The government has declared Wednesday August 22 and Thursday August 23 as public holidays in order to extend the weekend leading up to the Eid holidays.
The President’s Office said that the extended weekend would come in place of public holidays assigned for September 1 and September 15 this year. These two dates will instead be working days for government offices.
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(0)Former Finance Minister Ahmed Inaz has questioned the timing of the Maldives Monetary Authority’s (MMA’s) decision to offer Treasury Bills (T-bills) to the wider private sector claiming it would compound the country’s budget deficit rather than directly address state debt.
Inaz, who served as Finance Minister under the administration of former President Mohamed Nasheed, said that until the present government put a lid on its expenditure to levels agreed in the national budgets of the last two or three years – extending T-bills to the wider private sector in the current climate would only prolong economic uncertainty.
The comments were made as local media reported yesterday that the Maldives Monetary Authority (MMA) had opted to allow “private groups” to purchase T-bills.
Such bills, which are sold by governments all over the world, serve as a short-term debt obligation backed by sovereign states. In the Maldives, T-bills are said to have a maximum maturity of six months, in which time they must be repaid, according to Inaz.
The economy, particularly national debt, has become an increasingly important issue for the coalition government of President Dr Mohamed Waheed Hassan.
Parliament’s Financial Committee in May released projection that the Maldives’ budget deficit will reach 27 percent of the GDP by the end of 2012, a 175 percent increase on earlier forecasts.
In recent weeks, the government has downplayed delayed payments of civil servant salaries as being the result of a banking “administrative error”, while also admitting to facing “economic difficulties” in covering months of outstanding premium payments resulting from the Aasandha universal healthcare programme.
Yesterday, Abdulla Yameen, parliamentary leader of the government-aligned Progressive Party of Maldives (PPM) told local media that the country was in “dire need” of financial assistance from the international community to help set right the economy.
Yameen and fellow PPM MP and Spokesperson Ahmed Mahlouf were not responding to calls from Minivan News today to clarify the comments.
T-bill extension
Finance Minister Abdulla Jihad said the decision to extend the availability of T-bills to private enterprise was a condition outlined by the Asia Development Bank (ADB) to secure loan funding. He was unable to give the exact amount of the loan at the time of press.
According to Jihad, T-bills had been previously only open to private financial institutions, a market place that he said was presently “saturated” in terms of demand, limiting the amount of T-bills the institutions were willing, or had the capacity, to purchase.
“The issue was to open the market to private groups,” he said.
In regards to criticism from the previous administration about state spending, the Finance Minister pointed to a recent order for all government institutions to immediately reduce their budgets by 15 percent – a pledge Jihad stressed had been successfully realised.
However, former Finance Minister Inaz said by that extending the T-bill scheme without addressing wider concerns of groups like the International Monetary Fund (IMF) over government expenditure, authorities were only prolonging current economic instability rather than tackling the present spending shortfall.
“My reaction to the MMA’s proposals is that issuing T-bills to the private sector or these private groups is not going to help the situation. The budget deficit should be reduced at all costs. Then these T-bills could be introduced as a way to meet capital expenditure,” he said.
“Expenditure should of course not be reduced to a level that would kill off independent institutions and the democratic reform of recent years. But the best way forward is to maintain expenditure say to the levels set in the 2010 or 2011 budget, while increasing income.”
While accepting that current political tensions between the government and the now opposition Maldivian Democratic Party (MDP) made it difficult reach parliamentary agreement, Inaz said that the Majlis would need to agree on any changes to the state budget.
Inaz also called on policy makers to adopt a “broader mindset” by reviewing the present government’s decision, announced earlier this year, to restore import duties and reduce GST.
He believed that taxation measures such as the GST remained the easiest solution to boosting revenue.
Inaz contended that a focus on more direct taxation would allow the government to serve as a facilitator to encourage the private sector to generate economic activity.
T-Bill reliance under Nasheed
Despite concern over the timing of the MMA’s proposals, Inaz conceded that the previous administration had itself relied on debt financed through the sale of T-bills that amounted to about Rf 1.4billion in 2011. However, he claimed that the final budget passed under the Nasheed government in December 2011 was designed to reduce the nation’s budget deficit, while also cutting down on short-term debt obligations such as T-bills.
“The T-bills issued in 2011 amounted to Rf1.4 billion (US$90.8 million). We foresaw the need growing every year, but this is very difficult to maintain as the maximum maturity for T-bills is six months, during which time they must be paid back,” he said
However, Inaz added that before the controversial transfer of power in February that brought President Waheed into office, the Nasheed government had pledged to reduce its reliance on T-bills by focusing on generating revenue through economic reforms such as GST.
“This year though we were set to reduce our reliance on T-bills to about Rf 700 million (US$45.4 million) with a view to cutting back completely through repayments in the next two years or so.”
Local media reported in April last year that government debt accrued through the sale of T-bills to banks and financial enterprises was estimated to be equivalent to more than a third of this year’s Rf 12 billion (US$778.2 million) national budget, according to Maldives Monetary Authority (MMA) figures released at the time.
(0)Dislikes(0)With plans to generate revenue to fund welfare services for the armed forces, the government and Maldives National Defense Force (MNDF) has registered a joint venture company aiming to invest in various businesses, including the tourism industry.
The “MNDF Welfare Company” registered at the Economic Ministry on Tuesday, is 10 percent government owned, and 90 percent by Sifco, MNDF ‘s cooperative society, which provides welfare services for defense force officers and their families, including subsidised products and loans.
Speaking to Minivan News about the company, MNDF Spokesperson Major Abdul Raheem said the MNDF have been discussing the idea of expanding the cooperative society’s works through a registered company over the past 10 years.
He observed that the main objective of registering the company was to invest and run businesses, which can subsequently generate revenues to contribute to welfare services provided to the 7000 strong-armed force body.
“The allocated state budget is not enough to fund the welfare services. We are facing several financial problems. Therefore, our plan is to register the joint venture with the government and increase profitable business activities,” Major Abdul Raheem explained.
He added that the MDNF Welfare company was registered within legal boundaries, and the company’s board and other necessary decisions will be taken legally and without discriminating between any officers.
MNDF joining tourism?
Asked about the sort of businesses the company intends to invest in, the MNDF spokersperson responded that the discussions are underway and will be announced soon.
Local media Sun meanwhile reported that the company was targeting investment in the country’s main industry, tourism, and claimed islands have been leased for resort development.
Raheem did not verify these reports but commented: “It is hard to confirm specifically which business it will do, but I cannot say tourism is not an option.”
Following reports suggesting the MNDF’ is venturing into the country’s tourism sector, government aligned Dhivehi Rayyithunge Party (DRP)’s parliamentary group member Dr Abdulla Mausoom updated his twitter saying: ” SIFCO (of MNDF) & Maldives government venturing into tourism business? This will not promote capitalism, tourism or democracy!”
Mausoom told Minivan News that it was “not visible in many places” for military personnel to form joint ventures with the government and start investing in businesses.
“It is a trend observed mostly in communist states, where everything is run by the state,” he added. “This also seems to be going more in that direction.”
“However, my main concern is that the tourism industry is already saturated,” said Dr Mausoom, who has previously served as the Minister of Tourism and Civil Aviation under Gayoom’s administration.
He explained the industry was already challenged by the excess supply of resorts, which he claimed had been approved for development without any proper plans.
While several resort islands are now under development at a time when several investors are going bankrupt in the industry, Mausoom suggested that it is “not a good idea for the state to increase injection into the sector through joint-ventures.”
“It may be legal for the MNDF cooperative society to go into joint venture with government and even lease islands without even an open bidding process under the law. However, just because it is legal it does not mean it is the right thing to do,” he contended.
(0)Dislikes(0)Private broadcaster Raajje TV had its service terminated across the Maldives after intruders broke into the station and cut critical cables in the control room early this morning.
Deputy CEO of Raajje TV Abdulla Yamin told Minivan News that the cables had were vandalised some time between 7:00am and 8:00am.
“We suspect that the attack was by a person who knows this place and the functioning of Raajje TV very well,” Yamin said. “It has caused us millions of rufiya in damage because we have lost our reputation in front of our sponsors.”
Yamin said that the cables will cost more than Rf 100,000 (US$6666) to replace, and that it will take two days before the station can resume broadcasting.
“They shut down the electricity for the whole building which caused our electric lock systems to fail,” he said. “We suspect that either the culprit knows this place very well, or that this was done with the cooperation from a person who knew the place very well.’’
Yamin said the case was reported to police this morning.
‘’Police officers came over today but we have not heard from them since,’’ he added.
Police Spokesperson Sub-Inspector Hassan Haneef did not respond to Minivan News at time of press.
Meanwhile, the Maldives Broadcasting Corporation has condemned the attack on Raajje TV and has said that the intention of the attack was to obstruct the freedom of speech and journalism.
The Commission called on police to conduct an investigation into the case at a fast speed, and also called on police to withdraw an earlier decision to stop cooperating with Raajje TV.
On July 24, the police announced they would stop cooperating with Raajje TV, claiming that the opposition-aligned TV station was broadcasting false and slanderous content about the police which had undermined their credibility and public confidence.
The decision came just a day after Raajje TV broadcasted CCTV video footage of some police officers, who the station alleged were “caught on video” while they were stealing petrol from a motorbike parked in a small road in Male’.
Raajje TV also recently aired footage of police pepper-spraying former President Mohamed Nasheed during a protest rally, an act which attracted widespread criticism from the Maldivian Democratic Party (MDP) and international groups.
Police in a statement had denied pepper-spraying the former President, and urged the MDP “to publish statements responsibly.”
(0)Dislikes(0)It all came to an end on February 7 when Nasheed was forced to resign, effectively at gunpoint, writes political and digital strategist Samuel Coates for Conservativehome.
“Only one side had the luxury of making advance preparations for handling the aftermath, so inevitably the true nature of his resignation was lost in the fog of war. For the critical first 48hrs, history was written by the victor — almost everyone fell for the initial spin that Nasheed had taken it upon himself to resign due to public pressure and a police revolt.
That anyone had an inkling of what was really going on at that time was in large part down to Nasheed’s British international press adviser, Paul Roberts — who managed to blow the whistle about the coup to a few journalists whilst hiding in a President’s Office toilet cubicle, before fleeing the country. William Hague was the first major figure to condemn the situation and an article for ConHome by MPs John Glen and Karen Lumley was one of the first to tell it how it was. But overall international reaction was muted and mixed — the US and India recognised the new government immediately.
Since then, the world has kept turning and few seem to remember or care what happened in what is a strategically insignificant nation. Shortly afterwards, President Waheed had the pleasure of joining other Commonwealth leaders for dinner with the Queen to mark her Diamond Jubilee. As they politely tucked into brie and avocado terrine, wild sea bass and apple crumble soufflé, one wonders if Her Majesty was aware that Waheed’s allies had been publicly trashing her days before.
(0)Dislikes(0)The Dhivehi Rayyithunge Party (DRP) has called on the government to consider the potential financial repercussions and impact on investor confidence should it renege on a contract with Indian infrastructure group GMR to develop Ibrahim Nasir international Airport (INIA).
DRP Leader Ahmed Thasmeen Ali today said the party had asked the current government to assess the possible implications of cancelling the GMR agreement in three key areas before his party decided on whether to agree to proceed with renationalising INIA.
An agreement now thought to amount to US$511M was signed between GMR and the previous government of Mohamed Nasheed in June 2010 to manage and build a new airport terminal by 2014, as well as renovate the existing airport facilities in the meantime
The deal, the largest single financial investment in the Maldives’ history, has since faced several protracted legal disputes resulting this month in the infrastructure giant referring a disputed US$25 Airport Development Charge (ADC) included in its contract to a court of arbitration in Singapore.
Several pro-government parties – including the DRP, the Dhivehi Qaumee Party (DQP), People’s Alliance (PA) and Jumhoree Party (JP) – advised President Waheed in June this year that they continued to endorse an agreement signed in June 2010 calling for the airport to be taken back from GMR and nationalised.
The agreement endorsed six main points which included taking legal action to prevent the government’s decision to award the contract to GMR.
Thasmeen’s comments today about assessing the potential impacts of terminating the contract were made as Progressive Party of Maldives (PPM) Deputy Leader Umar Naseer alleged in local media that the DRP was now the “main obstacle” to the state resuming management of the airport.
The PPM is a coalition partner of the DRP in the government of President Dr Mohamed Waheed Hassan.
According to newspaper Haveeru, Naseer contended that an invitation from Indian Prime Minister Manmohan Singh to meet with Thasmeen this week was directly related to the GMR airport dispute.
With the Maldivian Democratic Party (MDP) and the PPM respectively holding the majority and minority leadership roles in parliament, he questioned the reason for Thasmeen’s invite other than discussing the airport case.
“I do not think this trip is related to anything else. The DRP not the main opposition anymore as everyone knows. Even if it is taken in an official manner, the parliament minority leader is from PPM,” Naseer was quoted as saying.
Naseer also claimed that President Mohamed Waheed Hassan’s government wanted to reclaim the management of the airport from GMR – a pledge he hoped would be carried out even without the support of the DRP.
An Anti-Corruption Commission (ACC) investigation into allegations that DRP Leader Thasmeen and Parliamentary Speaker Abdulla Shahid accepted US$1 million in bribes from GMR was last year reported to have “investigated thoroughly”, both men were cleared of wrongdoing over the case.
Thasmeen, Shahid and GMR have all vehemently dismissed the allegations of bribery.
Responding to Naseer’s claims today, Thasmeen told Minivan News that his recent visit to India was the result of a long-standing invitation by the Indian government to discuss a number of issues including the current political situation in the Maldives. He added the visit had not been related to GMR’s dispute with the government.
Thasmeen was not drawn into whether the issue of the GMR contract formed part of discussions, adding only that the prime minister had shown a desire for long-term stability in the Maldives during the talks.
“He was clear in his desire to see a resolution to the current political problems in the Maldives,” he said.
In addressing the issue of GMR, Thasmeen claimed that the DRP has already responded to a request by President Waheed for the views of his coalition government on how to proceed over the matter of the GMR case – but had yet to decide on possible renationalisation.
“In making a decision on this case and the GMR contract, there are three things to consider. These are the impacts on investor confidence from pulling out of such a deal, the impact this will have on bilateral relations with friendly nations and the extent of the financial repercussions from terminating such a contract,” Thasmeen claimed. “What sort of compensation might there be for example? The government is best placed to make such an assessment and we will wait for it to do so before making a decision on the case.”
While GMR has pledged to have the new terminal open by July 1, 2014 “irrespective” of outside issues, the Maldives government has pledged to back the will of parliament should it decide on re-nationalising the project.
The relationship between the airport developer and the government soured further late last month after the government temporarily called for a halt to work on the new airport terminal, alleging it had “violated rules and regulations” by not acquiring certain permissions from the Civil Aviation Authority.
In a statement, the infrastructure giant said the GMR Malé International Airport Private Limited (GMIAL) joint venture company had obtained “requisite approvals” under the regulations at the time construction commenced, but had since been asked to seek further approval from authorities.
“We have received a letter from Maldives Civil Aviation Authority asking us to seek its approval pursuant to a recent regulation, for the construction works related to the proposed new Passenger terminal building. Pending the approval, MCAA has directed stoppage of the said works,” GMR stated. “This has no impact on the operations of the airport at the existing terminal.”
Amidst claims by Attorney General Aishath Azima Shakoor that the “doors for dialogue” were still open over resolving the matter of the ADC case, a GMR spokesperson told Minivan News today that the company was not able to comment if fresh discussions with the government were taking place. Shakoor was not responding to calls by Minivan News at the time of press.
The attorney general told Sun Online that the company could be waiting for up to two years for a resolution to the ADC court case in Singapore. She claimed that discussions between the company and the government remained the “best way” to resolve the issue therefore.
Compromise
Earlier this year, GMR said it had sought to compromise with the government by offering to exempt Maldivian citizens from paying the ADC. However, the Transport Ministry continued to demand that the infrastructure giant repay US$8.2 million deducted from the concession agreement.
Under the concession agreement, a US$25 Airport Development Charge (ADC) was to be levied on all outgoing passengers to part-fund the airport development.
However, while in opposition, the Dhivehi Qaumee Party (DQP), led by Dr Hassan Saeed, now President Dr Mohamed Waheed’s special advisor, and Dr Mohamed Jameel, now Home Minister, filed a successful case in the Civil Court in December 2011 blocking payment of the ADC on the grounds that it was effectively a tax not approved by parliament.
Nasheed’s government as a stopgap measure agreed to deduct the ADC from the concession fees payable by GMR, while it sought to appeal to verdict.
As a result, Dr Waheed’s government received only US$525,355 from the airport for the first quarter of 2012, compared to the US$8.7 million it was expecting, at time the country is facing a crippling budget deficit, a foreign currency shortage, plummeting investor confidence, spiraling expenditure, and a drop off in foreign aid.
According to financial statements sent to MACL and released to local media, in the second quarter of 2012, GMR deducted the ADC revenue of US$7.1 million from total revenues of US$5.6 million, leaving the government with a bill for US$1.5 million.
Managing Director of MACL Mohamed Ibrahim told local newspaper Haveeru at the time that the government would not pay the amount, alleging that GMR’s deduction of the ADC from the revenue was illegal.
In its defence, MACL has said that its board of directors had been reformed with the arrival of the new government, and a decision made to annul the old board’s agreement to deduct the ADC revenue.
The government meanwhile sought to invalidate the GMR contract – and the clause invoking arbitration – by challenging the handling of the bidding process by the International Finance Corporation (IFC), a member of the World Bank group and the largest global institution focused on private development sector in developing countries.
“The advisory work was supported by AusAid (Australia), the Ministry of Foreign Affairs of the Netherlands, and DevCo. DevCo is a multi-donor program affiliated with the Private Infrastructure Development Group and funded by the UK’s Department for International Development, the Ministry of Foreign Affairs of the Netherlands, the Swedish International Development Agency, and the Austrian Development Agency,” the IFC explained, following a visit by the delegation in June to address the government’s concerns.
Following the first quarter deduction, GMR announced an employee benefits scheme converting 50 percent of employee salaries to US dollars from July onwards, and a one-percent profit-share.
(0)Dislikes(0)The Maldivian Democratic Party (MDP) has asked Attorney-General Azima Shakoor to “come clean” over a US$10 million invoice from accountancy group Grant Thorton, contending that the charge was a result of the present government prematurely terminating its investigation.
In a statement released today, the MDP contested claims made by Attorney General Shakoor to local news outlets that her office received two invoices totalling US$358,000 and £4.6 million from Grant Thorton. Shakoor claimed that the charges were for legal advice provided to the MDP government, for which it had not even received a report.
She made the comments at a press conference held on Sunday after documents were leaked revealing that President Dr Mohamed Waheed’s government spent £75,000 (MVR 1.81 million) on advice from former UK Attorney General, Baroness Patricia Scotland, prompting opposition criticism against the spending.
She said similar legal advice had been sought previously and specifically pointed out the Grant Thorton agreement.
The ousted former President Mohamed Nasheed tasked the UK-based accountancy group to uncover large amounts of state funds allegedly embezzled during Former President Maumoon Abdul Gayoom’s 30 year-old rule, several of which were flagged in the state’s audit reports.
Attacking the attorney general’s claims, the MDP claimed that the terms of engagement contracted with the UK forensic investigators was “not on a contingent fee basis” and instead, government had agreed to pay the fee as a percentage of the proceeds of the stolen assets that were recovered.
“This type of fee was used because a fee-paying engagement would have been too expensive,” the MDP contended. “However, given that the firm was not charging any fees, the engagement letter that was signed between the GOM and GT included a penalty clause in the event the investigation was unreasonably stopped by the government.”
Under these circumstances, the party said, the penalty would include retroactive charges for the work done by the GT but also a fine for not proceeding towards a full recovery.
“Thus the invoice for the penalty fees was submitted to the government last month when the government decided to close the investigation rather than continue with the criminal and civil complaints that had been lodged in Singapore Courts,” the statement reads.
The MDP also contended the US$10 million penalty was a “small price” to pay in order to suspend the civil and criminal proceedings reportedly underway in Singapore over a suspected illegal oil trade worth US$800 million, which was allegedly undertaken by Abdulla Yameen – Gayoom’s half-brother – while he was the head of state-owned State Trading Organisation (STO). The scheme was alleged to involve the purchase of subsidised oil through the STO in Singapore, which was sold on through an entity called ‘Mocom Trading’ to the Burmese military junta, at a black market premium.
Yameen however has denied these allegations.
Nasheed’s Presidential Commission on corruption, which had been charged with investigating the STO case was disbanded – one of incoming President Dr Mohamed Waheed Hassan’s first acts in power.
Meanwhile, MDPs spokesperson for international affairs has also pointed out that Grant Thorton’s investigators have not submitted a full report because they might decide to litigate in UK courts to recover the US$10 million in penalty fees.
“I believe that GT has not submitted a full report on what it uncovered in stolen assets by the members of the dictatorship because they might want to litigate in UK courts to recover the penalty fees. Clearly, the work undertaken by GT revealed the illegal monies embezzled through the Mocom scam and the existence of secret offshore companies owned by members of the former dictatorship,” Hamid Abdul Ghafoor said in the statement.
“A criminal complaint was ready for filing in Singapore courts in February when the coup d’etat intervened,” he added, alleging that: “the old boys are back in power and the money swindling operations are ready to take off again.”
Following the controversial transfer of power on February 7, 2012 that saw the ousting of President Nasheed’s government, the case fell silent – despite the matter having been forwarded to the Prosecutor General’s office a week earlier, according to MDP.
However, the Prosecutor General Office confirmed the office had not received the illegal oil trade case for prosecution from the former government and therefore no one had been charged.
Attorney General Shakoor was not responding to calls at time of press.
(0)Dislikes(0)A total of 108 nominations have been received by the committee overseeing this year’s National Awards.
The National Awards Committee said the selection procedure to finalise the nominees who will receive accolades had now begun after a two-month nomination period closed on July 31.
The committee, which decides on public figures to honour for their work in societal development in fields such as health, agriculture and the arts, was reformed on April 9, after the previous body completed their allotted three year term.
According to the President’s Office, the awards committee is designed to function independently from the government, which in turn will respect any decision made.
This year’s ceremony is expected to be held to coincide with the 2012 Republic Day celebrations.The national awards were last held in November 2011 and conferred by former President Mohamed Nasheed.
(0)Dislikes(0)Former independent MP for Kaashidhoo, MP Abdul Hameed, has been granted clemency by the parole board, local media reports.
State Home Minister Mohamed Fayaz was reported as stating that MP Hameed had implemented one third of his sentence before he requested the parole board grant him clemency.
The Criminal Court last year sentenced Ismail Abdul Hameed to one year and six months banishment after he was found guilty of corruption.
The Prosecutor General pressed corruption charges against Hameed alleging that he had abused his authority as the former Director of Waste Management at the Male’ municipality to financially benefit a Singaporean company, named Island Logistics, in a deal to purchase a barge.
According to local media reports, Judge Abdulla Didi noted in the verdict at the time that the agreement stipulated that the barge was to be delivered within 90 days of signing the agreement, upon which 50 percent of the value was to be paid to Island Logistics.
Although the barge arrived in the Maldives on October 23, 2008, Hameed had however signed a document claiming that the barge was delivered on schedule on April 28, 2008.
The judge ruled that Hameed’s actions were intentional and in violation of the Anti-Corruption Act.
The case was appealed at the High Court and the Supreme Court, however the superior courts upheld the Criminal Court’s decision.
Until today the government had been telling the local media that Hameed was held under house arrest because an island for his banishment had not yet been determined.
The State Home Minister has said that his verdict was implemented by placing him under house arrest, as that was how banishment had been implemented lately because island councils had refused to accpet banished people.
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