IMF delegation surprised by resilience of Maldivian economy

A delegation from the International Monetary Fund (IMF) expressed surprise at the “resilience” of the Maldivian economy in a meeting with MPs on the parliament’s public finance committee yesterday.

Dr Koshy Mathai, resident representative to Sri Lanka and Maldives, told MPs that the IMF was surprised that the economy has stayed afloat for years despite longstanding fiscal imbalances.

“For a long time we’ve been saying that reserves at the MMA [Maldives Monetary Authority] are very low and that the fiscal deficit is quite difficult and we expect the economy to run into some problems. But somehow the economy has shown resilience, a lot of resilience, and we’ve been surprised – happily surprised but surprised nonetheless,” he said.

The IMF was interested in “carefully studying” how the domestic economy has remained resilient in the face of soaring public debt and persisting budget deficits, Mathai said.

“Imports are on the shelf. If you go into a shop, you’ll find a wide range of imported goods there. You see people with motor scooters and cars and smartphones. You see people going on travel. All these are available, are done, even while the level of reserves at the MMA is quite low,” he observed.

In attendance at yesterday’s meeting were the committee’s chair, MP Abdulla Jabir, and MPs Abdul Ghafoor Moosa and Mohamed ‘Colonel’ Nasheed.

As the IMF delegation currently in the Maldives was on “fact-finding” or “exploratory mode” ahead of the organisation’s article IV consultation later this year, Mathai told the MPs that the team did not have “comprehensive policy recommendations” to share.

Fiscal consolidation

“One area where we have more clear ideas is an area where we’ve had discussions in the past, and that’s the need for fiscal consolidation,” Mathai continued.

Noting that “fiscal problems have been at the root of so many crises” in countries large and small, Mathai said that the the Maldives had “a government budget envelop that is very difficult to finance.”

“The deficit is quite large. Financing is difficult to find. Banks are not that willing to subscribe to treasury bills. We see treasury bill yields rising quite sharply. MMA external financing is difficult to mobilise as you all know. We’re left then with MMA printing money in order to finance expenditures,” he explained.

A second option was “running up arrears, unpaid bills to domestic suppliers,” he added.

Both methods posed serious challenges, Mathai continued, as the government’s failure to pay its bills “creates ripples effects throughout the entire economy.”

Moreover, printing money to finance deficit spending “puts a lot of pressure on prices” and central bank reserves, he said.

“Because in a small country like the Maldives, when the MMA prints money, that is an injection of purchasing power into the economy, it means more people can import things,” Mathai said.

Printing money therefore “creates increased demand for dollars, increased imports, pressure on reserves,” he noted.

“As I said, the system seems to work. The parallel market somehow is letting the economy work,” he observed.


As new sources of financing the budget were not available in the short-term, Mathai suggested targeting subsidies to the poor and increasing tourism taxes.

“The electricity subsidy is one that goes to even the richest strata of society. Basic food subsidies are being enjoyed now by the resorts, and never mind the resorts, are being enjoyed by wealthy foreign visitors who stay at the resorts. That to us seems like a totally unnecessary policy,” he said.

He added that “substantial savings” could be made from the budget by targeting subsidies to those most in need of assistance.

Mathai also argued that the rates of taxation in the tourism sector were “quite low” compared to other tourist destinations.

Mathai said he paid “north of 20 percent” in taxes at a hotel in Fiji while the Tourism Goods and Services Tax (T-GST) in the Maldives was only recently raised to 12 percent.

It would not be “a tax on business” that would slow down the economy, Mathai added.

“Rather it is saying people are coming and enjoying all that the Maldives has to offer, so let them pay something for it,” he said.

As 70 to 80 percent of the Maldivian economy was “driven by tourism,” Mathai said that it was “only natural that the [tourism industry is] contributing resources for the economy to operate.”

He added that “rates of return on Maldivian resorts are among the highest in the world” with profitable payback periods.

However, compared to other tourism-dependent economies, Mathai said that government expenditure in the Maldives was comparatively “very high” due to the geographic dispersion of the population and the large public sector wage bill.

In the medium-term, Mathai recommended taking measures to reform the civil service, improve delivery of public services and increase efficiency by economising.

“Ultimately we need to do a structural adjustment to the budget so that it’s more sustainable,” he concluded.


Three arrested from MP Jabir’s house with illegal narcotics and alcohol

The Maldives Police Services raided opposition MP Abdulla Jabir’s house in Malé and arrested three individuals for possession of illegal narcotics and alcohol.

Local media report that Jabir does not live in the building.

The raid was carried out under a court warrant on Wednesday night.

The three arrested are a 24 year old man, a 27 year old man, and a 23 year old woman. The police found one bottle of alcohol, one empty bottle of alcohol, four bottles containing narcotics, and one rubber packed containing narcotics.

On Wednesday, the police found three packets thought to contain narcotics in Gaa Dhaal Atoll Faresmathoda Island. No arrests were made.

On the same day, the police arrested a 21-year-old man in Kaafu atoll, Kaashidhoo island, with 14 folded paper pieces containing narcotics. Three men in Kaafu atoll, Guraidhoo Island, were also arrested with 39 rubber packets containing narcotics.

On Tuesday night, the police arrested a 22-year-old man from Haa Alif atoll, Maarandhoo island, with drugs and poker chips. A woman in Haa Alif Atoll Ihavandhoo had accused the man of sexual harassment on the same day.


Police present MDP MP Jabir to Criminal Court for alcohol raid trial

Opposition Maldivian Democratic Party (MDP) MP Abdulla Jabir was presented to the Criminal Court by police today, after being kept in custody since Tuesday (September 10) ahead of his trial for alleged possession of alcohol and cannabis.

Jabir and fellow MDP MP Hamid Abdul Ghafoor are among several senior party figures charged with drug and alcohol offences, after being arrested on on Hondaidhoo Island in November whilst allegedly under the influence of illegal substances.

While Jabir at the time of his arrest was a member of the Jumhoree Party (JP) – he later defected to the opposition – the MDP has maintained that his arrest was politically motivated to coincide with a no confidence motion at the time against senior government figures.

The MDP has alleged that the treatment of its MPs, including, Jabir was noticeably different to those of other parties currently aligned to the present government, accusing prosecutors of persecuting its members and supporters.

The trial began earlier this month, with Ghafoor being the only MP in attendance to hear charges against him concerning the case.

A total of 10 people taken into police custody on November 16 after officers obtain a warrant to search the island of Hondaidhoo.

Today’s hearing

Criminal Court Spokesperson Ahmed Mohamed Manik said state prosecutors during the hearing read out a list of charges against Jabir. The MDP MP will be given a chance to respond to these charges against him at the next hearing, Manik added.

Police Spokesperson Chief Inspector Hassan Haneef confirmed to Minivan News that Jabir had been held in police custody ahead of the hearing, under an order previously issued by the Criminal Court. Police did not provide any further details on where the MP had been detained.

Jabir earlier this week had his passport held by immigration officials when trying to leave the country, after previously failing to attend the opening hearing of the trial into the charges against him.

Explaining the absence, MDP MP Imthiyaz Fahmy ‘Inthi’ told Minivan News he understood Jabir had not received a summons from the Criminal Court to attend the trial, but would have attended if having done so.

“He has been away from Male’ campaigning [for the presidential election held on September 7] and had not therefore received a summons,” he said, accusing the country’s courts of purposefully scheduling hearings against MDP MPs to try and stymie the party’s election campaign.

Fahmy additionally claimed that the Criminal Court had failed to follow its own procedures, and that a summons had to be re-sent if not received by the individual in question.

By comparison, he alleged that Progressive Party of Maldives (PPM) MP and Deputy Speak of Parliament Ahmed Nazim had failed to respond to 12 summons without arrest in relation to his trial for fraud – charges which he was later acquitted of. That case is now the subject of an ongoing High Court appeal.

Fahmy said although the MDP had not been requested to provide a lawyer for Jabir, the party would be ready to provide assistance to him in what it continues to allege is a “politically motivated” arrest.

Fahmy also alleged that the judiciary was seeking to fast track cases against MDP members to hinder the party and its campaigning ahead of a run-off vote scheduled for September 28.

He himself is currently facing a charge of “disobeying orders” over allegedly contemptuous remarks he made against the judiciary during a television show.

Fahmy argued that Jabir, along with Hamid Abdul Ghafoor and the son of the former President Nasheed’s Special Envoy, Mohamed Hamdhoon Zaki, were on a “private island” when they arrested by police officers, who he alleged beat and then arrested them.

“This all happened at the time of a no confidence motion against Minister of Defence Mohamed Nazim and is a clear attempt at intimidation,” claimed Fahmy.

He said that the arrest was against Majlis regulations that say an MP could not be arrested at the time of a no confidence vote.

The no confidence vote had been scheduled for April 8, but was postponed after MDP MPs objected to a decision to not hold the vote in secret despite a parliamentary decision approving a secret ballot.

Previous MP liquor cases

Police last year forwarded a case for prosecution against MP Ahmed ‘Sun Travel’ Shiyam, after a bottle of alcohol was allegedly found in his luggage in March 2012 upon his return to the Maldives after an overseas trip.

The bottle was allegedly discovered when his luggage was screened.

Shiyam is the head of the Maldives Development Alliance (MDA), a new party allied with the Progressive Party of the Maldives and its bid for the presidency on September 28.

Newspaper Haveeru reported on September 3 this year that the case was sent back to police by the Prosecutor General’s Office in August 2012 to clarify further information.

Police have yet to send the case to the PG office over a year later.

The penalty for alcohol possession in the penal code is either a fine of between MVR1,000 to MVR3,000 or imprisonment, banishment or house arrest between one to three years.


Two MDP MPs among suspects facing prosecution over Hondaidhoo alcohol arrests

Police have submitted the cases of seven individuals, including two opposition-aligned MPs, to the Prosecutor General’s Office (PGO) after they were arrested on the island of Hondaidhoo last November on suspicion of possessing drugs and alcohol.

A total of 10 people were taken into police custody on November 16 after police raided and searched Hondaidhoo with a court warrant. Officers alleged they found large amounts of “suspected” drugs and alcohol upon searching the island.

Seven of the suspects, including Maldivian Democratic Party (MDP) MPs Hamid Abdul Ghafoor and Abdulla Jabir – a member of the government-aligned Jumhoree Party (JP) at the time of his arrest – are among those whose cases have been forwarded to the PGO this month.

Police confirmed that cases had also been submitted against former SAARC Secretary General and Special Envoy to the former President, Ibrahim Hussain Zaki, former President’s Office Press Secretary Mohamed Zuhair and his wife Mariyam Faiz. Jadhulla Jaleel and Hamdan Zaki also face charges.

Two Sri Lankan nationals named Raj Mohan and Anoor Bandaranayk as well as a Bangladeshi named Suhail Rana were taken into custody following the island raid.  Their cases have not been filed at the PGO.

Police Sub-Inspector and Media Official Hassan Hannef said at the time of the arrests that officers requested all suspects taken into custody on Hondaidhoo to provide urine samples for a routine examination. However, only Hamdhaan Zaki and the three foreign suspects complied with the request.

According to the Drug Act, Sections 123(a), 161(a) and 161(b), any person arrested on suspicion of having abused alcohol or narcotics has an obligation to comply with police requests for routine urine examination by promptly providing urine samples, and failure to comply is a criminal offence punishable with a one-year jail sentence.

Previous submission

Police previously submitted cases against “some” of the ten people arrested during the raid on Hondaidhoo to the PGO in January this year.

However, the case was returned after the investigation was deemed to have been incomplete, according to Sun Online.

The MDP has maintained that the arrests were a politically-motivated attempt to disrupt parliament ahead of a no confidence motion against President Dr Mohamed Waheed Hassan Manik, and a proposed amendment to voting procedure to allow such a vote to be held in secret.

In April this year, Parliament’s General Purpose Committee rejected procedural amendments to allow secret voting for no confidence motions, such as one previously scheduled to be heard against President Waheed.


“Some” cases from Hondaidhoo alcohol arrests sent to Prosecutor General

Police this week have completed an investigation into “some” of the 10 people arrested in November 2012 for alleged possession and consumption of alcohol on Hondaidhoo Island in Haa Dhaal Atoll, according to local media.

Upon completion of the investigation Tuesday (January 29), the cases were forwarded to the Prosecutor General’s (PG) office, newspaper Haveeru has reported.

The identities of the accused and the nature of the cases sent to the PG have not been disclosed.  However two Parliament members – Kaashidhoo constituency MP Abdulla Jabir as well as Maldivian Democratic Party (MDP) spokesperson and Henveiru South constituency MP Hamid Abdul Ghafoor – were among those arrested in November 2012.

In addition to Jabir and Hamid, former opposition Maldivian Democratic Party (MDP) President Ibrahim Hussain Zaki and former Press Secretary Mohamed Zuhair, his wife Mariyam Faiz, Zaki’s son Hamdhan Zaki, Seenu Hulhudhoo Reefside Jadhulla Jameel, two Sri Lankans and a Bangladeshi were among the ten people arrested from Hondaidhoo.


Cases against MDP MPs Jabir and Ghafoor to be forwarded to PG’s Office this week

Cases against MDP MPs Abdulla Jabir and Hamid Abdul Ghafoor are to be forwarded the Prosecutor General’s (PG) Office this week, Police Commissioner Abdulla Riyaz has said.

The commissioner told local media the cases to be forwarded to the PG’s Office are in regard to both Jabir and Ghafoor’s refusal to provide a urine sample after they were arrested under suspicion of drinking alcohol in November 2012.

Police Commissioner Riyaz was quoted as saying that the case against Ghafoor is also in relation to a previous occasion whereby he refused to provide urine sample after being arrested for obstructing police duty at a protest.

The Drug Act states that the punishment for a person who refuses to provide urine sample when requested by the police is imprisonment for one year, local media reported.

Jabir and Ghafoor were arrested on suspicion of alcohol consumption during a special operation carried out on the island of Hodaidhoo in Haa Dhaal Atoll. Both MPs were subsequently released by Kulhudhuffushi Magistrate Court.


Man sentenced to one year imprisonment for refusing urine sample

The Criminal Court on Sunday sentenced a man to one year imprisonment for refusing to submit a urine sample to police.

The verdict marks the first time a person was convicted for the offence since the new drug law came into force on December 31, 2011.

Ali Abdulla, of Hulhumale’ flat 10g 4, was arrested in a drug-related case on May 14 and refused to submit a urine sample to police.

He was sentenced under article 123(b) of the Drug Act (Dhivehi), which states that refusing to submit a urine sample when arrested on drug-related charges is a crime punishable by a one year jail term.

Following a police special operation in November that saw two MPs arrested from an uninhabited island in Haa Dhaal atoll on suspicion of drug use and alcohol consumption, police said individuals who refused to undergo a urine examination could face prosecution.

Maldivian Democratic Party (MDP) MP for Kaashidhoo Abdullah Jabir and MP for Henveiru-South Haamid Abdul Ghafoor, former President Nasheed’s Press Secretary Mohamed Zuhair, his wife Mariyam Faiza, and former President Nasheed’s Chief Advisor Ibrahim Hussain Zaki, allegedly refused to cooperate with police in the urine testing procedure.

Meanwhile, police sent cases of two individuals aged 23 and 39 who refused to provide urine samples to the Prosecutor General’s Office (PGO) in December.


Jumhoree Party MP Abdulla Jabir jumps back to MDP, pledges to oust President Waheed

Ousted Jumhoree Party (JP) Deputy leader and MP Abdulla Jabir has rejoined the Maldivian Democratic Party (MDP), pledging to oust President Mohamed Waheed Hassan.

The MP for Kaashidhoo signed with MDP last night during the party’s ‘Vaudhuge Dhathuru’ (Journey of pledges) campaign tour near the island of Hulhudhufaaru in Raa Atoll.

After joining the MDP, Jabir told the local press that he had joined the party because he believed it was with MDP that he saw progress in politics. He also said that he would spend all his time committed to MDP and its success.

Jabir added that despite the MDP candidate losing the weekend’s by-election to a Progressive Party of Maldives (PPM) candidate, his joining the party meant an addition of one more parliamentary seat to MDP.

Meanwhile, MDP Parliamentary Group Leader MP Ibrahim Mohamed Solih said the party was working to remove President Waheed and hold early elections, adding that the addition of MP Jabir to the parliamentary group would further this goal.

Jabir’s signing to MDP comes shortly after he was removed from the position of Deputy Leader of the JP in what he described as “a coup” within JP. All members aside from two voted in favor of Jabir’s removal from his position following the vote taken by the JP council.

Previously speaking during an MDP rally held on Ungoofaaru during by-election campaigning, Jabir announced his support for MDP’s campaign to oust President Waheed, and promised to contribute in his personal and financial capacity.

Speaking to Minivan News, Jabir said that he joined the MDP to support its fight against torture and police brutality and to support its democracy movement. He alleged that current government was indulging in acts of corruption and nepotism.

“What we see today is that Waheed’s government is resorting to brutality and torture is run like a corrupt and nepotistic regime that dishonors business agreements,” he said.

Asked why he had left MDP previously, Jabir stated that there was “no need to talk about the past”.

“What happened in the past should stay in the past. This is a new chapter. I look forward to work with the MDP parliamentary group to liberate this country from Waheed’s brutality and his corrupt government,” he said.

Antagonism towards Waheed’s government

Jabir became an outspoken critic of President Waheed after he was arrested from the inhabited island Hodaidhoo and alleged police brutality.

Those arrested included MDP MP Hamid Abdul Ghafoor – also the party’s international spokesperson – along with former SAARC Secretary General and Special Envoy to the former President, Ibrahim Hussain Zaki, former Press Secretary Mohamed Zuhair and his wife Mariyam Faiz.

Police claimed they found large amounts of “suspected” drugs and alcohol upon searching the island with a court warrant. The arrests were made “based on information received by police intelligence,” police said.

Recently, resorts owned by Jabir were issued with final warning notices for non-payment of rent. The move came days after he turned against the government, and was described by Jabir as the government’s effort to destroy a political opponent.

“I know following the recent political developments and due to my new opposition to the current government, [President] Waheed has now ordered the tourism minister to issue the repayment notice so as to threaten his political opponents,” declared Jabir.

“This is highly politically motivated. He knew I was the one behind submitting the amendment to parliamentary regulations to make the impeachment vote a secret ballot. It was I who in the first place drafted that amendment and gave it to MP Ahmed Amir. They know this but I will still continue to work for that,” he explained.

Since then, Jabir openly declared his support to MDP’s efforts to make parliamentary impeachment votes a secret ballot.

The first amendment proposed to the parliamentary regulations to bring the change by MDP was defeated on the parliament floor. However, a second amendment has been proposed and the parliament is to take a vote on the amendment on Monday.

Defection history

Jabir is well known for his frequent defections from party to party. His first political party was Dhivehi Rayithunge Party (DRP) during the presidency of Maumoon Abdul Gayyoom. He then joined former party of PPM Parliamentary Group leader MP Yameen Abdul Gayoom, the People’s Alliance (PA).

Jabir defected to the JP ahead of the 2008 presidential elections and backed JP leader and business tycoon Gasim Ibrahim.  Jabir was appointed as the party’s deputy leader.

He then went on to join the MDP and hold senior positions within the party. He also announced his intention to contest for the MDP chairmanship.

However, during the protests following the detention of Chief Judge of Criminal Court Abdulla Mohamed, Jabir once again declared that he had defected from MDP back to the JP.

In the meantime Jabir’s wife, former SAARC Secretary General Dhiyana Saeed, also resigned from her position in SAARC and joined the opposition movement against former President Mohamed Nasheed.

Jabir became an MP after winning the by-election held to elect an MP to the vacant seat of Kaashidhoo constituency on a JP ticket. He was backed by President Waheed and a coalition of parties supporting his government.

THe PPM who initially had its own candidate for the election also backed Jabir.


MPs can be arrested at crime scene, High Court rules

The High Court on Thursday ruled that MPs could be arrested at crime scenes despite a provision in the parliamentary rules stipulating that MPs could not be arrested while there was a pending no-confidence motion.

The ruling (Dhivehi) was made after the Prosecutor General’s Office (PGO) appealed a decision by the Kulhudhufushi Magistrate Court to release MPs Abdulla Jabir and Hamid Abdul Ghafoor, who were arrested on an uninhabited island on charges of alcohol consumption.

While it overruled the magistrate court decision to release the suspects, the High Court however ruled that there were no grounds to detain the MPs any further.

In its appeal, the state had requested authority to arrest the MPs again. But the High Court noted that the only reason police had given for requesting extension of detention was that the suspects might attempt to influence witnesses, ruling that such a possibility no longer existed.

In separate rulings referring to the constitution, the Police Act and Islamic Shariah, the High Court determined that despite the provision in the parliamentary standing orders, MPs could be arrested from crime scenes or if the arresting officer observes a crime being committed.

The article in the parliamentary rules was intended to protect MPs against arbitrary arrest, the High Court noted, but did not preclude arrests under any circumstances.

Section 202(d) of the house rules state that MPs cannot be arrested while there is a no-confidence motion before parliament to impeach the president or remove a cabinet minister, judge or member of an independent commission from his or her post.

Parliament on Wednesday meanwhile approved amendments to section 202 with 27 votes in favour and 18 against.

“The amendment proposed to Article 202 (b) states that if in the event of the arrest of a Member of Parliament under a circumstance that excludes allegations of criminal offense, and where immediate interrogation is not possible, then either the Speaker or the Secretary General of the People’s Majlis must be notified of the arrest in 15 minutes at the most,” according to the Majlis secretariat.

At the time of their arrest on November 16, no-confidence motions were submitted against President Dr Mohamed Waheed Hassan Manik and Civil Service Commission (CSC) Chair Mohamed Fahmy Hassan.

While Speaker Abdulla Shahid had instructed police to abide by the rules and release the MPs, police had refused and contended that it was up to a judge to determine the legality of the arrest.

During the hearings on the appeal, the High Court rejected a request by the state to abolish the provisions in the parliamentary rules as the appeal concerned extension of detention and not the constitutionality of a clause in a specific regulation.

Following an emergency meeting in the wake of the arrests, parliament’s Privileges Committee passed a motion to ask the Prosecutor General to press charges against Police Commissioner Abdulla Riyaz for arresting the MPs in violation of the law, and disregarding the Speaker’s instructions to release them.

The committee also passed a motion to ask the Human Rights Commission of the Maldives (HRCM) to investigate allegations of police brutality against the MPs.

Meanwhile, in a statement at the time, police said 10 people were arrested during a ‘special’ operation on the island of Hodaidhoo in Haa Dhaal Atoll.

In addition to ruling coalition Jumhoree Party (JP) MP Abdulla Jabir and Maldivian Democratic Party (MDP) MP Hamid Abdul Ghafoor – also the party’s international spokesperson – those arrested included former SAARC Secretary General and Special Envoy to the former President, Ibrahim Hussain Zaki, former Press Secretary Mohamed Zuhair and his wife Mariyam Faiz.

The others arrested were Jadhulla Jaleel, Hamdan Zaki, two Sri Lankan nationals named Raj Mohan and Anoor Bandaranayk as well as a Bangladeshi named Suhail Rana.

While Hamdan Zaki – son of Ibrahim Hussain Zaki – was detained on orders of the magistrate court, he was released to house arrest on Wednesday after being taken to hospital. Hamdan’s family told local media that he suffered a seizure when he was taken to the hospital and accused police of ill treatment and negligence.

Hamdan Zaki was admitted at the ADK hospital and reportedly suffered another seizure on Thursday morning.

MP Jabir meanwhile alleged that police used excessive force during the arrest. Jabir previously told Minivan News police actions resembled “a terrorist killing operation.”