Handling of economy affects popularity of Maldivian President: Sunday Times

Maldivian authorities have placed a restriction on the repatriation of foreign currency by expatriate workers including Sri Lankans to tackle an acute shortage of US dollars in the market, writes Feizal Samath for Sri Lanka’s Sunday Times, a move that recently triggered protests in the island nation.

“The restrictions, according to rules enforced in a gazette notification by the Maldivian Monetary Authority (Central Bank) on Friday, permits workers to remit their contracted salary and nothing more.

“The foreign exchange crisis in the Maldives has been precipitated by ballooning budget deficits spilling over from the regime of former President Maumoon Abdul Gayoom.

“Huge capital expenditure on new development which is not matched by revenue has widened the trade balance and precipitated the foreign exchange crisis. Banks have limited the issue of dollars. Most banks are limiting the issue of dollars against the rufiya (local currency) for repatriation, a move which has also affected tourism, the country’s main foreign exchange earner, and even for local business.

“’There is absolute confusion in the industry about how much can be retained by us in dollars (for our work). There are no clear guidelines,’” said a resort owner, accusing the government of mismanaging the economy.

“New taxes to be enforced in July on income and business profits, for the first time in the Maldives, have affected President Mohamed Nasheed’s popularity and led to a week of protests against cost of living and alleged corruption. Another new tax, Tourism GST was enforced from January.

“Prices of essential commodities have escalated and inflation has sharply risen mainly due to the shortage of dollars in the market. The Maldives imports all its needs except fish. Its main foreign earnings comes from the bed tax from tourism and fish exports while local taxes in the past have been limited to import duties and levies.

“The President’s chief spokesman Mohamed Zuhair, while acknowledging that the new measures have affected government’s popularity, has accused opposition parties and disgruntled businessmen unhappy over the taxes, of instigating the violent protests by youths, and also blamed unscrupulous traders for jacking up prices.

“He said while taxes were inevitable and had been announced a long time ago, the latest round of protests came after Mr Gayoom broke away from the main opposition DRP and formed his own faction.
Opposition spokesman Mohamed ‘Mundhu’ Shareef rejected the claim and said the protests were a natural reaction of the people against rising food prices and what he called ‘a corrupt regime’.”

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Government approves project for floating golf course

The Maldivian government has signed a contract with Dutch Docklands of the Netherlands to develop a floating golf course and hotel in the Maldives.

Minister of Trade and Economy Mohamed Rasheed signed the contract on behalf of the Maldives, and Chief Executive Officer Wen Di Cam signed on behalf of Dutch Docklands.

President of the Maldives Mohamed Nasheed and Ambassador of the Netherlands to the Maldives Leoni Margaretha Cuelenaere attended the ceremony held at the President’s Office on 4 March when the agreement was signed.

Cam said the Docklands was proud to develop the floating centres in the Maldives and the company would seek a good location for the development.

He said the company would start the project as soon as possible after doing the necessary studies.

Press Secretary for the President’s Office Mohamed Zuhair said the project would be “very beneficial for the country.”

He added that it would increase the number of tourists visiting the country.

”Most of our resorts do not have a golf centre due to lack of space,” Press Secretary Zuhair said, noting that ”Golf has a good market in the world.”

Deputy Minister for Environment Mohamed Shareef said the floating golf centres would be “much better and more environmentally friendly than reclaiming land.”

Shareef noted the floating developments would be stabilised by anchoring.

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Proposed golf course in the Maldives

”It would not be very harmful for the environment,” he said, ”the only damage is that it will block the sunlight from the stones and corals.”

He added that there were showcases of floating centres made by the same company in Australia.

”They are now developing such centres in the Middle East,” said Shareef. ”We would not compromise our environment for anything.”

The Environmental Protection Agency (EPA), which is responsible for conducting environmental impact assessments, has not yet been consulted on the project according to its director Mohamed Zuhair.

The project would “definitely have negative environmental impacts”, he said, but added that “it is not for the EPA to assess the risks of this project at this stage. The contractor [Dutch Docklands] is responsible for finding a suitable consultant to assess the risks.”

Zuhair said once project proposal by Dutch Docklands’ is finished, it will be submitted to the EPA who will then screen the project. The EPA will then provide an environmental assessment report.

“They can only start actual work once they have EPA approval,” he noted.

Director of environmental NGO Bluepeace, Ali Rilwan, said as long as the project was conducted in an environmentally friendly manner he thought it was “very exciting” and “innovative and weird”.

“I don’t think there should be a problem,” he said, “but it depends on how they do it.”