Comment: IMF stabilisation program threatened if Majlis ignores tax bills

The current majority of members in the Maldives Majlis have been cynically irresponsible in their handling of financial legislation.

Though they have found the energy to pass detailed amendments to the Finance Act which threatens to create administrative chaos and undermine the constitutional powers of the executive, they have ignored two tax bills – the Tourism Goods and Services Tax, and the Business Profits Tax.

These two bills are a vital part of the IMF program that stabilises the economy and keeps the country from bankruptcy.

The tax bills have been buried in the ‘Whole of Majlis’ committee for around a year, and it is obvious the members are not interested in passing them.

The sensational phone recordings released this week featured Majlis member Mohamed ‘Kutti’ Nasheed reading out a plan to ‘fast process’ the Financial Act Amendments bill and no-confidence motions, and  “cease all work on the tax bills submitted by the government to the Majlis”.

It is unlikely the IMF and international banking groups will tolerate this situation for much longer without a downgrading of the country’s credit rating, especially now the tax bills’ delay has become associated with high levels of corruption in the Majlis.

The IMF is not a benign charity. It is a hard-nosed organisation quite capable of taking action against countries that take its money and fail to keep their promises and obligations.

Unless a better taxation system is established in the Maldives, international bankers may pull the loan plug, and the public sector and lower income groups in the population will both experience job losses and extreme financial hardship.

The blame for this potential economic disaster will rest squarely on the Majlis members who the people elected in 2009.

The latest IMF report for Maldives criticises the high public sector wage bill that is “very high by international standards”, and the low tax rate for its tourism sector, which the IMF says “remains well below international standards”.

Maldives’ hotel tax rate is one of the world’s lowest, well behind India, Sri Lanka, Philippines, Indonesia, and other comparable tourist destinations such as Dominica, Fiji, Barbados, Mauritius, Costa Rica, Vanuatu, Bahamas, Seychelles, Tahiti, and Jamaica.

Most of the profits from the tourism sector go to wealthy men and families who are often members of the Majlis and/or owners of media companies. The dreaded word ‘tax’ is rarely heard in the political discussion programs that dominate Maldives’ radio and television. Print and internet website news organisations also avoid the subject of tax. Serious informative articles on economics and business are impossible to find.

Significant government tax revenues will undermine the present system of patronage and corruption that permeates Maldivian society. People’s loyalties would shift away from wealthy men towards the government, which will be able to provide pensions, subsidies, adequate salaries and health care. These are the foundations of a just and fair society.

The Majlis majority who are refusing to pass tax legislation are acting against the best interests of the people and threatening the independence and national security of the country.

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

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Comment: Thick as thieves

“Would a Rose by any other name still smell as sweet?” wrote Shakespeare. In the case of the Maldives People’s Majlis, call Rose what you like – she will still stink of corruption.

The ‘cash for votes’ scandal has gripped the nation ever since secret telephone recordings between opposition MPs were published on the Internet yesterday afternoon.

In one recording, the deputy speaker of the Majlis Ahmed Nazim discusses with Abdulla Yameen how Gasim Ibrahim took ‘Rose’ to Paradise Island Resort to finalise a Rf1 million deal.

“So Rose is joining Jumhooree [Gasim’s political party] now?” Yameen asks.

“No it’s not that….it is just for these matters,” assures Nazim, before explaining that ‘Maniku’ will complete the deal with Rose for a further Rf2 million. Nazim goes onto say that Gasim “has said everything will be OK… 100 percent and not to worry.”

In another recording, MP Mohamed ‘Kutti’ Nasheed says to Gasim, “I need some cash.”

“Yeah, OK,” replies Gasim before the two MPs discuss how the transaction will be completed.

In the third recording ‘Kutti’ Nasheed explains to Yameen and Nazim how he will “prevent the government from trying to do what it is doing” by moving motions of no-confidence against Finance minister Ali Hashim and Economic Affairs minister Maumood Razee. He reads out a plan to stop “all work on the tax bills submitted by the government to the Majlis.”

Rumours of corruption in the Majlis are nothing new, but never before have the sordid details of MP’s shenanigans been aired in such excruciating detail.

Last week, President Nasheed was being pilloried in sections of the media for being ‘dictatorial,’ following the arrest of Yameen and Gasim for alleged corruption and bribery. Now, significant sections of the community seem keen to lock them up and throw away the key.

“Petty, cheap, revolting, nauseating” – “Have nothing to say except that…I am ashamed. How cheap are our parlimentarians?” – “Thick as thieves. Guilty as sin. Let them hang from the nearest coconut tree!” – a few readers’ comments from Minivan News’ coverage of the scandal.

While many Majlis watchers will not be surprised to hear the tapes involving Yameen, Nazim and Gasim, many people have been shocked to hear that ‘Kutti’ Nasheed is also implicated.

Kutti likes to present himself as an independent MP par excellence, a symbol of integrity who rises above the grubby day-to-day deals of the Majlis. No longer. He has been treating Gasim as his personal ATM. In return, he appears to be chief architect of plans to subvert the government’s tax and privatization initiatives, measures that could damage Gasim’s and Yameen’s extensive business interests.

In his personal blog, Kutti says he simply borrows money from Gasim from time to time and it has no influence on his voting in parliament. Few, if anyone, will believe his excuse.

So far, the corruption allegations appear concentrated on Yameen’s Peoples’ Alliance party, Gasim’s Jumhooree party, and their ‘independent’ supporters in the Majlis. Indeed, President Nasheed said yesterday that the speaker of the Majlis, DRP MP Abdulla Shahid, is “an honourable man.”

How far this scandal spreads is anyone’s guess, but it is likely to lead to both political and cultural change in the Maldives, as people recognise the real damage that corruption can bring to their institutions.

For centuries, Maldivians have pledged their loyalty to rich men, bodun, whose political power and status was measured by the number of their followers. These loyalties often spanned generations, and the practice of honouring the rich and seeking their ‘benevolence’ was deeply entrenched in the Maldivian psyche. The dictatorship and crony capitalism of the previous Gayoom government welded easily with this old cultural tradition. The democratic revolution of President Nasheed’s administration, and the President’s open condemnation of corruption, is demanding new loyalties to the rule of law, honest administration and institutions, and personal integrity.

It’s a painful process for the old cliques who profited so much and enjoyed high social standing, but a welcome change for the young Maldivian population who see an opportunity to compete and prosper without selling their loyalty and bowing to the bodun.

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

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Majlis members in voice recordings identified by Maldives media

The Maldives print, television and Internet media have identified the voices and names in three voice recordings made available on the Internet yesterday.

The voices were those of Kuludufushi-South MP Mohamed ‘Kutti’ Nasheed, Dhiggaru MP and Majlis deputy speaker Ahmed Nazim, Mulaku MP and leader of the People’s Alliance party Abdulla Yameen Abdul Gayoom, and Maamigili MP and Jumhooree party leader Gasim ‘Buruma’ Ibrahim, says the Maldives media.

Gasim Ibrahim is chairperson of the permanent Majlis committee for economic affairs, and chairperson of the Majlis sub-committee considering the Tourism Goods and Services bill and the Business Profit Tax bill. Abdulla Yameen Abdul Gayoom is the younger brother of former President Maumoon Abdul Gayoom and heads the permanent Majlis committee for national security. Both Gasim and Yameen were arrested and charged with bribery and treason last week.

Mohamed ‘Kutti’ Nasheed admits that he took part in the conversations in his personal Internet blog where he says a conversation he had with Gasim Ibrahim was not about raising money to bribe Majlis members.

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Maldives facing biggest challenge to its constitution: President Nasheed

Maldives is facing its biggest challenge in implementing the constitution, said President Nasheed in his weekly radio address, and “We should face this hurdle with aptitude, patience and wisdom.”

Referring to the circumstances surrounding the mass resignation of his cabinet on Tuesday, the president said they resigned in protest at the behaviour of members of the Majlis who they claimed were “hijacking” the powers of the executive and making it impossible for cabinet ministers to function.

The cabinet ministers alleged that MPs’ votes at the Majlis were influenced by bribery.

These allegations must be investigated, the president said, and an investigation was underway and people were being arrested.

The president said the constitution should be upheld to achieve the development the country wanted, and for the benefit of future generations.

Everything we do today to shape the future should depend on the lessons learnt from the history of this country, he said.

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New members for Presidential Commission investigating alleged embezzlement

The Presidential Commission established in 2009 to investigate alleged embezzlement of state funds and resources was reconstituted by President Nasheed yesterday.

The commission will now be chaired by Sarangu Adam Manik and Hussain Rasheed Ahmed. The other two members are Mohamed Aswan and Abdulla Haseen.

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Maldives heading towards military dictatorship: Yameen

The lack of ministers after their resignations, lack of consultations with the Majlis, and rule by the President, means that Maldives is heading to a military dictatorship, said People’s Alliance party leader Abdulla Yameen after police raided his house in connection with bribery and treason charges laid last week.

The charges against Yameen and Jumhooree Party leader Gasim Ibrahim followed a mass resignation of the ministers appointed by President Nasheed. They complained to the president that corruption and bribery in the Majlis meant they were unable to function.

Yameen also called for a referendum on President Nasheed’s leadership.

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Letter on recalling elected MPs

Dear Editor,

Should we have the right to recall Majlis Members? It can be done in other democracies, why not in the Maldives?

I believe it is time we change the electoral law to force MPs to seek votes of confidence through a constituency recall mechanism if they have been found guilty of unacceptable behaviour.

In the light of current political chaos and other ongoing outrages committed by Majlis Members, we should demand the right for voters to be given the power to sack MPs.

Please demand ”right to recall” legislation by signing a petition:
http://www.gopetition.co.uk/online/37519.html

Solah Rasheed

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Comment: From the perils of presidentialism to deliberative politics

The argument, which was most famously advanced by the political scientist Juan Linz, that presidentialism is more prone to executive-legislative deadlocks is by now well established. Deadlocks are bad because they can break down democracy as they did in Latin America.

In fact, when we contemplate on the political events unfolding over the past months, and more dramatically in the past few days, what we see is a textbook diagnosis and explanation of the ‘perils of presidentialism’.

With the parliament delaying crucial legislation such as tax bills which are necessary to ensure distributive social justice (and, of course, urged by the International Monetary Fund); consistently encroaching on the democratic mandate of the president such as messing up the decentralisation policies in president’s manifesto; blocking government administration through unwarranted no-confidence attempts; hampering government’s key policy programme of privatisation and public-private partnerships; and attempting to block a number of state welfare provisions, the country now is in a fierce executive-legislative conflict.

Again, the context for this gridlock is explained in political literature: a minority government, multipartism and poorly disciplined parliamentarians, and dual democratic legitimacy given to the president and the parliament.

Vain actions and reactions

The main recommendations from such comparative politics literature in the face of political impasse – such as shifting to a parliamentary or semi-presidential system and/or changing electoral rules to encourage a two-party system – seem to be difficult if not impossible in the short run.

No person in this country will be more frustrated than President Nasheed when his policy programmes get blocked or hampered. This frustration will be compounded in our competitive political environment, where public expectations are so high, when the country is in an austerity period, and while the imperative for delivery overshoots as the dates when voters can sanction politicians draw close.

As there is no easy mechanism (such as dissolving the parliament) to resolve such conflicts in presidentialism unlike parliamentarianism, the government has resorted to one of the few means left to a president in a deadlock situation.

The president had been resisting calls for arresting culprits responsible for past injustices citing good arguments such as an incompetent judiciary which itself is implicated in sustaining an autocracy. Tuesday’s arrests, however, I believe will only escalate the political rifts.

Gridlocks have often plagued crucial legislation in the US and continue to frustrate even President Obama, who has over 100 job nominations and crucial legislation yet to be even voted in the Congress. What Ted Kennedy called the ‘great unfinished business’ of health care reform – a basic ingredient of social justice – was repeatedly blocked in the US, which had led to thousands of unnecessary deaths in the most opulent nation on earth. In what has been one of the most serious deadlocks, the budget crisis of 1995 forced government agencies to shutdown when Clinton administration was a minority.

The Majlis has no doubt gone against the spirit of the constitution (for instance, delaying or passing legislation with implications for basic social and economic rights while wasting time and public money over petty business), but it is unconvincing to claim they have clearly contravened the letter of it.

It may be true that arresting two opposition MPs is not necessarily unwelcome based on ‘substance’ but was so based on ‘process’. While ‘substance’ does matter, ‘processes’ also matter because they contribute to the hard-won, delicate democratic and liberal legitimacy of the government.

The ‘great game of politics’, therefore, must be by the rules of the game.

Why and way forward?

While well-intended and solid policy programmes of the government are delayed and hampered, the idea I want to float is that a minority government too can mobilise the public sphere, and play the great game of politics within rule of law through deliberative politics.

That is, while deliberative democracy is usually justified on its potential for more just and legitimate policy-making, I want to conjecture that deliberative democracy can also have instrumental benefits for a minority government.

If one looks through all controversial policy changes of the government, one thing is unchanged: there is no effective pre-crisis public communication and deliberations programme.

From decentralisation to the alcohol regulation to Islam/Divehi teaching, and to airport privatisation – which otherwise are all solid and beneficial policies – the government did a miserable public communication and deliberations job, if any. Again, it is a ‘process’ failure that have led to ‘substance’ failures.

The meeting with the business sector stakeholders on airport privatisation, the press conferences, news releases, television programmes, and the photographs of the new airport all came too late and too inadequately. And even when all this came, the government appeared messy and contradictory. There was simply no pre-crisis public communication and deliberation programme in this.

Sceptics would say that this suggestion is utopian and politics is too power-ridden and unalterable to public opinion. I concede to an extent, but, as the most prominent proponent of deliberative democracy, Jürgen Habermas, argues in Popular Sovereignty as Procedure:

“[R]epresentatives normally do not want to expose themselves to the criticism of their voters. After all, voters can sanction their representatives at the next opportunity, but representatives do not have any comparable way of sanctioning voters.”

The wealthy politicians in the parliament can indeed publicly buy parliamentarians, but they too cannot publicly buy public opinion.

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

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‘Climategate’ scientist cleared by US university

American climate change scientist Michael Mann has been cleared of manipulating his research findings, reports ABC Australia.

The allegations caused an international furore and reinforced the stance of climate change deniers, after emails between Dr Mann and other scientists were taken from a computer at the University of East Anglia in Britain and posted anonymously on the internet.

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