maldives for millennia and are an important feature of the industry which has long prided itself on its sustainable practices.

The previous government, however, felt it necessary to look into greater opportunities for the use of long line fishing techniques. It argued that, despite the greater risks of harming protected species, the technique offered far greater economic opportunities for a struggling industry.

A research officer at the Ministry of Fisheries and Agriculture at the time argued that long line fishing vessels did not have to travel as far as pole and line ships, lowering fuel costs and so making operations more viable economically.

Former President Mohamed Nasheed, speaking at the opening of the Majlis 2010 session that it was not feasible to burn fuel and engage in pole and line fishing in big vessels.  He claimed at the time that experts had advised him it would be more profitable to use those vessels for group long-line fishing.

Fisheries Minister Shafeeu said that the ministry would seek to continue this policy of providing varied opportunities to local fishermen. He said that pole and line fishing remained the most “prominent” method used in the Maldives, but said that “diversification is something [that is] required”.

A feature of this approach has been seen in the granting of long-line licenses within the 200-mile Exclusive Economic Zone (EEZ) exclusively to Maldivian businesses. In April 2010, foreign licences for long lining were terminated by the government.

The long-line fishing method appears as something of a double edged sword for the industry.  While the method offers the potential for better harvests of species that subsist in deeper waters such as Yellowfin and Bigeye tuna, it is also alleged to potentially  harm the marketability of Maldivian marine produce.

Shafeeu noted that the number of skipjack tuna exports, most commonly caught using the pole and line method had dropped “significantly” although the industry had been able to sustain the numbers of Yellowfin being caught.

Many chains such as Marks and Spencer in the UK place great value on purchasing tuna caught using the traditional economically friendly pole and line method. The marine conservation group Bite Back, in 2010, expressed its belief that the use of long line methods in the Maldives could result in a UK boycott of its tuna products.

Depleted financial stocks

The Dhivehi Quamee Party (DQP) last year took the Finance Ministry and the Fisheries Ministry to court over the failure to pay fuel subsidies to fishermen.

In a similar case yesterday, the Civil Service Commission (CSC) announced its decision to repay money withheld from government employees during the previous government’s attempts at enforcing austerity measures in 2010.

Abbas remarked that due to a Civil Court ruling on this issue, the Rf443.7 million owed to civil servants was now a “legally compulsory payment.”

This financial commitment comes at a time when the government faces a widening budget deficit, argued by Finance Minister Abdullah Jihad to stand at Rf2 billion, based on current rates of spending.

As part of its new austerity measures, the People’s Majlis has been re-examining the Aasandha health care scheme in an attempt to rein in state overspending. Thorig Ali Luthfee of the National Social Protection Agency (NSPA) recently told the Majlis’ Financial Committee that the scheme was likely to spend more than double its allocated budget this year, according to Sun Online.

Were the government able to tame this overspend, it could expect to save around Rf500million. Minivan News was unable to contact Finance Minister Jihad or Ahmed Nazim, head of the Majlis’ Financial Committee,  regarding further attempts to cut spending at the time of going to press.

The International Monetary Fund (IMF) told the people’s Majlis earlier this month that a failure to reduce spending could have disastrous consequences for the Maldivian economy if it results in the depletion of its foreign currency reserves.


So long and thanks for all the fish: the decline of the Maldivian fishing industry

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.”


Fisheries ministry accepts need for regional collaboration in changing marketplace

Maldivian authorities say they are ready to join the Indian Ocean Tuna Commission (IOTC) despite initial reluctance, as a changing agricultural situation within local waters requires a more active role in outlining possible quotas and regulations.

Hussain Rasheed Hassan, Minister of State for Fisheries and Agriculture told Minivan News that with the Maldives currently responsible for fishing between a quarter to a fifth of the Indian Ocean’s skipjack tuna catch, the country was now waiting for parliamentary approval to join the tuna commission, which serves as an intergovernmental agricultural organisation.

Having spent two years collaborating with the IOTC regarding possible membership into the group, Hassan claimed that the move was not in contradiction to planned aims of selling more sustainable fish supplies or outlawing harvesting species such as sharks. Instead he claimed it reflected wider aims to work under guidelines set out in an EU initiative to combat illegal, unreported and unregulated fishing (IUU).

“In the past, we have been very reluctant to become a member of the IOTC, I guess for a number of reasons,” he said. “One [reason] is that we were afraid that by becoming a member, the IOTC will dictate how much fish [the Maldives] can harvest.

As a major stakeholder in supplying skipjack tuna from the Indian Ocean, the state minister claimed that there had in the past been fears that becoming a full IOTC would allow other to enforce quotas on the size of the Maldives’ catch of the fish leading to some hesitation by government in acting in this way.

However, Hassan claimed that the situation has changed very much of late in regards to capturing Indian Ocean tuna, particularly in terms of species such as yellowfin that he said were considered to be at stake throughout the region.

“Our hand line fishermen are targeting these fish. But in the Indian Ocean as a whole, these species are considered overexploited. There was talk that we should have a fish quota for that and we want to be included in these discussions and decision making,” he said. “If we are outside this process we will not be able to say what we want and we will not be able to influence the decision making process of the IOTC. That is not a very good position for the Maldives.”

Hassan claimed that the obtaining membership to the IOTC was also a key requirement of meeting the European IUU regulations, which he said were being sought by major import markets for tuna like the EU and demand cooperation with regional fisheries management organisations.

“It is a market demand really. A lot of our buyers are telling us that we are a major player and should become a member of the IOTC,” he added. “They want us to ensure management measures are put in place and they want us to have a more proactive role in the organisation.”

Just last year, the Maldives government had courted threats from some conservation groups that the country’s fisheries faced being boycotted by certain major UK retailers over a decision to adopt long line fishing alongside the perceived environmentally friendly, yet lower yield, pole and line methods.

The use of the long line system has itself continued to divide opinion with groups like the Maldives Environmental Protection Agency (EPA) claiming last March that there were both “good and bad implications” to adopting the practice.

“It is obvious that long line fishing will definitely catch some un-targeted fishes, like sharks and turtles,” EPA director Ibrahim Naeem said at the time.

By the end of March last year, the Cabinet opted to allow long line fishing of yellowfin tuna and bigeye tuna for Maldivian vessels after discussing a paper submitted by the Ministry of Fisheries and Agriculture claiming such a move would improve yields from the fisheries sector, which has worsened significantly since 2006.

Senior Research Officer at the Ministry of Fisheries and Agriculture, Hussein Sinan, said at the time that long line fishing was “far better for targeting yellowfin and bigeye tuna.”

Hassan claimed that a key interest of the government in looking to long line methods was to try and ensure that the 15,000 to 16,000 people estimated to be employed directly within the fisheries sector remained employed.  The state minister added that it was therefore vital to ensure that effective management was put in place around the region to ensure sustainable prospects for fishing.

“We have been a pole and line fishing nation for at least a thousand years, so we cannot afford to give up our interest in this fishing and our culture. So we have got to maintain this for the foreseeable future,” he said. “Unless we can provide alternative and better employment opportunities for people we must remain a significant fishing nation.”

In order to provide the best price from fishermen, Hassan said that adding value to fish being caught in the country was not just linked to processing, but also in the quality of the produce from the way it has been caught.

“There may be an environmental value that you can add to it. I believe that having a sustainable pole and line fishery we are adding value [to the sector],” he said. “There is a huge demand for pole and line fish in the European market, especially the UK. For canned tuna there is a huge demand for pole and line fish and the reason is that the UK buyers have seen how sustainable and environmentally friendly the way we are catching it is. It is small scale and has very insignificant impact on the environment.”

Hassan said that although the government was limited in the amount of financial support it could offer fishermen to help try and manage more sustainable and added value fishing, the Maldives was at the same time working to introduce long line fishing through licensing agreements.

According to the state minister, these agreements have already led to foreign long line fishing in the Maldives being stopped last April.

While Hassan said that there was after this point no legal foreign fishing using long line methods in the country, he added there had also been a loss of opportunity for local business, where fish was being caught on licence and then processed and exported.

“What we are trying to do – and it is in the government manifesto – is to try and encourage the private sector to establish a local long line fleet. So the government is not buying vessels and supplying them, but we are encouraging private parties to acquire oats and start a long line operation,” he said.

Foreigners would therefore continue to be allowed to work on fishing vessels in the country under contract, but the boats themselves would required to be Maldivian owned and managed.

As part of this wider long line pledge, Hassan claimed that authorities were calling on a number of measures to try and prevent creatures that are not allowed to be caught and harvested such as sharks being taken from the seas by accident.

The state minister said that long line fishermen were purposefully being made to aim below 60 metres under the water where sharks and other outlawed creatures were not so abundant and would ensure that the practices were being monitored as required under international standards.

“We are very confident that this will mitigate the by catch issues and we will change regulations if necisary based on the outcomes and results of our long line fishing,” he said. “we are a relatively resource poor country. There is a huge potential under the [60 metre] thermaclime, which is yellowfin tuna and bigeye tuna that right now we are not targeting through hand and line fishing.”


Government to allow canning of imported fish

The government says it will allow imported fish to be processed at the country’s canning factories to help try and alleviate concerns over shortages in local supplies.

President Mohamed Nasheed claimed that a “dwindling” local fish catch had meant Maldivian canneries were currently running below capacity. To alleviate the potentially detrimental impacts of this situation on the country’s fishing industry, the government hopes allowing the processing of fresh imported fish will help businesses to diversify their products lines and re-export a more diverse array of canned products.

The government insisted that despite records of improved catches in the country’s northerly atolls, fish numbers have fallen over the last decade. In looking to further diversify the country’s fisheries income, Nasheed said that the government has pledged to step up sea cucumber exports.


Kuddoo fisheries makes Rf13 million profit

The Kuddoo Fisheries complex has reported an Rf 13 million (US$1 million) in profit over the last two months. It had faced a loss of Rf 80 (US$6.2 million) last year.

The turnaround means that by July, when new figures become available, the company might not be operating at a loss at all. Kuddoo fisheries complex was set up by the government in May as a separate company from the Maldives Industrial Fisheries Company (MIFCO).

Speaking to Haveeru, the company Managing Director Ismail Adam said its intake has increased in correlation to the increase in fish purchase value in the last few months.


Fisheries fund to lure shark fishermen to alternative livelihoods

A fund to help shark fishermen find alternative livelihoods has been launched by the Ministry of Fisheries and Agriculture on World Ocean’s Day, June 8th.

The fund was inaugurated less than a month before a total ban on shark fishing and export of shark products comes into effect on July 1.

The ministry had originally deferred the ban, citing the need to facilitate alternative livelihoods for the 200-odd shark fishermen and middlemen involved in the industry.

Money for the fund

“As we had not pre-planned for this ban, we hadn’t included it in our budget,” said Hussain Sinan, Senior Research Officer at the ministry.

Sinan said the urgent need to declare a total ban arose following a report from the Marine Research Center (MRC), which noted that the number of reef sharks sighted by divers had declined in recent years, that shark stocks were and vulnerable to exploitation due to their slow growth, late maturity and low fecundity.

“We had one year to prepare for this ban, and so we had discussed this with the fishermen involved,” says Sinan.

The ministry plans to raise money to fund the ban through NGOs and the tourism sector.

“The World Wide Fund for Nature (WWF) has promised US$300,000 and some resorts have also pledged money,” he said, but declined to name those involved.

Influential lobby group the Maldives Association of Tourism Industry (MATI) meanwhile said it is not aware of any resorts contributing to the fund. MATI’s Secretary General ‘Sim’ Mohamed Ibrahim says the group has heard of the fund but had not been approached by the ministry.

“Resorts might have been approached directly,” Sim speculated.

The fund to support an alternative livelihood for shark fishermen was a good idea, he suggested.

“We lobbied for a shark fishing ban five years ago, after which a moratorium was placed by the government banning shark fishing in areas close to the resorts.”

A study carried out in 1992 revealed that tourists paid a total of US$ 2.3 million for shark watching dives, while in the same year export of shark products earned a revenue of US$0.7 million.

“If they come to us and say this issue needs to be addressed, we will help of course,” Sim said, but maintained that MATI could only talk to resorts “as on financial issues [such as this] resorts will decide how they spend their money.”

Funding alternative livelihoods

“Shark fishing is not a year long activity, it lasts for about five months” Sinan explained, therefore fishermen already practiced another form of livelihood for the rest of the year like “reef fishing and yellowfin tuna fishing.”

The funds are going to be spent on training opportunities for fishermen, agricultural projects and to boost the “secondary livelihoods” of shark fishermen, he stated.

“It will not be distributed directly to fishermen,” he added. Already the ministry has received requests from islands to help them find markets to sell reef fish and help them to keep fish fresh for longer.

Fourteen islands to receive the fund have already been identified by the ministry.

“We are also floating the idea of buying back long line fishing gear from the fishermen – this way we can identify those involved also,” he said.

Each dhoni would be assessed separately, and owners compensated “taking into account the current market value and depreciation.”


Fisherman’s Union’s President Ibrahim Manik says the ministry has made no contact with the body.

Agreeing that sharks needed protection, he said the issue of compensating the shark fishermen was crucial.

He is supportive of how the money will be spent: “everyone wants money, but a one-off payment is not going to reap positive results in the long run.”

“Even if we were not included in the discussion stage, what the Fisheries Minister is saying is a good thing; the funds need to be spent in a sustainable manner,” Manik said.

However he points out the contradictory nature of announcing a shark ban while on the path to introducing long line.

“Let’s face it: sharks are going to be caught with long lining, and a lot of them are going to die,” Manik said.

Long lining was necessary if local fishermen were to survive, he said.

“Fishermen need to survive and right now we are suffering,” he said, adding that a lot of fishermen were questioning the logic of the ban.

“According to some estimates, there are about 300 Sri Lankan fishing boats that do long lining near the Maldives. They are killing sharks by the dozens, so does having a ban only in the Maldives help? We have no idea how they are going to implement this, but we support the move.”