Finance Ministry proposes drastic austerity measures to Parliament

Parliament’s Finance Committee last week received a proposal from the Finance Ministry which, if accepted, would save MVR2.2billion (US$143million).

The austerity measures include raising Tourism Goods and Services Tax (TGST) to 15 percent,  terminating electricity subsidies in Male’, increasing import duties on alcohol and imposing a 3 percent  duty on oil, “reforming” the Aasandha health insurance scheme, and reducing the budget of every Ministry and independent institution by 15 percent – among other measures.

If successfully carried out the Ministry’s proposals would halve this year’s budget deficit, currently projected to reach MVR9.1billion (US$590million).

The original budget for 2012 envisioned that revenue would rise to MVR11.4billion (US$740million) with expenditure anticipated to be MVR14.5 billion (US$941million). This would have resulted in a budget deficit of around MVR3billion (US$194million), representing 10 percent of GDP.

However, the revised figures provided by the Finance Ministry have shown that revenue will only be MVR8.4billion (US$545million) for this year with actual expenditure rising to around MVR18 billion. The ensuing deficit would represent around 28 percent of the nominal GDP for 2012, which was predicted to be MVR31.7billion (US$2billion).

This ballooning deficit has alerted the IMF which has expressed concerns that without raising revenue and cutting expenditures the country risked exhausting its international reserves and sparking an economic crisis.

The Maldives Monetary Authority’s (MMA) most recent statistics show that the country’s gross international reserves had decreased by 2 percent in the 11 months up to May before dropping by a further 6 percent between May and June this year.

The MMA’s data shows this figure to represents around ten weeks worth of imports in the Maldives, a country which relies heavily on imports, spending around two thirds of its real GDP on foreign goods each year.

The current government has pointed the finger at the previous administration for the current budgetary issues whilst simultaneously implementing a series of policies which have added to its financial obligations.

These deficit expanding policies have included promoting 1000 police officers,  doubling of the budget of the Maldives Marketing and Public Relations Corporation (MMPRC) to MVR69.3million (US$4.5 million), hiring of 110 new police officers, and a reinterpretation of the legal provision for the payment of resort island lease extensions which had cost the government MVR92.4million (US$6million) already in comparison with the same point last year.

The government also chose to reintroduce a MVR100 million (US$6.5 million) fishing subsidies and to reimburse MVR443.7 million (US$28.8 million) in civil servant salaries, reversing measures implemented during the previous government’s own austerity drive.

The raft of measures currently being considered by the Finance Committee represent the most comprehensive effort thus far to reign in the deficit.

Austerity Measures

The proposed measures for reducing state expenditure were published in local newspaper Haveeru. They include discontinuing electricity subsidies in Male’ City which, where around one third of the nation’s population live, saving MVR135million (US$8.7million).

Reducing the state’s offices budget by up to 15 percent is expected to save MVR1.5billion (US$97million) and was first suggested by Finance Minister Abdulla Jihad in May. Jihad mentioned at the time that a pay review board would be convened in order to “harmonise” the pay of government appointees.

The document received by Haveeru revealed details that this pay review body will seek to restructure pay schemes in order to save MVR100million (US$6.5 million). It also emerged that MVR300million (US$19.5million) could be saved by introducing a recruitment freeze in the civil service.

The austerity plan also includes a reform of the Aasandha national health care scheme, the cost of which promised surged ahead of its MVR720million (US$46.7million) budgeted allowance shortly after its introduction in January. After discussions with the government, the Aasandha company has decided to share the costs of private treatments with patients.

The Finance Ministry predicts that reform of the Aasandha scheme can save the government MVR200million (US$12.9million).

Revenue raising

Proposed revenue raising measures include raising the import duty on oil, upon which the country relies heavily for fuel, to three percent. MMA figures show that the price of crude oil has decreased 15 percent in the 12 months leading up to June whilst the domestic price had remained the same with the exception of diesel which increased in price by 2 percent.

Import duties are also to be raised on items whose value exceeds MVR6.4million (US$41million) as well as on liquor imports. The duty on both of these items had been raised as part of the amended Export Import Act in December of last year which saw duties on pork and alcohol products, used exclusively by the resorts, go up by 42 percent.

The tourist industry will be similarly hard-hit by the proposals to raise Tourism Goods and Services Tax (TGST) to 15 percent.  The IMF had previously urged the government to double the 6 percent tax levied on all goods and services sold in resorts with Tourism Minister Ahmed Adheeb announcing his intention in May to consult the tourism industry.

Minivan News discussed the potential increase with several resort managers at the time, and was told that an increase would have  “serious ramifications” for certain sections of the market. One manager said that the fixed term contracts many resorts have with operators meant that increases to T-GST would have to be absorbed from revenue, resulting in potential cutbacks to staff or services.

Visitors to the Maldives could also be affected by the proposed increase in the Airport Service Charge from US$18 (MVR277) to US$30 (MVR462).

Further rises to the tax levied on luxury items would be accompanied by the introduction of taxes to the sale of flats and on telecoms service in the Finance Ministry’s plan.

The visa fee paid by foreigners working in the Maldives is also slated to see be increased by MVR150 (US$10). Estimates of expatriate workers are be as high as 110,000 although the same estimates suppose that around half to be undocumented.

Despite the recent suspension of sittings of the full Majlis, the Finance Committee continues to hold meetings as normal.


Six arrested during MDP protest against prosecution of party supporters

Police arrested six people during the Maldivian Democratic Party’s (MDP) demonstration held on Tuesday evening to protest against ongoing court cases against its supporters.

According to the party, the Prosecutor General (PG) has filed charges against 60 MDP members for obstruction of police duty during the party’s three-month series of protests. If charges are proved, the accused may be jailed for six months or fined up to Rf 12,000 (US$800) each.

The Criminal Court on Tuesday held hearings against 10 people charged with obstruction of police duty during an MDP rally on March 1.

The six arrested on Tuesday were also detained for obstruction of police duty.

The MDP has been campaigning for fresh elections in 2012 after former President Mohamed Nasheed alleged he was deposed in a coup d’état, carried out by mutinous elements of the police and military on February 7.

Speaking to MDP members on Tuesday night, Nasheed said he was “concerned about the arrest and prosecution of protesters exercising their right to freedom of expression and assembly.”

The MDP continues to rally against prosecution of its supporters with a peaceful demonstration held outside the Supreme Court building at 2:00 pm on Wednesday. At time of press MDP supporters were also gathering outside the Justice Building where the country’s lower courts are housed.


Police Spokesperson Hassan Haneef said the six people arrested on Tuesday were detained for obstructing police duty after they broke through police barricades in front of the Maldives Monetary Authority (MMA) building. Five of the six arrested continue to remain in custody.

Haneef also said two police officers had suffered head injuries after protesters threw glass bottles at the officers.

Minivan News observed over a thousand protesters at the MDP rally.

In a statement on Wednesday, the MDP claimed its supporters were pepper-sprayed at close range and beaten with batons on Tuesday night.

Video footage of the protest shows a woman fall to the ground as police officers in riot gear attempt to arrest her.

Court cases

The ten people who appeared in court on Tuesday were arrested during an MDP protest on March 1 which had sought to obstruct new President Mohamed Waheed Hassan from delivering a presidential address at parliament’s opening session on March 1.

According to local media, two policemen gave differing statements on Tuesday’s hearing. One police officer said he had witnessed eight of the 10 men who appeared in court beating police shields, while another policeman said he had only seen five of the ten men beat on police shields during the protest.

The Prosecutor General’s (PG) Office was unable to confirm the exact number of cases filed at court for obstruction of police duty.

However, Deputy PG Hussein Shameem has previously told Minivan News that 116 cases had been filed against demonstrators regarding unrest on February 8. Riots broke out throughout the Maldives following a brutal police crackdown on MDP supporters in Malé. Court buildings and police stations were set on fire and vandalised during the riots.

“We have submitted 116 cases to the criminal court. The charges we have filed regard obstruction of police duty, assault on police officers on duty, and attempt to assault police officers on duty,” Shameem said.

Freedom of assembly

Speaking to MDP supporters, Nasheed said he condemned the charges against “peaceful” protesters while police and military officers who carried out the “coup” continued to remain free.

“Maldivian citizens cannot accept the prosecution of protesters who raised their voices against treasonous police and military, when we continue to see these officers in front of us,” Nasheed said.

“It is essential that we come out in support of those who are being tried. We gain success only when we find courage in each other to overcome fear. It will be difficult to carry out civil disobedience if we neglect those who are arrested from amongst us,” Nasheed added.

Police have also forwarded two different cases against Nasheed over the discovery of alcohol bottles at his former residence Muleeage on February 7 and the controversial arrest of Criminal Court Chief Judge Abdulla Mohamed in January.

Video footage of MDP rally on May 8:


Mixed fortunes for pro-government parties in island council voting

There were mixed fortunes for government aligned parties in island council by-elections held yesterday in contrast to the national unity government’s success in simultaneous parliamentary polls.

In polls for the vacant seat on the Haa Dhaal Kumundhoo Island Council, PPM candidate Mohamed Shafy received 257 votes to beat MDP rival Aishath Hassan and the Dhivehi Rayyithunge Party’s (DRP) Abdul Hakeem. The polls saw the MDP lose its majority on the local council.

Hassan ultimately finished in second place having secured 164 votes, followed by Hakeem with 123.

In the Thaa Gaadhifushi Island Council contest, MDP candidate Mohamed Irushad won the seat, which is based in the Thimarafushi constituency, by securing 223 votes against PPM’s Hussein Ziyau.  PPM candidate Ziyau tallied 169 votes.

Though yesterday’s by-elections saw the first contest for parliamentary seats since the controversial transfer of power that bought President Mohamed Waheed Hassan to power in February, an island council by-election was held in Noonu Maafaru on March 17.

MDP candidate Abdulla Majid Ali took the Noonu Maafaru seat with 240 votes, winning by a margin of four against PPM candidate Muslih Mohamed, who tallied 236 votes.

The seat was previously held by a DRP councillor.

Five by-elections have now been successfully concluded since February 7, with the MDP telling local media today that it accepted that outcome of all recent local by-elections. The MDP’s position comes as the party pushes ahead with calls for early presidential elections.


Maldives will disappear from climate stage without democracy: Nasheed

As news of the Maldives’ so-called coup d’état grows stale on the international palate, the release of documentary film ‘The Island President’ in New York last week has refreshed the Maldives’ image as a key victim of rising seas. It has also renewed former president Mohamed Nasheed’s image as a climate change activist, who is now pushing democracy as a core ingredient to the climate change movement.

‘The Island President’, produced by Richard Berg and directed by Jon Shenk, chronicles Nasheed’s tumultuous rise to power under former president Maumoon Abdul Gayoom, and his fight against global warming. Nasheed was ousted from the presidency last month in a “seriously staged coup” engineered by Gayoom, who he claims has effectively returned to power.

“What I would like to do initially is have democracy back in the Maldives,” Nasheed informed an audience of approximately 200 climate change academics, activists and journalists at Columbia University’s Low Library in New York City on Thursday evening. He stressed that all change is people-based.

“Even UN legislation happens because the people want it, and have the ability to voice their concerns,” he said.

Jointly addressing the topic of climate legislation and the US’ rapid recognition of the Maldives’ new government, Nasheed also encouraged the public to “ask bigger countries not to be so hasty in always defending the status quo.”

Adding that the Maldives’ current government has not addressed climate change – “they only just came to power” – Nasheed expressed concern that without a strong platform on the issue the Maldives would disappear from international awareness.

Climate change has become a pressing item on many diplomatic agendas. Yet few have clearly stated that the matter can only be addressed in a democratic environment.

“I think there is widespread understanding of the close linkage between climate change and politics,” wrote the Andrew Sabin Professor of Professional Practice and Director of Columbia’s Center for Climate Change Law, Michael B Gerrard, in an email to Minivan News. “However, in few places other than the Maldives is there such a close linkage between climate change and democracy itself.”

Gerrard organised and moderated Thursday’s event.

During his tour in the US, Nasheed has claimed that talking about climate change is a matter of human rights – “the minute you start talking about it people start pulling skeletons out of your closet.”

The People’s Politics

“Politicians only do things they are told by the people. I am afraid American’s don’t tell enough.”

Nasheed challenged his audience to make the environment a key platform in the US’s current presidential campaign. “Now, you cannot win an election in Germany without having proper environmental legislation and preparation. I can’t see why it can’t be like that here. It’s really up to the people in the US.”

Gerrard separately stated that American public opinion on climate change has fluctuated amidst economic instability and contentious scientific reports. “There is little prospect for aggressive US action on climate change until the pendulum of public opinion swings back. With an improving economy and growing evidence of the perils of climate change, the political situation may be improving, but things are still in flux,” he wrote.

Meanwhile, several audience members rose to Nasheed’s challenge and asked for further specifics on “the average person’s” role.

“I think we are all average, so all of us should be advocating,” he told one individual, expressing firm belief in street demonstrations and community action.

While channeling the spirits of revolution and humanity sat well with many, other audience members retorted with America’s more prevalent campaign season sentiment – cynicism.

Citing her own allegedly futile efforts to reach state politicians through demonstrations and correspondence, one frustrated activist asked for new approaches. “I don’t know. I have no new advice,” Nasheed admitted. “So, it’s bodies in the streets, basically?” the woman asked, deflated. “I don’t think there is any other, easier way,” he explained, reiterating his support of public demonstrations and community action.

Extreme measures and new economics

If world powers do not reach a legally binding agreement on carbon emissions in the next seven years then the next Maldivian generation will have little country to claim, Nasheed believes.

Reminding the audience that approximately 40 percent of the world population currently lives within 100 kilometres of a coastline, he added, “It’s an issue for all countries, rich or poor, big or small.” He further urged developing countries such as India and China to move away from the “not my fault” discourse that surrounded the Durban talks in December 2011.

While island states such as Kiribisi are reportedly weighing options for relocation, such as the construction of floating islands, Nasheed observed, “You can always relocate a person, but to relocate a culture and a civilisation, is impossible.” Quoting a Maldivian grandmother for whom her place was synonymous with her self, he believed “a vast majority of people [in the Maldives] will stay.”

Shifting the dialogue from sentimental to proactive, Nasheed admitted that constructing islands and relocating communities struck him as “extreme…but we must be thinking about extreme ideas.”

His position on economics was similarly revolutionary.

“The existing economics in which air is a free good is false,” he explained in answer to a question about market-based mechanisms and the Kyoto Protocol. “We need a new economics that will address the issue.”

Focusing on adaptation, Nasheed recommended reversing the language of climate change diplomacy. Stating his feeling that “the UN process exists simply for the sake of process,” he suggested asking countries to take new actions on renewable energy rather than to cut back on existing energy use. “I believe we may be able to arrive at the same destination with renewable energy,” he said.

“So, do it!”

The current political situation in the Maldives was a central talking point with the audience. Questions addressed the arrest of Judge Abdullah Mohamed, the international community’s response to the new government, and even Nasheed’s coping techniques.

One audience member said she had seen the Island President film and was dubious about Nasheed’s genuine nature – suggesting that he was enjoying the celebrity –  but said his manner during the discussion and response to questions at Colobmia was reassuring of his uniquely genuine interest and manner.

Overriding the Gerrard’s cut-off of queued audience members at five minutes before the scheduled end of the discussion, Nasheed found himself face to face with a young woman who had “a question or suggestion”—that he and his team make their views more accessible to the climate change-curious public by expanding their use of social media. Taking in her observation, Nasheed tipped his head and affirmed that it was possible.

“So, do it!” she said.


Police motorbikes vandalised

Police have said that last night two police motorbikes belonging to two officers working at Specialist Operations Department were vandalised.

Ten other motorbikes were also vandalised last night, according to police.

Police said officers have been receiving threats, while vandalism of property belonging to police officers has increased.

Elements of the police sided with opposition supporters in the ousting of former President Mohamed Nasheed on February 7.


“No ambulance on Fridays”: Villigili man takes wife to hospital in garbage cart

An elderly man named Ali Waheed living in Villingili, a residential island that is the fifth district of Male’, has claimed he had to carry his wife to hospital in a garbage cart after the island’s health centre said there was no ambulance available “because it was Friday”.

“I called the police and asked for help, but they said all their vehicles had been damaged and taken Male to repair,’’ Waheed said. “The health centre said that because it was Friday there was no doctor or health worker available, and when asked if one could be made available as it was an urgent case, they said it was not the health centre’s policy.’’

Waheed’s house is located near the garbage pile on the island, and he found a wheel-cart nearby which was used to carry trash.

“I carried my wife on the wheel-cart to the Villingili-Male’ ferry and wheeled her to Indira Gandhi Memorial Hospital (IGMH).”

Waheed said he had informed Health Minister Aiminath Jameel of the incident by “sending more than 50 text messages to her mobile phone.”

“But so far she has not responded to any of those texts. It is very sad that this is the current situation in Villinigili,” he added.

He said doctors and other staff working at the health centre were themselves frustrated due to low wages and because they did not receive any overtime payments.

“They are frustrated and it affects the citizens of Villingili,” he said.

Minivan News spoke to Director of Villingili Health Centre Ahmed Zahir, who said that while Waheed had asked if an ambulance was available to take his wife to the ferry terminal, staff were not made aware that her condition was urgent.

Zahir said an ambulance and doctors were available on Fridays in urgent cases, but said there had been recent cases of the ambulance being called to carry boxes to the ferry terminal in lieu of a taxi.


Abandoned baby discovered inside garage in Thinadhoo

An islander on Thinadhoo in Gaafu Dhaalu Atoll today discovered an abandoned newborn baby inside a garage this morning.

Police Sub-Inspector Ahmed Shiyam confirmed the incident occurred and said the police were currently trying to trace the baby’s mother.

‘’It was a male baby and he was in a good condition when found,’’ Shiyam said. ‘’So far no arrests have been made.’’

Shiyam said the investigation was still on going and details would be revealed later.

Local media reported that the baby was admitted to Thinadhoo hospital and that an anonymous woman had phoned the hospital and claimed the baby.

However, later there was no sign of her and the authorities have not yet revealed if she has been found or if the caller was traced.

On May 5 a dead infant was found in a plastic bag in the swimming track area of Male’. A medical examination later concluded that the baby had sustained cuts, bruises and other wounds.

On May 21, the corpse of a premature baby boy was discovered inside a Coast Milk tin on the island of Villingli.

Police Sub-Inspector Shiyam at the time told told Minivan News that the dead child, believed by forensic examiners to have been born three months premature, was discovered in a discarded container near the power house area of the island.

On May 22, the body of a newborn baby boy discovered in a park in Hulhumale’ was found with underwear tied tightly around his neck.

Spokesperson for Hulhumale’ Hospital Dr Ahmed Ashraf said the baby may have died from asphyxiation.

‘’When the baby was found the knot was a bit loose, but the marks on its neck shows that it was tied tightly around the neck,’’ Dr Ashraf said, regarding that incident.


MDP National Council appoints ‘Reeko’ Moosa Manik as acting chairperson

The Maldivian Democratic Party (MDP) has appointed the party’s Parliamentary Group leader MP ‘Reeko’ Moosa Manik as the party’s acting chairperson for a year, replacing Mariya Ahhmed Didi.

Mariya had previously resigned from the role in anticipation of being appointed Parliament’s representative on the Judicial Services Commission (JSC), however she was last week beaten to the post by Jumhoree Party (JP) leader and local business tycoon, Gasim Ibrahim.

The MDP said that 97 out of 99 council members present voted in favor of appointing Moosa as the acting chairperson, during the party’s 91st national council meeting held at Bandos Island Resort.

The council meeting started yesterday and was initially chaired by the party’s newly-elected Deputy Leader and MP Alhan Fahmy, until the decision to appoint Moosa as the acting Chairperson was made.

Following the decision of the national council, Moosa announced his resignation from his position as the leader of the parliamentary group.

The MDP council discussed the payment of a salary for the party’s deputy chairperson, but resolved not to pay any person at an elected post.

Full details of the national council meeting were not provided and no media outlet was invited to attend the meeting.

Deputy Leader of MDP and MP Alhan Fahmy told Minivan News that the national council meeting “concluded successfully”.

‘’All went accordingly to the party’s charter and rules,’’ Alhan said. ‘’There are no internal issues within the party or the leadership regarding any decisions made.’’

Local media have reported that MDP leader, former fisheries minister Dr Ibrahim Didi, was unhappy with the decision made by the national council to appoint Moosa as the acting Chairperson for one year.

Online newspaper Sun Online reported Didi as claiming that the decision violated the party’s charter and regulations and that he would seek legal advice to clarify whether it was possible.

Alhan however said that he has no information about the remarks made by Dr Didi, and MDP Parliamentary Group’s Media Coordinator MP Mohamed Shifaz did not respond to Minivan News.

President Mohamed Nasheed also attended the national council meeting.


MDP misleading citizens over the extent of support for the party, claims DRP MP Mahlouf

Dhivehi Rayyithunge Party (DRP) MP Ahmed Mahlouf, of the faction led by former President Maumoon Abdul Gayoom, today accused the Maldivian Democratic Party (MDP) of “misleading the public over the extent of their support” and “attempting to lure more citizens to the party.”

”In all the elections held so far, be they Local Councils Elections or Parliamentary Elections, the citizens have said they oppose the current government and its party MDP,” Mahlouf claimed. ”So today what MDP do is gather all the supporters they have all around the Maldives and buy MPs, trying to show the rest of the country that they have more support than the opposition.”

Mahlouf alleged that MDP was attempting to “psychologically play with the minds of the citizens.”

”They do have some supporters in Male’, and what they do is gather all their supporters to one place, take pictures and show them to the other citizens, trying to make them feel that MDP has more support than it does,” he said. ”In the Local Council Elections MDP won only 379,494 votes while the opposition won 565,919 votes.”

Mahlouf claimed the MDP would not have won the Presidential elections “without the help of Jumhoory Party (JP) leader MP ‘Burma’ Gasim Ibrahim, Adhaalath Party leader Sheikh Hussein Rasheed and Dhivehi Qaumy Party (DQP) leader Dr Hassan Saeed.”

”But they all have turned their backs against this government now – they all want to change this administration,” said Mahlouf. ”It is really a foregone conclusion that MDP will not win the next presidential election in 2013.”

Mahlouf’s comments followed the defection of two DRP MPs, Ali Waheed and Abdu-Raheem, to the ruling MDP, granting the party the largest voting bloc in the Majlis.

MDP MP Mohamed Shifaz said that both Mahlouf and the DRP had “failed”.

”It is regrettable that someone as young as Mahlouf declined to accept democracy and rather decided to follow a single person,” said Shifaz. ”The entire party failed because some among them wanted to follow this one person.”

Shifaz said that regardless of Mahlouf’s figures, 75 percent of the Maldivian population supported the MDP.

”There are unregistered persons who support the idea of MDP,” he said. ”All the MPs who joined MDP, only joined because they wanted to do so.”