Saudi delegation visit Maldives to assess investment opportunities

Minister of Islamic Affairs, Dr Mohamed Shaheem has said Saudi Arabia will be informing other Arab nations about the many investments opportunities in the Maldives.

Addressing the press after a meeting with a special Saudi delegation, Shaheem stated the country was assessing means through which it can assist in developing the Maldivian economy.

“The delegates will have a meeting with officials from the Ministry of Economic Development tomorrow where they will discuss potential investment opportunities in the Maldives and how to increase outreach regarding investment,” he added.

The 16 strong delegation arrived from Saudi Arabia this morning consisting of seven Saudi government officials alongside representatives from private sector Saudi enterprises who have shown an interest in pursuing business in the Maldives.

Speaking at the meeting, Saudi Arabia’s Deputy Minister for Foreign Trade at the Ministry of Commerce and Industry Dr Abdullah A. Al-Obaid said the visit signifies his country’s intention to enhance the bilateral relationship through trade, investment, and Islamic affairs.

“We are so proud to hear that Maldives is keeping with its Aqeeda [faith], its religion and trying to stick with it even though we have globalism effecting all countries,” said Dr Abdullah.

Shaheem said that the delegation arrived after a request made to the Saudi King by President Abdulla Yameen. He also said that the delegation was due to meet with President Yameen during this visit.

In October, Saudi Arabia’s crown prince Salman bin Abdulaziz Al Saud donated US$1.2 million to a mosque project, with further plans to build 10 new mosques in the islands.

The Saudi Prince reportedly told Shaheem that he was willing to help the Maldivian government in preserving the Islamic identity of the nation and that Saudi Arabia sees the Maldives as a country of ‘special importance’.

During the recent Malé water crisis – caused by a fire at the capital’s only desalination plant, unnamed Saudi donor pledged to assist the Maldives by providing US$1 million to the government’s water crisis fund.

Vice President Dr Mohamed Jameel Ahmed visited Saudi Arabia earlier this year, meeting with the Imaam of the Grand Mosque of Makkah.

The vice president stressed the importance the government placed on enhancing ties with the Arab world and in strengthening religious unity in the Maldives.

Shortly after Jameel’s return, the government initiated its pledge to introduce Arabic lessons in schools as part of a drive to increase Islamic learning in the country.

After signing an MoU to permit flights between the Maldives and Saudi Arabia earlier this year, Mega Maldives has this week begun flights between Malé and Jeddah.

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India offered to build naval dockyard in Maldives, says Indian media

India’s Army Chief General Bikram Singh has offered to build a dockyard worth MVR 7.7 billion (US$ 500 million) in the Maldives in his ongoing visit, Indian media has reported.

According to the Deccan Herald, China had already offered to develop the Uthuru Thilafalhu lagoon in the archipelago’s north.

Reclamation work is already underway in the area. Once completed, it will serve as the Maldivian Coastguard’s primary operations base and will provide a much-needed berthing space to naval ships and ocean liners.

India’s Foreign Secretary Sujatha Singh, during a visit to the Maldives in February, visited the Uthuru Thilafalhu project site. Minivan News understands discussions are underway on Indian investment in the project, but it is not clear if a decision has yet been made.

In recent months, India has been steadily increasing defense cooperation with the Maldives including the gifting of two ‘Dhruv’ Advanced Lightweight Helicopters (ALH) and development of the military hospital Senahiya.

Ties with India came under strain during President Dr Mohamed Waheed’s administration in the aftermath of Indian infrastructure giant GMR’s abrupt eviction. The company had won a concession agreement to develop the main airport.

Waheed went on to strengthen military ties with China, sparking Indian concern over “a Chinese policy to throw a ‘string of pearls’ – or a circle of influence – around India.”

Speaking during an official trip to India earlier this year, new President Abdulla Yameen stated that while the Maldives has “close ties” with China, “nothing will precede ties with India, which are far more precious”.

“While we have had a slight rough patch with India, the time of good relations far outweigh the rough patches we had. I suppose it is easy for us to be on the right track again,” Yameen said, referring to the airport dispute.

Singh’s visit is the first by a serving Indian Defense Chief since General Deepak Kapoor’s visit in February 2010.

An Indian High Commission press release on Tuesday said Singh’s three day visit – set to conclude today – will “further enhance bilateral defense cooperation.”

“India’s commitment to Maldives defense has been growing with each passing year. Both countries have inter-linked mutual security interests which need to be protected for the safety and security of the South Asian region and the Indian Ocean,” the statement said.

During his visit, Singh met with President Yameen, Defense Minister Mohamed Nazim and the Maldivian Chief of Defense Forces Ahmed Shiyam.

Singh also discussed the possibility of supplying fast-attack craft, amphibious landing craft and small arms from New Delhi, reported the Deccan Herald.

Another potential project is to train 40-60 officers of the Maldivian National Defence Force (MNDF) in Indian training establishments, the article continued.

“All such topics were discussed. But we will reveal details at a later time,” said MNDF Deputy Spokesperson Captain Ali Ihusaan, when asked for a comment on reports by Indian news sources.

Chinese investments including a US$54 million for an IT infrastructure project sparked Indian concern in 2013, with Indian Ministry of Communications and IT saying Beijing’s state owned companies must be “kept at bay.”

According to Indian media, the ministry – in an internal government note – suggested “substantial investment in the Maldives on similar projects [as being planned by China] ensuring that the traffic between India and the Maldives is handled through the equipment installed and commissioned in the Maldives by India.”


Saudi Arabia’s growing role in the Maldives: BBC

“Foreign holidaymakers in the Maldives, one of the world’s most popular luxury honeymoon destination, were not happy earlier this year when their hotel bookings were cancelled at short notice,” writes Charles Haviland for the BBC.

“The reason was that Crown Prince of Saudi Arabia, Salman bin Abdulaziz al-Saud, had booked out three whole islands for nearly a month.

It is just one example of the growing role of Saudi investment in the archipelago, a factor which may make the Maldives’ government unwilling to ruffle the feathers of Saudi Arabia’s rulers.

“The well-being of our guests is always our primary concern,” a spokeswoman for the Anantara resorts told the British newspaper, the Daily Mail, which reported that some tourists were angry at being moved to make way for the Saudi prince.

Prince Salman, who is also Saudi Arabia’s defence minister, was on an official business visit at the invitation of Maldives President Abdulla Yameen, who was elected in November after two years of political turmoil.”

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Politicians trivialising severity of economic problems, foreign investment: Chamber of Commerce

The Maldives National Chamber of Commerce and Industries (MNCCI) has accused senior politicians of trivialising the severity of the country’s economic problems, claiming parties are addressing financial concerns with negative slogans rather than actual policies.

The concerns were raised as the government-aligned Progressive Party of Maldives (PPM) claimed over the past week that foreign investors were now turning away from the Maldives due to concerns about political stability and safety in the country.

“Bad shape”

While accepting the present “bad shape” of the Maldives economy, the chamber of commerce criticised negative campaigning on the economy by senior figures in the last two governments – arguing they had done little to address an ongoing shortage of US dollars and a lack of investment banking opportunities and arbitration legislation in the country.

On Saturday (June 29), PPM presidential candidate Abdulla Yameen was quoted in local media as expressing concern that foreign businesses were shunning the Maldives in favour of financing projects in other countries in the region.

“With our present woes no one wants to invest here. They are looking at Seychelles and Caracas. No foreign investor wants to come to the Maldives,” Haveeru reported him as saying.

The concerns were shared by Yameen’s running mate, former Home Minister Dr Mohamed Jameel Ahmed, who told a campaign rally in Raa Atoll days earlier that the PPM was the only party able to secure peace and safety in the country required to boost foreign investor confidence.

Dr Jameel was dismissed as home minister by President Dr Mohamed Waheed in May this year after announcing his decision to stand as running mate for rival candidate Abdulla Yameen in September’s election.

Minivan News was awaiting a response from Dr Jameel about the party’s economic policies at time of press.

While MNCCI Vice President Ishmael Asif accepted that political stability was a key challenge to building foreign investor confidence, he added that senior political figures such as Dr Jameel had failed to implement much needed legislative reforms to aid investment while in power.

Asif argued that Dr Jameel was not the only government figure in the last five years guilty of failing to try and boost investor confidence in the Maldives.

“We are not happy. People are using the economy as a campaign slogan. All parties are looking to come to power and they will do or say anything to be in power,” he said.

Asif expressed particular concern over various parties’ using the country’s present economic difficulties to score points during campaigning without offering their own solutions.

“The economy is not healthy right now. We do not hear any solutions from these people. We want to hear positives about will they change,” Asif said.

“What exactly did Jameel do for the economy? What did Anni [former President Mohamed Nasheed] do? What also did Dr Waheed do? What did any of them do?”

Economic record

Asif argued that ahead of the upcoming presidential election scheduled for September, it was hugely important that voters evaluated all candidates on the basis of their recent economic record.

He said that the Maldives’ first multi-party democratic election in 2008, the country had failed to implement a number of legislative reforms required to provide greater freedom to foreign investors.

According to Asif, key economic reforms lacking included the establishment of investment banks to encourage foreign parties to borrow domestically, and arbitration law to ensure that investments were protected in the country’s courts.

He said that with rival parties and President Waheed all campaigning ahead of this year’s election, there appeared to be little consensus to try and deal with “huge issues” such as the dollar shortage.


Asif said he believed that the majority of voters had failed to properly hold their leaders to account since the democratic transition in 2008, comparing the nation’s democratic freedoms over the last five years as being comparable to “a child with a new toy”.

“We have not really understood democracy here. Many have not grown up with the right to question that comes with democracy, so we don’t know how to test the capacity of our leaders,” he said.

Raising concerns that the loudest and most controversial figures had dominated the country’s political arena since 2008, Asif said fears of a lack of accountability were a significant difficulty for the economy.

“Take the Ministry of Trade for example. There is a huge issue over the supply of US dollars, yet instead everyone is focused on their own parties. There is no mandate to address this,” he said.

Opposition concerns

The opposition Maldivian Democratic Party (MDP) meanwhile rejected criticisms over its foreign investment record, claiming it had attempted to introduce a raft of economic reforms for the economy while in power, before the government was controversially changed on February 7, 2012.

The present government, made up entirely of former opposition parties, came to power after former President Mohamed Nasheed resigned from office during a mutiny by sections of the police and military.

MDP MP and Spokesperson Hamid Abdul Ghafoor said that it was hypocritical for the PPM, or any other party serving in the present government, to raise concerns about political stability, given that they had intentionally deposed the country’s first democratically-elected government.

On an economic level, Ghafoor claimed the former MDP government had sought to introduce an economic reform package aimed at encouraging investment not only in the country’s tourism industry, but in a wider number of sectors such as energy, communications and infrastructure.

He said that this investment focus had been seen in the introduction by the former administration of direct taxation, the restructuring of government finances and the reduction or elimination of import duties on a wide range of goods.

Before Nasheed came to power, Ghafoor said the country had been managed much like a “corner shop” – with no mechanisms to attract and keep investors in the country.

He argued that one legacy of this approach to foreign investment could be still be seen in the country’s courts, which he continued to remain a “mess”.

Judicial criticisms

Before his resignation, former President Nasheed controversially detained the Chief Judge of the Criminal Court Abdulla Mohamed, in a move he claimed was needed to prevent him from continuing to rule on cases while charges of misconduct against him were investigated.

In November 2011, the Civil Court ordered the Judicial Service Commission (JSC) to take no action against the chief judge over an investigation into his alleged misconduct until the country’s court reached a verdict in a case filed against him. The Civil Court case preventing action against Abdulla Mohamed was filed by the chief judge himself.

In the build up to the judge’s arrest, Nasheed continued to raise concerns over allegations of perjury and “increasingly blatant collusion” between senior judicial figures and politicians loyal to the former autocratic President Maumoon Abdul Gayoom.

Since Nasheed’s resignation, NGOs and independent experts including UN Special Rapporteur for the Independence of Judges and Lawyers, Gabriela Knaul have expressed concern over politicisation within the country’s court system.

Accusing the PPM – as part of the present coalition government –  of being directly involved in instigating a mutiny within the country’s security forces prior to the change of government last year, MDP MP Ghafoor alleged the party was also culpable for ruining interest in foreign investment.

He accused PPM presidential candidate Abdulla Yameen in particular of using President Waheed as a “pawn” last November to abruptly terminate a US$511 million contract with India-based GMR to develop and manage Ibrahim Nasir International Airport (INIA).

Indian infrastructure giant GMR recently filed a claim for US$1.4 billion in compensation from the Maldives, following the government’s sudden termination of its concession agreement citing  “wrongful termination” and loss of projected profits.

Meanwhile, the PPM accused President Waheed of ignoring the advice of his coalition government by terminating the agreement.

Waheed’s allies hit back by accusing the PPM of making “contradictory statements” regarding the decision to terminate GMR’s concession agreement, claiming the party’s senior leadership tried to terminate the deal without discussion or following due process.

The MNCCI claimed in September last year that legal wrangling between the government and India-based developer GMR over the multi-million dollar airport development contract was not anticipated to harm confidence in the country’s “challenging” investment climate.


PPM only party who can secure peace, investor confidence: Former Home Minister Dr Jameel

Dr Mohamed Jameel Ahmed, running mate of Progressive Party of Maldives (PPM) presidential candidate MP Abdulla Yameen, has said ensuring peace and safety in the Maldives will be vital to ensuring economic progress following September’s election.

Speaking on the island of Dhuvaafaru in Raa Atoll on Thursday (June 28), Dr Jameel was quoted by Sun Online as saying that the PPM was the only party able to secure peace and safety in the country required to boost foreign investor confidence.

He also praised the PPM’s founder, former President Maumoon Abdul Gayoom, for his efforts in trying to establish peace across the country during his time in office.

Dr Jameel said the former president had been able to attract major multinational companies and foreign leaders to the country due to the culture of “peace, solidarity and obedience that existed among the Maldivian people” during his rule.

Gayoom was the autocratic ruler of the Maldives for thirty years before being unseated by a coalition backing Mohamed Nasheed in the second round of the country’s first multi-party democratic elections in November 2008.

Dr Jameel’s claims were made after the PPM earlier this month accused President Waheed of ignoring the advice of his coalition government by abruptly terminating a US$511 million airport development contract with India-based GMR without holding talks with the company to first resolve the issue.

The PPM’s coalition partners later hit back by accusing the party of making “contradictory statements” regarding the decision to terminate GMR’s concession agreement, also claiming that its senior leadership tried to terminate the deal without discussion or following due process.

Dr Jameel, who served as home minister under the current coalition backing President Dr Mohamed Waheed, was dismissed from the role in May after announcing his intention to support MP Yameen’s campaign against the incumbent.


Small and Medium Enterprises Bill ratified by president

The Small and Medium Enterprises Bill was ratified by President Dr Mohamed Waheed yesterday (April 14) after being approved by parliament last month.

The bill, now published in the Government Gazette, outlines policies targeted at developing small, medium and micro-scale businesses in the country.

According to the President’s Office website, the bill includes numerous measures such as, outlining how to promote and develop small to medium size business.  Methods for monitoring and evaluating the effectiveness of government policies to support small and medium business are also included.

Other key considerations in the bill include supporting the sector to become sufficiently “innovative” and broad, while also ensure long-term national and international competitiveness.

The bill also calls for the establishment of a government-backed centralised registration system for companies, according to the President’s Office.


Maldives government denies US$160 million arbitration talks with Axis Bank

The Attorney General (AG’s) Office has denied receiving any notice of arbitration from Axis Bank, one of the lenders backing a US$511 million airport development project voided by the government late last year.

In November 2012, President Dr Mohamed Waheed’s government declared void a concession agreement signed by the previous government with Indian firm GMR, to manage and build a new terminal at Ibrahim Nasir International Airport (INIA), and ordered the company to leave the country within seven days.

Following the decision – later cleared by Singapore’s Supreme Court – project lender Axis Bank announced its intention to seek a repayment of loans taken out for the project, which were guaranteed by the Ministry of Finance and approved by the AG’s Office under the former government.

“Arbitration process”

The India-based Financial Express publication reported yesterday (April 5) that Axis Bank had initiated an arbitration process with the Maldives government as part of efforts to recover loans granted to GMR with an estimated value of US$160 million (MVR 2.4 billion).

Ahmed Usham, Deputy Solicitor General for the AG’s Office, told Minivan News today that although some discussions had been held with Axis Bank, there had been no notice of arbitration given to the state by the finance group over the loan issue.

“We have requested some documents from [the bank] and we are set to meet with them after receiving these,” he said.  “There has been no talk of arbitration.”

Usham added that the documents requested from Axis Bank by the AG’s Office pertained to loans taken from GMR as part of the INIA development.

Acting Minister of Finance Ahmed Mohamed said he too was not aware of any arbitration hearings concerning Axis Bank, or even if talks had been held on the matter.

“All I am aware of is that there was a teleconference held Thursday (April 4),” he stated.

GMR arbitration

The government meanwhile is set to participate Wednesday (April 10) in the preliminary hearing of a separate arbitration case with GMR over the decision to void its airport concession agreement .

Authorities have previously told local media that the meeting, scheduled to take place in London, was not an official arbitration hearing, but rather a means to outline the timeline for both parties to present their case. Once the process for the arbitration is agreed, official hearings are expected to begin in Singapore.

According to the Attorney General’s office, the Maldives will be represented by Singapore National University Professor M Sonaraja, while former Chief Justice of the UK, Lord Nicholas Addison Phillips, will represent GMR.

The arbitrator mutually agreed by both GMR and the government is retired senior UK Judge, Lord Leonard Hubert Hoffman.

Concession agreement

In 2010, GMR-Malaysia Airports Holdings Berhad (MAHB) consortium, the government of former President Mohamed Nasheed and Maldives Airport Company Limited (MACL) entered into a 25-year concession agreement worth US$511 million (MVR 7.787 billion) – in which the GMR-MAHB Consortium was contracted with the management and upgrading of Ibrahim Nasir International Airport (INIA) within the 25 year contract period.

However in November 2012, the government of President Dr Mohamed Waheed Hassan Manik declared the developer’s concession agreement void and ordered it to leave the country within seven days.

A last minute injunction from the Singapore High Court during arbitration proceedings was overturned on December 6, after Singapore’s Chief Justice Sundaresh Menon declared that “the Maldives government has the power to do what it wants, including expropriating the airport.”

GMR is seeking US$800 million in compensation for the sudden termination, while the Maldivian government is contending that it owes nothing as the contract was ‘void ab initio’, or invalid from the outset.

If decided in GMR’s favour, the outcome of the case could potentially see the Maldives facing sovereign bankruptcy, with millions of dollars in additional debt emptying the state’s already dwindling reserves, crippling the country’s ability to obtain further credit, and potentially sparking an economic or currency crisis.

If decided in the Maldives’ favour the case risks setting a legal precedent for effective nationalisation of foreign investments signed under previous governments, and placing existing investors further at the mercy of the country’s turbulent politics.

Kuwaiti interest

Discussing the future of INIA on Thursday, President Waheed was reported in local media as stating that authorities in Kuwait had expressed an interest to “assist in the development” of INIA, following a recent official visit to the country.

“Kuwait is really interested in the airport. It’s because we have received a great deal of assistance from the Kuwait Fund to develop the airport so far. They are well aware of it,” he was quoted in newspaper Haveeru as saying.

“They really believe that we have managed to develop the airport with the assistance of Kuwait. So there is a lot of interest. They are very happy that the government has now taken the initiative to develop the airport.”

President’s Office Media Secretary Masood Imad said he was in a meeting and unavailable for comment when contacted by Minivan News.


Coalition divided over fate of STO/Addu Airport managing director

Representatives of several government-aligned parties are divided on whether to support removing Shahid Ali from his position as Managing Director (MD) of both the State Trading Organisation (STO) and Addu International Airport over his alleged political beliefs.

The Dhivehi Rayyithunge Party (DRP) said this week it not made any sort of decision over removing Shahid from the positions he presently held and had not been aware of any such motion to remove him, though added any eventual decision would need to be “justified”.  Jumhoree Party (JP) Deputy Leader Abdulla Jabir said his party would support the STO MD, while also warning against the politicisation of key business positions and deals across the nation.

The comments were made as the Interim Vice President of Progressive Party of Maldives (PPM) Abdul Raheem Abdulla told local media that parties within the present coalition government sought to remove Shahid from his posts for allegedly being a member of the opposition Maldivian Democratic Party (MDP).

Earlier this week, Jumhoree Party (JP) Leader and MP for Alif Dhaal Maamigili MP, Gasim Ibrahim warned Shahid that he would be sacked from his post at the STO if an agreement was signed to sell a 30 percent stake in the Addu International Airport Company Ltd (AIACL) to Kasa Holdings.  The sale was confirmed a day later.

During a televised appearance on private broadcaster Dhi TV on Wednesday, Abdul Raheem claimed that calls to replace Shahid were not related to the controversial sale of the shares in Addu International Airport (AIA), newspaper Haveeru reported.

Instead he said that the motion was based around concerns about having a figure he claimed was allegedly linked to the opposition MDP in a senior position of a state-owned company, claiming such an appointment was “unacceptable”, according to media reports.

Abdul Raheem went on to accuse Shahid of spending money to help fund a recent campaign trip by former President Mohamed Nasheed in Addu during the program.

PPM Deputy Leader Umar Naseer and Party Spokesperson Ahmed Mahloof were not answering calls at the time of press.


Responding to the PPM’s criticism, JP Deputy Leader Abdulla Jabir said that Shahid was a “professional” and “highly technical” MD, adding both he and his party would not back any attempts to remove him.

Jabir also played down claims Shahid was politically tainted or biased in his work.

“We should keep independent people in business as much as possible, we need good people like him right now,” he told Minivan News. “STO is a huge company with many employees and he has done a very good job, I support him and our party will support him.”

Jabir also requested that Maldivians avoid trying to politicise business and economic matters in the Maldives that could impact on the investment climate within the country.

Last month, Jabir also hit out at what he claimed were attempts by some of the JP’s coalition partners to try and “politicise” a dispute between the government and India-based GMR over an agreement to develop Ibrahim Nasir International Airport (INIA) – fearing a negative impact on foreign investment.

Meanwhile, DRP Deputy Leader Ibrahim Shareef told Minivan News today that it had not been made aware of any decision to remove Shahid from either of his MD posts.  He also expressed caution over making a potential scapegoat out of Shahed over concerns owing to the Addu airport sale.

Shareef said that before taken any potential position on the matter, the party would need to investigate if there was any possible reason to dismiss Shahid, claiming the party would not back any cause raised by coalition partners unless it was “justified”.

“However, I do not think a deal such as [selling shares] in Addu International Airport can be taken by one person alone,” he added, referring to Shahid.

Responding to the PPM’s reported concerns of potentially giving positions in government-owned companies to opposition figures or supporters, Shareef claimed that the coalition had been founded on a policy of not discriminating along party lines.

“It is important to remember that President Dr Mohamed Waheed Hassan invited the MDP to join his coalition government – an invite they declined,” he claimed. “However, that said, the government was to invite capable people from anywhere to join us even from MDP. We have nothing against the MDP.”

Dhivehi Qaumee Party (DQP) Leader Dr Hassan Saeed and Secretary general Abdulla Ameen were not responding to calls from Minivan News at time of press.

Coveted post

Back in August, an audio clip allegedly of Deputy CEO of Maldives Ports Limited, Ahmed Faiz, was leaked and then aired on opposition-aligned Raajje TV, alluding to significant interest in replacing Shahid Ali within the STO.

In the transcript, which Faiz confirmed was authentic but re-cut and edited together, he appeared to allege that PPM Parliamentary Group Leader Abdulla Yameen had offered financial incentives to replace the STO MD.

“The first post that was guaranteed to a person in this government was one that I had asked for, that is the post of Managing Director at STO, the one in which that Shahid Ali is. That is something I did in my interest, and I swear, it is something I myself did. There is no one who hasn’t been coveting that post. I was offered five hundred thousand dollars to get Shahid Ali replaced by a person of Yameen’s choice. I said to him… what he said to me even at the beginning is that if you are uncomfortable by this, then we shall treat this as a conversation that never happened, and I replied saying this never happened,” Faiz claims in the audio.

“I said this conversation never happened. Yameen said it never happened. And that was it, I got up and walked away. That (expletive) said to someone nearby that I am a very dangerous (expletive). Now I’ve told you of some of the problems in this government.”


India concerned over Maldives’ political instability, investment climate

The Indian government has expressed concern over continuing political instability in the Maldives, following the murder of Progressive Party of the Maldives (PPM) MP Afrasheem Ali this week.

In a statement on Thursday, India’s External Affairs Ministry said it had “consistently emphasised that peace and stability are necessary prerequisites to the firm implantation of democracy, as well as for the economic growth and prosperity of the people of Maldives.”

“We call upon all parties in Maldives to continue to work towards facilitating an early and commonly acceptable internal solution to the political impasse in the country. In this context, India urges the government of Maldives and all political parties to adhere strictly to democratic principles and the rule of law thus paving the way for the holding of free, fair and credible elections. Violence should find no place in democracies,” the Ministry stated.

India also called on the Maldivian government “to ensure a propitious climate for foreign investments, which have a direct bearing on the economic growth and development of Maldives.”

The latter remark comes after parties in the ruling coalition last month stepped up rhetoric calling for nationalisation of Ibrahim Nasir International Airport (INIA), currently being developed and managed by Indian firm GMR in the Maldives’ single largest foreign investment.

Following the controversial transfer of power on February 7, President Dr Mohamed Waheed Hassan’s government has swung between issuing reassurances within diplomatic circles that Indian investments in the country would be protected, while locally stepping up nationalisation rhetoric.

Last week, GMR’s Airports CFO Sidharth Kapur told Indian television channel CNBC that the dispute could affect the country’s investment climate.

“While we have invested both debt and equity into this project, these kind of problems naturally affect the investment climate of any region,” said Kapur.

Discussing the GMR case last week, the Maldives National Chamber of Commerce and Industries (MNCCI) assured Minivan News that investor confidence was not being harmed, though the body did describe the investment climate as “challenging”.

India meanwhile recently granted the Maldives a further US$25 million as part of a US$100 million standby credit facility agreed during last November’s official visit from Prime Minister Manmoham Singh.

The deal represents the third instalment of the credit facility, with the previous two instalments having amounted to US$50 million. The previous tranche of US$30 million was released following President Waheed’s first official visit to India in May.

The assistance comes at a time the Maldives is facing a crippling financial position.

Minister of Finance Abdulla Jihad told parliament’s Finance Committee that this year’s budget deficit is set to be double the original estimate of MVR 3 billion (US$195million).

Jihad told Parliament’s Finance Committee that state spending this year, MVR 9 billion (US$590 million), had outstripped earnings by 28 percent.