Tag: maldives

State guarantee for GMR to obtain bank loans had no limits: Attorney General

Attorney General (AG) Azima Shukoor has claimed that a loan guarantee provided by the former government to infrastructure group GMR would have allowed the company to obtain finance without limitation.

According to local media, the attorney general has alleged that such a loan agreement would have contravened the country’s financial regulations unless approved by parliament at the time.

However, her claims have been dismissed by former Attorney General Ahmed Ali Sawad, who claimed that the agreement was conducted within state laws.  Sawad helped oversee the agreement between GMR and former President Mohamed Nasheed’s government back in 2010.

GMR’s concession agreement was terminated by the Maldives government  late last month after it decided – citing legal advice – that the sovereign contract was invalid from the outset.

Speaking to Parliament’s Public Accounts Committee yesterday (December 19), Shukoor revealed that the Maldivian state had agreed under the cancelled contract to act as a guarantor for all loans obtained by GMR under its agreement to develop Ibrahim Nasir International Airport (INIA).

According to the attorney general, this provision had been approved despite not being part of any senior finance agreement.

Shukoor added that under the primary agreement between the state-owned Maldives Airports Company Limited (MACL) and GMR, should MACL fail to make any repayments, the Maldivian state would have to cover any resulting costs.

“[The state] is not part of the senior agreement, thus to act as guarantor for loans obtained by another group – whether this was done with approval or not – would be to give a ‘blanket’ guarantee. I don’t think this can be permitted. I don’t believe that even the Public Accounts Committee would do that,” local media reported Shukoor as saying.

The agreement, which states that the Maldivian government is responsible for all loans obtained by GMR, was made with the approval of former Attorney General Sawad, Shukoor said.

According to Shukoor, Sawad had permitted the agreement in writing, concluding at the time that the deal would not result in any legal problems.

She also claimed that approving the agreement without parliament’s approval was in violation of the Finance Act.

“Financial guarantees given by the state should have limits. We are signing an agreement allowing future groups to obtain as much money as they want under our guarantee – I don’t believe that this is a valid legal concept,” Shukoor was reported to have said.

Responding to Shukoor’s comments, Sawad today told Minivan News that he “did not believe” there had been a violation of any law whilst he held the position of attorney general.

“I deny her claims, although I’m not actually sure what her claim is. I don’t think she knows what her claim is,” he said.

“She [Shukoor] needs to figure out if it was a guarantee or not a guarantee, because in the meeting she said that it ‘was a guarantee’ and then said that it was like a guarantee’.  Regardless of whether or not it was a guarantee, the whole thing is irrelevant as she has stated the GMR contract is void ab initio (invalid from the outset),” Sawad claimed.

GMR’s tender agreement to develop INIA was overseen at the time by legal and financial experts including the International Finance Corporation (IFC) – a World Bank entity.  The deal also obtained the certified approval of former Attorney General Sawad.

Attorney General Shukoor was not responding to calls from Minivan News at time of press.

Speaking to the committee yesterday, local media reported Shukoor as stating that Singapore’s Axis bank had permitted GMR to obtain loans worth $386 million, of which GMR had taken $165 million. Shukoor highlighted that should GMR fail to repay this loan, then the government would have been required to meet any resulting costs.

She stated that if the government found itself unable to pay back these loans, the image of the state will be damaged, leading to potential implications for securing future finance.

“When we think about taking legal action in relation to this matter, we see that the head state prosecutor has advised that signing that agreement should not cause any legal problems. So it becomes something the state has to honour,” she added.

Despite the former Attorney General approving the agreement, Shukoor stated that government has a strong legal argument over the loan issue, whereby under the Public Finance Act, the government cannot act as a guarantor without the parliament’s approval, which was allegedly not obtained.

“The State is acting as the guarantor to the loans taken based on the transactions between GMR and Axis Bank. I believe that is not something permitted under the Finance Act. It is like a blanket sovereign guarantee. We may not be able to classify it as a sovereign guarantee. But we are seeing an assurance given by the State,” Shukoor was quoted as saying by local newspaper Haveeru.

GMR bid qualification

Meanwhile, Chief Financial Officer (CFO) of GMR Airports Sidharath Kapur today rejected comments made by President’s Office Spokesperson Masood Imad in Indian media alleging that the company did not originally qualify as a bidder to develop INIA in a technical evaluation process.

Masood was quoted in the Business Today publication as claiming that the technical evaluation committee during the bidding process acted under pressure from former President Mohamed Nasheed, who then qualified the GMR Group for the project.

In response, Kapur said that the company had won the project in an “open and transparent” bidding process, stating that GMR had qualified in the technical, financial and legal evaluations.

Kapur noted that the bidding process was supervised by the International Finance Corporation (IFC), and that the IFC had successfully handled such public-private partnerships in the airport sector in many countries.

“While other bidders opted for the ‘earn and pay’ route, the GMR consortium adopted a ‘pay and earn’ strategy, and hence paid $78 million up front to the Government of Maldives,” he added.

Kapur also attacked the present government’s handling of the GMR issue, alleging that the resulting arbitration case to decide on compensation owed to the company from the contract cancellation could have serious financial ramifications for the nation.

“Compensation believed owed to GMR due to the illegitimate cancellation of the contract by the government of Maldives may put a significant and avoidable financial burden on the people of Maldives,” he stressed to Business Today.

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Decision to halt live programme not politically motivated, state broadcaster claims

The Chief Operating Officer (COO) of state broadcaster Television Maldives (TVM) Mohamed ‘Mondhu’ Asif has said that yesterday’s decision (December 19) to cease transmission of the live show ‘Thafaas’ was not politically motivated.

Speaking to Minivan News Today, Asif dismissed allegations circulating on social media alleging that the programme was halted following a direct order from Dr President Mohamed Waheed Hassan, claiming the decision was taken over a violation of “editorial policy”.

“I can confirm you that no order was sent from either President Waheed or any governmental authority. We are now an independent television station as under the Maldives Broadcasting Corporation Act,” he said.

Asif admitted that the programme had been halted during a live telecast, but claimed the decision was made over concerns that the show’s content had violated the station’s editorial policy.

“We had done that previously as well. As a principle, in a live television programme, if [the show’s content] violates the editorial policy set out by the company, we would usually halt the telecast of that programme,” he explained.

Asked if any action may be taken against members of staff over the issue, Asif explained that TVM had only decided to halt the yesterday’s live broadcast at present. He added that TVM management would need to assess in future how guests were briefed over what they could and could not speak about on the state broadcaster.

During the terminated broadcast, Feydhoo constituency MP Alhan Fahmy and Progressive Party of Maldives (PPM) council member and a local lawyer Ibrahim ‘Wadde’ Waheed had been invited to reportedly discuss current parliamentary issues.

Twitter response

Despite Asif’s claims that the show was taken off air in line with concerns over editorial policy, the host of the ‘Thafaas’ show, Ali Shamin, yesterday used his personal twitter account tweeted to claim – “I’m done with this, it’s all politics,”.

One of the guests, MP Alhan Fahmy responded to the tweet urging Shamin to “make it clear” for the public about what happened.

“[Please] make it clear to the public. [People] need to know what happened! [Don’t] worry about the job,” read MP Fahmy’s twitter response to Shamin’s tweet.

Speaking to Minivan News, Communications and Advocacy Manager of local NGO Transparency Maldives, Aiman Rasheed Ibrahim said that the NGO had noticed that “an incumbent government had always had the opportunity to unduly influence the content of the state media [in the country]”.

Transparency Maldives had previously conducted a media monitoring programme back in 2011.

“Perhaps the new legislation may mean state influence may not be as extreme as was the case prior to the ratification of the legislation, but the ground reality is that an incumbent government has always had the opportunity to unduly influence the content of the state media,” Rasheed suggested.

When contacted by Minivan News today MP Alhan Fahmy said that he was very busy and had already given information about the matter to private broadcaster Raajje TV.

The MBC has been previously involved in a protracted legal battle against former President Mohamed Nasheed’s administration over whether the executive – via the Maldives National Broadcasting Corporation (MNBC) – or parliament should have responsibility for overseeing state media.

The MNBC was established by Nasheed to run the state media, removing its employees from the jurisdiction of the Civil Service Commission (CSC). In 2010, the then-opposition majority parliament created MBC and demanded the transfer of MNBC’s assets to the new body, which Nasheed’s government refused to do, alleging political partiality on behalf of the MBC board.

Following the controversial transfer of power that saw President Mohamed Waheed Hassan take office in February, MBC was granted control of the state broadcaster.  On February 7, the channel – then called MNBC one – was renamed TVM.

Meanwhile, fellow state broadcaster Raajje Radio was re-branded as Voice of Maldives. TVM and Voice of Maldives were used as the names for the two channels during the autocratic 30-year rule of former President Maumoon Abdul Gayoom.

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MP Yameen accuses National Movement of damaging diplomatic relations with India

Progressive Party of Maldives (PPM) Parliamentary Group Leader Abdulla Yameen has said in local media that any damage to relations between India and the Maldives  is the result of the actions of the National Movement.

During an interview with private broadcaster DhiTV on Tuesday (December 18), Yameen claimed that the airport was not withdrawn from GMR due to the pressure of National Movement, which had strongly opposed the deal.

He added that the decision to void the airport development agreement was made by the coalition government after all parties backed the move, according to the Sun Online news service.

Yamin also alleged that during rallies held by the National Movement, some participants spoke in a tone about GMR and the airport development that might have caused diplomatic issues with India.

According to Sun Online, Yameen was also quoted as claiming that the ongoing protests and rallies being held by the National Movement were unnecessary.  He added that the Maldives might have to face difficulties due to the recent activities of the National Movement.

Earlier this week, National Movement steering committee member and Minister of State for Finance Abbas Adil Riza said efforts would be taken to “break up” parliament should its dispute with the Supreme Court continue.

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UK Foreign Office to “pressure” Maldives over tackling police abuse allegations: The Guardian

UK Parliamentary Under Secretary of State at the Foreign and Commonwealth Office (FCO) Alistair Burt is expected to “pressure” the Maldives government to tackle alleged abuses conducted by police during a visit to the country next month.

The UK-based Guardian newspaper reported today that Burt would be asking the government of President Dr Mohamed Waheed Hassan about efforts being undertaken to tackle “serious and persistent abuses” alleged to have been carried out by police – claims backed in reports on the country by a number of international NGOs.

These alleged abuses are reported to include: “attacks on opposition MPs, torture and mass detentions of democracy activists,” according to the paper.

President’s Office Media Secretary Masood Imad and Home Minister Dr Mohamed Jameel Ahmed were not responding to calls from Minivan News at the time of press concerning the upcoming UK FCO visit.

However, the government and police authorities in the Maldives have previously questioned findings by a number of international NGOs, accusing their individual authors of acting with bias in favour of former President Nasheed and the opposition Maldivian Democratic Party (MDP).

Police probe

Reports of Burt’s visit follow The Guardian reporting earlier this week that senior UK government figures were set to be questioned by politicians over the role of a Scottish police college in training Maldivian officers accused of perpetrating human rights abuses.

Police authorities in the Maldives contacted by Minivan News yesterday played down the abuse allegations raised by a number of NGOs such as Amnesty International, questioning possible bias in the data gathered in their reports.

Just last month, the circumstances behind the arrests of then Jumhoree Party (JP) MP Abdulla Jabir and Maldivian Democratic Party (MDP) MP Hamid Abdul Ghafoor for their alleged possession of alcohol had been labelled “very worrying” by delegates from the Inter-Parliamentary Union (IPU).

The comments were made following a a three-day mission to the Maldives over alleged human rights abuses.

Philippine Senator Francis Pangilinan from IPU’s Committee on Human Rights of Parliamentarians said at the time that circumstances surrounding the arrests of Jabir – now an MDP MP – and Ghafoor were concerning and that the delegation found it “difficult” to believe it was not politically-motivated.

Both Jabir and Ghafoor – along with eight others – were arrested on the island of Hodaidhoo in Haa Dhaal Atoll for the alleged possession of alcohol and drugs.

The arrests were made days prior to a vote on whether or not a no confidence motion against President Mohamed Waheed could be voted with a secret ballot.

Transfer of power

Since February’s controversial transfer of power that saw former President Mohamed Nasheed resigning from office follow a mutiny by sections of the country’s police and military – a decision he claimed was made under duress – several NGOs have published reports addressing concerns about police conduct in the Maldives.

Minivan News observed violent clashes between police officers and anti-government protesters directly following the change of government. On February 8, Minivan News journalists witnessed Specialist Operations (SO) officers specifically target certain MDP activists by chasing and beating them.

Anti-government protests have continued on and off throughout 2012 resulting in both local and international media coverage of alleged police brutality, attacks by protesters on police and reporters, numerous arrests and the occasional, almost playful stand-off.

Amidst this backdrop, several NGOs have released reports into alleged rights abuses conducted by police.  These reports include findings by the International Federation for Human Rights (FIDH) entitled “From Sunrise to Sunset: Maldives backtracking on democracy” and an Amnesty International publication entitled: “The Other side of Paradise: A Human Rights Crisis in the Maldives”.

FIDH noted in its findings that the government of President Waheed stood accused of a wide range of human right violations, including violent harassment of street protesters, torture and harassment of pro-opposition media as well as legal and physical harassment of the opposition.

“Practices to silence political dissent that had disappeared in the course of Nasheed’s presidency, have once again become prevalent under Mohamed Waheed’s presidency,” said FIDH at the time.

Meanwhile, Amnesty International’s report recommended that the Maldivian government “ensure prompt, independent, impartial and effective investigations into allegations of violence by officials.”

The NGO also called for the de-politicisation of the police, reform of the judiciary and enhanced training of security forces to meet with international standards of conduct.

Amnesty said that several of its human rights recommendations were reflected in the Commonwealth-backed Commission of National Inquiry’s (CNI) report which was released on August 30. The report concluded that President Waheed’s government had come to power legitimately and that there no evidence of any mutiny by the police and military.

Following the report’s publication, two international advisors to the Commission of National Inquiry (CNI) – Judicial Advisor Sir Bruce Robertson and Legal Advisor Professor John Packer – criticised what they believed was an “alarming level” of street demonstrating.

“Some would want to call [this] an example of the rights of freedom of expression and assembly. In reality it is rather more bully-boy tactics involving actual and threatened intimidation by a violent mob,” they stated at the time. “This perpetual behaviour is sapping public life and hindering the Maldives’ development as a modern democracy.”

However, the CNI’s findings did nonetheless highlight the need for institutional reform within the country focusing on areas such as law enforcement and the judiciary.

Earlier this month, the Commonwealth announced it would be working with the Maldivian government to push ahead with strengthening and reforming “key public institutions” – issues raised in the CNI report.  The Commonwealth also said that it was reiterating calls for “inclusive and credible” presidential elections to be held next year.

Report “bias”

Following the publication of Amnesty’s report in September, Home Minister Dr Mohamed Jameel Ahmed criticised Amnesty International for failing to seek comment from the government, accusing it of publishing a one-sided report.

Similar criticisms of the NGO were made by Commissioner of Police Abdulla Riyaz back in April.  He expressed disappointed with what he perceived had been Amnesty’s failure to ask the police for its comments before releasing a report based on its findings.

“I don’t see that there has been any investigations done, none of our officers was questioned, interviewed – neither by them nor by the Police Integrity Commission (PIC), nor by the Human Rights Commission (HRCM). I don’t think that’s fair,” said Riyaz.

Amnesty International had previously denied it has taken sides compiling its report on the Maldives.

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Tourism Ministry figures show year-on-year drop in November arrivals

Official Tourism Ministry figures have recorded a 3.7 percent drop in arrivals to the Maldives last month when compared to the same period last year.

It is the first time since May 2012 that monthly arrivals to the country have fallen on a year-on-year basis.

Despite the monthly decline, arrival numbers rose by 2.4 percent between January and November when compared to the same period in 2011.

The official figures indicate that as of November 2012, 866,310 tourists have arrived in the country over the last 11 months. By contrast, 845,732 arrivals were recorded visiting the Maldives between January and November in 2011.

Earlier this year, the Maldives Marketing and Public Relations Corporation (MMPRC) had set a target of attracting one million visitors to the country by the end of 2012.

According to the latest ministry figures, tourist arrivals during November from Britain fell 13.8 percent to 7,164, while Chinese visitors to the country rose 9.2 percent to 18,450 during the same month.  China has accounted for 24.7 percent of all tourist arrivals to the country during the year so far.

Visitors from Germany decreased 13.2 percent to 8,729 in November, while Italian arrivals decreased by 35.9 percent to 3,551 during the same month.

Promotion aims

The MMPRC had this year been allocated a budget of MVR 70 million (US$4.5 million) to conduct marketing activities for the year, almost double last year’s budget of US$2.3 million which saw the country receive 900,000 tourist arrivals.

Following February’s controversial transfer of power, the incoming government of President Dr Mohamed Waheed Hassan sought to utilise public relations groups and advertising to try and offset the impact of negative news headlines resulting from the controversial nature of the change in government.

This focus has included agreeing on a US$250,000 (MVR3.8million) advertising deal to promote the country’s tourism industry on the BBC through sponsorship of its weather services, as well as signing a £93,000 per month (US$150,000) contract with public relations group Ruder Finn to try and improve the country’s image internationally.

With these focuses in place, Maldives tourism authorities said back in October that they were confident the country could meet its one million visitor target, despite ongoing “political turmoil” in the Maldives over the last year.

Speaking to local media in the same month, Minister of Tourism, Arts and Culture Ahmed Adheeb Abdul Ghafoor said that should the Maldives achieve its aims of attracting one million visitors during 2012, it could be effectively seen as being equivalent to welcoming two million arrivals to the country.

Adheeb claimed this statement was made taking into account the challenges in overcoming the impact of “political turmoil” on the country’s reputation following February’s power transfer.

“We are closing in on that target with a lot of challenges. We are working with major obstacles due to the present crisis in the country,” Adheeb was quoted as saying at the time.

Adheeb and Deputy Tourism Minister Mohamed Maleeh Jamal were not responding to calls by Minivan News at the time of press.

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Two expatriates arrested in connection to murder of Bangladesh national

Police have arrested two Bangladeshi nationals in connection with the murder of a fellow expatriate whose body found was found in a building on Chandhanee Magu in Male’ last month.

During a press conference held today, Chief Inspector of Police Mohamed Dhaudh told local media that a Bangladeshi national identified as Moneerul Islam was believed to have been killed by 23-year-old Kamarul Islam, a close personal friend of the deceased who was said to have confessed to the murder.

A 34 year-old relation of the deceased, identified only as Abdulla, has also been arrested in connection to the murder.

Speaking to local media about the investigation, Chief Inspector Dhaudh said that the dead body of Moneerul Islam was discovered last month in the capital with stab wounds to the neck, chest and face.

Authorities told reporters that Moneerul Islam was last seen alive in the company of Kamarul Islam.

According to local media, a police investigation team was also reported to have obtained CCTV footage of the area where the body was discovered that appeared to show Kamarul Islam walking away from the crime scene following the murder.

Dhaudh said that Kamarul has now confessed to the murder and has told police the reason why he had killed Moneerul Islam after allegedly being asked to commit the crime by Abdulla.  Kamarul was arrested arrested while at his previous workplace at Dhangethi in Alifu Dhaalu Atoll, police added.

Police have said that Kamarul had confessed to having thrown the weapon he used to kill Moneerul Islam, as well as the clothes he was wearing at the time, into the sea near the T-Jetty area of Male.

Police said that a diving squad has since retrieved the weapon and the clothes.

Local media reported that police had confirmed during their investigations that there were a number of family and money issues between Muneerul Islam and Abdulla, who have been living in the Maldives since 2006.

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Parliament to vote on whether to halt Nexbis border control project

Parliament’s Finance Committee is to put the controversial issue of the Nexbis border control system (BCS) before parliament to vote on whether to halt use of the project.

The MVR500 million (US$39 million) project finally moved ahead this year after a series high-profile court battles and delays that led Malaysia-based Nexbis to last year threaten legal action against the Maldivian government should it incur losses for the work already done on the project.

However, the Malaysia-based mobile security provider has come under scrutiny by political parties who claim that the project is detrimental to the state, while the Anti-Corruption Committee (ACC) has continuously alleged of corruption in the bidding process.

Nexbis has continued to dismiss accusations of corruption within its deal with the Maldives government.

The vote has been scheduled after Parliament’s Finance Committee earlier this month also revealed that the Maldivian government had agreed to waive taxes for Nexbis.  The committee noted in a letter sent to President Dr Mohamed Waheed Hassan that there was a potential financial burden facing the state due to the BCS deal agreed with Nexbis.

Despite the allegations, the border control system is currently active at Ibrahim Nasir International Airport (INIA) after a Supreme Court ruling in early September favouring Nexbis ended almost two years of efforts by the ACC to block the project.

Speaking about the BSC project, Majlis Finance Committee member Ahmed Hamza said today he believed parliament would halt the project as “most members” were of the impression the contract is not financially beneficial to the country.

“The nature of the contract means that both the government and Maldivian people will suffer heavily from a financial point of view,” Hamza told Minivan News today.

In September, the ACC informed the committee that the deal would cost the Maldives MVR 2.5 billion (US$162 million) in potential lost revenue over the lifetime of the contract.

A member of Parliament’s Finance Committee member told local media yesterday (December 18) that the project is “laden with corruption allegations” and could have been carried out at a much lesser cost.

When asked if there was a sufficient system to take over from Nexbis, Hamza revealed today that there was a “worry” within the immigration department that their own system will not be sufficient.

Furthermore, Hamza stated that there is a “possibility” that human trafficking could increase should the Nexbis contract be cancelled, and to combat this parliament will need to provide a “sufficient solution to deal with these problems”.

Under the ‘build operate and transfer’ (BOT) agreement with Nexbis, the government is obliged to pay Nexbis US$2 for every foreign passenger processed and US$15 for every work permit for the 20 year lifespan of the contract. Nexbis remains responsible for the upgrading, servicing and administration of the system.

Former Immigration Controller Abdulla Shahid has expressed concern earlier this year over both the cost and necessity of the project, calculating that with continued growth in tourist numbers, Nexbis would be earning US$200 million in revenue over the 20 year lifespan of the agreement.

At five percent, royalties to the government would come to US$10 million, Shahid said, when there was little reason for the government not to be earning the revenue itself by operating a system given by a donor country.

“The option was there to establish the system for free,” stated ACC President Hassan Luthfee, revealing that the US government had offered a free system in 2009.

“Even the Indian government had offered to do it for free. On the other hand this could have been done for MVR2.3-2.5 million. So we can’t believe that this should be done at such a high cost,” Luthfee told the committee.

Minivan News today contacted Immigration Controller Dr Mohamed Ali over the developments regarding the BCS agreement with Nexbis.

“I am not aware of any recent decisions from the parliament over this matter,” Dr Ali claimed, before declining to comment further.

Back in July, Dr Ali claimed that with the Maldives having signed up to conventions pledging to try and more effectively combat Transnational Organised Crime like human trafficking, new systems were needed to help meet these aims.

“From our own experience, we have found people being trafficked back into the country even after they have previously been deported,” he claimed at the time. ”A system like this should put a stop to that.”

Minivan News was also awaiting a response from Nexbis at the time of press.

Nexbis has previously claimed that allegations of corruption in its deal with the government was “politically motivated” and had “wrought irreparable damage to its reputation and brand name.”

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MDP calls for release of Abdulla Jaavid

The Maldivian Democratic Party (MDP) has called for the release of its Chairperson ‘Reeko’ Moosa Manik’s son-in-law Abdulla Jaavid, who has been arrested in connection to the murder of MP Dr Afrasheem Ali earlier this year.

On Sunday (December 16) the High Court upheld a Criminal Court order to extend Javid’s detention claiming police had a phone call recording as evidence to support their accusation of his involvement in the murder.

The MDP accused the police of attempting to pin Afrasheem’s murder of MDP members instead of going after those guilty of the crime, a statement seen by local media has read.

The party further reportedly stated that police had detained two of its members Mariyam Naifa and Alli ‘Smith’ Hashim for an extended period of time before releasing them without any charges.

The statement, according to local media, read: “If someone is being detained on such allegations, there should be enough evidence to file charges. Smith was kept in detention until the Ungoofaaru by-election was over. He was released less than 24 hours after final voting results were announced. All these things show us that the police are trying to frame MDP for the murder of Dr Afrasheem.”

Police Commissioner Abdulla Riyaz, who earlier stated that the motive behind the murder was political, was also accused in the statement of not having any evidence to back up his claims.

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Parliamentary reaction mixed as Majlis committee cuts MVR2.4billion from state budget

Opposition and government-aligned parties have given mixed reactions to a decision by Parliament’s Budget Review Committee to enact an almost 15 percent reduction to state expenditure proposed for 2013.

The government-aligned Dhivehi Rayyithunge Party (DRP) has claimed that cutting the budget to MVR 14.5 billion from a proposed MVR 16.9 billion would impact the provision of government services and functioning of independent institutions at a vital time.

The DRP added nonetheless that it has yet to make a decision on supporting the cuts when the reviewed budget is put to a vote on the Majlis floor.

The opposition Maldivian Democratic Party (MDP) meanwhile contended that the cuts would be made to “unnecessary” recurrent expenditure, such as transportations costs for 30-strong government delegations on overseas trips, as well as over MVR 400 million in office furniture and stationary.

While also hitting out at the “lousy” promises made by President Dr Mohamed Waheed Hassan for allegedly unrealistic development projects, the former ruling party also stressed that existing wage bills were not expected to be affected by the proposed cuts.

The comments were made after parliament’s cross-party Budget Review Committee yesterday announced that it had trimmed the proposed annual budget budget to MVR 14.5 billion from the previous figure of MVR 16.9 billion.

The committee opted to make cuts to the budget based on recommendations from both the International Monetary Fund (IMF) and Maldives Monetary Authority (MMA) Governor Fazeel Najeeb to ensure more manageable expenditure next year.

A recent mission from the International Monetary Fund (IMF) had urged the government to implement a raft of measures to raise revenues, advising that strengthening government finances was “the most pressing macroeconomic priority for the Maldives.”

Some senior finance figures within the country have confirmed to Minivan News under condition of anonymity that the reductions made by the budget committee were an “encouraging” development in trying to manage state expenditure and that the proposals were likely to receive Majlis support.

However, DRP Deputy Leader and MP Dr Abdullah Mausoom has said that despite the party’s own concerns, it would wait for the government to decide whether it could function during 2013 with a reduced budget of MVR14.5 billion, before deciding whether to back the changes.

“We need to know whether the government thinks it can manage to function with this MVR 14.5 billion. If it can then we would have no problem,” he told Minivan News today.

Mausoom said that considering the cross-party composition of the Budget Review Committee that approved the cuts, support for the amendments in the People’s Majlis could prove likely.

“Debatable: Chucking 15 percent of Maldives budget is a deliberate attempt by MDP and PPM [government-aligned Progressive Party of Maldives] to ‘choke’ government and institutions in 2013,” Dr Mausoom tweeted yesterday.

Mausoom contended today that the “drastic” nature of the proposed reductions had raised concerns about whether funding would be distributed “fairly and equally”, as well as having a detrimental impact on the running of the state.

“It is a shame that such drastic reductions have been made. We have had a very different year [in 2012] to other years with the change of government. With 2013 set to be a presidential election year should the budget be squeezed as a result of political rivalry,” he stated.

Mausoom said that of noticeable concern was how the budget cuts may potentially impact the work of independent institutions that he said would be increasingly vital over the course of a contentious general election next year. He added that a wide number of independent institutions in the country had already gone on record to address concerns about how the present budget would impact on their operations.

According to Mausoom, the MVR 16.9 billion budget presented to the Majlis by Finance Minister Abdullah Jihad earlier this month was already providing the “bare minimum” of funding needed to operate the state.

“There is a risk that when you cut into flesh you will go too far and touch bone. This nearly 15 percent reduction will impact services and independent institutions, we have to hear from government if it can manage with such finances,” he said.

With the budget amended by the committee now awaiting parliamentary approval, Mausoom added that the party had already been in general support of proposed measures to raise revenue.

State salaries

Amongst legislation considered by parliament ahead of approving the budget for 2013 has been the passing of a bill on state wage policy that will create a National Pay Commission tasked with determining salaries and allowances for the public sector.

In July, the Finance Ministry instructed all government offices to reduce their budgets by 15 percent, with only 14 of 35 offices complying by the given deadline.

However, in the same month the Finance Ministry decided to reimburse civil servants for the amount deducted from their salaries in 2010 as part of the previous government’s austerity measures.

The deducted amounts, totalling MVR 443.7 million (US$28.8 million), were to be paid back in monthly instalments starting in July.

The original budget proposal also included salary increases for military and police officers as well as plans to hire 800 new officers for the security services.

Combined with the transfer of about 5,400 employees in the health sector to the civil service, some MPs this month estimated that the state wage bill would shoot up by 37 percent.

When questioned on the government’s decision to reimburse civil servants and increase military expenditure for the current budget, Dr Mausoom said it was important for the country to prioritise rule of law in the country and respect the role police and military played in society.

He claimed that the biggest challenge on the budget was in fact dealing with what he claimed was years economic mismanagement, particularly during the administration of former President Mohamed Nasheed and the Maldivian Democratic Party (MDP) over the last three years.

Mausoom added that Nasheed government’s attitude towards privatisation had not helped with state expenditure, accusing the previous administration of staffing private corporations with political appointees to give the false impression the state had trimmed civil service employment.

In light of this alleged financial mismanagement by the former government, Mausoom argued that while there was a need to further streamline state expenditure under the present government, such cuts should be made gradually rather than the drastic cuts he believed had been proposed by the Budget Review Committee.

However, MDP MP for Nolhivaram and fellow review committee member Mohamed ‘Colonel’ Nasheed said that the cuts would be made largely by reducing “unnecessary recurrent expenditures” within the budget.  As such, no civil service wages are expected to be touched by the cuts, he added.

Nasheed claimed that the committee had looked at specific areas of the budget where “fat” could be cut from state expenditure without directly impacting services.

“What we proposed was that there could be reductions to internal and external transport [for government employees],” he claimed. “We have big delegations going abroad at present. What we have called for is a 50 percent reduction of transport costs. It is not necessary to send 30 people abroad on trip. Five people could go for example.”

Another area Nasheed claimed cuts could be more easily made was in the purchase of new office furniture that could reduce spending by some MVR 451 million in line with the costs of supplies like stationary and paper. He claimed such expenses could be reduced through more effective online governance.

Cuts were also said to have to be made in the proposed provision of specific services to islands around the country, which Nasheed claimed had never been viable considering the current economic challenges facing the Maldives.

“The president has made many lousy promises on his tours of islands for developments that cannot be granted. We cannot work from a fantasy budget,”

Finance Minister Jihad, Economic Development Minister Ahmed Mohamed and head of the Parliamentary Financial Committee Ahmed Nazim were not responding to calls from Minivan News at the time of press.

Budget criticism

When delivered to the People’s Majlis earlier this month, the state budget for 2013 presented by Finance Minister Jihad came under heavy criticism from both opposition and government-aligned parties over the course of a 16-hour budget debate.

MP Ibrahim Mohamed Solih ‘Ibu’, MDP Parliamentary Group Leader contended at the time that the proposed budget could not be salvaged or improved through amendments.

Meanwhile, MP Abdulla Yameen, Parliamentary Group Leader of the Progressive Party of Maldives (PPM), said that the government’s objectives or policies could not be discerned from the proposed budget.

“These projects are very random or ad hoc. The government’s planning should be better than this,” he said.  Yameen was not today responding to calls.

While the debate over the budget regularly came to a halt due to frequent loss of quorum – most MPs complained of the lack of funds allocated for development projects in their constituencies. These projects included developments such as harbours, water and sanitation systems, additional classrooms and upgrades to health centres.

Earlier this month, State Minister for Environment and Energy Abdul Matheen Mohamed moved to play down reports that his department had slammed the proposed state budget for neglecting the “fundamental rights” of Maldivians, claiming there had been a “misunderstanding” with local media.

Environment Ministry Permanent Secretary Ahmed Saleem was quoted by the Sun Online news agency at the time as claiming that some 15 projects proposed by his department had been excluded from the budget. These projects were said to deal with issues including waste management, as well as supplying water and sewerage systems to more islands around the Maldives.

However, Matheen claimed that Saleem’s reported comments had been the result of a “misunderstanding” by its author.  He alleged that the journalist had focused on a few points of a long meeting with the committee.

Consolidation

Speaking to Minivan News earlier this week, Jihad reiterated that in trying to balance state spending with providing national developments, the government favoured a policy of population consolidation – relocating certain island populations to larger administrative areas.

He added that a strong focus had also been provided to amending revenue raising measures, while also trying to cut spending at government offices.

The Finance Ministry issued a circular at the beginning of the month to all government offices and state institutions with instructions to implement cost-cutting measures during the final month of the year that included cancelling all overseas trips.

However, Jihad maintained that the circular was not a long-term financial strategy, but rather a traditional measure imposed by the government during December.

“At the end of the year some offices have a habit of spending lavishly,” he said. “This is just a regular measure at this time of year to curb costs.”

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