Tag: mega projects

Chinese President Xi Jinping due to visit Maldives

Chinese President Xi Jinping is due to arrive in the Maldives on an official state visit next week in the first ever trip to the country by a Chinese head of state.

“During his stay in the Maldives, President Xi will be officially ‎meeting President [Abdulla] Yameen one-on-one,” the President’s Office revealed in a statement.

“The two leaders will chair official talks between high-level delegations of the respective countries.‎”

A number of bilateral agreements “on advancing developmental corporation in various identified ‎fields” would be signed during the visit, the President’s Office said.

“Furthermore, two development projects in the Maldives that are ‎funded by the Chinese Government and implemented by Chinese ‎corporations will also be launched jointly by the two presidents,” the statement added.

President Yameen extended an invitation to visit the Maldives to Xi Jinping during official talks held in Nanjing last month.

A 200-strong delegation, including representatives from major Chinese companies, is expected to accompany the Chinese president.

Speaking at a Progressive Party of Maldives event on Thursday, President Yameen reportedly said that the imminent visit of one of the most influential world leaders was an honour for the Maldives.

China was a global economic powerhouse with one of the fastest growing economies in the world, Yameen noted.

“[Xi Jinping] is beginning his Asian tour in the Maldives. He is arriving one month to the day after I returned to the Maldives after visiting China,” Yameen was quoted as saying by newspaper Haveeru.

“We will use the visit to bring development for the people. During the Chinese president’s visit, [he] will agree to do many things for the Maldives.”

China bridge

Upon returning from a visit to China last month, Yameen said the Chinese government has pledged assistance in building a bridge connecting the capital Malé and Hulhumalé.

According to the President’s Office, President Yameen expressed his desire for the bridge to be known as the ‘China Bridge’ “to symbolise the friendly ties between the two countries” during a meeting with Xi Jinping.

Speaking to the press, Yameen revealed that the Chinese president recommended forming a high-level China-Maldives joint commission to oversee the project.

The Chinese president was also briefed about other ‘mega projects’ the government plans to commence, Yameen said, adding that “major Chinese contractors” would undertake the projects.

The Chinese government could ensure that loan facilities sought from the Chinese EXIM bank would be provided at a very low interest rate, he explained.

Meetings also took place between the Maldivian delegation and “large Chinese civil works companies,” Yameen noted.

Based on assurances from Xi Jinping, Yameen expressed confidence of receiving significant assistance from the Chinese government for the bridge project.

The Chinese government also provided MVR250 million (US$16 million) as grant aid during the president’s trip.

Discussions also focused on “important matters for China in international diplomacy,” Yameen revealed, referring to the the Chinese ‘New Silk Road’ project, which he said was intended to foster economic relations and increase trade between China and Asia-Pacific nations.

“We requested participation in the Silk Road initiative and were immediately welcomed,” he said.

Yameen said the Maldives would back China in the international arena as the two countries shared “the same principles on a number of issues, especially concerning the Indian Ocean region, human rights and many such matters.”

Asked if closer ties with China would adversely impact relations with India or Japan, Yameen said Sino-Maldives economic cooperation would not affect “the very friendly, close relations with India”.

“All these projects are also open to India and we are doing a lot of diplomatic work with India,” he said, referring to his administration’s decision not to sign a Status of Forces Agreement (SOFA) with the United States as an example of cooperation.

“No country has expressed concern so far and I don’t believe they will either,” he said.

Likes(0)Dislikes(0)

Political consensus necessary for success of SEZs, cautions MMA governor

Political consensus is necessary for special economic zones (SEZs) to be successful and beneficial to the nation, Maldives Monetary Authority (MMA) Governor Dr Azeema Adam has cautioned.

Speaking at a forum on state broadcaster Television Maldives (TVM) last night, Dr Azeema said one of the most important prerequisites for successful enactment of the SEZ Act was stability and consensus “on a political and national level.”

“If SEZ becomes caught up in political waves, it will not bear fruit,” she warned.

“Political confrontations must come to an end for investors to come to the country, to ensure investor confidence, and for jobs to be created for Maldivians.”

Political disputes should be resolved through “constructive, meaningful and academic debates,” she advised.

President Abdulla Yameen ratified the SEZ Act on Monday (September 1), which he has said would be a “landmark law” that would “transform” the economy through diversification and mitigate the reliance on the tourism industry.

The government has maintained that SEZs with relaxed regulations and tax concessions were necessary to attract foreign investors and launch ‘mega projects’ for economic diversification.

Opposition leader Mohamed Nasheed has, however, dismissed SEZs and the touted mega projects as “castles in the air” whilst his Maldivian Democratic Party (MDP) warned that the law would pave the way for money laundering and other criminal enterprises, undermine local councils, and authorise the president to “openly sell off the country” without parliamentary oversight.

Longterm plan

Dr Azeema went on to stay that SEZs should create wealth and employment opportunities for Maldivians.

School leavers and university graduates should have the necessary skills when they enter the job market, she added, noting that a high employment rate was required for sustainable growth.

Citing International Labour Organisation (ILO) figures, Azeema said over 3,500 zones of varying sizes have been created in 130 countries.

“Economists agree that special economic zones play a very important role in the economic development of a country. It is known that at least 40 million people work in such zones,” she said.

Studies have shown that SEZs increase national productivity and income, she continued, and the zones contribute at least US$200 billion worth of exports worldwide.

However, she stressed that a longterm plan and strategies – which “should be transparent to investors and the public” – would be needed for SEZs to be successful.

While SEZs have been beneficial in some countries, “the results have not been so good” in others, she noted.

She added that SEZs in Singapore and China created in the 1960s and 1970s, respectively, took foresight and years to become successful.

Forum

At last night’s forum – organised jointly by the Maldives Broadcasting Corporation and the Maldives National University business school’s student association – MDP MP Fayyaz Ismail said large investments could not be secured while foreign businesses did not have confidence in the judiciary.

Fayyaz argued that the SEZ law lacked provisions for oversight and adequate legal protection for investors, relying solely on the benevolence and integrity of the government.

Tourism Minister Ahmed Adeeb – co-chair of the economic council – said the law was designed to attract investments beyond the ‘seaplane zone’ close to Malé’s international airport.

Under the existing tourism law, a flat rate of US$8 per square meter was charged for development of tourist resorts, Adeeb explained, which led to investors choosing uninhabited islands closer to the capital.

The SEZ Act combines the government’s policies on population consolidation and foreign investments to expand the economy and develop infrastructure in the north and south, Adeeb said.

Economic Development Minister Mohamed Saeed said SEZs were “tried and tested” in many countries, including small island states in the caribbean, which had a thriving banking sector.

“A zone is created to establish infrastructure that we don’t have through foreign funds,” he said.

Referring to the the iHavan transhipment port project, Saeed said the Maldives could capitalise on its strategic location and the “trillions of dollars” worth of trade that passes through the seven degree channel.

Saeed explained that the Ihavandhippolhu integrated development project would include offshore docking, bunkering facilities, an export processing zone, real estate businesses, and non-convention tourism facilities.

He noted that the development of Singapore’s port saw establishment of banks, a hotel industry, and other subsidiary services.

Adeeb stressed that the SEZ law allows the government to offer incentives and “for the first time” negotiate directly with investors, who preferred “a one-stop solution” for applications, permits and licenses.

While US$5 billion has been invested in tourism since 1972, Adeeb suggested that even if one project such as iHavan “takes off” with US$1.3 billion worth of investment, the economy would be transformed through multiplier effects.

Mohamed Ali Janah, former president of the Maldives Association of Construction Industry, meanwhile said emulation of the SEZ model implemented in the Caribbean and the ‘tiger’ economies of East Asia could take the Maldivian economy to “the next level”.

Likes(0)Dislikes(0)

China pledged assistance for bridge project, says President Yameen

The Chinese government has pledged assistance in building a bridge connecting the capital Malé and Hulhumalé, President Abdulla Yameen told the press last night upon returning from a visit to China.

“[Chinese President Xi Jinping] said let us form an economic council or committee. So we have come after determining representatives from our side on the joint committee,” Yameen told reporters at the airport.

Once the high-level joint commission is set up, Yameen said a feasibility study would be conducted with a team of Chinese engineers due to arrive this year.

The team would study the strength of ocean currents, he explained, which was necessary to determine the “strength of the structure” of the bridge as well as an estimated cost.

“When that is completed, the Chinese government informed us during the meetings that one of the contractors [that have expressed interest] would then begin work,” he said.

“So God willing, we hope work could begin very soon.”

The Chinese ambassador is due to arrive in the Maldives in a few days with a list of Chinese representatives on the joint commission, he revealed.

Yameen also said the likelihood of the bridge project being awarded to a Chinese company was “99 percent” and that “a large portion” of the project would be financed through free or concessional aid from China.

The Chinese president was meanwhile briefed about other ‘mega projects’ the government plans to commence, Yameen said, adding that “major Chinese contractors” would undertake the projects.

The Chinese government could ensure that loan facilities sought from the Chinese EXIM bank would be provided at a very low interest rate, he explained.

Meetings also took place between the Maldivian delegation and “large Chinese civil works companies,” Yameen noted.

Based on assurances from Xi Jinping, Yameen expressed confidence of receiving significant assistance from the Chinese government for the bridge project.

The Chinese government also provided MVR250 million (US$16 million) as grant aid during the president’s trip.

Diplomatic cooperation

Discussions also focused on “important matters for China in international diplomacy,” Yameen revealed, referring to the the Chinese ‘New Silk Road’ project, which he said was intended to foster economic relations and increase trade between China and Asia-Pacific nations.

“We requested participation in the Silk Road initiative and were immediately welcomed,” he said.

Yameen said he also invited the Chinese president to visit the Maldives for next year’s 50th anniversary of independence and Xi Jinping “promptly” accepted the invitation.

“So we believe [Sino-Maldives] relations are very good and [the Chinese government] was very well-prepared for our visit,” he added.

Yameen said the Maldives would back China in the international arena as the two countries shared “the same principles on a number of issues, especially concerning the Indian Ocean region, human rights and many such matters.”

He stressed, however, that the “main focus” of the discussions was the development projects envisioned by the government.

Asked if closer ties with China would adversely impact relations with India or Japan, Yameen said Sino-Maldives economic cooperation would not affect “the very friendly, close relations with India”.

“All these projects are also open to India and we are doing a lot of diplomatic work with India,” he said, referring to his administration’s decision not to sign a Status of Forces Agreement (SOFA) with the United States as an example of cooperation.

On relations with Japan, Yameen noted that a project for the construction of a new terminal at the Ibrahim Nasir International Airport (INIA) would be jointly undertaken by the Maldives Airports Company Ltd (MACL) and two Japanese companies.

“No country has expressed concern so far and I don’t believe they will either,” he said.

Likes(0)Dislikes(0)

MDP to protest against “dangerous” SEZ bill

The Maldivian Democratic Party (MDP) has declared its intention to protest against the governments flagship special economic zone (SEZ) legislation, warning that passing the bill would pose serious dangers to the Maldives.

“We note that the bill on special economic zones in its current form would allow the government to conduct transactions broadly with no transparency and no opportunity for oversight, as a result of which the possibility of losing the country’s independence and sovereignty would be high,” read a press release from the main opposition party yesterday.

The government, however, maintains that SEZs with relaxed regulations and tax incentives were necessary both for foreign investors to choose the Maldives over other developing nations and to launch ‘mega projects.’

The MDP noted that its lawmakers along with Jumhooree Party (JP) MPs boycotted the economic affairs committee yesterday – which was in the process of reviewing the draft legislation – in protest of procedural violations by the committee’s chair and “dictatorial” actions of pro-government MPs.

MDP and JP MPs also objected to the economic committee allegedly disregarding recommendations and commentary on the bill sent by various state institutions.

Reflecting its combined 48 seats in the 85-member house, the ruling Progressive Party of Maldives and coalition partner Maldives Development Alliance have voting majorities on key parliamentary oversight committees.

After walking out of a committee meeting yesterday, JP Leader Gasim Ibrahim warned that an SEZ law would facilitate massive corruption, threaten independence, and authorise a board formed by the president “to sell off the entire country in the name of economic zones.”

Incentives

The MDP press release warned that an SEZ law would allow the government to bypass local councils, declare any region an economic zone, and lease land for any period.

The law would undermine the Decentralisation Act and restrict the authority granted by the constitution for local councils to “raise funds,” “own property and incur liabilities,” the party contended.

Geographic areas declared an SEZ would be removed from the jurisdiction of local councils.

However, Tourism Minister Ahmed Adeeb told Minivan News in June that an SEZ law would encourage further development of tourism outside of the central atolls or the ‘sea plane zone’ – referring to the proximity from Malé’s international airport – and assured that councils would be consulted.

“I believe that by doing the SEZ Act, we will bring the investment to these regions and this is the real decentralisation of investments,” he said.

The MDP also expressed concern with the tax breaks offered to investors in SEZs, which it argued would limit opportunities for small and medium-sized enterprises.

Concessions in the current draft include tax exemptions and relaxed regulations for employing foreign labour.

Investors would be exempted from paying either import duties for capital goods or business profit tax, goods and services tax and withholding tax for a period of 10 years.

Regulations on foreign workers would be relaxed while companies with foreign shareholders would be allowed to purchase land without paying privatisation fees or sales tax.

Article 74 meanwhile allows up to 40 percent of any zone to be tourist-related development with tax and duty exemptions.

Moreover, private airports and seaports in the zones would be outside the jurisdiction of the Maldives Customs Service.

The enactment of an SEZ law would pave the way for “dangerous and serious crimes,” the MDP press statement continued, such as drug trafficking, money laundering, and human trafficking.

“Castles in the air”

Former President Mohamed Nasheed had dubbed the legislation the ‘Artur Brothers bill’, referring to an infamous pair of Armenians linked with money laundering and drug trafficking who made headlines last year after they were photographed with cabinet ministers.

Nasheed has also dismissed SEZs and the touted mega projects as “castles in the air.”

Referring to the opposition to his administration’s public-private partnership projects on religious and nationalistic grounds – with opposition parties accusing the government of “selling off state assets” – in a speech at an MDP event on Tuesday night (August 12), Nasheed argued that the current administration’s economic policies were far worse judging by their terms.

“There could be no bigger deception of the Maldivian people,” he said.

Nasheed also contended that Maldivian law would not be enforced in the SEZs, claiming that gambling would be allowed in the zones.

President Abdulla Yameen meanwhile insisted in a speech on Monday night (August 11) that foreign investments in the zones posed no threat to Islam or Maldivian sovereignty, assuring that the businesses would be fully subject to Maldivian law.

The government’s objective was “economic transformation” through diversification – to mitigate the reliance on the tourism industry – and shifting the economy from its “present production frontier” to a higher level, Yameen explained.

Yameen had declared in April that the SEZ bill would become “a landmark law” that would strengthen the country’s foreign investment regime.

Likes(0)Dislikes(0)