Tag: investors

Tourism Minister Adeeb appointed chairman of SEZ investment board

President Abdulla Yameen has appointed Tourism Minister Ahmed Adeeb as the chairman of the board of investment created last week under the Special Economic Zone (SEZ) Act.

Along with Economic Development Minister Mohamed Saeed as vice chairman, the rest of the members are Fisheries and Agriculture Minister Dr Mohamed Shainee, Environment and Energy Minister Thoriq Ibrahim, and Youth and Sports Minister Mohamed Maleeh Jamal.

The five-member board is authorised to grant approval for applications by developers to establish a zone, issue permits and investment licenses, and formulate rules and policies for the operation of SEZs.

Additionally, the board would monitor and review progress of investments, assess risk damage and liability, determine rates of fees and charges, and sign investment agreements between the government and developers.

The board would be assisted by a 17-member technical committee comprised of government officials as well as representatives from the private sector.

Following criticism from the opposition over the appointment of ministers to the board – who contended it was unconstitutional – President’s Office Spokesperson Ibrahim Muaz Ali put out a press statement yesterday (September 6) insisting that the board was instituted in line with laws and regulations.

Article 136(a) of the Constitution states, “A member of the cabinet shall not hold any other public office or office of profit, actively engage in a business or in the practice of any profession, or any other income generating employment, be employed by any person, buy or lease any property belonging to the state, or have a financial interest in any transaction between the state and another party.”

However, unlike boards of state-owned enterprises, Muaz stressed that the ministers on the board would not receive any form of remuneration, noting that it was “a governing board”.

“Therefore, the Maldivian government condemns misleading statements from some politicians made for different political purposes concerning the president forming the board of investment and appointing members,” read the press release.

SEZs

Under the SEZ Act, each zone would be granted to a developer – following evaluation of a proposal – to take overall responsibility for management and operation. Once a permit is granted, finding and choosing investors is left to the developer.

The investor would then be issued a license once the developer submits its agreement with the investor to the board.

The investment agreement signed between the board and the developer would include details of the investment, its value, proposed business activities, details of incentives, compensation formula, dispute resolution mechanisms, rights and obligations of the developer, as well as other terms and conditions.

Speaking at a forum on state broadcaster Television Maldives (TVM) last week, Adeeb said the SEZ law allows the government to offer incentives and “for the first time” negotiate directly with investors, who preferred “a one-stop solution” for applications, permits and licenses.

While US$5 billion has been invested in tourism since 1972, Adeeb suggested that even if one ‘mega project’ such as iHavan “takes off” with more than US$1 billion worth of investment, the economy would be transformed.

The iHavan or ‘Ihavandhippolhu Integrated Development Project’ envisions an international shipping and commercial hub with a container transhipment port, bulk-breaking and warehousing, oil storage and bunkering facilities, an international airport, a cruise liner terminal, a yacht marina, real estate development and ‘vertical’ tourism services.

The project aims to take advantage of the strategic location of the Maldives’ northernmost atoll on a major shipping route – through which more than 700,000 ships carry goods worth US$18 trillion a year – and develop 5,700 hectares of land along with deep natural harbours.

Opposition leader Mohamed Nasheed has, however, dismissed SEZs and the touted mega projects as “castles in the air” whilst his Maldivian Democratic Party (MDP) has warned that the law would pave the way for money laundering and other criminal enterprises, undermine local councils, and authorise the president to “openly sell off the country” without parliamentary oversight.

Speaking at the forum, MDP MP Fayyaz Ismail said large investments could not be secured while foreign businesses did not have confidence in the judiciary.

Fayyaz argued that the SEZ law lacked provisions for oversight and adequate legal protection for investors as well as controls for the inflow and outflow of money, relying solely on the benevolence and integrity of the government.

Addressing allegations concerning criminal enterprises and gambling in SEZs, Adeeb referred to President Yameen’s assurance that investments would not pose a threat to either Islam or Maldivian sovereignty.

“We don’t sell our daughters or women, do we? A clean tourism has been introduced in the Maldives without any prostitution,” he said.

If sound policies to favour local contractors and create jobs for youth are implemented, Adeeb suggested that investors could be brought in while “protecting our religion and traditions.”

“I don’t think gangs or black money are created by a law. It is done outside the law,” he said.

Likes(0)Dislikes(0)

Political consensus necessary for success of SEZs, cautions MMA governor

Political consensus is necessary for special economic zones (SEZs) to be successful and beneficial to the nation, Maldives Monetary Authority (MMA) Governor Dr Azeema Adam has cautioned.

Speaking at a forum on state broadcaster Television Maldives (TVM) last night, Dr Azeema said one of the most important prerequisites for successful enactment of the SEZ Act was stability and consensus “on a political and national level.”

“If SEZ becomes caught up in political waves, it will not bear fruit,” she warned.

“Political confrontations must come to an end for investors to come to the country, to ensure investor confidence, and for jobs to be created for Maldivians.”

Political disputes should be resolved through “constructive, meaningful and academic debates,” she advised.

President Abdulla Yameen ratified the SEZ Act on Monday (September 1), which he has said would be a “landmark law” that would “transform” the economy through diversification and mitigate the reliance on the tourism industry.

The government has maintained that SEZs with relaxed regulations and tax concessions were necessary to attract foreign investors and launch ‘mega projects’ for economic diversification.

Opposition leader Mohamed Nasheed has, however, dismissed SEZs and the touted mega projects as “castles in the air” whilst his Maldivian Democratic Party (MDP) warned that the law would pave the way for money laundering and other criminal enterprises, undermine local councils, and authorise the president to “openly sell off the country” without parliamentary oversight.

Longterm plan

Dr Azeema went on to stay that SEZs should create wealth and employment opportunities for Maldivians.

School leavers and university graduates should have the necessary skills when they enter the job market, she added, noting that a high employment rate was required for sustainable growth.

Citing International Labour Organisation (ILO) figures, Azeema said over 3,500 zones of varying sizes have been created in 130 countries.

“Economists agree that special economic zones play a very important role in the economic development of a country. It is known that at least 40 million people work in such zones,” she said.

Studies have shown that SEZs increase national productivity and income, she continued, and the zones contribute at least US$200 billion worth of exports worldwide.

However, she stressed that a longterm plan and strategies – which “should be transparent to investors and the public” – would be needed for SEZs to be successful.

While SEZs have been beneficial in some countries, “the results have not been so good” in others, she noted.

She added that SEZs in Singapore and China created in the 1960s and 1970s, respectively, took foresight and years to become successful.

Forum

At last night’s forum – organised jointly by the Maldives Broadcasting Corporation and the Maldives National University business school’s student association – MDP MP Fayyaz Ismail said large investments could not be secured while foreign businesses did not have confidence in the judiciary.

Fayyaz argued that the SEZ law lacked provisions for oversight and adequate legal protection for investors, relying solely on the benevolence and integrity of the government.

Tourism Minister Ahmed Adeeb – co-chair of the economic council – said the law was designed to attract investments beyond the ‘seaplane zone’ close to Malé’s international airport.

Under the existing tourism law, a flat rate of US$8 per square meter was charged for development of tourist resorts, Adeeb explained, which led to investors choosing uninhabited islands closer to the capital.

The SEZ Act combines the government’s policies on population consolidation and foreign investments to expand the economy and develop infrastructure in the north and south, Adeeb said.

Economic Development Minister Mohamed Saeed said SEZs were “tried and tested” in many countries, including small island states in the caribbean, which had a thriving banking sector.

“A zone is created to establish infrastructure that we don’t have through foreign funds,” he said.

Referring to the the iHavan transhipment port project, Saeed said the Maldives could capitalise on its strategic location and the “trillions of dollars” worth of trade that passes through the seven degree channel.

Saeed explained that the Ihavandhippolhu integrated development project would include offshore docking, bunkering facilities, an export processing zone, real estate businesses, and non-convention tourism facilities.

He noted that the development of Singapore’s port saw establishment of banks, a hotel industry, and other subsidiary services.

Adeeb stressed that the SEZ law allows the government to offer incentives and “for the first time” negotiate directly with investors, who preferred “a one-stop solution” for applications, permits and licenses.

While US$5 billion has been invested in tourism since 1972, Adeeb suggested that even if one project such as iHavan “takes off” with US$1.3 billion worth of investment, the economy would be transformed through multiplier effects.

Mohamed Ali Janah, former president of the Maldives Association of Construction Industry, meanwhile said emulation of the SEZ model implemented in the Caribbean and the ‘tiger’ economies of East Asia could take the Maldivian economy to “the next level”.

Likes(0)Dislikes(0)

Amendment to open visa laws sent for further review

An amendment to the Immigration Act was sent to the National Security Committee for review with 56 votes in favour and 31 against.

The bill, presented by Hulhu-Henveiru MP Moosa ‘Reeko’ Manik, would give foreign businessmen and investors in the Maldives easy access to resident visas. The amendment bill is part of the government’s 18-bill economic reform package.

The amendment would make visas available to foreigners married to Maldivians; legal guardians of children born in marriages including a Maldivian; investors; investors involved in government material and financial development projects; and foreigners providing technical service.

An amendment to the parliamentary rules of procedure to allow foreign heads of state and dignitaries to address parliament was meanwhile passed 59-2 at today’s sitting.

Likes(0)Dislikes(0)