The government expects the fiscal deficit to have fallen to a single digit at the end of the year, below the previous forecast of 11 percent of GDP, President Mohamed Nasheed said in his weekly radio address on Friday.
“The budget deficit as a percentage of GDP or national productivity has been estimated for next year at [budget] meetings with ministers and heads of government offices,” he said. “From that estimate we know that government expenditure has been substantially reduced in a number of different areas. For this year, we forecast a budget deficit of 11 percent. We have noted now that it has been reduced by three or four points.”
The government hoped that the fiscal deficit would be below 10 or “a single digit figure” when it is calculated at the end of the year, he said.
The budget deficit, which stood at just 1.9 percent of the economy in 2004, expanded to 7.3 percent in 2006 and ballooned to 23.9 percent in 2007, according to the International Monetary Fund (IMF).
The fiscal deficit exploded on the back of a 400 percent increase in the government’s wage bill between 2004 and 2009, with tremendous growth between 2007 and 2009. On paper, the government increased average salaries from Rf3000 to Rf11,000 and boosted the size of the civil service from 24,000 to 32,000 people – 11 percent of the total population of the country – doubling government spending from 35 percent of GDP to 60 percent from 2004 to 2006.
While preliminary figures had pegged the 2010 fiscal deficit at 17.75 percent, “financing information points to a deficit of around 20-21 percent of GDP”, down from 29 percent in 2009, the IMF noted in March this year.
“We see bringing the fiscal deficit down as the key macroeconomic priority for the Maldives,” the IMF’s Mission Chief to the Maldives, Rodrigo Cubero, told Minivan News at the time. “A large fiscal deficit pushes up interest rates, thereby undermining private investment and growth, and also drives up imports, putting pressure on the exchange rate and inflation, all of which hurts the Maldivian people, particularly the poor.”
“Further efforts are still needed to reduce the fiscal deficit. Those efforts should comprise further tax reforms as well as measures to reduce expenditure and to improve the channelling of social expenditures to the needy.”
Meanwhile in a booklet issued to media titled “the DRP’s response to the government’s economic nuisance package,” the main opposition Dhivehi Rayyithunge Party (DRP) strongly objected to a bill on fiscal responsibility currently before parliament.
The DRP also noted that provisions on imposing limits to government spending would only come into force after 2013.
“In the past three years, the MDP [Maldivian Democratic Party] government earned billions of rufiya by selling off state assets, facilitating business opportunities for their friends and introducing new taxes,” the DRP said. “Nonetheless, while the health sector, the education and overall standard of living has gone from bad to worse, it is unclear how the government spent the billions and billions of rufiya it received.”
President Mohamed Nasheed inaugurated a city council programme last week to plant trees in the congested capital city for “a greener, shadier, and more peaceful Male’.”
Speaking at a ceremony on Thursday, President Nasheed underscored the progress of the government’s flagship “Veshi Fahi Male'” housing programme, revealing plans to build more flats in an additional six areas of Male’.
Under the greenery programme meanwhile, the city council plans to plant 600 trees on both sides of the main thoroughfare Majeedhee Magu.
While the Indian High Commission has donated 10,000 trees, the council has also been receiving donations from islands, individuals and businesses.
Luxury Maldivian resort Soneva Fushi is currently hosting a three day ‘Slow Life’ symposium bringing together big names in business, climate science, film and renewable energy to come up with ways to address climate change.
Attendees at the Symposium include famous UK entrepreneur Richard Branson, founder of the Virgin Empire; actress Daryl Hannah, star of films including ‘Blade Runner’, ‘Kill Bill’ and ‘Splash’; Ed Norton, star of films including ‘Fight Club’ and ‘American History X’; Tim Smit, founder of the Eden Project; Maldives President Mohamed Nasheed; and an array of climate experts and scientists including Mark Lynas and Mike Mason.
Richard Branson
Branson described how six years ago former US Vice President and environmental advocate Al Gore arrived at his house “and made me realise I had to make changes to the way I was doing business in the own world.”
Among other initiatives, Branson described his creation of a “Carbon War Room” funding scientific work into both climate education and the development of a renewable alternative to jet fuel.
“Ethanol was not a good idea because it freezes at 15,000 feet,” Branson noted. “So we’re investigating alternatives such as algae, isobutanol and fuel created from eucalyptus trees,” he said, adding that Virgin would be making a significant announcement on the subject next week.
Big business had the ability and prerogative to break down market barriers to the development of low carbon technologies, he said. Inefficient shipping, for instance, wasted US$70 billion a year, and led him to create a website allocating ratings to the most efficient vessels and ports, that had attracted interest from large grocery chains.
Branson also outlined his US$25 million prize for the development of a commercial technology capable of removing carbon from the atmosphere, an idea he said was inspired by the 1714 prize offered for developing a means of measuring longitude on a ship, and had attracted thousands of innovative ideas.
President Mohamed Nasheed
Speaking at the symposium on Saturday, Nasheed said it was “very clear, that regardless of whether you are rich or poor, too much carbon will kill us.”
“For us, this is not just an environmental issue. We need to become carbon neutral even if there was no such thing as climate change, simply because it is more economically viable. We spend more than 14 percent of our GDP on fossil fuel energy, which is more than our education and health budget combined.”
The most important adaptation measure, Nasheed said, “is democracy. You have to have a responsive government to discuss this issue. When I do something people do not believe in, they shout at me. But they are not doing this on this issue.”
The government had reformed its economic system and introduced new taxes “so we can fend for ourselves. We cannot endlessly rely on the international community.”
Since last year’s symposium the government had launched its renewable energy investment plan, and contracted an international firm to process waste at Thilafushi, Nasheed said, as well as introduced a feed in tariff which would make generating solar “more profitable than a corner shop.”
“If you are buying electricity at 40 cents a kilowatt hour you can sell electricity to the state at 35 cents. Soneva Fushi is going to be able to produce electricity with solar at 15 cents. We will be able to finance households as a loan to pay back from savings they are making. If you do the sums in the Maldives it is really quite possible, and I’m confident that households will see the commercial viability.”
Ed Norton
Meanwhile Ed Norton, star of films including ‘Fight Club’ and ‘American History X’, linked sanitation and waste management to human development, noting that more people had cell phones than toilets. As a result, Norton said, 1.7 million people died yearly of preventable diarrheal diseases – 90 percent of them under the age of five.
“The World Health Organisation estimates that for every dollar spent on sanitation, $3-34 is returned to the economy,” he observed.
Ocean dumping of sewage was standard, he noted, while septic tanks could leak and contaminate groundwater. He proposed a greater focus on using waste water for fertiliser and water recycling, rather than thinking of it simply as a matter of waste disposal.
Jonathan Porritt
UK environmentalist Jonathan Porritt, founder of Forum for the Future, observed that just by attending the Symposium he had contributed four tons of carbon dioxide to the atmosphere.
He referred to a colleague who was “so overwhelmingly conscious” of his carbon footprint that he weighed his attendance at such events by “the gravity of the audience, the quality of his speech and the effectiveness in lobbying and networking.”
However, he noted that travel and tourism was, overall, a “force for good in an increasingly troubled world.”
“We live in a world where governments invest US$1.4 trillion a year in war. We live in a world where US$4 trillion is invested in the war against terror, a world were fundamentalism is rampant and aggressive nationalism is all over the place. Many countries taking a lead on the issue suffer from a deep sense of exhaustion. Against that backdrop, hands-on [tourism] is a way to bridge the divide,” Porritt said.
At the same time tourism was driven by the balance sheet, and that while there was a great deal of ecotourism initiatives much of it was “marketing, with no credibility.”
“There is a focus on green rather than sustainable tourism, and no real understanding of what it means,” he said. “There is a reluctance to engage on socio-economic issues.”
“Gaps in equity are widening – and the gap between the have and the have nots is widening. Even as tourism contributes economically, because of the gaps resentment about the impact of the industry is rising – especially in a country where access to land, water, beachfront, reef and biomass is being privileged to support growth of tourism industry rather than the interests of local people.”
Tourism, Porritt said, was a microcosm of the local economy, with high end tourism such as that in the Maldives attracting the wealthiest and most influential people.
“For the one percent of the population that control more than 30 percent of the net wealth in a country such as the United States, it is very easy to insulate one’s self from real world by traveling from high security offices to gated communities to privileged, luxury resorts. It is a bubble through which the real world rarely penetrates.”
A state of low carbon with high inequality was “not a judgement anyone should be comfortable with. We should be thinking not just about the need to mitigate carbon impact, but offsetting inequality. I think what we are doing should be from the perspective of social justice as much as low carbon.”
However, he noted, it was easier to educate a few billionaires than the entire population of a country such as the US, distracted from the issue by Xboxes and cable TV.
“Billionaires have a vested interest in keeping the [planet sustainable], because they have enough money enjoy the planet,” he suggested.
Tim Smit
Founder of the Eden Project in Cornwall, Tim Smit, spoke about the need to mobilise people by capturing their imagination – and the responsibility the Maldives has as a symbol of a united effort combating climate change.
“Author CS Lewis said that while science leads to truth, only imagination leads to meaning,” Smit said.
“We are used to talking to halls of middle aged men who want to be inspired. We read the books about affecting change and they have the same language, and it is really dull: paradigm shifts, centres of excellence, leading edge thinking, cutting edge thinking, and when they are very excited, bleeding edge thinking. We don’t write books about the impact of this thinking.”
Incredible things, Smit said, were “being done by the unreasonable.”
“The Maldives has captured the imagination, and the elected political elite are showing charisma and leadership on the issue [of climate change]. The danger is that we listen to too many middle aged white people, and miss the point. I see an incredible moment when the story of Maldives becomes the story of us all – but it needs to be delivered with a pirate grin that says f*** it, we’re going to do this thing. I hate idealists. I like unreasonable people who do things.”
There was, Smit said, a danger that the Maldives would lose sight of its goal, and “lose the moment when the Maldives could become the most important place in world. The goal is open but the moment will be gone, and suddenly the bright future is no longer there, just a job – and not a job in the spotlight.”
The Maldivian people needed to be given the independence to make their own decisions, such as installing solar, and given control so that they knew the impact of flipping the light switch.
“Trust in the people of the Maldives to get excited of a picture of the Maldives reborn,” Smit suggested.
“Teaching Excellence Awards” in eight categories were handed out at a ceremony last night to celebrate Teacher’s Day.
The categories included best pre-school teacher, best secondary school teacher and best teacher for children with special needs. The recipients were awarded a monetary gift of Rf30,000 (US$1,945).
Speaking at the ceremony, President Mohamed Nasheed said that teachers played the most important role in the country’s development.
The Maldives Inland Revenue Authority (MIRA) has decided to conduct a nationwide campaign to raise public awareness of the newly-introduced General Goods and Services Tax (G-GST).
Sun Online reported that 13 teams from MIRA would be visiting 20 atolls in the coming days to inform the public and help businesses register with the tax collection authority.
The Maldives National Chamber of Commerce and Industries (MNCCI) meanwhile filed a case at the High Court last week seeking a temporary injunction to halt the implementation of the GST Act. The group of businessmen argue that a number of provisions in the Act were unconstitutional.
However the High Court informed the appellants to correct errors in their case forms and re-submit it. The first hearing is likely to take place next week.
The Maldives Police Service signed a Memorandum of Intent (MoI) with the US government on Tuesday to “enhance the abilities of the law enforcement agencies of the government of Maldives to deter terrorists and terrorist groups from engaging in international terrorist acts.”
The MoI was signed by Commissioner of Police Ahmed Faseeh on behalf of the government while the Ambassador of the United States of America, Patricia Butenis, signed for the American government.
According to a police press statement, the US State Department would be providing assistance to the Maldivian police under its anti-terrorism assistance programme.
The purpose of the MoI is to establish a mechanism for local law enforcement to cooperate with the US government in counter-terrorism activities, the statement said.
The viability of the Maldivian tuna fishing industry is being threatened by the mass harvesting of fish stocks by foreign fishing vessels just outside the country’s exclusive economic zone (EEZ), Minivan News has learned.
Fishing is the Maldives’ second largest industry after tourism, and the country’s largest employer. The sustainability of centuries-old ‘pole and line’ fishing methods is not only considered a source of national pride, but also attracts buyers from premium supermarkets in the UK and Europe.
“We have noticed a decline in skipjack tuna due to the operation of purse seniers, mainly French and Spanish, along our EEZ,” Fisheries Minister Dr Ibrahim Didi tells Minivan News. “We have heard they are using FADS (Fish Aggregation Devices) across a very big area.”
Purse seining is a fishing method whereby a vessel deploys an enormous net to encircle and capture entire schools of fish at once. The method is very cost effective but indiscriminate, and generates a large amount of bycatch.
It is particularly efficient used in conjunction with FADs. Fish such as tuna are naturally attracted to the floating object, such as a buoy, typically fitted with a sonar device capable of determining the quantity of fish below, and a satellite uplink that communicates this to the nearby fishing vessel. The vessel’s net does not discriminate between the predators and scavengers attracted by the target fish population around the FAD.
“Nothing escapes,” says Solah Mohamed, Head of Production for the Maldives’ Felivaru fish cannery, which was opened in 1982 in collaboration with a Japanese company.
“Just outside the Maldivian EEZ are thousands of FADS, with sonar and live tracking systems. There are so many deployed that the natural migration of the skipjack is changing,” he says. “Fish that are supposed to migrate into Maldivian waters are being stopped because so many FADS are deployed.”
Solah claims the FADs are deployed by purse seines belonging “mainly to Spain, France and Japan, and also Iran.”
The Maldivian fishing fleet is simply unable to compete due to its reliance on pole and line fishing methods, says Solah, “one of the most sustainable methods of fishing.”
“The issue is that purse seines have become so efficient – and their sizes are becoming huge – as large as 100-400 tons. They say the sonar detects dolphins, but I don’t think it sounds very effective. Sharks, dolphins, turtles – they take everything. I doubt they can be bothered to sort it all out before pulling it on board.”
The under-resourced Maldivian coastguard is unable to monitor the vastness of the Maldivian EEZ, and local fishermen rarely go beyond the 100 nautical miles (the EEZ is 200 miles).
However the issue is not one of legality or of policing capacity. Many vessels at least in the EU fleet are fitted with vessel tracking devices ensuring they do not stray into Maldivian waters. But in international waters, almost anything goes – and seeking to hold foreign countries to account for over-exploitation is near impossible.
“We may as well be under siege,” a senior government source told Minivan News, of the ring of vessels surrounding the country.
Officially, the government is more diplomatic. “This is happening on the high seas and not in our EEZ, so there is very little we can do to raise our concerns,” says Fisheries Minister Dr Ibrahim Didi.
“Purse seiners are operating without limitation in the Indian Ocean near our EEZ, and the Indian Ocean Tuna Commission (IOTC) has not taken any measures against it.
“Since we became a full member of the IOTC we have tried to raise the issue and talk with neighbouring countries to take a joint stand. But the IOTC is dominated by European countries.”
Solah from Felivaru has observed the same problem: “We are just becoming a full member, but Japan, Spain and France are big players in the Commission. I have been to one of their conferences and I feel that their voices are heard more than those of the coastal islands. They have more expertise and they can put forward more resolutions, more numbers – we simply don’t have the expertise to beat them.”
A fish aggregation device, or FAD
Last gasps of the tuna catch
Meanwhile, the pole and line catch in the Maldives is in decline.
Felivaru’s Deputy General Manager Mohamed Waheed observes that the Maldivian tuna catch has fallen from “very high” figures in 2005-2006 “to now less than it was in 1995-1996.”
“The main thing is that the pattern of fishing changed. May to August is the low season, but we can usually still catch fish in the southern waters of the country. But this season it did not happen – we had hardly any fish in the north, and very little in the south.”
The foreign purse seines have not reported a declining catch, notes Solah.
“In commercial fishing we talk about ‘catch’ and ‘effort’,” he explains. “The Maldivian catch is going down but according to the IOTC, the purse seine catch is stable. This means the purse seines have hugely increased their effort.”
Value-adding means employment
Felivaru buys fish from local fishermen, canning, labelling and adding value to the commodity prior to export. The company has high demand for its product from upmarket UK supermarkets such as Waitrose, but has been forced to scale down its production lines because it just cannot buy enough fish.
“We are now processing 15 tonnes per day. We can go up to 50 tonnes if we can get the fish – but our cannery has had to scale down because we don’t get enough,” says Solah.
That has impacted employment: “At the beginning of 2008 we employed 1100 employees,” says Waheed. “Four years later we’re down to half that – 550 workers. And all these people are going to lose their jobs when the fisheries collapse.”
“Maybe tourism brings the most money to the country, but fisheries still provides most of the jobs. It accounts for more than half the employment of the entire country,” he explains.
A question of economics
Former head of the Maldives Industrial Fisheries Company (MIFCO), Adhil Saleem, now the country’s Transport Minister, attributes the decline in local fisheries to the industry’s struggle to meet global pressures and remain competitive.
He espouses a pragmatic, free market view. Marketing the Maldives’ pole and line fishing as a premium ‘eco’ brand pleases environmentalists and looks fine on paper, he explains, “But our gains in the market are eaten up by the supermarkets, because they are the only outlets marketing the product. ‘Maldivian fishermen saving the world’ does not fetch a premium, because as much as they talk about it, the world is not prepared to pay for eco-friendly fishing.”
Saleem contends that small rises in ocean surface temperatures due to climate change are driving fish deeper, further reducing the stocks within reach of the traditional pole and line method.
“Our method only works near the surface,” he says. “But with changes in weather and sea temperature, fish will not surface.”
“At the same time, look at the way we fish – most countries do multi-day trips, sticking with the same school of fish until it is fished out. Our fishermen fish for bait early in the morning, and then in the afternoon if they are lucky they find a school of tuna, fish it and then leave. The next day they make a wild guess as to where it has gone, and hope they get lucky.
“I also get the feeling that because of the high price we get, our fishermen are not putting in their best efforts. At Rf 25-30 (US$1.6-2) a kilogram, in the south it’s not uncommon for a fisherman to be on Rf 11,000 (US$720) a month. The mentality is: ‘I have enough for today, so I can relax. I don’t need to think about tomorrow.’”
Saleem believes the Maldives will eventually have no choice but to begin purse seining, augmenting traditional fishing know-how with technology such as aerial surveys to share with local fishermen sightings of birds circling the schools.
“The Maldives can certify pole and line fishing, while simultaneously conducting purse seining,” he says. “We need field officers to go on board and teach multi-day fishing techniques, such as using lights at night to catch squid and reef fish so that when they come back they have something to sell.”
Thailand tramples Maldives canning industry
As for Felivaru, the Maldives has to come to terms with the fact that it now competes in a global marketplace, and that maintaining such a level of industry is not economically competitive, Saleem suggests.
“If [Felivaru] is unable to compete in the global market it would be better to do something else. Do we ask why Airbus has not built a manufacturing plant in the Maldives? If [fish canning] is a matter of national pride, then so is having a nuclear plant.”
Based on an island in the north of the Maldives, Felivaru is faced with the high logistical costs of feeding and accommodating large numbers of staff, which other canneries in South Asia do not have to contend with.
“The main problem is that Felivaru is an old factory, and secondly the labour cost in the Maldives is very high compared to Sri Lanka or even Thailand,” adds the Fisheries Minister, Dr Didi.
“There is also a problem of quantity and [consistent supply]. If they are running a factory they require a certain amount of fish per day, which is not economic or feasible as the pole and line method means our fishing is seasonal. Felivaru has four production lines, but I doubt they have ever used more than 1-2 lines because not enough fish is available.”
Saleem adds that the Felivaru cannery “has expanded in the north, while the fish are in the south. It would be better for them to operate in Galle in Sri Lanka where they would not have pay the extra costs such as accommodation.”
The outsourced model has been embraced by Felivaru’s competitor, Kooddoo Fisheries, which now exports pole and line tuna caught in the Maldives to the Thai Union cannery in Thailand for processing and export to UK supermarkets such as Sainbury’s and Marks & Spencer (M&S). Kooddoo also buys cheaper purse seines-caught tuna, then processes and sells it to the Maldivian market at a cheaper price point, undercutting Felivaru. The company has recently opened a shop in Male’ and launched a marketing blitz.
“In Male’ we can buy fish caught one-by-one in an eco-friendly manner for Rf 18-19 (US$1.2). We can also buy an imported can of the same fish caught with purse seines for Rf 11 (US$0.70),” says Saleem.
“Instead we should eat the Rf 11 tin and export the Rf 19 tin to increase the amount of foreign currency available. The Maldives, Japan and India are not bothered about pole and line – it is only fashionable in Europe.”
Felivaru’s Solah complains that this approach forces the cannery to compete for the dwindling supply of fish with companies that are simply exporting the raw commodity without adding value.
“The government should be encouraging the fisheries industry to remain in the Maldives, because if the fish stay it means jobs and wealth stay in the country,” Solah argues.
“It is really sad to see the label on these cans that reads ‘Maldivian pole and line tuna’, complete with a picture of a Maldivian island, next to ‘Packed in Thailand’. Who is checking how much the Maldives supplies, compared to how many cans come out of Thailand? They can buy 1000 tons of Maldivian pole and line fish, and supply 2000 tons of Maldivian ‘pole and line fish’ to UK supermarkets. There is no regulatory board monitoring them.”
Saleem argues that Felivaru “cannot expect fish to be sold to it at a subsidised rate. Kooddoo is exporting because the price is better. The companies would not export if Felivaru was prepared to pay world market rates – they just wouldn’t, because of the increased cost of shipping.”
Solah concedes that the Thai Union cannery can afford to pay more for unprocessed fish, even including transport costs, because of the operation’s economies of scale, cheaper labour and lower overheads.
“People are willing to pay more for a premium pole and line product, but currently there is no disincentive to export unprocessed fish,” he says. “Government policy should be to add value while the fish is in the country, and to make sure there is enough fish available to run the factories inside the country at full capacity before exporting it.”
Maldives pole and line tuna, packed in Thailand
Sustainability sells, says Sainsbury’s
Minivan News contacted Sainsbury’s supermarket in the UK, which sells the Thai-processed product marketed as Maldivian pole and line tuna.
“The pole and line method is recognised as the most responsible fishing method for catching tuna mainly as a result of minimising bycatch in the fishery,” explained Sainsbury’s Aquaculture and Fisheries Manager, Ally Dingwall.
Media coverage around the issue of sustainability in fisheries meant it was “increasing in the public consciousness in the UK,” she said.
“The Maldives is associated with a pristine environment and clear, clean waters which deliver great quality tuna, and this is clearly attractive to consumers.”
The supermarket regularly audited its supply chain and was able to trace its products to the capture vessel via the batch code, she said.
“Sainsbury’s have had tuna products packed in the Maldives in the past but encountered logistical difficulties in supply. We are reviewing the situation at present with a view to recommencing an element of our supply from Maldivian canneries,” Dingwall explained. “Our suppliers of products such as sandwiches and sushi which contain tuna as an ingredient are already sourcing pouched, pole and line caught tuna from Maldivian processing establishments.”
Yet while the Maldivian fishing industry grapples with the pressures of climate change, globalisation and appeasing Big Grocery, the ring of foreign purse seines sieging the country’s EEZ are, according to the IOTC, scooping up tuna to the tune of US$2-3 billion a year.
“By catching fish one by one we are using a bucket to scoop from the well, while the rest of the world is pumping,” says Saleem. “It is going to finish – and we will not have got our share of the catch.”
On this, Solah agrees.
“If the Indian Ocean fisheries collapse, the European, Japanese, Chinese and Iranian vessels can go to other oceans. But what can we do? This is the only industry we know. We have to negotiate and beg other countries to please stop, because this is killing us.”
Renowned Qari (Quran reciter) Hussain Thaufeeq has been charged with possession of pornographic material by the Prosecutor General’s Office, on top of multiple counts of child molestation.
The Criminal Court held the first hearing of the pornography charges this morning.
Deputy Prosecutor General Hussain Shameem confirmed to Minivan News today that additional charges had been pressed against the famed teacher.
“Police discovered [the pornographic material] on his computer,” he said.
Qari Thaufeeq, widely considered to be the best Quran reciter in the Maldives, was arrested in August last year on allegations of sexually abusing a number of under-aged girls.
Police Sub-Inspector Ahmed Shiyam told Minivan News at the time that Thaufeeq was arrested in connection with “many” child sex offences against girls, “some cases going back a long time.”
Prior to his arrest, Thaufeeq hosted a daily Quran teaching programme with school children on state television every night after Maghrib prayers. He also led Friday prayers and conducted religious sermons.
Under the Child Sex Offenders (Special Provisions) Act of 2009, the penalty for child sex abuse is 10-14 years but can be extended to 15-18 years if the accused was in a position of trust with the children he allegedly abused.
In child sex abuse cases, the court usually exercises its authority to conduct closed hearings, excluding journalists and the public from observing the trial.
While the Criminal Court initially extended Thaufeeq’s detention in police custody to 15 days following his arrest on August 17, 2010, the court later transferred to the Qari to house arrest.
Thaufeeq was also sacked from his post at the Centre for the Holy Quran by the Islamic Ministry after it received reports of misconduct.
The government’s decision to offer 15 percent of its shareholdings in local telecom giant Dhiraagu for sale to the general public is intended to benefit foreign parties, the incipient Progressive Party of Maldives (PPM) alleged today.
At a press conference this afternoon, PPM Spokesperson MP Ahmed Mahlouf claimed that the party has learned through “inside information” that the government planned to sell a large portion of the shares up for sale through the Initial Public Offering (IPO) to British company Cable & Wireless, which currently owns the majority stake of Dhiraagu.
The government sold seven percent of its shareholding in Dhiraagu to Cable & Wireless in 2009 for US$40 million.
“While claiming to sell 15 percent to Maldivian citizens what they’re doing now is selling shares to Cable & Wireless again,” Mahlouf said. “We received inside information long ago that a large part of that 15 percent is going to be bought by Cable & Wireless.”
The MP for Galolhu South expressed concern with the shares being open for purchase by both foreigners and international companies.
He added that the Maldivian people would have to face “the bitter consequences” of the Maldivian Democratic Party (MDP) government “selling off state assets built up by the former government through a lot of hard work.”
Economic Development Minister Mahmoud Razi however dismissed the allegations as completely unfounded.
“Why would we register with the CMDA (capital market development authority) and go for an international public offering if we wanted to do that?” he asked. “We’ve already sold them the majority stake.”
If the government wished to sell shares to C&W, he added, there would be “no need of a charade.”
In a press release issued after a ceremony to launch the IPO this week, Dhiraagu stated that 11,400,000 ordinary shares having a nominal value of Rf2.50 each at the offer price of Rf80 per share would be made available to the public.
The subscription period will open on October 25 and close on November 30. Formed in 1988 as a joint venture between the government and Cable & Wireless, Dhiraagu has since invested US$155 million in developing its network and operations within the Maldives. The company employs more than 600 people, 99 per cent of whom are Maldivians.
Speaking at the IPO launching ceremony Tuesday night after releasing the Dhiraagu prospectus, President Mohamed Nasheed said the government’s aim was to divest its remaining 33 percent to the public at a later date.
The MDP government’s policy was to ensure that the government would no longer be involved in business, said Nasheed, reiterating the government’s commitment to free market principles and economic liberalisation.
“The government is very much certain that profits increase manifold when the government is not involved [in doing business],” he said. “This became most clear when the airport was privatised. Did you know that before [Indian infrastructure giant] GMR took over [management of] the airport, in the year that the government received the highest amount from the airport company to the state budget, it was Rf100 million (US$6.4 million). Usually it is Rf75 million (US$4.8 million). This year the government will receive Rf600 million (US$39 million).”
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