Tag: minivan

The price of healthcare in the south

A team of retired Royal Air Force personnel are trying to raise money to help a small community in the Indian Ocean gain access to the vital healthcare they need to subsist. Inspired by this group’s determination to help this impoverished community in the Maldives – a land oft-associated with luxury – Donna Richardson travelled to the Addu region to uncover the real state of medical care on an island that used to enjoy free, first class medical care while the island was a Cold War staging post.

Because of its geography, it is easy to cover up the poverty-stricken side of the Maldives’s inhabited islands. The Maldives is seen as a luxury holiday resort destination, but in fact there is hardly a place where the contrasts between rich and poor are so pronounced. While millionaires sup their cocktails, the indigenous peoples barely scrape by on a dollar a day and many are priced out of the most basic medical care because of the rising cost of health.

The RAF have long left Addu Atoll (‘RAF Gan‘) in the Maldives where they were stationed during the 1970s, but for some servicemen such as Richard Houlston and Larry Dodds, Addu has remained close to his heart. Upon returning to the island during a memorial visit last March, he saw first hand how locals are suffering and denied access to even the most basic of medical care. He decided to see how he can help a community which he loves dearly. Along with a former colleague Phillip Small, they have been trying to establish a Gan Medical Fund to help to raise awareness of the issues the island faces, provide medical equipment, and eventually if there is enough funding when it takes off, to train the future generation of doctors.

When British Forces left the region, the hospital as well as the expertise and knowledge also vanished (allegedly the equipment all moved to Male), and with the establishment of a dictatorial government regime, Addu stepped ten steps back in terms of their medical facilities.

Based in the south of the country, Hithadhoo Regional Hospital (HRH) is the main public provincial health care facility providing curative public health services and is the only government hospital in the province. The hospital is located in the capital of the south atoll, in the furthest corner of Addu Atoll, and covers seven districts over two atolls. It serves 50,000 patients, including the inhabited islands of Hulhumeedhu and Fuvahmulah, but has only 50 beds.

Lack of funding, limited expertise and treatment for only those who can afford it – this is the picture of government health in Addu, but things are improving, according to the new director of the recently-formed Southern Healthcare Corporation Hussein Rasheed.

“The biggest challenges are most of all the lack of equipment, then patient load, then the quality of doctors, but we are changing things,” Hussein Rasheed said.

Now run under the 100 percent government-shared trust, the hospital also hopes to leverage revenue from the new national health insurance schemes to cover its costs and to help raise vital cash for the departments.

For some years now medical facilities for those living in Addu Atoll and its far-flung neighbour, Fuvahmulah, in Nyaviyani Atoll have been overstretched and in short supply. Many of the problems are hereditary. The aging 26-year-old hospital building is a relic of the Gayoom regime. It is in bad shape, with crumbling walls, unstable voltage, barely enough beds and no air-conditioning. Post operative patients swelter in temperatures akin to a sauna and the hospital is in desperate need of improvement. There are plans to build a new 100-bed hospital with a government loan and charity funding, but it will take a year to secure the funding and then to find a site.

Due to its previous funding constraints, HRH is currently understaffed and runs more like a general surgery practice found in most developed countries. Although it does have practically all the departments required to make it a hospital, most areas are understaffed and in need of vital equipment from donors and charities. As a public hospital it is appealing to charities and non governmental organisations to help it to serve its community and restore public confidence in its services.

At present there is still not enough basic equipment for the hospital to function. It was not even able to provide basic X-rays at the time we visited. Since the last one blew up due to faulty voltage in the building, a new X-ray machine was purchased but has stood in a box because of the risk of damaging the new equipment.

While HRH does have basic outpatient clinics including dental, ear nose and throat (ENT), gynecology, internal medicine, ophthalmology, orthopedics, paediatrics, reproductive health, diagnostics imaging services, and ultrasound scanning and physiotherapy services, there are not enough specialists to staff these departments or the right equipment to provide full services under these remits.

Previously most equipment was donated by NGOs and charities such as World Health Organisation, United Nations Children’s Fund, JICA and the Japanese as well as the Chinese and Australian governments. They have pledged to continue to work with the Ministry of Health and Family to procure equipment.

But the hospital urgently needs a CT scanner, MRI machine and incubators plus vital surgical instruments such a chest stapler and cannulas for performing tracheotomies. Each and every department needs more equipment.

Two rusty ambulances sit grounded on the parking lot. All gifted by various NGOs and nations, these vehicles need parts which are unavailable in the Maldives. One is a Japanese vehicle donated by the Japan Council of International Schools (JCIS) which requires expensive parts, and the other is a converted minibus with the seats relaxed to make room for stretchers.

Two more vehicles sit rusting in the garage. While these are in better shape they need parts and technicians to service them. The only functioning ambulance is an old ‘green goddess’ type vehicle gifted by the Australian government, which is used infrequently.

The Casualty and Accident and Emergency unit has just two beds. A serious road traffic victim was brought here just last week had to be transported to Male’ by Maldivian Air Taxi at his own cost. In cases such as this, if there are no seats, or medical insurance does not cover the patient, they simply cannot receive the vital care they need. It becomes a ‘pay and display’ system of healthcare.

Even the labour suite is ill-equipped for delivering babies. One small baby was fighting for his life in intensive care at the time of visiting. The infant’s parents said they could not afford the transportation to give birth in Male‘. The hospital urgently needs an incubator and does not even have a paediatric ventilator to aid distressed infants.

While the hospital does have an operating theatre with one operating room there are no specialist surgeons to perform vital operations and just two general surgeons.

Collectively this means that the hospital is unable to function to full capacity and the public is losing confidence in the medical care available in the atoll. While there is a surgical theatre, there are only two qualified general surgeons whose knowledge extends only to hernias and small operations.

These conditions and the need for basic equipment are urgent issues and the hospital is appealing for outside help and funding to solve these shortages.

A question of confidence

Another challenge the hospital faces isthe need to restore public confidence in its services. Facing huge waiting lists, patients with serious health conditions opt to travel to Male’ or India for treatment if they can afford it, and the hospital stays stuck in a rut. Yet these ‘health tourists’ face great perils amidst cases of organ trafficking and alleged substandard treatment in southern India.

A young girl from Hithadhoo told us how her family were forced to sell their car and personal possessions to pay for her mother to go to India for a leg operation. Her brother also has eye problems and needs to attend regular eye clinics, which the hospital does not yet have, although there are plans to introduce under the Madhana health scheme.

“My mother suffers from arthritis and rheumatism and needed to go to India for treatment,” she said.

“She was very ill and needed treatment and we have lost faith in the hospital here in Hithadhoo so we decided to go to India where the treatment is better value for money.”

Travelling for medical treatments is a costly business. Patients must pay for the airfare, accommodation and treatment, but people believe that the care they receive overseas is better and so the cycle of health tourism continues.

One of the ways that Hithadhoo Regional Hospital wants to counter this health tourism is to introduce ‘telemedicine’, whereby customers can be confident that their results will be seen by qualified medical specialists from around the world, and also to introduce visiting surgeons and hold specialist surgery days.

Rasheed admitted: “People are not happy with the level of care. Right now we don’t meet the basic requirements so many people decide to go to Male’ for treatment and when they don’t see any difference in services, they go to India.”

He warned of the dangers of travelling abroad to India for treatment. The practice of medical tourism there is not regulated and patients organise the travel plans themselves.

“While there are many good quality doctors in India, there are also huge problems with cheating in India, particularly in the south,” he said. “Someone recently went to India for surgery and ended up having a kidney removed. Health tourism is a very risky business,” he added.

Another patient told how his father in-law has been regularly travelling to India to receive palliative care for lung cancer. Put simply, there is no care of this type available in the Maldives.

Until now talk of cancer has been taboo, although cancer and heart disease are some of the biggest killers in the Maldives. But with no oncology or cardio department, or even an ECG machine, many people are forced to travel farther afield to receive treatment. In the past, limited information has been available about preventative measures so many people die earlier than they should.

There is no palliative care in the islands and only limited care for cancer patients even in Male’, and no facilities to perform open heart surgery or brain surgery.

Rasheed himself is interested in studying more about cancer and its causes to help to inspire health promotion campaigns and attract more doctors to the region.

In its favour, HRH does have an ISO-certified laboratory which is fairly advanced and offers some patient services including intensive care units and neonatal intensive care departments.

The hospital is also working on its health promotion,  including child immunisation and growth monitoring, vector control, food hygiene and sanitation, disease surveillances and epidemic control, family planning, sexual transmitted disease clinic and turboculosis and leprosy control.

The hospitals’ three-year plan includes building a new hospital within a year, improving services in all areas, focusing on preventative health and education and introducing exchange programmes for doctors to visit the hospital and to partner with the private hospital in the region.

Rasheed said he has removed some of the ‘dead wood’ and de-motivated staff from HRH and replaced them with more high-energy staff. He hopes to turn the hospital’s reputation around in three years.

“When I took over the hospital here, we inherited a bad system, de-motivated staff and dated equipment,” he said. “In the past the doctors here were neglecting the needs of the patients. They knew they could do operations, but they were so de-motivated that they decided they could not do it and on many occasions we sent patients away,” he revealed.

These conditions and the need for basic equipment are urgent issues and the hospital is appealing for outside help and funding to solve these shortages.

There is also a need to distribute medicines for psychiatric patients, improving antenatal care and introducing an electronic record keeping system. At present patients with mental health issues are being released into the community without proper care and attention.

In addition, some elderly patients who have been abandoned by their families have taken up residence in the hospital.

However, things are starting to improve at the hospital after a change of management. Over the last three months since taking over the hospital trust, Rasheed has been making major strategic changes. In part this is due to a government reorganisation, which has placed all Maldivian hospitals under a new structure – which will operate more like a business, taking fees and charges from patients covered by the health insurance system.

“In the last couple of months we have managed to improve the level of confidence – for example, allocated a special day for general surgery where we have seen a couple of hernia patients, and we have been getting some good feedback. News spreads through word of mouth here,” he added.

With a limited budget to hire qualified doctors, the hospital is considering hiring visiting practitioners and surgeons. They are also appealing for the humanitarian services of voluntary, retired or semi-retired surgeons and specialist doctors to spend some time at the hospital in exchange for free accommodation, air fare and a share of commission from the profits gained from the operations they perform.

In the last month, the hospital hired a new Maldivian surgeon, a former classmate of Rasheed, who has performed basic operations. Just the other week they performed two hernia operations and feedback from the local community has been quite positive, according to Rasheed.

The two surgeons, Dr Fuammi Moustaffa and Abdulla Adsa, admitted that they were limited to small cases because of lack of equipment. Their remit includes appendicitis, hernia operations, cyst and gall bladder removal.
“We want to do more, but we don’t have the equipment or the specialists to perform other operations,” admitted Dr Moustaffa.

In January, the Israeli Eyes from Zion charity visited the hospital and removed cataracts from patients. There are plans for more visiting practitioners over the next few months.

Due to increasing demand for tertiary services in the provinces, with more funding it is planned to develop a specialised service centre for trauma treatment and the development of their service portfolio, as well as to improve provision of quality health care services.

The areas that they want to focus on include advanced diagnostic services such as MRI, telemedicine and treatment of kidney/renal conditions (including dialysis services) and establishing a provincial Emergency Medical Service (EMS) to international standards.

The hospital needs full time paramedics, fully-fledged ambulances, development of intensive care services and the development of a provincial medical emergency coordination centre.

Meanwhile, there is a private hospital called IDMC (run by the Simdi group) aimed at paying customers and those under the Madhana health scheme, such as civil servants. This hospital, run by Mariyam Shakeela, a former Hithadhoo resident, aims to provide first class medical care, but also requires more doctors to propel it to national standards. The hospital is currently campaigning to become an NGO called the Hawwa Trust to help alleviate some of HRH’s problems.

Eventually, once the basics are in place, Addu wants to develop medical tourism to attract patients to the Maldives. But for now this ambitious plan is limited until they come up to scratch on the other areas which are seriously lacking.

Donna Richardson is a freelance travel writer based in the Maldives.

For more information on Hithadhoo Regional Hospital visit www.shsc.com.mv

Likes(0)Dislikes(0)

Fixed peg can only be maintain by no deficit monetisation: Lanka Business Online

The currency peg allowed the Maldives to have some of the highest living standards in South Asia by preventing excessive deficit spending, reports Lanka Business Online.

“Currency debasement and inflation are key to expanding the state at the expense of the larger society.

The Maldives also started active open market operations recently, ostensibly to mop up excess liquidity, but it can make it almost impossible to maintain a peg.

A well functioning open market operations system automatically sterilises interventions by a central bank (dollars sales by the monetary authority) with injections of local money forcing a balance of payments crisis, even in the absence of excessive deficit spending.

In 1997 many East Asian nations which had good fiscal management ran into currency crises due to sterilized interventions by central banks.

A fixed peg can only be maintained with unsterilized interventions and no deficit monetisation.

One of the triggers of Maldives current troubles was a large increase in the salaries of state workers. However the archipelago was also hit by a tsunami in 2004 and also suffered a downturn in tourism, a key source of state revenue, amid a global recession.”

Read more

Likes(0)Dislikes(0)

Air tickets rise in price as rufiya falls

Several air ticket agencies in Male’ have raised the price of tickets in response to the government’s decision to authorise the trade of dollars at up to Rf15.42.

Haveeru reported that Villa Travels, the local agent for Malaysia Airlines and Indian Airlines, had increased its dollar exchange rate to Rf15.42, increasing the cost of a Male-Trivandrum ticket by Rf740.16 (US$60).

Galaxy Enterprises, which sells Sri Lankan Airlines tickets, last week announced it was suspending sale of tickets because of the dollar shortage.

Mac Air Services, the agent for budget airline Mihin Lanka, told Haveeru that ticket prices would remain unchanged as they had not been based on the official exchange rate of Rf12.85.

Likes(0)Dislikes(0)

Nihan renews calls for Nasheed no-confidence motion as DRP factional strife intensifies

Dhivehi Rayyithunge Party (DRP) MP Ahmed Nihan renewed calls for a no-confidence motion against President Mohamed Nasheed, during a rally on Friday.

Nihan said the motion, which requires 25 signatures from MPs to be put before parliament and a two-third majority vote to be passed, was in response to an increase in problems such as gang violence and the dollar shortage.

“Galaxy Enterprises can no longer sell air tickets because of the dollar shortage, and I received at least 20 desperate calls last night from people needing medical treatment who are suddenly unable to travel to Colombo. The public is very unhappy,” Nihan said.

“I strongly believe the opposition should seriously consider this motion because the President is ignoring problems. There is inflation, and people are in a mess and getting reckless,” he said, claiming that Nasheed had been “lying to the country over the extent of the problem.”

The government, and the International Monetary Fund (IMF), have contended that a key contributor to the dollar shortage is the high spend on civil servant salaries in rufiya relative to its dollar income.

The government hopes a reform of the tax system, including a business profit tax and a tourism goods and services tax – delayed in parliament and passed only late last year – will eventually increase its income, but contests that political obstacles prevent it from reducing the size of the civil service.

Nihan acknowledged that while the civil service was “quite large”, blaming it for the dollar shortage was “just an excuse”.

“This country has survived for the last decade as a well-governed country. There was no problem getting dollars on this scale, only now due to mismanagement,” Nihan claimed.

He also acknowledged that even with 25 signatures, the no-confidence motion was unlikely to get the two-thirds majority required to oust Nasheed. It was, he claimed, an attempt “to get the President to take notice of the problems people are facing.”

The brief resignation of Nasheed’s cabinet in July 2010 was in part prompted by letters from six ruling party MPs who claimed they had been offered bribes by the opposition to vote against the party line. As the opposition parties already have a majority in parliament, this was widely interpreted as an attempt to secure a two-thirds majority to remove the President.

Nasheed promptly arrested the respective leaders of the minority opposition Jumhoree and People’s Alliance parties, businessman Gasim Ibrahim and the former President’s half brother Abdulla Yameen, and charged them with treason and bribery.

No charges stuck in court, and Nasheed was eventually pressured by the international community to release Yameen from his “protective” extrajudicial detention on the Presidential Retreat of on Aarah.

The possibility of the Dhivehi gaining a two-thirds majority is particularly unlikely given the recent fracturing of the party into factions loyal to either former President Maumoon Abdul Gayoom or the DRP’s leader Ahmed Thasmeen Ali. Gayoom had endorsed Thasmeen as his successor on his retirement from politics early last year, but cemented his disapproval of Thasmeen’s performance with an open letter faulting his leadership and particularly the party’s dismissal of Deputy leader Umar Naseer, ostentiously for conducting protests without party approval.

During a rally on Thursday, Thasmeen told the press that he could not stand aside and watch when the internal dispute has reached the point where “the people are not sure what the DRP is.”

“When a rally is announced, it’s not clear who is calling for it,” he said. “A person dismissed from the party is using the party’s logo and giving press conferences as the party’s deputy leader.”

As the factional strife has reached “the limit where we can’t remain without taking measures,” Thasmeen said he would bring the matter to the party’s council seeking a decision.

Meanwhile Riyaz Rasheed, the sole DQP MP in parliament, participated in the Gayoom faction rally for the first time, despite the recent coalition agreement between the Dhivehi Qaumee Party (DQP) and Thasmeen’s faction. The party’s existing coalition partner, Yameen’s PA, supports Gayoom.

At the Thasmeen faction rally at Immadhudheen School, speakers strongly criticised Umar Naseer for “disregarding the party’s charter.”

Leading the attack, Deputy Leader Ali Waheed argued that the opposing faction consisted of “presidential candidates who couldn’t get 3,000 votes (Umar) and leaders of parties with less than 3,000 people (Yameen),” and accused them of hijacking the DRP’s membership base.

“These people are holding rallies in DRP’s name because it has 40,000 members. Why won’t they hold a rally in their the name of their own party?”

The Gayoom faction was “obsessed with the DRP” because “when the time comes, it’s the DRP that has the ace of spades,” Waheed said.

“But what they don’t know is that we’re not playing cards,” said Waheed. “We’re playing joker. God willing, we will put down the joker and win the presidential election. When you’re playing joker, the ace of spades isn’t that important.”

Waheed argued that rallies held by Gayoom faction were “in truth Yameen Abdul Gayoom’s presidential campaign.”

Likes(0)Dislikes(0)

Q&A: CEO of Bank of Maldives, Peter Horton

The Bank of Maldives (BML) has appointed British national Peter Horton to the position of CEO, replacing Ganesan Subramanyam who left the country in May 2010 amidst an internal investigation concerning allegations of sexual assault. Minivan News spoke to Horton about the challenges facing the bank, its strengths and opportunities such as developing the Maldives as an offshore banking destination for nearby emerging economies such as India.

JJ Robinson: What was it about your professional background that makes you suitable for the role?

Peter Horton: The very long story is that I’ve been in banking since 1984, spending the first 15 years in the UK with Barclays (one of the UK’s four major banks). I then moved out to Africa with Barclays operating initially as a risk director for the business, at the time the most profitable part of their business. That was in Botswana.

From there I ran Barclay’s corporate turnaround teams for the whole of Africa, so I have huge experience dealing with distressed portfolios and problem lending. I lived in Nairobi (in Kenya) for three and a half years.

Afterwards I spent time building my own company in South Africa, before going back into banking in the Bahamas with a subsidiary of the Canadian Imperial Bank of Commerce, where I was in charge of corporate banking. If there is any theme in my career it is one of building strong teams and re-engineering teams and businesses internally and externally. In many ways I’m probably more equipped for this role with BML than I first realised.

JJ: What were your reasons for accepting the BML role, how did it come about, and why did you decide to come to the Maldives?

PH: At this particular stage of my career I was looking for the right step in terms of progression and development. This is my first CEO role, although not my first leadership role.

It really fulfilled a number of my requirements. Here is a business with challenges facing it, and a CEO role with some degree of autonomy, and just happens to be in the Maldives. I was happy to come here – although I have limited experience of Asia, my wife is from Indonesia.

I am very hungry to develop myself and I wanted a challenge. I also know that at my age it’s important to advance your career properly, and I never hide from challenges or taking responsibility for my actions.

The bank was looking through many channels to recruit and the role came to me through an HR consultant I was working with in the UK. He recommended it and the rest is history.

JJ: Did you hear anything about the fate of your predecessor?

PH: It’s fair to say is that Google is a very powerrful tool and I’ve seen a lot of things, some of which might be true and some might not. Obviously on arriving here it was very important to understand the history of the business. Certainly I’ve taken time to understand some of the challenges the business has had to face in the last few years.

My predecessor did go some way towards making changes in the business, and I needed to understand where it was going to. I’ve spent the first two months learning the recent and distant past.

JJ: What do you see as the key challenges BML is facing?

PH: I think many [challenges] will dovetail ino each other. We have a very public and a very high non-performing loan problem. Whereever you are in the world, that is an impediment to any bank’s performance, and it has a carrying cost. It also creates a certain mood around the business internally and externally.

The economy we are operating in creates a challenge. We like any bank in the Maldives are restricted by the size of our balance sheet and in respect of having a single borrower limit, and also crediential industry limits. Knowing that the bulk of the industry here is tourism, but also having a limit up to which we are not able to lend any more to tourism, becomes a constraint and a challenge.

I think the other challenge we face is around service. I think this business grew very rapidly, not just the loan base but in terms of customers, especially if you look at what BML was 10 years ago.

That goes some way to explaining why we have such big queues in the banking hall. When I came out for my interview I took the time to walk around Male’ several times – and go in very incognito to see the BML branch. I have to experience what the customer experiences , and I don’t think that experience is what any of us want.

So for me a challenge is to create a great customer experience. That is a challenge: serving the segments we have chosen to serve, but acknowledging some aspects in which we have to do better. Some of that is service, some of that is embracing new technology, other looking is at our processes. The customer base often grows faster than processes.

Those are the key challenges: a challenging and relatively flat economy – we haven’t even touched on the dollar shortage – a high level of non-performing loans, concentration of activity in the economy which is at odds with what any bank has to have for a balanced portfolio, and personal service issues.

JJ: What are some of the ways you are planning to address these challenges?

PH: Without sidestepping the question, I am at the point where I am formulating a bigger strategy for the bank and it is only correct that I speak to the board and engage them first.

What I can say is that every single one of those issues we can address, and we can deal with. None of the challenges I’ve outlined daunt me. What I do not want to do is to rush into inappropriate quick fixes. I want this business to be successful in a very sustainable way.

We can talk about the challenges, but also focus on the upsides of the business and start to capitalise on them better than we have been.

JJ: What are some of key areas of potential for BML?

PH: Some of this is again part of the strategy. But as to the strengths: we already have some great innovation within BML. We issue credit cards, debit cards, and have invested substantially to be a card acquirer serving domestic and resort communities. We have unparalleled reach in this country. We are in every atoll and do our best to reach clients even if we don’t have a branch near them. It might not be the best in some respects, but we are trying.

We bank more parts of the sector in this country than any other bank, and we have some outstanding talent within our business.

JJ: One of the perceptions here is that despite the resorts being a major part of the economy and certainly moving a lot of money around, they tend bank outside the country – either because of concerns relating to the stability of the Maldivian economy, dollar issues, or because they already have a head office based overseas somewhere like Singapore or Thailand. Is there an issue attracting these businesses to bank locally?

PH: Every international business is going to to an international treasury function. I’ve seen it in Africa and the Caribbean. They will move funds around as it suits them best, and it isn’t necessarily negative towards the Maldives. [A company] in Sydney might have an offshore unit in Singapore for tax reasons because that suits them better.

If we were able to provide an offshore banking alternative, it is not inconceivable that the Maldives would attract some of that global flow of cash by having a favourable tax jurisdiction here. It is certainly a big plus.

I think that’s always what you are up against in terms of flow of cash. Ways we can attract more dollar flow to stay here is  probably by lending more dollars to make it stay here. If I am lending in dollars I am making a dollar profit – that dollar profit stays here because we don’t have dividends going outside the country. If we’re able to address the balance sheet and dollar contraints we have, that to me would be a way to increase the level of dollars that stay in the country.

Merchant services is one aspect – whilst the dollars might flow out of the country, we do make a profit on it – a profit I can lend, because my profits stay here. Beyond that it is very difficult to dictate to people where their cash should and shouldn’t be, and the decsions are largely dictated by people outside the country anyway, at least for the international groups.

JJ: What were some aspects of the Bahamas’ approach in making itself a favourable tax environment for attracting offshore banking, and are they things that can be applied in the Maldives?

BH: Some of it is historic [in the Bahamas], and that can be an advantage and a disadvantage. It is a disadvantage because you get very staid in your ways and you don’t move as quickly as you should. But the advantage is that you build up in your economy local and imported people who are experts in these areas. The legal and accountancy professions are very experienced in the industry and there are lots of local staff who are qualified trust professionals.

But some of the things that are a real advantage – a colossal advantage – is the Bahamas’ geographic proximity to the US mainland. But if you look at the world’s emerging economies, which are moving West to East, our proximity to India and to a lesser extent Sri Lanka, and with direct flights to most South-East Asian cities, should be a huge advantage for us.

The majority of offshore banking centres do rely on imported people and instiutions. They are truly migratory these days. We are in a global economy now where things move overnight, so if you were able to do the things to attract people, it is very, very doable.

The other thing is having sufficient protection around the business – having a strong regulator, a strong legal system, and probably some degree of monetary protection. If a private bank is bringing dollars into the country, there needs to be some degree of certainty that the dollars can sit in the country quite safely. A lot of the things are already here, and not many things need to be done. There is certainly quite a lot of sophistication in the Monetary Authority, certainly the Maldives’ geographic location is a huge plus, and you already have a tax regime which is friendly to anybody, more or less.

It is doable, but it shouldn’t be considered easy. You also have to decide on a specialisation – if you look at the Carribbean, jurisdictions tend to specialise in one area so you have to pick what horse you’re going to ride as well.

JJ: The ongoing dollar shortage is now among the top issues everyday people in the Maldives are facing. What is your impression of the origins of the dollar shortage, how it can be addressed, and do you agree with the government that it is an internal problem, or is else a product of outside factors?

PH: I’ve only been here for seven weeks so it is difficult to say. A reality of the economy is that we are importing so very much, and we have so few dollar generating industries. In very simple terms, any downturn in the economy incur losses in the economy when turnover drops below break-even level. That is where we are as an economy – our revenue in dollar terms, in terms of the imports we require, is lagging.

We need to look at ways of keeping dollars in the country as much as possible. You touched on the fact that a number of entitites are taking money out of the country – and are free to do so without exchange control. I think we also need to look at other ways of enhancing dollar revenues through fresh or new industries – and I would include financial services among those industries.

It is also an impact of the global [economic recession], and there are only so many things the Maldives’ economy can do. I know too little of the history of the dollar shortage to know the precise causes of it, but I agree that it is a real challenge facing the whole country right now.

JJ: One of the perennial issues is that most of the banks impose a quota on the amount of dollars they exchange for rufiya every day. Obtaining those dollars seems to be an issue of personal connections at whatever bank you happen to bank at – an issue of who you know. Do you forsee a situation where there will be a free-flow of dollars in the near future? Or do you think it will get worse before it gets better?

PH: I can’t really say if it will get worse before it gets better. I don’t see it [improving] in the short-term without some form of intervention, and correction of what is a difficult day-to-day problem for us. I think it may be as good as it gets right now, and it will be something more than today’s economy that will be required to correct the issue. It is hard to say – it is not going to get much better.

JJ: How does the dollar shortage affect the banks? The government is struggling with the problem and people are quick to blame “greedy banks hoarding dollars”.

PH: As all banks do we have an assets and liabilities committee and that is a sign of a bank very actively managing its balance sheet and its liquidity. As with every bank right now, you have a number of calls on your dollars. You have dollar committments yourself – you may have intermediary credit lines, commitments on credit card settlements you have to meet. If you are issuing credit cards to people using them overseas, that is a cash cost to me. We also have committments to try and help our customers as best we can.

However the inflows of dollars we have are really only in two areas – one is acquiring credit cards, so all the dollars from tourists using credit cards come through our accounts and might not stay with us, but we do make some fee income on those [transactions], and the second area is our lending. Hopefully what we earn on our loan is more than we lend once we settle our funding cost. It is a daily job managing that liquidity. We don’t have the luxury of not being able to monitor it closely.

[The dollar shortage] is very challenging for us because we see customer needs we are unable to fulfill, whether it be the guy trying to get money for medical treatment or the trader trying to buy goods from overseas, and we just can’t provide it because we haven’t enough money. We are credentially holding sufficient dollars to cover our short, medium and long-term commitments – which we have to, and which will be our first priority always. However after fulfilling that requirement we not hoarding any dollars – we are doing our best to satisty as many people as fairly as possible.

The challenge for us is that as a bank for the masses that is a very broad spectrum of people – we try to devise systems that are even-handed and fair, but it is difficult to satisfy everybody.

JJ: What kind of impact does it have on foreign investment when you go to a bank and find a withdrawal limit on your account, or a set exchange you can do in a day?

PH: A lot of the foreign investors will almost see their investment as being in a different country [to the Maldives], because you have a domestic economy and an international economy here. The resort business, which is substantially where the international investors are coming from, has clear dollar flows, and no restrictions on funds being repatriated.

Those companies can only speak from their own personal experience, and their own personal experience is probably that they’ve never had a problem getting money out of the country when they’ve needed to, after they’ve fulfulled their obligations.

I think for those without dollar inflows, it is a challenge. Anybody doing due diligence in the country is probably going to look at that as an issue. It is less of an issue if you are in a dollar-dominated business – I’ve spoken to resort owners who have a problem paying their workers because they are trying to get cash from the bank. You could argue that’s a separate matter, but for the bulk of international investors it’s probably not an issue.

If I was coming in to invest in something that wasn’t exclusively earning dollars, then I would have a problem because any investment you make is on the basis of a dividend coming to you. If you can’t repatriate money – through a dividend or a head-office charge – then the uncertainly would make it a consideration for you. Whether it’s a deterrent depends on the potential profit and competitive advantage, and that might be big enough to mitigate those issues. But it is undoubtedly an issue for incoming investors.

JJ: The MMA has been quietly replicating a successful mobile banking system popularised in Kenya by Safaricom’s M-Pesa. What is the status of mobile banking here and what kind of impact do you think it could have?

PH: The first thing about M-Pesa is that it is a cellphone company initiative – Safaricom – as opposed to what MMA is looking at here, which is a bank-led initiative.

JJ: Didn’t Safaricom effectively become a bank?

PH: Yes, but interestingly – and I havent reasearched it enough – they are taking deposits, but are not registered as a bank. The way they get around it is by converting deposits to ‘mobile currency’ which has a 1:1 value with the local currency. They buy and sell that currency at time of deposit and withdrawal – a highly successful model.

Yes the MMA have been engaging with BML, I have reviewed some of the material, but I’ve asked MMA to share more information with me. We already have a mobile banking option as part of a suite of electronic banking options that we offer to our clients. I think the sentiments and objectives of the MMA are first-class, which is to reach the unbanked, or partially banked. We have been doing that as BML – we have branches in the atolls, and we have a dhoni going around the islands – I suppose having a floating bank really is mobile banking!

I think the whole area of using techonlogy to break down barriers is exciting and appropriate, however within that there are solutions that are not appropriate and there solutions that are appropritate.

What we have to do is be careful and not rush in because something looks wonderful but is not right. At this stage we have to tread carefully to make sure it is right for customers primarily, and commercially right for the bank. We cannot enter into things that are substantially loss-making to us, or substantially wrong for us in terms of the risks it exposes us to. Equally we wish to the serve the customers, that is something we can achieve.

I’m very mindful of the difficulties some people have banking with us right now – or in having access to banking at all. I do want to bridge that, and that is a mandate that is implicitly BML’s. Once you are a bank to the masses you are a bank to the masses for life; you can’t go backwards from that.

We are genuinely proud of that, but it is important to look at how we can do it efficiently, with good serivce, and as a cost to business. It should always be profitable – we are not here to be a charity.

JJ: How much autonomy does BML and the CEO’s position have? How far are you able to operate independently of the MMA or the government?

PH: We have a very active board, and it is a board with plenty of experience in many different directions. The relationship between the board and its sub-committees are excellent, and I don’t want autonomy that doesn’t have that. We have a very strong corporate goverance structure and I think that comes out of the previous areas of criticism of the bank, which have since been corrected. They are robust and they work.

We work with the regulator, and I haven’t seen anything that would stop us working as a commercial entitity. We are commercially focused and operate as a commercial entity. I have not sensed any politics in my time so far, in terms of the business.

We know we’re regulated and have a generally good relationship with the regulator. I’ve met with officials and they are doing their job properly and professionally. I don’t feel constrained, but neither do I feel I can run off and do crazy bad things. Which is how it should be – we are properly regulated and governed.

Likes(0)Dislikes(0)

Violent extremism “urgent challenge” in South Asia, says US Admiral Willard

Violent extremism is among the most pervasive and urgent challenges in South Asia, US Pacific Command Commander (USPACOM) Admiral Robert Willard has told the US Congress’s Armed Forces Committee.

“Violent extremism is associated with a wide-range of activities, which include supporting insurgencies that seek political autonomy and fomenting conflict between nuclear-armed India and Pakistan as a means of spreading radical Islamic ideology,” Zeenews reported Admiral Willard as saying.

The US was endeavouring to work with Nepal, Bangladesh, Sri Lanka, Maldives and India to particularly contain Lashkar-e-Taiba, a Pakistani-based extremist organisation responsible for the attacks on Mumbai.

“LeT involvement in the November 2008 attacks on Mumbai, India, validates India’s concerns regarding terrorist threats originating from outside India. Significantly, LeT deliberately targets westerners and specifically engages coalition forces in Afghanistan,” Willard said.

“Consequently, USPACOM continues to expand its relationships with host-nation militaries and CT agencies to increase regional capacities to counter this threat,” Willard said.

Likes(0)Dislikes(0)

Blackmarket dollar crackdown won’t address demand, warn businesses, financial experts

Police today launched a crackdown on the blackmarket trading of dollars after President Mohamed Nasheed last night declared he would “put a policeman behind every dollar”.

The Maldives has been suffering a crippling dollar shortage for over a year, with most banks in the country sporadically refusing to trade dollars at the official pegged rate of Rf12.85.

Maldivians travelling outside the country and expatriate workers seeking to export their remittances are forced to rely on the unofficial black market, which trades dollars at up to Rf14. Panicked text messages appealing for dollars are circulated whenever emergency medical treatment is required overseas.

Until now authorities have turned a blind eye to the practice, as even many sizeable local businesses have been forced to obtain dollars from unofficial avenues.

Launching the operation, police accused the Maldives Monetary Authority (MMA) of failing to address the problem of foreign currency dealers violating their licenses.

“It has been noticed that the MMA has yet failed to take action, despite the exchange of US dollars in violation of policies, in order to regulate the exchange of US dollars,” police said in a statement.

“Information received as of now reveals that the receipt and reports that should be sent to MMA have not been sent, according to the policies of the MMA in effect. We have also received information that unlicensed dealers are exchanging US dollars against the policies devised by the MMA,” police said.

The first arrest was made today, after a man was arrested in a shop on the tourist strip of Chandhanee Magu for exchanging dollars at higher than the pegged rate.

“The shop was not licensed to carry out transactions related to foreign currency exchange,” Sub-Inspector Ahmed Shiyam told newspaper Haveeru.

The government has levelled blame at MMA Governor Fazeel Najeeb, and called for parliament to dismiss him for failing to respond to the President’s requests for counsel.

A letter from the President requesting Fazeel’s dismissal was read out in parliament today and the matter was sent to the Public Accounts Committee, which will make a recommendation to the floor. Debate on the subject today included proposed limits on carrying foreign currency out of the country.

Earlier this month following initial calls for Fazeel’s dismissal, leader of the opposition-allied People’s Alliance (PA) Abdulla Yameen appeared on Villa TV to defend the MMA governor, insisting that the dollar shortage was not reasonable grounds to dismiss Najeeb.

“The MMA is not responsible for solving the problem of the decreasing amount of dollars coming into Maldives,” he said. “The MMA has to maintain the value of dollars and rufiya… if there is a dollar shortage, what the MMA can do is use their open market operations to borrow from commercial banks and attempt to maintain the value of the dollar.”

If these efforts were unsuccessful, said Yameen, also former Trade Minister and former Chairman of the State Trading Organisation, the only other option would be to “officially devalue the rufiya.”

However, he added, the impact of such a move on the economy had to be carefully considered, or the rufiya would have to be devalued again after six months and the positive effects would be “nominal”.

“From what we can see now, [devaluation] will not be a solution for our structural problems,” he said. “Our biggest structural problem is that our fiscal policy is still recklessly expansionary, it is very much a spending policy without any control. Government expenses are very high and they are not trying to control it.”

Although the Maldives received a high amount of dollars as tourism revenue, “not all these transactions take place in the Maldives.”

“A lot of tour operators for example sell tour packages in Europe and send to the country only what has to be paid to the resort,” he explained.

The other major problem is investor confidence: “If the Maldivian economy is collapsing like this and the dollar shortage is reaching this level, private Maldivian investors will not want to keep their money in the Maldives. They don’t know when, under some law or regulation, the government will give them an IOU and take their money from the bank saying ‘in two years we’ll pay you back in dollars what we’re taking, but now we don’t have cash for foodstuff’ and convert it at the 12.85 rate after a decision by the cabinet – no investor or businessmen will have a guarantee that this won’t happen.”

MMA had not been able to solve the disparity between the rufiya and the dollars because devaluing the rufiya would only lead to spiraling inflation, he said.

An internal problem

Local economists and businesses badly affected by the dollar shortage, such as importers, dispute that the problem is either political or can be solved in such a manner.

A representative for a Dubai-based company supplying resorts in the Maldives explained to Minivan News that while he was required to pay suppliers in dollars and euros, “the resorts try their best to pay in rufiya. Their revenue is acquired in dollars, so they can [sell the dollars] on the open market and pocket the difference.”

“It’s a huge issue for the entire country and makes it very difficult for anyone to import. We’re lucky in that we have a parent company to which we can transfer revenue and which pays centrally,” he said, adding that not all companies operating in the sector were as fortunate.

“We keep a local rufiya account which we use for pay customs payments and incidentals, otherwise the only way to exchange is on the grey market. There you’re looking at Rf14 to the dollar,” he said.

He speculated that the crackdown on the unofficial market could be positive, “as the resorts would lose the incentive to trade dollars into rufiya and any forex coming into the country would stay here.

“But the flip side is that you still can’t change money – it’s an incredible situation when you can’t go into a bank with your Rf12,850 and change it into US$1000. Imagine what would happen in the UK if you walked into RBS (Royal Bank of Scotland) and asked them to change £1000 pounds into dollars and they refused to do it.

“A crackdown on the black market also need laws guaranteeing dollar supplies for banks, with liquidity provided by the government,” he suggested.

“What bothers me is that there’s plenty of dollars coming into the country, but the people in control of the economy seem to be hiding it away.”

A local financial expert working in the private sector, Ahmed Adheeb, told Minivan News that while the crackdown would enforce existing monetary law, “the problem from the point of view of an economist is that the dollar flow is there but the exchange rate is not at the market rate. There have been a lot of dollar fluctuations since it was pegged.”

Adheeb emphasised that building confidence in the rufiya was now “more important than anything else”, and an internal problem innately linked to the country’s high budget deficit.

“We are producing a lot of rufiya to finance the deficit. If the inflow is greater but the exchange rate is not adjusted, that becomes a problem,” he said.

“The government is pumping more rufiya into the economy to finance the deficit than it is earning in dollars. The confidence in the rufiya is not there, and there is no incentive for people to keep their savings in rufiya.”

Adheeb predicted that while the crackdown would limit exchanges on the black market, “there will still be huge demand for dollars.”

“When the black market suffers shortages, we may find ourselves in a situation where we can’t find dollars at all. Even now if I am individual it is difficult to find dollars, because the banks are not supplying. The total solution is for banks to supply to demand.”

The banks, Adheeb said, had significant dollar reserves but found the rate of exchange unacceptable.

A pegged rate had been instrumental in building investor confidence in the tourism sector, Adheeb noted, however it had led to an internal problem that had left the currency vulnerable to global fluctuations in the dollar caused by events such as the Gulf Wars, 2008 recession, rising oil prices, “and now reconstruction in the wake of the Japanese tsunami”.

“If I have savings in dollars, why would I exchange if the rufiya is so volatile?” he asked. “At the same time why is the government raising oil prices? Because of international price increases.”

Foreign investors in the country were already concerned, he noted, because of the difficulty of repatriating profits to the home country.

“Dhiraagu, for instance, is probably having a lot of difficulties repatriating dividends to Cable&Wireless. This can lead to a fall in investor confidence. When that happens, foreign investors will either try to exit or stay away. We will only see foreign investment that earns dollars, such as resorts.”

The problem would soon lead to inflation and difficulties importing essentials such as fuel and medicines, he suggested, and could potentially have a major impact if the State Trading Organisation (the country’s primary importer) found itself unable to acquire foreign currency.

“There is no reason why this should be politicised – it is a national issue, like a tsunami. We need to get together and solve this. I believe the economic outlook for the Maldives is good – the tourism sector is continuing to grow. We can manage this, it should not be a major problem.”

Likes(0)Dislikes(0)

Letter on High Court appointments

Dear President Mohamed Nasheed,

Since the committee has not followed the criteria set up by the Judicial Service Commission (JSC) to allocate marks for the potential judges of the high court, and since constitutional problems are apparent in the process of appointing judges to the High Court, I voluntarily participated in case forwarded by Baa Kendhoo Abdul Bari Yousuf, in the hopes that an independent and fair verdict would be reached.

But to the surprise of the whole judiciary, this particular case has been rejected by the courts and as a result the trust I, myself and the people have placed in the judicial process has grown faint.

Therefore as I am responsible for heading an official institution, I am obliged to work towards correcting this matter. And according to the article 115 of the constitution, since it is your responsibility to maintain the rule of law, I am obliged to report this to you. I sincerely request you to bring an end to this process which is violating the rules and laws of the State. Due to the inconvenience and shortage of time, I am unable to provide you with all the details of the matter.

Yours sincerely,

Hassan Saeed

Chief judge of Family Court

All letters are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write a letter, please submit it to [email protected]

Likes(0)Dislikes(0)

Leaked audio implicates MDP MP in secret deals with Thasmeen

A leaked phone call between MP Mohamed Musthafa and Deputy Speaker Ahmed Nazim discussing a bill proposed by the former to cease state benefits to ex-President Maumoon Abdul Gayoom has emerged in local media, suggesting a secret relationship between the ruling Maldivian Democratic Party (MDP) MP and embattled Dhivehi Rayyithunge Party (DRP) Leader Ahmed Thasmeen Ali.

In the leaked audio clip, Musthafa explains that while he did not believe that former President Gayoom deserved financial benefits after returning to active politics, he had considered withdrawing the bill but was dissuaded by Thasmeen.

Moreover, the MP for Thimarafushi claims that Thasmeen had offered financial assistance to his campaign in 2009 against Gassan Maumoon, son of the former President.

Musthafa told Minivan News today that he would not comment on the leaked audio clip.

”It was Gayoom who leaked the phone conversation, he has a phone tracing machine, which was once in [presidential palace] Theemuge during his administration. He took it with him when he left,” alleged Musthafa. ”He has violated our privacy.”

“Because of him, Thasmeen and I had to go into a verbal quarrel. Thasmeen was very concerned,” he continued. ”We can’t even sleep with our wives now because of Gayoom.”

Neither Thasmeen nor minority opposition People’s Alliance MP Nazim has responded to Minivan News at time of press.

In July 2009, Musthafa told Minivan News that one of the “five richest MPs in DRP” had secretly helped his campaign.

Meanwhile, in his letter condemning Thasmeen’s leadership last week, Gayoom accused Thasmeen of not participating in any DRP trips to Thaa atoll for Gassan’s campaign.

In July 2010 both Musthafa and Nazim were arrested on charges of bribing a Civil Court judge with US$6000 and a two-way plane ticket to exert influence on a court case; however Chief Judge of the Criminal Court Abdulla Mohamed ruled there was not reasonable grounds to extend the detention of the two MPs.

Translated transcript of the leaked phone conversation:

Nazim: You know that bill on Maumoon you submitted, the one about terminating benefits? That’s coming up, either tomorrow or the day after, it’s going to come…so how did that come about? I’m asking because you submitted it.

Musthafa: Yes, that. Well, a lot of people know why it has been submitted, right? Even whom it was that asked [me] to submit it. In truth, I proposed it during those days when I was saying I am going to sue Gayoom. And he came back to politics and it looked as if things were going to go back to the way they were, it was round then that I did it. It’s not something I approve of in any case – resigning, announcing to the whole country that he was stepping aside from politics, and then coming out again and taking to stages, that’s really not good. So that’s why I submitted it – on the notion that he did not deserve those benefits.

But in fact it wasn’t just me who backed it. I did it because some people asked me to do it. But afterward, when [others were telling me] to amend it or withdraw it, they told me ‘Musthafa, we’ve heard about this, why would you want to take it back, don’t withdraw it.’ And the person who said this is someone who has always given me great assistance and support.

But, when two others requested that I withdraw it, I asked him again, what should I do, I’m facing pressure from your party. They’re telling me to pull it out.

Nazim: MDP is asking you to withdraw it?

Musthafa: Er, now, it’s not just MDP alone. You know these so-called Maumoon factions?

Nazim: Hmm.

Musthafa: It’s some of them. It was mainly Mahlouf who talked to me about it, asking me to take it back. After he met me about two or three times, I changed my mind and thought about withdrawing it, thinking that I did not really want to pressurize someone so advanced in age. I was going to take it back and asked that side.

Nazim: What is this ‘side’ you’re talking about? How would I know when you say ‘that side’?

Musthafa: You know very well that it’s Thasmeen. Anybody would know. He is someone who has helped me a lot with this even in the past. For example, during Gassan’s campaign – it’s even noted in that letter Maumoon sent. Whether it is Maumoon or anyone else who says it, it is a fact. [Thasmeen] never once went to Thimarafushi. He was in Fonnadoo near Thimarafushi once but he wasn’t going to go to Thimarafushi to campaign against me and challenge me, right? That is how it is.

Nizam: By help do you mean he gave money to your campaign? But then, he’s not going to give Musthafabey money when there’s someone from DRP [contesting].

Musthafa: [Laughs] That’s a big misunderstanding among them, isn’t it? If you think about it, even a child would know that neither Thasmeen nor his family would want Gassan to come into this. That is how it is. Everyone in the country knows that.

To put it briefly, I cannot withdraw it without a word from that side. That’s it. I’ve even got different offers, asking me to take back that bill I proposed to cut off Maumoon’s benefits. Even within my own party, some have asked me. [they’ve said], ‘what is this for’.

But it’s not going forward because of this problem. The way it is now it is very difficult for me to go against Thasmeen and them and take it back. Even if something happens to me tomorrow, they are the ones who are going to help. So I can’t do it. If not, I would have done what I could.

Likes(0)Dislikes(0)