Expatriate workers becoming “very desperate” in wake of blackmarket dollar crackdown

Low-wage expatriate workers in the Maldives are becoming increasingly desperate in the wake of a government crackdown on the blackmarket exchange of rufiya into US dollars.

Many of the country’s 100,000 foreign workers, particularly a large percentage of labourers from Bangladesh, are paid in Maldivian rufiya by their employers and are forced to change the money on the blackmarket at rates often several rufiya higher than the government’s pegged rate of Rf12.85, before sending the money to their families.

Banks have been reluctant to sell dollars at the pegged rate in more than token quotas for much of the last year, a symptom of the ongoing dollar shortage – even those with dollar accounts have reported difficultly withdrawing cash at the counters without appropriate connections within financial institution.

Several expatriate workers Minivan News spoke to expressed frustration that banks were refusing to exchange rufiya to dollars, only to hand over money to local residents next in the queue.

A well-known figure in the Bangadeshi community, Saiful Islam, who has been in the country for 28 years, told Minivan News that many people were becoming “very desperate.”

“They are struggling to get money remitted to relatives and parents at the other end. This is a very desperate situation for them,” he said.

“There are some people who work in resorts and who are paid in US dollars who travel to Male’ and sell them at a much higher price than the government’s [pegged rate] of Rf12.85, sometimes as high as Rf14 or Rf15. There are people who are so desperate they will buy dollars at any price because they have no other choice,” Islam said.

“Without taking this demand into consideration, I don’t think a crackdown will work. I don’t think it is unfair to abide by the rules when you are in another country, however that changes when people become desperate – look at people in Libya, do you think they will apply by the government’s rules and regulations?”

“There needs to be an outlet where they money can be changed to US dollars, even 50 percent of it. Otherwise, why are they here? They have a big family at the other end who depend on their income.”

Unable to change money legitimately and under pressure to provide for families at home, and unable to leave due to the expense of air travel, debts owed to unscrupulous recruiters or common practices such as employers holding workers’ passports until the conclusion of their contract, many workers are functionally left without options other than to risk arrest.

Bangladesh’s High Commissioner to the Maldives, Rear Admiral Abu Saeed Mohamed Abdul Awal, acknowledged the problem was one that ”all expatriates face, because all their revenue is earned in local currency, but when they go to pay remittances it must be paid in dollars.”

The crackdown, Awal said, was the government’s prerogative, “however our concern is the payment of expats in local currency. There needs to be a proper government arrangement for repatriating salary.”

“This has become a pressing problem and a serious concern, however the availability of dollars is a longstanding issue. The issue of dollar scarcity is an internal matter for the Maldives.”

The President’s Press Secretary Mohamed Zuhair told Minivan News that there was an “expatriate element” to the dollar shortage faced by the Maldives due to the high numbers of “illegally-employed workers buying dollars on the blackmarket and transferring them overseas.”

Zuhair claimed that every expatriate arriving in the Maldives came in on a contract “stating what currency he would be paid in. The onus is on the employer to pay in US dollars.”

“If [the worker] accepted a contract paid in rufiyaa, then if he wants to send dollars back to his country he will have to change it at the bank when and if that is possible, or on the blackmarket [and risk arrest]. Banks have a quota at which they sell dollars based on need and supply.”

Zuhair said the police crackdown targeting the illegal sale of dollars by both licensed and unlicensed vendors had made “considerable progress, with two arrests.”

“The government hopes [the crackdown] will stabilise the dollar market, black or otherwise, and create a scenario whereby the dollar dips so anyone hoarding dollars will release their reserves,” he said. “We have the numbers and the numbers are clear: we have enough dollars in the country.”

Meanwhile, Zuhair said, the government was seeking to replace the Governor of the Maldives Monetary Authority, Fazeel Najeeb, “who has not effected any changes to rectify this situation.”

“Najeeb is known to be affiliated with the People’s Alliance (PA) party and its leader, Abdulla Yameen, the former Minister of Trade and half brother of the former President. He is said to be a guarantor of the former regime and retains tight control of the MMA,” Zuhair alleged.

“From the government’s point-of-view the MMA needs to be much more involved in the current situation, rather than the Governor being away on study leave. It has not released a single piece of regulation to address this issue.”

Islam meanwhile pointed out that the government had long been stating it intended to reduce the number of expatriates working in the Maldives – currently a third of the total population – “but we do not see this happening in practice.”

“Every day a lot of people are still coming into the country, on tourist visas from countries such as Sri Lanka and India,” he said. “There are very few genuine tourists arriving from Bangladesh, mostly they are on work permits. Why are they being allowed in without any work being attached to the work permits?”