Agricultural practices are ingrained in the traditional Maldivian lifestyle. However, Mohamed Shafeegu – Director of Seagull Maldives – argues that with space at a premium and most foods imported, the art of agriculture is at risk of being lost forever.
“They will forget,” warns Shafeegu, “before they know what to do, food security will be a big problem – it will come.”
The answer to a sustainable farming future, according to Shafeegu, is hydroponics.
Hydroponics is a branch of horticulture which uses water to deliver minerals and nutrients to plants rather than soil – allowing farmers to grow crops in places where soil is arid or unyielding.
“I think hydroponics is our future. The demand [for food] will increase with tourism, so there is a big future for agriculture. If we can plan, we can do this.”
Seagull currently operates one of the Maldives’ few farming and fishing operations on Mafaahi island – the produce of which is used to stock their cafe and supermarket in the capital Malé.
The company grows a variety of fruits and vegetables, as well as making boats, keeping goats, and fishing. According to Shafeegu, this is one of only two islands that are carrying out an agricultural project of this scale.
“They said ‘nobody can do this’ – so we tried to do it”
With space at a premium, and much of the land barely arable, the Maldives is a challenging place to grow food. Currently the Maldives imports the majority- an estimated 90% – of its food from neighbouring countries.
The company’s project on Mafaahi it one of the only businesses to be growing its own food – and with 41 different varieties of fruits and vegetables the operation seems to be a success.
The key to the fruitful harvest, according to Shafeegu, is a hydroponics model which they brought from Australia.
“We studied in Australia, and I was doing engineering. We didn’t study agriculture,” revealed Shafeegu. “The reason we did agriculture was for the challenge – because they said ‘nobody can do this’, so we tried to do it.”
As well as the hydroponic system, Seagull brought in an Australian consultant named Graham Evans who helped to evaluate the business. In his review of the Mafaahi establishment in 2008, Evans praised the island’s move towards a sustainable and environmentally friendly agricultural system.
“Changes being made on Mafaahi with the introduction of hydroponics to maximize production with limited resources is commendable. The installation of the very latest solar technology on Mafaahi for pumping water from ground wells has immediate application in many locations throughout the Maldives,” wrote Evans.
In addition to environmental benefits, the effects of the Seagull hydroponics programme can already be seen in the cost of living.
“When we started in 1996, a chilli [was] 6 rufiyaa,” Shafeegu explained. “Now the chilli is around 2 rufiyaa.” Because of these benefits, people are already starting to see the benefits of localised agriculture, he contended.
Water – a precious resource
The only limitation on the potential of hydroponics is water itself, stated Shafeegu.
“We need a lot of water. Now the system we are doing in Mafaahi- we need around 2 thousand tons of water in storage. Because in the rainy season, we get a lot of rain from the roof.”
“If we can desalinate water, it costs a lot of money, but if you can go solar it will be much better.”
Desalination continues to be a huge issue in the Maldives. The lack of fresh drinking water in the country’s 190 inhabited islands – made worse with the contamination of groundwater following the 2004 tsunami – leaves most communities reliant on rainwater and vulnerable to shortages during the dry seasons.
“Because we have done 20 years of agriculture, now the island is suffering, so we have to go for another form of irrigation. We put a line, with only a very small amount of water, given just to the roots. Now what we do is we take the pump and put water there, and a lot of water is wasted. So we have to really do a lot of quality control on the water.”
He illustrates the seriousness of this issue with a story about a neighbouring island Thoddoo, and their mis-use of water supplies.
“What has happened to this island is they have done extensive agriculture without scientific methods – what has happened now is the whole water system has gone.”
“They put chemicals in the water, and when you see people there they have white patches on them, from the chemicals – and kidney problems as well. So they are misusing because the demand is so high. And so, it [the environment] is getting destroyed, the control is not there, awareness is not there.”
The future for agriculture
Seagull is currently bidding to extend their lease on Mafaahi, which is due to expire in June 2014.
” Now we are in a very critical situation, and the water is gone now. But we can’t invest in the future, as we are almost at the end of the lease now. I think if we don’t give to us, I don’t know to whom they will give.”
“So I think the only thing is hydroponics – the government has to invest in this,” confirmed Shafeegu.
“If they don’t do that I think we will even lose the backyard farming [a traditional farming practise on local islands]. And we will not have anything to eat. Food security will be finished. Now we have a good food security based on this backyard farming, now I think it’s going to a different level.”
The Maldives has previously been described as one of the most vulnerable countries in the world to climate-change related food security issues, due to its dependence on fish stocks regarded as likely to migrate with changing conditions in the oceans.
“They [Maldivians] will forget. I think what will happen is, they will forget even to grow their own plants. Before they know what to do, food security is a big problem, it will come,” says Shafeegu.
The Maldives has “substantially understated” its budget deficit, the International Monetary Fund (IMF) has warned, by underestimating its spending and “probably” overestimating tax revenues.
“Moreover, not all of the financing for even the approved budget has been identified, and additional risks exist as well – including the need to clear reported unpaid bills carried over from 2011 and the possible loss of lease extension payments (Rf 700 million, or US$42.4 million) assumed in the budget,” the IMF’s mission chief for Maldives, Jonathan Dunn, told Minivan News.
While the 2012 budget put the deficit at less than 10 percent of GDP, “the IMF team sees the figure as more likely to be 17.5 percent of GDP, and perhaps larger than this,” Dunn said.
“The financing gap for 2012 is thus at least 7.5 percent of GDP, or about US$160 million, and possibly substantially larger than this,” he added.
As a result, economic growth and stability in the Maldives were unlikely to be maintained “in the medium term” unless the government substantially cuts spending.
Meanwhile, government revenue for the first quarter of 2012 has fallen 15.5 percent below projections, the Maldives Inland Revenue Authority (MIRA) has reported.
Revenue from tourism land rents fell 18.6 percent on the previous quarter, however the largest contributor to the drop were the new government’s changes to resort lease extension payments, which saw a 76.1 percent drop in revenue below projected figures.
Inflation meanwhile spiked 13.4 percent in February, with the price of food increasing 28 percent.
Government revenues for the quarter has nevertheless increased 76.2 percent compared to the same period in 2011, “mainly because of the significant increase in Business Profit Tax (BPT) and Goods and Services Tax (GST) collections”, MIRA noted: Rf 361.7 million (US$23.4 million) and Rf 721.9 million (US$46.8 million) respectively.
However, Dunn warned that revenue collection by MIRA “does not provide a full picture of total revenue performance in the country.”
“Revenue from import duties – previously the single largest revenue – collected by Customs and is not reported by MIRA. Due to implementation of the 9th Amendment to the Maldives Export Import Act, revenue collection from import duties is expected to decline substantially in 2012, fully offsetting the increase in tax revenues from GST and BPT.”
Dunn observed that printing money would only facilitate the much-larger-than-expected 2012 fiscal deficit.
“This, in turn, would imply that national imports would be substantially larger than expected, because in the Maldives, where most goods are imported, almost any spending by either the government or the private sector turns, directly or indirectly, into import demand,” he noted.
As a result, the imbalance between the demand for dollars and the supply would become even larger, “and the MMA would likely have to supply dollars from its own reserves to meet the shortfall.”
“Usable reserves at the MMA are low, so if the fiscal gap this year is financed via money creation, it is likely that the MMA’s usable reserves would soon dry up,” he said.
Another option, Dunn suggested, was for the Maldives to borrow more money. However borrowing from domestic sources “will be difficult to achieve, as it is unclear whether the banks have much more appetite for buying treasury bills.”
Obtaining foreign grants “would be helpful but is probably not realistic.” Foreign loans, meanwhile, “would have to be considered carefully, given that Maldives already has a very high debt-GDP ratio, but they may be needed in the short run to avoid the consequences of printing money.”
Dunn emphasised that the only sustainable solution was for relevant parties to rationalise the budget by boosting revenues and cutting expenditure, despite the political difficulties.
“These may be politically difficult measures, but the consequences of not reducing the budget deficit are likely to be even more difficult,” he warned.
Furthermore, ongoing dollar shortage would not be resolved while the Maldives continued to substantially increase spending, Dunn added.
The foreign currency crisis – the bane of many of the country’s importers, who are forced to use unofficial channels outside the banking system to obtain currency necessary to purchase overseas – was exacerbated by the number of unrestricted foreign exchange licenses issued to resorts and other private businesses, “without the requirement that they hold substantial capital to back up that business.”
This practice allowed such nonfinancial businesses to conduct large-value foreign exchange operations outside the banking system, “an unusual arrangement and sustains the parallel foreign exchange market,” Dunn noted.
“In a more typical situation, nonfinancial businesses [such as resorts] would have licenses only for the exchange of small-value cash transactions and would be required to channel large-value foreign exchange transactions through the banking system. In the case of Maldives, this would substantially increase liquidity in the official foreign exchange market,” he suggested.
However, “as long as the government continues to inject substantial amounts of new spending into the economy, the foreign exchange situation in the country will not be resolved.”
Dunn emphasised that “fiscal imbalances in the Maldives have been present for many years and that fiscal adjustment remains necessary”.
Faced with increasing pressure from the IMF to lower expenditure after failed attempts in 2010 to cut the salaries of civil servants – a maneuver blocked by the Civil Services Commission (CSC) and backed the then opposition – former President Mohamed Nasheed’s administration insisted that increased revenue from the new taxes would match expenditure, and boasted that the 2012 budget was the first in many years to balance income and expenditure.
Following the police mutiny and controversial change of government in what the MDP contends was a coup d’état, spending by President Dr Mohamed Waheed’s administration has escalated as it seeks to shore up support in a fractious political environment.
Newly-announced expenditure in the last few months includes:
The promotion of 1000 police officers – approximately a third of the force – and plans to both recruit 200 new officers in 2012 and appoint four new Assistant Commissioners;
An unspecified amount for an international public relations firm, to combat negative publicity and “rally an alliance of support” in the international media following the controversial change of power and coverage of police crackdowns;
A proposal to create two new ministries, including the Ministry of Gender, Family and Human Rights, and the Ministry of Environment and Energy;
The reimbursement of Rf 443.7 million (US$28.8 million) in civil servant salaries from July 1, following cuts by Nasheed’s administration in 2010. In addition, civil servant working hours have been reduced to 8am-3pm;
The doubling of the budget for the Maldives Marketing and Public Relations Corporation (MMPRC) to US$S4.5 million.
Lost income has also increased, with MIRA warning in March of unrealised revenue from the new government’s recent decision to accept resort island’s lease extension payments in installments, an amendment that former Tourism Minister Dr Mariyam Zulfa contends was pushed through by several local resort owners with vested interests, that immediately cost the treasury US$135 million.
In March, MIRA anticipated receiving a total of Rf375 million (US$ 24 million) for lease extensions, however the income received dropped to Rf23 million (US$1.5 million) as a result of the decision.
Meanwhile today the publicly-owned State Trading Organisation (STO) dropped legal attempts to reclaim a US$1.2 million debt owed by the Meridian Services owned by MP Abdulla Riyaz of the new ruling coalition. The STO justified the decision in a letter to the court, by stating that it did not have enough board members to meet quorum and make decisions.
In a bid to address spiralling costs, the government is reviewing the Aasandha universal health scheme introduced by Nasheed’s administration on January 1 this year, which “is and will always be completely financially unsustainable in a country such as the Maldives”, according to President Waheed’s Special Advisor, Dr Hassan Saeed, in an article for newspaper Haveeru.
“The introduction of unrestricted, universal free healthcare with no agreed regulation or management was an act of folly, recklessness and irresponsible political immaturity that rivals any of the actions of Mr Nasheed’s administration,” Dr Saeed contended.
“And what’s more he knew this but still went ahead with it. And the consequence is that we now have the IMF breathing down our necks and a budget deficit that threatens to derail all government social programmes,” Dr Saeed wrote.
Dr Mariyam Zulfa is the former tourism minister of the Maldives, appointed by Mohamed Nasheed’s administration in November 2010. Prior to her appointment she was a Managing Partner with the law firm Duckham & Co, Lawyers. She holds a PhD from Curtin University in Australia, and in her thesis examined the competitiveness of small island tourism destinations. Dr Zulfa also holds a Bachelor of Arts in Urban & Regional Planning and a Masters of Business Administration (MBA), and has worked as a tourism law lecturer in Australia.
Daniel Bosley: What is the average resort owner thinking about the current political crisis in the Maldives and its impact on the economy?
Dr Mariyam Zulfa: I think everybody is in a state of shock at the moment because the turmoil in the country will definitely have an impact on the image of the destination. The [pro-government] forces are trying to paint the picture that there is a lot of violence in the country and that the violence is being instigated by the Maldivian Democratic Party (MDP), which is not true at all. All we are doing is holding peaceful demonstrations and calling for early elections in order to ensure the legitimacy of the government.
Our tourists come from developed countries and I think they have the maturity to understand that people have the right to freely express their views on political matters. In that sense I don’t think the resort owners should be very worried about tourists concerns as to whether the place is going to be safe or not. The resort owners like to say that the situation in the country is safe and I think it is so because the only thing we are doing here is expressing our views on the political situation, and that the current President has assumed his role after a coup.
DB: Have you had any questions from resort owners?
MZ: Not really no, because the government, as it should, has been spreading the message through its own PR machinery that the country is safe.
DB: How have different markets been reacting?
MZ: I am given to understand that many Germans, for example, and many people from the UK, are questioning the welfare of the people of Maldives and that is not necessarily a bad thing.
I have personally had a number of communications from interested persons, especially from Germany and the UK, asking what is happening in the country, and that is a good sign because the traveller is not a nameless faceless body that comes here. I think people who travel are also conscientious people who care about the well-being of the people of the countries that they visit. I would tend to think that the political concerns of a wide majority of the Maldivian people are indeed something worth listening to.
I’ve has quite an overwhelming number of emails and communications sent to me asking about what’s happening in the country and when a political resolution is going to be found, what they could do to help; because of course they will see on the media that a large number of people, including a large number of women,for the first time in the Maldives are demonstrating continuously about how unhappy they are with the coup-led government in the country.
I have also received many calls from the Maldives’ foreign investors who are concerned about the current situation.
The silly thing about what the government is trying to do is portray to the international media that there is violence in the country. Indeed, that is not the case, we are expressing our unhappiness about how undemocratic the coup is. A coup is a coup is a coup, and can never be accepted as something legal or legitimate. That is a message that I think needs to be understood by members of the travelling public who come to the Maldives.
DB: Do you think that there is a risk that resorts will trade their political support for short-term stability?
MZ: It’s not the MDP’s intention to interfere in any way with the economic gains that we have made in the tourist industry. Nevertheless, we say that some people in the resort industry were actually involved. We have information that could be used as evidence to say that some members in the resort industry were behind, for example, in financing the coup and so on. So, in that sense it is connected to the tourism industry. But it has never been the MDPs intention and it will never be the MDPs intention to obstruct the progress that we have made in the tourism industry.
But, having said that, I will say that it is our duty also to inform the travelling public that a wrong has been done unto the people of the Maldives and following from that, we provide the information about the political situation in the country so it is up to that traveller to either decide to do something about it or carry on with their decision to travel to the destination. It’s not in our agenda to affect the travellers decision to choose Maldives as a destination at all.
DB: Do you think the alleged involvement of some resort owners harms the image of all resorts?
MZ: Neither a formal nor an informal investigation has been completed so far but there is evidence to show – and material that can be used as evidence – that leads us to the conclusion that some people in the tourist industry have been behind at least the financing of some of the operations that led to the overthrow of President Nasheed [on February 7]. But I can’t categorically say exactly who was involved unless a formal investigation has been completed. Some in the industry were involved, not all. Amongst them were a couple of major players in the Maldives [tourism] industry.
DB: What did you think of the Friends of Maldives travel advisory, asking tourists to avoid particular resorts associated with these players?
MZ: I have actually not seen the Friends of Maldives advisory. I heard about it in the media to boycott the resorts of the alleged coup perpetrators, but my opinion is that it is not the MDP’s policy, it was something done by an organisation that wished us well and that their purpose would also have been to disseminate information about who were behind the activities that led to an illegitimate government coming into place. I would like to think it was done to spread information, not to deliberately harm the economy or hurt the industry in any way shape or form.
MZ: The lease extension is about increasing the asset value of the properties. In the Maldives, all the islands actually belong to the government and when the second amendment to the tourism law came into place it gave the option for resorts to extend the existing 25 year leases to 50 years. A time period was given and there is a clause that stipulates that the payment must be done in completion before the lease period can be extended. So, the Nasheed government had interpreted that clause as the payment to be paid in full for the period extended. So, because the wording is such that the payment must be complete before the extension is granted, we interpreted it as the full payment.
But there is another clause which says the manner in which the payment is calculated is on an annual basis. This government has over-interpreted that clause and has said that the payment has to be made on an annual , but I have always insisted that the value of the government assets must not be allowed to decrease because the payments go to funding welfare services, housing projects, infrastructure projects, health services and so on that would benefit the local community.
The current government has not only allowed payment to be made on an annual basis but for the payment to start at the end of the 25 year period, which is years away. It is a huge loss to the government treasury, about US$150 million, and I think as a result that a lot of people will be deprived of the many projects that we have started for the benefit of the communities across the atolls.
Furthermore, I have had news that the government has borrowed US$50 million on a sovereign bond. There is no need to resort to this kind of borrowing when resort investors could provide that money easily. The interesting thing about it is that many resort operators had actually agreed to lump-sum payments, and a lot of them had already done so, because people are very conscious of the fact that services have to be provided to the people and it is a way to support the government budget to do so.
I this noticed because some the influential people behind the coup perpetrators have been pressuring me for some time now to do this so, again, it’s not everybody in the industry but some who had a vested interest in deferring the payment.
Now of course they have the power to decide in any manner that they want and this was one of the first things that they did when they came into power.
DB: The government continues to emphasise the separation of tourism and politics. Is it a good idea to have such a divide between the politics/society and a country’s biggest source of income?
MZ: Tourism and politics have always been separate so I’m quite baffled as to why now they are saying this. It has never been the MDPs intention or any other political party’s intention to harm the economy in any way. So I’m surprised as to why this message is going out to separate tourism from politics. Even in my time at the ministry I have always maintained that Tourism Minister will never be colour coded and we have worked with all stakeholders who have come from all different parties. Even with the new projects we don’t look at anybody’s political background, it has always been very robust in this sense.
DB: With Nasheed’s interest in mid-market tourism as an example, is bringing broader societal issues into tourism something the MDP is interested in?
MZ: Yes, it cannot be any other way because the Nasheed government is about the people and with tourism and every other economic policy, we have strived to put in place a fair go for all. For example the small and medium loan schemes encouraged middle-scale businesses to go into fruitful operation and we tried in every way to encourage the small business owner and the medium SME owners to get ahead in life. Because our philosophy is to do things for the people as opposed to making the rich richer, so in that sense even in tourism we came up with the mid-market policy and the policy to develop guest houses and city hotels across the country especially as a source for more people from the community to participate in the tourist industry – that is our aim. It not anything political at all.
The only way this can be viewed as political would be now people who are already successful, multi-millionaires in the industry, will tend to think that if you spread it around too much their businesses might become shaky. But the way we designed it is not to disrupt the apple cart in any way.
We were always going to emphasise the fact that Maldives is a luxury destination. People who seek that sense of luxury actually come, that was always going to be our main theme when promoting the Maldives yet at the same time we had wanted for more people to be participating directly not only in the business side but from the benefits of tourism in the communities. And also of course we wanted more tourists to see more of Maldives at a value for money price.
The former tourism masterplan, which was effective until 2011, said that islands specifically selected by the government have to be put on tender. But the way the Nasheed government did it was to open up all the islands in the country again to deviate from making the rich richer kind of philosophy to opening up the country to whoever has the ability, ambition and drive to apply for a tourism development to do so.
It was perfectly legally-allowable because the tourism law states that you can do a joint development with the government, so for example the government owned five percent and the developer 95 percent, which was legally permissible. But the interesting thing is that the current administration is saying we were doing that in contravention of tourism law – that is not the case.
Article 5 of the tourism law actually says that a joint venture can be allowed with the government as a shareholder. That is what we were doing instead of making the already rich richer, we were opening the islands to everybody who wanted to apply and with the means to do so.
In the past when you put something on tender, the process is so complicated and costly you have to know the right people in the right places, so the average person who was desirous of joining the tourism industry was very far-removed from anything to do with moving towards successful application.
Equity is what the Nasheed government was about and providing more opportunities for the able person, not necessarily the well-connected person. I don’t think there’s anything wrong with that approach so I don’t find it surprising at all when some of the already established enterprises in tourism are saying that these kinds of policies have been perpetrated by the Nasheed government for political reasons. It’s not for political reasons, it’s for reasons of equity.
DB: How do you see the political instability affecting tourism in the long run?
MZ: I don’t think that the political situation is actually affecting the tourism industry as such because Maldives is a well-established destination. The Maldives is a unique destination. You don’t find this kind of geographical competitive advantage in any other country. 1200 islands ringed into atolls, unique lagoons and beaches, the various shades of blue that make the islands so attractive. I have seen many tourists actually cry in amazement, it’s so beautiful.
The political situation is not going to affect the beauty that we have in the islands that we offer to the tourists. But I think the tourist industry has a responsibility to provide correct information about Maldivian life in general because I have had interaction from my experience as tourism minister that even the wealthiest tourists who come here are genuinely concerned about the well-being of the average person, they want to contribute financially and to better the life of the average citizen, and that is what the government was doing.
I think the tourism industry has the responsibility to provide information on the great wrong that had been done unto the average person of the Maldives which is denying them the government that has been legitimately installed through their vote.
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.”
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.”
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.”
The stigma against female employment in resorts presents challenges for reducing the 32 percent unemployment rate, over two-thirds of which is accounted for by women.
Sources familiar with the issue, however, claim that the stigma is “fueled by misinformation and fear”.
A recent report from Sweden’s Lund University claimed that community perceptions of resort life as ‘western’ and offensive to Islam are giving the industry a negative reputation, and are preventing women from pursuing employment in the Maldives’ most lucrative sector.
Ima* recently spoke to Minivan News about her employment in the resort sector. She was one of the first Maldivian females to be hired at a resort ten years ago, and previously lived on a local island.
“It’s very much like a family,” she said. “I know of hardly any issues with harassment from guys, people look out for each other.”
By contrast, several women working in Male’ told Minivan News that they often face sexual discrimination and harassment in the workplace. One source said there is no support against such treatment.
According to Maldivian Democratic Party (MDP) MP Eva Abdulla, “I don’t know if we have made it comfortable for women to talk to each other here.”
The thesis, “Women in Tourism: Challenges of Including Women in the Maldivian Resort Sector” was prepared by Eva Alm and Susanna Johansson during their five-month stay in the Maldives in 2010. Their findings identify “culture, religion, and women’s role in the family, the role of the family, safety, geographical spread, transportation, education and awareness” as obstacles to female employment in resorts.
Parents play a significant role in a woman’s professional future. “In the Maldives, in our religion, we are not allowed to drink or be with just any guys and things like that. So our parents are scared about that,” said one young woman quoted in the thesis.
According to the thesis, resorts are widely believed to be threatening to traditional Muslim values. At the same time, growing religious fundamentalism is projected to prevent women from participating in the local economy.
Dhivehi Rayyithunge Party (DRP) MP Rozaina Adam said a rise in fundamentalism would be an economic setback: “Instead of working, women will be lying around. That is not constructive for a growing economy and country.”
Tourism directly accounts for 30 percent of the Maldives’ GDP, and for 70 percent indirectly. Maldivian women account for a mere three percent of resort employees.
Ima said most community anxiety is due to a lack of information.
“When I go home and tell people that I work at a resort, their first perception is that I must be a good cook. But you know, they also don’t have a good idea of what my job title means. And I think that that’s a big reason behind the misperceptions in many Maldivian island communities. Many people have never been to a resort, if there was more interaction then they would understand what the resort lifestyle is. As it is, most just can’t relate to the kind of work we do here.”
One resort manager quoted in the thesis said awareness is a major challenge to promoting female employment. “Convincing the parents is difficult. They are very possessive of the girls. The parent’s perception is that they will mix with the European culture and do bad things such as drinking alcohol.”
The Maldives has one of the world’s highest divorce rates, and girls often drop out of school and get married in their late teens. Aspiration rates among youth ages 17 to 25 were recently calculated at six percent.
These statistics do not refer to the resort community.
Ima says resort life has significant benefits. “For local islanders, it can be an easy transition to resort life. Many people leave home to live or work in Male’. I think that that’s much more dangerous than working at a resort. At a resort, the lifestyle is much healthier, safer, and there is more opportunity to save.”
A source familiar with the issue told Minivan News that saving is not common for Maldivian women. She gave the example of a cleaning lady who was proud that her daughter gave her entire salary as a family contribution. “I know you want to respect your family, but how can a woman save up for herself? What option does she have for herself?” she said.
The Maldives was recently criticised for lagging behind other countries in gender equality, as defined by the Millennium Development Goals (MDGs). At the UNDP’s Democracy Day ceremony earlier this month, advisor Ferdinand von Habsburg-Lothringen warned that with only half of the Maldives’ work force engaged in the economy, “growth would not flourish.”
Several resorts have tried to accommodate social preferences by outsourcing tasks to local islands and providing daily transportation so Maldivian women do not have to live away from home.
Ima said that at the end of the day, success depends on the individual’s self confidence.
“The way you perceive colleagues and portray yourself matters for anybody, male or female. It’s about how you value yourself and the beliefs you hold. If you can stick to that, and show people who you are and how to respect you, then you can succeed,” she said.
Police have released suspects arrested for their alleged involvement in the human trafficking network that exposed last month, Haveeru reports, after the Criminal Court found no grounds to detain them.
The number of suspects released is unknown.
Five Maldivians and 12 expatriates were previously arrested for their alleged roles in the human trafficking network, said to worth up to US$123 million. The ring reportedly to forged over 70 local investments using copies of national identity cards belonging to individuals who were uninformed or deceased.
None of the suspects released today were expatriates involved in that particular case, Haveeru News reports.
Minivan News earlier reported that human trafficking has replaced the fishing industry as the Maldivian economy’s second greatest contributor of foreign currency.
The tourism industry in the Maldives is worth three to four times more than previous estimates, President Mohamed Nasheed acknowledged during a press conference this morning with journalists, ministers and industry leaders.
“Previously we had thought tourism receipts for the country were around US$700 million. But since collection of the 3.5 percent Tourism GST it has come to light that the figure is around US$2.5-3 billion,” President Nasheed said.
”I was told that the government’s expenditure was too high, but I told them it was not that the expenditure was high, but that the revenue was too low. There are not many ways we can decrease the expenditure of the government,” Nasheed said.
Nasheed was speaking ahead of parliament’s resuming sessions next week, where the ruling Maldivian Democratic Party (MDP) hope their new voting majority will push through major economic reforms. Most ministers were in attendance, as well as senior industry figures including Jumhoree Party (JP) leader Gasim Ibrahim.
Secretary General of the Maldives Association of Tourism Industry (MATI), Sim Mohamed Ibrahim, suggested the US$2.5 billion figure was optimistic, “as a lot of it is guesstimate.”
“The TGST income is variable depending on season, occupancy and volume of business,” he explained. “If they are projecting the figures from Jan-March for the rest of the year, that is the biggest time of the year and the figure will be very rosy. It may be a few years before we can calculate this accurately.”
Nonetheless, “the government will have a lot more money at its disposal for national development,” Sim predicted.
“I don’t think traders will have any problem paying taxes so long as other charges and levies are lowered. What business needs is predictability – this has been lacking in the past, particularly the calculation of rent and lease periods. They need confidence in the system, and things to be spelt out clearly. I think this is now happening.”
Historically the government had derived most its revenue from import duties, followed by bed taxes on the resorts, President Nasheed explained, both of which ultimately be abolished in favour of a modern tax economy.
One impending change – which was not given a date – was the sale of land for commercial purposes, Nasheed said, with all land, including resort islands, becoming a tradeable commodity.
“Ultimately that is where we have to go. I understand that this not the law right now,” he said.
The Maldives currently does not recognise freehold land, and furthermore lacks a central register of land ownership. Currently land is owned by the government and leased to commercial operators, although these agreements can extend up to 99 years. Resort leases are shorter, but under the current government are extendable to 35-50 years when a certain percentage is paid upfront.
Sim observed that only 20 percent of resorts had invested in the longer leases, “either due to their income [required for the upfront payment] or because the banks aren’t lending.”
“[Land purchase] might be an advantage to the industry, as resort land has always been treated differently,” he said.
“It was briefly introduced in the past but was later revoked. Given the shortage of land in the Maldives, land ownership can be a touchy subject. But now it is possible for the government to reclaim land.”
Nasheed has previously observed that the government’s new financial changes, which include an income tax and a general GST it hopes to approve in parliament, were “perhaps far more radical that introduction of political pluralism in the semi-liberal society that we had.”
One of the most influential and pioneering shark and marine conservation organisations, Bite Back, has said a UK boycott of long line tuna from the Maldives is a real possibility unless the Maldivian government disallows long line fishing in Maldivian waters.
Bite Back, which works to promote sustainable fishing and halt the trade and consumption of vulnerable fish species to protect ocean habitats, has expressed alarm at the proposed long line fishing in Maldives.
Graham Buckingham, campaign director of Bite Back, says that seafood is a hot ecological topic, with consumers demanding that fish are caught sustainably and with the minimum of by-catch.
“As such, a UK boycott on long line-caught tuna from the Maldives is a real possibility that, of course, could be avoided by the government outlawing longline fishing in Maldivian waters in the first place,” he said.
Marks & Spencer, a global retail giant, and one of the major buyers of Maldivian tuna, announced last year it would no longer buy tuna that is not caught by pole and line.
Talking to the press last year, an M&S spokeswoman said: “As all of our food is own-brand, it means there will be absolutely no products in our stores that use tuna which isn’t pole or line caught.”
Minivan News has learnt that M&S buyers visited the Maldives recently and held talks with local environmentalists to ensure that all tuna in the Maldives were caught using pole and line.
The steady decline in fish catch has lead the Maldivian government in proposing long line as an alternative method of fishing alongside the more traditional and environmentally friendly pole and line.
President Mohamed Nasheed in his opening address to the Majlis appealed to fishermen to find new methods of fishing saying “Those massive fishing vessels that we built yesterday, that are now anchored in the lagoons as they are not suitable for pole and line fishing, are causing us immense loss.”
Nasheed went on to say that it’s not feasible to burn fuel and engage in pole and line fishing in big vessels, and experts had advised him it would be more profitable to use those vessels for group long-line fishing.
The Ministry of Fisheries is now poised to provide financial and technical support to fishermen to adopt this new method. The president urged the fishermen “to take to the seas again.”
The president also announced that licenses for foreign boats that had been catching fish using long line and net in the Maldives would be cancelled in April and Maldivian boats would take their place.
Ibrahim Manik, chairman of the fishermen’s union says “around 80 per cent of fishermen are against this new method, but the dire situation means there will be those who will adopt this.”
He says at least Maldivian fishermen will be more careful about the ecological impact.
“Even now our fishermen will release any sharks they catch by mistake, so if our people do long lining they will be more careful.”
Interestingly enough in 2008 the same union sent a letter urging the then fisheries minister to stop boats using long line methods in Maldives waters on ecological grounds.
“Even now we are saying don’t give permission for long lining, but on the other hand the fact that fishermen can’t make ends meet anymore means that there will be those who will do this for the money.
He admits that longline has negative effects on dolphin and sharks and says readily that ‘the reputation we had built over the years will be destroyed.”
Organisations like Green Peace which had urged last year for people to buy Maldivian fish would no longer be doing that, says Ibrahim.
“Money is the big factor here. A fishing boat used to earn around 10,000 Rf to 20,000 Rf per trip before, and now we have exporters also who are encouraging this.”
But even private exporters like Big Fish are worried. The company’s director Ali Riza says “long line is completely contradictory to how we fish now; Maldives Seafood Processor and Exporters Association (MSPEA) are even now debating the pros and cons of it.”
According to Ali, UK supermarkets are supposed to have certified sustainable products on their shelf in the year 2010, and this complicates everything.
“Europe is our biggest market right now and we are even now planning to participate and promote our product as one caught by sustainable fisheries in the biggest fish export fair in Belgium this year.
However he says the fact that ‘a lot of companies are now on the verge of bankruptcy’, which is also cause for concern.
Ali says right now one can only hypothize about how European consumers will react but says he finds all the talk a bit hypocritical also.
“it’s not us that overfished the waters, but now that it’s done, we are being told not to do what western countries had been doing.”
And like Ibrahim who evoked the idea of foreign boats doing long lining, Ali says “we obviously can’t seal off our waters – fish are migratory. If we don’t do it others will overfish around us, so we might as well be the ones doing it.”
He expresses hope that there will be minimal negative impact, as they are not targeting sharks and other species, and says there will not be a “significant amount” of by-catch.
Activists like Graham say long lining causes the unintentional death of 80,000 turtles a year along with countless sharks, dolphins, sailfish and seabirds worldwide, calling it one of the most indiscriminate methods of fishing.
Major exporters like MIFCO who last year exported 115,580 cases of canned tuna, 21,008 tons of frozen tuna and 312 tons of fresh yellow fin seem to think that the shift in fishing methods would not cause a major problem.
“We will also apply for long line license when they start giving it,” says Ali Faiz, Managing director of MIFCO. He says as the customers are different for long line and canned tuna, it would not have much of an impact.
“With long lining we mostly export raw fish.”
He also scoffs at the environmental concerns, saying a lot of the time environmentalists are controlled by big businesses. “All these days’ foreign boats were doing it, and having an advantage over us. Now it will be more difficult for boats to come here and steal from us.”
He is confident that there will always be buyers for Maldivian fish.
Ali says those who support the environment friendly method of fishing in Maldives, do not give any incentive for it to be continued. “We have an entire country that is fishing with pole and line, but do we get any special concessions, any benefits because we do it?”