Tag: funds

MMA denies US suggestion it has knowledge of terrorist funding

The Maldives Monetary Authority (MMA) has rejected claims by the US State Department that it has any knowledge of funds being used to finance terrorist activities abroad (May 11).

The MMA’s statement came in response to a report from the US government that the authority believed funds from the Maldives were being used to sponsor terrorist activities.

“The MMA has neither received nor communicated any information regarding confirmed operation of terrorist financing activities,” said the MMA.

The US Country Reports on Terrorism 2013 claimed that criminal proceeds were coming from hawala systems (informal money transfer networks) to transfer money between islands.

“Maldivian authorities believe that funds are currently being raised in Maldives to support terrorism abroad; however, there is no reliable information regarding the amounts involved,” read the US report.

“While no official studies yet have been conducted, the Maldivian Central Bank believes that criminal proceeds mainly come from domestic sources, as a large percentage of Suspicious Transaction Reports (STRs) are related to Maldivians,” it continued.

The Maldivian Democratic Party (MDP) has today cited the US report as evidence that the government is not doing enough to combat terrorism.

“The Maldivian Democratic Party strongly condemns the government’s failure to bring an end to terrorist and extremist activities as funds are raised in the Maldives to fund terrorism abroad,” read a press release today.

The party suggested that examples of Maldivians engaging in extremism and terrorism was on the rise, suggesting the government was not doing enough to resolve organised criminal activity in the country.

In response to the US report, the MMA has contended they have not received any confirmed suspicious transaction reports related to terrorist financing in the Maldives through formal or informal money transfer networks.

The authority also expressed confidence in the industry’s framework for preventing such operations, adding that any companies that are under their supervision are subject to the Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) obligations.

AML/CFT legislation drafted by the MMA was passed by the People’s Majlis last month and ratified by President Abdulla Yameen on April 13.

The new law introduced rules governing financial transactions and the inflow and outflow of money from the Maldives.

“We are pleased to note that most of these financial institutions have internal policies, procedures and programs to implement those obligations,” the MMA statement added.

The US State Department had further noted growing concern since 2010 “about the activities of a small number of local violent extremists involved with transnational terrorist groups”.

“There has been particular concern that young Maldivians, including those within the penal system, may be at risk of becoming radicalized and joining violent Islamist extremist groups. Links have been made between Maldivians and violent extremists throughout the world,” the report stated.

The department also suggested that the Maldives has few laws which effectively control the movement of people and money into and out of the country, adding that due to its “sprawling island geography and insufficient technological capabilities” the coastguard could not effectively patrol the territory.

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Elections Commission faces “major challenges” over “lack of funds”

The Elections Commission announced yesterday (May 8 ) that it was facing “major challenges” preparing for the upcoming elections due to a “lack of funds”.

Elections Commission Member Ali Mohamed Manik told local media the commission requires over MVR 80 million (US$ 5,232,160) to hold the upcoming elections.

The EC has meanwhile declared it will publish the voter registry in the government gazette later this month, reports local media.

Manik also announced that the voter registry is almost fully updated and the commission plans to publish the list May 21, so to give the public an opportunity to verify the information and file complaints if revisions are needed.

Regarding ballot box placement, Manik said that there will be 556 ballot boxes for the presidential election, 355 in the atolls, 55 at resorts, while the remainder will be divided between Male’, industrial islands, and prisons.

Manik also urged voters registered in Male’ Dhaftharu – a special registry for people who are Male’ residents, but are from other islands – to provide the Elections Commission with their current addresses as soon as possible.

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Elections commission disbursing politcial party funds

Political parties will receive funds disbursed by the Elections Commission (EC) this week, according to local media.

Secretary General of EC Asim Abdul Sattar told Sun Online that the Finance Ministry was facing “difficulties” because of the high number of vouchers received at the beginning of the year, which is why funds had not previously been distributed.

According to EC Member Ali Mohamed Manik, seven political parties have had funds withheld because they have not held any political activities or submitted “up-to-standard” audit reports.

The Maldives presently has 16 registered political parties, however only eight meet the requirements for actively holding political events and having at least 3,000 registered members, states local media.

Party funding:

  • Maldivian Democratic Party (MDP): MVR 3.6 million (US$233,280);
  • Progressive Party of Maldives (PPM) MVR 1.98 million (US$128,304);
  • Dhivehi Rayyithunge Party (DRP) MVR 1.9 million (US$123,120);
  • Jumhooree Party (JP) MVR 1.2 million (US$77,760);
  • Adhaalath Party (AP) MVR 794,000 (US$51,451);
  • Maldives Development Alliance (MDA) MVR 624,000 (US$40,435);
  • Gaumee Itthihad MVR 608,000 (US$39,398);
  • Dhivehi Qaumee Party (DQP) MVR 529,000 (US$34,279); and
  • Maldives National Congress (MNC) MVR 478,000 (US$ 30,974).
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Finance Ministry not working to recover funds lost through state incompetence: AG

The Finance Ministry has not been working to recover lost funds from the state, Auditor General Niyaz Ibrahim has alleged.

Speaking to local media, Niyaz said  the state treasury has suffered huge losses due to incompetence from state employees.

Despite audit reports revealing where money has been wrongly spent, Finance Ministry has not been working to recover the funds, Niyaz told local media.

“We are sending a copy of the audit reports from each institution to the Finance Ministry. We recommend the finance ministry to take action against them in which the ministry is involved.

“However there has not been enough work towards taking action against them, especially in the cases where the incompetence of some employees and other loss,” Niyaz was quoted as saying in local newspaper Haveeru.

The Auditor General said that transactions made against the state finance act and violations of travel procedures in government offices were common issues repeated in the audit reports.

Niyaz added that as some offices are repeating these mistakes, there will be a period of three months whereby the offices have to improve prior to an assessment at the end of the time period.

Cases of incompetence or deliberate acts of fraud resulting in losses of state funds are also being submitted to the Anti-Corruption Commission (ACC) by the Auditor General, according to local media.

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Government spending on tourism marketing comes under scrutiny

A tour operator has claimed that the government should not spend so much money marketing multi-million dollar resorts, particularly since it receives such limited revenue from the industry in return.

Ahmed Firaq, chairman of tour operator Inner Maldives, said the government should not be so much money on tourism advertisement marketing resorts as many had their own marketing campaigns.

Firaq told newspaper Miadhu that the “amount of money being spent on tourism advertising is the same money which could go into the development of social services”.

Government tourism advertising

State Minister of Tourism Thoyyib Mohamed Waheed said the government’s budget for tourism, including marketing, is planned each year in advance.

“The money [for marketing] comes from both stakeholders and the government,” Waheed said, mentioning that the industry adds to the budget if it is asked by the government.

“If there is not enough funding, we approach the industry,” he said.

Waheed said the “industry is quite cooperative” but added the government “does needs more help and support from it.”

Secretary General for the Maldives Association of Travel Agents and Tour Operators (MATATO) Mohamed Maleeh Jamal said after the 2004 Tsunami the marketing budget “drastically increased” to about US$9 million per year.

This number remained unchanged until the 2008 economic depression, when the budget decreased to its current amount of US$2.5 million, used mainly for destination marketing.

Sim Mohamed from Maldives Association of Tourism Industry (MATI) said the government has “very little money to play around with. When this government took over, [the country] was broke.”

Sim said marketing was essential in times of crisis, particularly following events such as the 2004 tsunami or the financial depression, as “you need to let people know you are still here.”

Jamal noted that MATATO’s main concern “is the total number of rooms is increasing and the [marketing] budget is down. If it is reduced further, in the long run we will be disadvantaged.”

Jamal estimated this year’s spend on tourism marketing across the Maldives to be around US$30 million. The industry, he said, was providing around US$20 million for specific product marketing.

He said in a time when the tourism industry is being “expanded north to south” the government should at least maintain the previous budget, if not increase it.

With the new tourism taxation bill being considered in parliament, (a bill that will phase out the ‘bed tax’ which currently stands at US$8 per night) the government will be getting an additional six percent in revenue from the tourism industry, “but they are still reducing the marketing budget,” Jamal claimed.

Marketing the Maldives as a tourist destination

Sim agreed that “the government should get out of [marketing] all together” and “business should be left to businesses.”

But he expressed his appreciation for the government’s efforts to help the industry, saying “we like what the government is trying to do.”

Sim believes “the government should regulate and set national and industry standards” and not focus so much on advertising.

“It is tour operators who sell the Maldives,” Sim said, and “they are doing a good job at it. We should keep them happy.”

He added that “the tourism industry is not about resorts alone, but also employment, transport and aviation.”

He also questioned on whether the government should be spending any money on marketing the Maldives as a tourist destination, saying “it sells itself.”

And although there are other similar products on the market, Sim says the Maldives offers “unique features” and not a lot of money is needed to market it as a travel destination.

However Jamal said competition in the region is a major concern. He noted that the Sri Lankan government has allocated US$50 million to tourism marketing this year, a significant amount compared to how much the Maldivian government is spending.

“We need to maintain occupancy,” Jamal said, adding that the Pacific islands, the Middle East and African countries like Mozambique were quickly becoming major competitors.

One of the main marketing strategies for the Maldives, according to Jamal, is “destination branding”. This brings another major concern for MATATO to the surface.

Jamal said tour operators “now say the Maldives is sinking”, and asked why travel agencies would send their customers to a “sinking” destination.

Other traditional marketing strategies for the Maldives have been road shows and travel fairs. Jamal says road shows in China, Eastern Europe and the Middle East have been cancelled for this year, and that the Maldives is attending eight fewer travel fairs than it did last year.

“We don’t see much [advertising] in magazines,” Jamal said, adding that existing advertising contracts with television channels BBC, National Geographic and CNN will expire this June “and there is not enough budget to renew them.”

“The success of the tourism industry in the Maldives depends on whether or not we maintain advertising,” he said.

On his return from Copenhagen President Mohamed Nasheed said the Maldives’ growing significance on the world stage as an icon of climate change – and the associated free publicity – was worth far more than the government could ever spend on paid advertising.

Tourism Revenue

One of Firaq’s complaints was that the government should be spending this money on development for social services and not on tourism advertising.

When asked about Firaq’s statement that the revenue from the tourism industry should be spent on developing social services and not on marketing, Waheed noted that the money “doesn’t come straight to the ministry, but it goes to the Treasury.”

The Treasury then decides how the money is allocated; some of it goes to social services and some goes back to the tourism industry.

Press Secretary for the President’s Office Mohamed Zuhair said “there is no direct relationship between tourism revenue and social service development.”

He added that the expenses of tourism marketing are jointly assumed by MATI, the Tourism Ministry and the Tourism Board.

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