MDP holds series of protests as Dr Waheed’s government marks two months in power

The Maldivian Democratic Party (MDP) held two protests on Saturday, continuing the party’s call for early elections and the resignation of President Mohamed Waheed Hassan.

Both protests began from ‘Usfasgandu’ behind Dharubaaruge, the party’s new protest hub following the government’s recent closure of the MDP’s permanent protest site near the tsunami  monument.

The first protest started at 5:30pm from Usfasgandu, and concluded at Sultan Park near the Islamic Centre at 6:30pm.

Former Education Minister Shifa Mohamed, former Home Minister Hassan Afeef and former National Security Advisor Ameen Faisal were seen in the frontline of the protests.

The protest was peaceful and there were no reports of police confrontations or arrests. However, angry protesters had some verbal arguments with the police.

The second protest started at around 10:00pm from Usfasgandu. The protesters marched their way from Sosun Magu, passing the parliament and towards President Waheed’s residence, Hilaaleege.

The protesters made their way in front of Dr Waheed’s residence at around 11:00pm.

Surprisingly, only a handful of Maldives National Defence Force (MNDF) officials were on guard at the time when protesters arrived.

Some of the protesters sat down in front of the presidential residence, and continued their call for resignation of President Waheed and his government, and called for early elections.

Spokesperson for Dr Waheed, Masood Imad, said the protesters called for President Waheed’s death, and accused the party of “inciting fear”.

MNDF officials later dispersed the crowds from the premises and closed routes leading towards Dr Waheed’s residence.

The protesters peacefully retreated several blocks and there were no reported confrontations.

After the MNDF had blocked all the routes to Dr Waheed’s residence, protesters headed towards current Defence Minister Mohamed Nazim’s residence.

The protesters gathered outside the minister’s residence and reiterated their calls for the “coup government” to step down and hold elections, and then headed towards artificial beach along Majeedee Magu.

During the protests, a recording of former president Mohamed Nasheed stating that MDP “would not sink” was played continuously, with crowds roaring in support every time the recording was played.

MDP’s women’s activist Aishath Aniya led the protests while former Ministers, Shifa Mohamed and Dr Musthafa Luthfy, and MDP MP Rugiyya Mohamed, were seen in the frontline of the protest.

The protests concluded back at Usfasgandu, and MP Rugiyya handed the MDP flag to its flagman at Usfasgandu.

Shifa addressed the crowds at Usfasgandu and said that the government needed to hear the people’s voice, and the call for early elections.

“Today marks two months after the democratically elected president was brought down by a coup. We will not stop until democracy is restored,” she said.

MP Rugiyya and Dr Luthfy also spoke to the protesters at Usfasgandu, and thanked them for their determination.

The protests ended with a prayer from Mohamed Hafiz, the head of MDP religious affairs council.

A police media official confirmed that there were no confrontations or arrests during the protests. The MDP is to hold another protest tonight.

The MDP has been holding series of demonstrations after the transfer of power that took place on February 7, claiming that the government was brought down illegally in a coup d’état led by rogue police and military personnel, and funded by several local resort owners with political interests.


MDP stages ‘simultaneous’ protests calling for early election

Maldivian Democratic Party (MDP) supporters last night staged simultaneous protests around the capital of Male’ calling for early elections and the resignation of President Mohamed Waheed Hassan.

The protesters had at first gathered  by the Justice Rally held near the Tsunami monument area, before later moving to different locations including the front of the residences of Parliamentary Speaker Abdullah Shahid and current Defence Minister Mohamed Nazim.

The protesters also chose to gather near Male’ City Council hall, which is close by to a residence of a senior police official.  Demonstrations were also said to have taken place in front of the home of the Progressive Party of the Maldives (PPM)’s Parliamentary Group Leader, Abdullah Yaameen Abdul Gayyoom.

Protesters who gathered up in front of Parliamentary Speaker Shahid’s residence claimed they were calling for him to not to let any “coup” leaders inside the parliament and not to corrupt the Majlis.

They also called the speaker not to obstruct a political solution and to find a way to hold an early election as soon as possible. There were reports of approximately 300 protesters gathering in front of the speaker’s home.

Meanwhile, protesters who gathered near the Male’ City Council hall called on the police to stop alleged brutality against ordinary people claiming the mandate of the police is to serve justly and not torture.

Protesters that gathered in front of Defense Minister Mohamed Nazim’s house, called for an impartial and independent investigation of the alleged “coup” that saw President Mohamed Nasheed “resign” from office.

Some of the protesters had also gathered in front of PPM’s parliamentary group leader Abdullah Yaameen’s residence calling for an investigation into an alleged US$800 million money laundering case in which Yaameen was implicated.

There were some verbal arguments between a group of around 10 to 15 people and protesters who had tried to obstruct the protests. However no violence reportedly took place.

Protesters travelling on motorbikes and about six pickups were witnessed riding around the city calling for early elections and the resignation of President Waheed.

Though there were no reports of serious violence or confrontations, PPM MP Dr Afrshim Ali’s car was allegedly attacked during the demonstrations.

Speaking to the local media, a police media official was quoted as saying that Afrashim reported a case to police stating that his car was attacked, an act he claimed was carried out by protesters during the course of last night’s protests.

According to local media, the unnamed police media official confirmed that the police was investigating the matter and so far nobody has been arrested.

Speaking to Minivan News, Police Media official Ahmed Shiyam said that there were complaints from the public that protests had caused some ‘disturbances’. He added that there had been reports of damage being done to both public and private property, including some police motorbikes.

Shiyam confirmed that the attack on Afrashim’s car was reported to police.

” We have got the report that MP Afrashim’s car was attacked. We will investigate all these reports and take the necessary action,” he said.

However,  MDP MP and spokesperson Imthiyaz Fahmy denied the allegations saying that individual involved in the protests did no such thing.

“We deny all those allegations. There are groups who commit such acts just to blame us. We have reason to believe these groups represent parties that support the Waheed government.” Fahmy claimed.


Economy’s pigeons come home to roost

The stated cause of the opposition-led protests in Male’ – the party claims the rallies are “youth led”, however opposition politicians are a leading fixture at the demonstrations – is the increase in the cost of living due to the government’s recent decision to implement a managed float of the rufiya, within a 20 percent band of the pegged rate of Rf 12.85.

An ongoing dollar shortage, reluctance of banks to exchange local currency, and a flourishing blackmarket that reached Rf 14.2-14.8 to the dollar, culminated in mid-April with the government finally acknowledging that the rufiya was overvalued – after a short-lived attempt to crack down on ‘illegal’ exchanges.

High demand immediately led to most banks and companies dealing in dollar commodities – such as airline ticketing agents – to immediately raise their rate of exchange to the maximum permitted rate Rf15.42.

With the Maldives almost totally reliant on outside imports, including fuel and basic staples such as rice, the government’s decision has effectively led to a 20 percent increase in the cost of living for most ordinary Maldivians.

Moreover the Maldivian economy is dependent on oil to such an extent that is spends a quarter of its GDP on it – US$245 million – the vast majority on marine diesel, making imported energy one of the single largest drains on the country’s economy.

Customs documents obtained by Minivan News in January showed that Maldives was spending almost US$100,000 more per day more on fossil fuels than it was in the summer of 2010. At that time, oil was US$86 a barrel. By the same calculations but with today’s oil price, the Maldives is paying an additional US$450,000 per day for oil compared to summer prices last year.

Amidst rising commodity costs and external pressures, the country’s insistence on maintaining a fixed rate while increasing government spending had late last year begun to affect shop shelves and raise the ire of the International Monetary Fund (IMF), which delayed the third tranche of its funding due to “significant policy slippages” concerning the government’s failure to curtail spending. That amount in itself was not substantial, but the IMF is used as a financial bell-weather by most major donors.

The government’s unwillingness to face the political difficulties inherent in its budget deficit of 21 percent – the legacy of a 400 percent increase in civil service expenditure since 2002 and a hot printing press – was compounded by the addition of an extra layer of local government added to the state payroll, and the country’s graduation from the UN’s ‘Least Developed Country’ status to ‘Middle Income’, and the loss of concessional credit and certain trade concessions.

In an article for Minivan News, Director of Structured Finance at the Royal Bank of Scotland Ali Imraan observed that ‘growth’ in the domestic economy had been driven by the public sector and “paid for by printing Maldivian rufiya and clever manoeuvres with T-Bills, which the government has used since 2009 to be able conveniently sidestep the charge of printing money. In simple terms: successive governments printed/created money to drive domestic economic growth.”

Imraan pressed for the Maldives to invest in private sector revenue growth “rather than building airports on every island”, and implement a progressive taxation system targeting high earners in the interest of income equality. He also urged the Majlis to uphold the constitutional stipulation whereby MPs – such as those with business interest in the tourism sector – removed themselves from voting on issue in which they had a vested interest, and further suggested that the government resolve the matter of stalled tourism developments “awarded to parties with no money or track record.”

“Moratoriums on lease payments or debt repayments may look innocuous enough, but they rob the country of vital growth opportunities and hence ultimately rob the people. We should not stand for it,” he said.

Imraan’s latter suggestion proved somewhat prescient when the Tourism Ministry renewed the lease for Hudhufushi in Lhaviyani Atoll, despite the resort island’s owner owing more than US$85 million in unpaid rent – most of it fines for non-payment.

The government’s decision to implement a managed float of the currency came as a least one local sales agent for international airlines operating in and out of the Maldives closed its doors to customers, blaming an inability to pay the airlines because of a lack of US dollars circulating within the economy.

Parallel economy

The Maldives’ profitable tourism industry is considered to be indirectly responsible for 70 percent of the country’s GDP, and certainly the vast majority of its foreign currency earnings.

However historically little of the industry’s financial success has reflected on the Maldives’ domestic economy, with the inflow of money limited to the flat rate bed tax, import duties and worker salaries – most of that in rufiya.

With the introduction this year of a 3.5 percent tourism goods and services tax, a business profit tax and a revision of the rents paid for resort islands, the government now has a number of economic levers it can pull to increase revenue in the future.

However it has struggled to explain that to people now paying 20 percent extra for basic commodities – an affront to the MDP’s pledge to reduce the cost of living – and seems have been caught unawares by this week’s populist protests.

Both factions of the opposition have meanwhile seized the political opportunity to take the focus off the party’s internal troubles, but have offered few alternatives beyond demanding the government “reduce commodity prices”.

“I believe a lot of people are very unhappy with rising prices. People are asking the government to bring down the prices,” opposition Dhivehi Rayyithunge Party spokesman Ibrahim ‘Mavota’ Shareef told Minivan News.

“It has been a sudden and tremendous jump and people were not prepared for it. This feeling is shared across party lines.”

Shareef accused the MDP of financial mismanagement and recklessly increasing spending, without investing “in productive resources that ensure future revenue for the country, and reducing expenditure in areas that do not affect the people – such as foreign missions.”

“They need not reduce the civil service, because these are the lowest paid government employees and reducing their numbers would have not tangible effect. But the top players in government – the political positions – and positions in the paper companies created by the government are many areas [that can be reduced],” Shareef claimed.

“Before the tsunami the country’s finances were very well managed, and even after the tsunami, given the circumstances, they were well managed. Tourism infrastructure was damaged, islands needed reconstruction and in some cases resettlement. We had to spend a lot of money, and increased the budget from Rf4 billion to Rf5.5-6 billion. It was still a manageable level, and although it was not the best option we had no choice at the time,” he claimed.

The opposition – and the Civil Service Commission (CSC) – for much of last year opposed the reductions in the 21,000-strong civil service demanded by the IMF, with the issue becoming mired in the court system.

The opposition contested that it is unfair to reduce the number of civil servants while increasing the number of political appointees. While the government now has only 170 political appointees on its books, Shareef claimed “they do not show up on paper because of the paper companies the government created in the name of corporatisation to try and fool the International Monetary Fund and the World Bank. I don’t think a country of this size – 350,000 people – needs to have so many political appointees.”

The government has since changed tactics, offering incentives to civil servants as young as 18 to leave the state payroll.

Under the scheme, the application deadline for which was May 31, civil servants and government employees are eligible for one of four retirement incentive packages: no assistance, a one time payment of Rf 150,000 (US$11,700), a payment of Rf 150,000 and priority in the small and medium enterprises loan scheme (for those 18-50 years of age), or a lump sum of Rf 200,000 (US$15,600) and priority in government training and scholarship programmes (for those 18-40 years of age).

The move to incentivise the departure of civil servants is likely to draw further support from the IMF, which has finished its Article IV consultation and may be weighing up the provision of further support.

Meanwhile, the government is unable to respond to demands from the constituency to reduce commodity prices without explaining the complexities of the situation it finds itself in. Yet neither is it realistic “to pin our hopes on some sort of tourism growth bonanza in the short term,” wrote Imraan. “We might as well play the Euro lottery every week if this is the only plan.