“Political lightweight” President to face “complex” deliberations in Delhi: The Hindu

A host of complex issues will come up for deliberations as Maldivian President Waheed Hassan Manik, arrives in New Delhi on Friday, soon after the successful visit of the former Maldivian President Mohamed Nasheed to India, writes R. K. Radhakrishnan for Indian newspaper The Hindu.

Dr Waheed, the former Vice-President, who stepped in after Mr Nasheed vacated office on February 7, is a political lightweight, who will be unable to categorically assure New Delhi on issues that are high on the agenda. The issues include the problems confronting Indian investments in the Maldives, the open hostility of some sections of the new government towards India, and the fate of projects that have been approved by the Nasheed dispensation.

But the most important agenda will be the political issues that have been flagged by Mr Nasheed during his visit to New Delhi. The Waheed government has neither shown the urgency, nor the persistence to engage all shades of opinion to arrive at an early election date. While the main supporters of the new administration, including India, the United States and the European Union, wanted early elections – by the end of the year – this now appears remote.

Dr Waheed’s main backers in Maldives want elections closer to the date that the elections would normally be conducted – late next year. There have been some discussions on fixing July 2013 as the election month, but this too has not found favour with Dr. Waheed’s backers – including the former President Maumoon Abdul Gayoom, one source said.

Dr. Waheed will be flown to New Delhi in a special plane on Friday, in his first visit to India after he took over as President. During the five-day visit, he is expected to meet a host officials and leaders, including Prime Minister Manmohan Singh. Officials said that the visit has been accorded the status of an ‘official visit’ as opposed to a ‘State visit.’

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Politicians must seek ”broadest support” rather than dividing country: Dr Hassan Saeed

Since 2008, our country has become even more divided. Politics in the Maldives seems to be pretty polarized with citizens and voters seeing things in very black and white terms, President Waheed’s Special Advisor, Dr Hassan Saeed writes for Haveeru.

Responsible government, and for that matter responsible opposition, should not seek to divide the country but try to gain the broadest support possible by building consensus.

But how do voters make up their minds about how they are going to vote? Do they study the manifestos or policy platforms of respective candidates and parties and then weighing all the options make their minds up in a calm and collected fashion? Are they offered distinct and competing visions of the road down which the Maldives might travel by political parties? How much genuine choice and difference is there in the offer from our politicians and political parties?

In 2008 it was relatively easy. The election was really only about whether voters wanted change or continuity. In 2013 political parties will have the opportunity to come of age and spell out to the voters what they really stand for and why their ideas and policies can take the country forward. At present many voters will cast their vote because of

•    Habit – “I’ve always voted this way”,
•    Family – ‘my family is..’
•    Island loyalty- “this is an X political party island”
•    Personal interest-“what are you going to do for me personally?”
•    Personality-“I like X”

And the last one is the most dangerous because it can lead to a crude populism where big personalities attempt to outbid each other with unkeepable promises and voters compile ever more unachievable and unrealistic shopping lists. That’s how we end up in the financial mess that we are in now with a budget deficit of over US$300 million this year.

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Comment: Institution building in the Maldives

Former President Mohammed Nasheed was on a six-day-long visit to India, pressing his case for early elections and reiterating his position on the need for reforming the nation’s ‘independent institutions’.

During his three years in office, cut short from the mandated five following his sudden resignation on February 7, and later, too, he has laid a great stress on the need for reforming the Judiciary, Election Commission, Human Rights Commission and also the legislative aspect of the People’s Majlis or Parliament.

His detractors, now in power, are using the same arguments of his to try and deny him the early presidential polls that Nasheed and his Maldivian Democratic Party (MDP) have been demanding since his resignation. President Waheed Hassan and his multi-party coalition Government say that they needed to ’empower’, not ‘reform’ independent institutions, and enact laws to check against ‘Executive interference’ as happened under the Nasheed regime.

The MDP has never hidden its reservations about working with judges and members of independent commissions, once appointed by then entrenched President Maumoon Gayoom. It wanted them removed, and critics say that the party and the Nasheed government ‘invented’ reasons to paint the entire lot of government employees black. Critics also say that the MDP perception was based on the anti-Gayoom mood of the nation’s people and voters when Nasheed won the presidential polls, again as a part of an informal coalition ahead of the second, run-off round in October 2008. The party refused to acknowledge that three years down the line and less than two years to presidential polls, Nasheed, not Gayoom, would be the electoral issue and sought to keep the electoral focus still on the latter.

There is some truth in the political argument of both sides. There is however a need to revisit the MDP-offered specifics dispassionately, for the nation to arrive at a consensus on capacity-building at all levels of governance. It can start at the top-most, where in the absence of established norms and democratic precedents, whims of every kind, have passed for executive discretion. Given that the President has always been chosen in a direct election, whether multi-party or not, there was greater respect for the institution.

This translated into excessive loyalty for the person of the President, and a blind adherence to the policies initiated in his name. This did not find much change under the MDP, too. Familiarity with the forgettable past led to status quoism, though of a different kind, and breaching the comfort zone became difficult after a point.

Appealing to the youth

In their time, both President Gayoom and President Nasheed were in their early 40s when they assumed office. They appealed to the youth of the day, addressed their immediate concerns and quenched their aspirations, however limited their efforts were by Maldivian circumstances and economy. They sounded genuine and were readily accepted as the man for the time.

In his early days as President, Gayoom focussed on education and employment, the former by opening schools in atolls and islands across the country and the latter by promoting resort tourism, an imaginative economic initiative, taking Maldives beyond the limitations imposed by fishing on both counts. All of these efforts stood in the name of Gayoom’s predecessor, the late Prime Minister Ibrahim Nasir, who did not stay on in power for long. Yet, to President Gayoom should go the twin-credits of not discontinuing the good work done by his predecessor, a common trait otherwise across South Asia, and also building on the same.

Ironically, educational opportunities, though only up to the Cambridge A-Level, also meant that Maldivian youth would not be satisfied with the status or lack of it attaching to resort jobs. The salaries were also low compared to what was on offer in the government. Lest they should go astray in a nation that was already concerned about increasing incidence of drug-addition in the lower age-groups, and lest he too should lose the emerging rank of youthful voters ahead of the first multi-party presidential polls of 2008, the Gayoom leadership appointed more government employees than may have been justified, adding up to 10 per cent of the nation’s 350,000 population.

The trend has continued in a way, though the Nasheed presidency scrapped 20 per cent of all Government jobs through a voluntary retirement scheme (VRS), as a part of the IMF-guided economic reforms, but created more for political appointees, though elections after intervening ad hocism. The Gayoom leadership could not grow with its beneficiaries in terms of thinking for the new generation of youth, born to governmental largesse or social benefit that was new and welcome to an earlier one.

The inevitable stagnation attaching to entrenched leaderships, whose communication with the governed often gets stifled owing to a personality-driven administration and the inevitable sycophancy in the existing climate proved to be the electoral bane of President Gayoom. The cry for human rights and multi-party democracy were all products of a new generation approach to issues in a new era where global communication and exposure had become relatively easy and equally resolvant.

The successor-government has since alleged that the Nasheed administration created a multiplicity of government corporations and a plethora of elected provincial councillors, under a privatisation and decentralisation scheme. The former owed to IMF reforms, and the latter was flagged as an achievement of democracy and constitutional reforms. The elected councillors took the place of island-councillors, nominated in President Gayoom’s time.

Government officials now claim that the new scheme provided for salaries for elected members and board members of public corporation, denting the exchequer much more than what the job and salary-cuts saved. In President Gayoom’s time, as some recall, even parliamentarians held only a part-time job, their sources of income coming either from the government jobs they held, or the businesses they were associated with.

The 20 percent cut in salaries and jobs introduced by the Nasheed presidency also meant that the government was at logger-heads with the constitutionally-mandated Civil Services Commission (CSC). Creation of nominated provincial and island councillors ahead of election to these bodies in March 2011, replacing those nominated by President Gayoom under an atolls-based scheme instead, critics argued, was aimed at circumventing the existing processes, including the role of the CSC in Government recruitments, appointments and transfers. Under the nominated scheme, followed by elections later, the Nasheed leadership, it was argued, had brought in MDP cadres in the place of Gayoom loyalists at all levels.

In a way, it was a clash of interest between the entrenched Gayoom-appointees and the new-found power at the hands of youthful MDP cadres that was said to be at the bottom of the crises that successively rocked the Nasheed Government. When a promotion-level appointment of Deputy Ministers in individual departments under the earlier dispensation was ‘compromised’ through political nominations under the Nasheed leadership, non-partisan observers in Maldives claimed that the Government and its Ministers, inexperienced and unexposed as many of them were, might not have been able to extract the right inputs and advice from the permanent civil service as would have been the case otherwise.

Otherwise, too, the Nasheed leadership, in a hurry to fast-track reforms much of which was required, rather than learning to work with and within the system, and on it, chose to work against the system. Near-wholesale change of officials at all levels as was being hinted was not on, but that was what the proposed course ended up being seen as. Worse still, unbiased observers in Maldives saw the replacement of Gayoom loyalists, whose other qualification at the lower-levels of islands-administration in particular could not be questioned, being replaced by MDP foot-soldiers. The legitimisation of the process through the decentralisation scheme in particular did not go down well. With the result, even the well-meaning measures of the Nasheed Government on governance reforms, by addressing specific cases involving top people in various institutions, came to be viewed with a jaundiced eye.

Capacity-building in judiciary

The story was no different in the case of the judiciary. In a country where quality education means and stops with the A-Level, equivalent to Plus-Two in India, there could not have been many with legal qualification and background to prefer the Bench to the bar. At one stage during the Executive-Judiciary deadlock in 2010, it was pointed out that of the 170-plus judges across the country, only 30 or so had undergone legal education in the modern sense. The rest, the government of the day merrily argued, had not passed even the eighth grade in some cases. The Gayoom camp, which had to accept responsibility, would point out that many of them were well-versed in the Shariat. Thereby hangs a tale, still.

In a way, no one contests that the provocation for the police protests – though there are different opinions about calling it a coup or mutiny – flowed from the arrest of Criminal Court Chief Judge, Abdulla Mohamed. The armed forces, namely the Maldivian National Defence Force (MNDF), arrested him on January 16, after the police chief wrote to the latter that the judge was a threat to national security. Critics argue that there was a flaw in institutional responsibilities on this count, despite the Gayoom government too having initiated action against the said judge. At present Presidential Advisor, Dr Hassan Saeed, as Attorney-General under the Gayoom dispensation had initiated action, but nothing moved beyond a point, for a variety of reasons, not all of them political.

The question remains if the MNDF should have been called into service to handle the case. That was also the contention of both the protesting police men and soldiers, whose numbers however were fewer than that of the former. The former feared lack of trust in the police and the latter said the MNDF was being misused for duties it was not mandated or equipped to handle. This was the case when President Nasheed used the MNDF to arrest two leading opposition leaders on corruption charges, and more importantly to shut down the Supreme Court for a day, in mid-2010.

In the Abdulla case, however, the Nasheed camp is right in arguing that even the Judicial Services Commission (JSC) had upheld his government’s contention for the judge not to discharge judicial duties. Incidentally, both the High Court and Supreme Court had stayed the proceedings against the said judge, as empowered under the law.

There is a clash of concepts between the status quo system and the modern thoughts of the Nasheed leadership, on all fronts. In the judiciary, the reformists argued that the status quo legal and judicial systems, which at times sounded arbitrary in the absence of codified laws that applied to all and derived from one another, was refusing to give place to common law practices, as understood elsewhere.

The confusion also derived from the cross-cultural integration that the Islamic nation had achieved to a substantial level in other walks, but not fully in some others. In a nation dependent on resort tourism and imported goods and services for sustaining its economy and society, the dichotomy of free repatriation of the dollar earned by the former and the absence of internationally-accepted banking laws made things difficult for global players. It may have also owed to the absence of laws governing repatriation and a role for the Maldivian authorities to intervene in the processes over the past three decades and more.

The stagnation was striking, independent of the absence of attractive scope of mega-investments outside of tourism industry. Given the inherent limitations imposed by Maldives’ geographical location, human resource, and a local market for goods and services that would interest big-time investors from South Asia and elsewhere, credit facility for local investors is a pragmatic route in the local context.

The beneficiary has been the local creditor and the loser, international banks, including India’s SBI. In the absence of enforceable legislation, they were often left to be cautious than overwhelming with extending credit facilities, after an initial spurt.

During Prime Minister Manmohan Singh’s bilateral visit to Male in November 2011, when he participated in the SAARC Summit at southern Addu, the two sides signed an agreement for India to help Maldives in improving its banking laws and practices. There is a need for simultaneous reforms of laws relating to transfer of property and crimes of credit default, if international banks are to evince an interest in supporting Maldivian economy.

Reforms on the legal front in Maldives often boils down to marrying common law practices with the Shariat. No other country has achieved satisfactory results on this score, particularly in the immediate South Asian neighbourhood than India. The evolved Indian scheme ensures protection under theShariat as far as the Muslim personal law goes. It covers marriage and divorce, inheritance and the like. More importantly, the Indian scheme have imbibed the Shariat practices in its laws and judicial pronouncements, so much so lawyers and judges in India, educated and trained under the common law scheme, practice the same without they having to study these laws in madrasas or confining their knowledge and expertise only to the Shariat.

Even while criticising the nation’s judiciary while in power, the MDP and President Nasheed did acknowledge the amended provisions of the Judges Act to equip and educate the judiciary in the country on the reforms that need to be undertaken, over a seven-year period. The unstated understanding is that the judges who had not equipped them under the new scheme would have to go at the end of seven years. Two years have already passed by, but the Nasheed Government was not known to have taken any serious step to reform the judiciary, though updating/modernising the judiciary would have been a better and more acceptable term. Capacity-building is the name of the game in modern parlance. The Nasheed government could not be blamed for not trying in approaching the UN agencies and India, among others, for helping with capacity-building in judiciary and other areas of administration, but the follow-up was lacking.

The other problem pertaining to the judiciary, as pointed out the MDP since Nasheed assumed the presidency in 2008, relates to the life-long tenure for judges. For a nation that had borrowed the US model of executive presidency without the attendant checks-and-balances, the Maldivian scheme suffers from internal contradiction that are natural to adapting alien models without thought. The checks-and balances scheme took roots in the US for historic reasons. The US also takes pride in protecting the individual accountability and collective responsibility of institutions. Neither this, nor the ‘French model’ of shared powers between the directly-elected President and a Prime Minister as under the Westminster scheme, for instance, could have been transplanted into another system, without nation-wide acknowledgement and discourse, and a commitment flowing from it.

In the Maldivian context, the executive presidency from the Gayoom era was accompanied by live-tenure for judges, without self-accountability on the latter’s part. Under the scheme, the legislature too being a tool of the executive did not protest violations or protect the common man’s interests. The MDP in general and President Nasheed in particular wanted this situation changed. What transpired however was a government in a hurry wanting to change everything overnight. With the Opposition-controlled Parliament in no mood to amend the laws to grant a fixed or age-barred tenure for the judges, the Nasheed Government started painting all appointees of the Gayoom administration in black, leaving no room for shades of grey.

This also applied to members of other independent institutions, including the Election Commission, Judicial Services Commission, Civil Services Commission and the Human Rights Commission. In a more recent response to a legislative proposal to amend Article 53 of the Civil Services Act, which stipulates that civil servants wanting to contest elections should quit their post six months in advance, Mohamed Fahmy Hassan, CSC president, said that professionalism of the civil service can be maintained only of if the civil service is established as a non-political establishment. What needs to be achieved is a measure of legislative changes, which do not always go in favour of the Government of the day, particularly when it lacked parliamentary majority.

The MDP government was in a hurry to do too many things in too short a time, and seen as having revamped the system in time for their second presidential poll under the multi-party scheme. In the process, they bit more than they could have chewed.

Anti-incumbency & coalition from start

All sections of the nation’s polity should share the blame for writing the Constitution with an individual, and not institutions, in mind. Through the debates of the Constituent Assembly (2007-08), the unacknowledged assumption was President Gayoom would either thwart the effort or ensure his electoral victory even under a multi-party system. His Government in a way fed such apprehensions on the side of the multi-party Opposition. The Gayoom camp favoured the Westminster system of government. As the polling pattern in 2008 proved, he would have continued in office under the scheme, he having polled 40 per cent of the popular vote in the first round of presidential elections. Against this, Nasheed polled only 25 per cent with two other Opposition candidates, Hassan Saeed and Gasim Ibrahim obtaining 17 and 15 per cent of the votes, respectively. Anticipating some game-plan up President Gayoom’s sleeve, and also understanding the awaiting complexity, the Opposition parties preferred the Executive Presidency through direct elections and 50-per cent-plus share of the popular vote for the winner.

Written into the script even at the time was the inevitability of an anti-Gayoom candidate pooling the votes of other runners-up in the second round, if he had tobe elected President. Deals were struck by parties behind the back of the people, who in turn were excited about the prospects of multi-party democracy. The 40-per cent youth population was overwhelmed by vote for 18-year-olds. Nasheed’s victory thus implied a contract for the winner to accommodate the runners-up in the Government and in the parliamentary elections under the new constitutional scheme. When that part of the deal was not kept, the inherent coalition, inevitable to the Maldivian scheme of the time, broke. It also implied that anti-incumbency of the kind that beleaguered President Gayoom in electoral terms after multi-party democracy became possible, would haunt his successor, too. Or, with the electoral focus turning towards the new President, other parties would ‘gang up’, as they did against President Gayoom, if they felt being let up the garden path or that the mood of the voter had changed, since.

Elsewhere, particularly in directly-elected executive governments, coalitions of the non-incumbent/anti-incumbent kind are often represented in terms of ‘interest groups’ within an umbrella organisation of a single political party. In such instances as post-independence India or Sri Lanka in the immediate neighbourhood, such umbrella organisations had splintered and fractured with passage of time, to form other political parties, representing individual interest groups, within which commonality could suffer further erosion under specific circumstances. In democratic Maldives, such ‘interest groups’ have had ready representation in different political parties even at the commencement of the process.

Barring the main player, the President of the nation and the party that he led and/or represented, the rest of them all have remained constant. There are visible signs of some of the political parties weakening and others strengthening themselves at the cost of the rest. A clearer picture will take time to emerge, with each election for the presidency, Parliament and local councils, throwing up different permutations and combinations, in the interim. All this would go on to prove that democracy is a dynamic process, eternally changing and reshaping itself.

Maldives and Maldivians, starting with their divided polity, have to accept that there is no constancy or permanency in democracy after a point, and that all would have to accept this reality and be prepared to make sacrifices.

At present, as in the pre-democracy past, the leadership of various political parties, and by extension, the government also remains Male-centric, and thus represents the urban elite. It could not have been different in the short span, though early signs of the Maldivian polity moving away from urban Male for leadership have become visible in the democracy years. As has been happening in older democracies elsewhere in the Third World, particularly in the rest of South Asia, the trickle-down effect of democracy would swarm not only the population in terms of socio-economic benefits but would also throw up a new class of rural elite, and non-elite among the political party, and consequently government leadership in due course.

The Maldives has to prepare itself to accept this reality. So should Maldivians be prepared for the same. Yet, given the urban-islands divide – an urban-rural divide, elsewhere – and the reality of urban population centres having a disproportionately high share of the votes, the transition and consequent transformation could be more painful than elsewhere, and more than what the young democracy has been subjected to, already.

Institution-building, as democratic traditions, is time-consuming. Once built, it would be left to the practitioners of the scheme, politicians and bureaucrats in this case, to protect what they have given themselves and the nation. In a contemporary history whose current life is only three years or even less, institution-building in Maldives could not be, and should not be, compared to those in older and thus more matured democracies. The nation will also have to marry the traditions learnt from elsewhere with the cultural and civilizational ethos of a proud people, whose geographical insulation in this communications era needs to be balanced, carefully and patiently.

It is not that it could not be achieved, but the tweaking and tempering takes time, at times running to several years. After all, Rome was not built in a day, nor can Maldivian democracy and democratic institutions be, particularly when they have been inherited from another scheme of governance that were in force in another era even in the global context, and cannot be, and should not be wished away, either.

The writer is a Senior Fellow at Observer Research Foundation.

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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Gayoom is back and India is in no hurry to change its stand: Eurasia Review

Having recognised the new regime in a hurry, India is in no position to change its stand, writes Dr. S. Chandrasekharan for the Eurasia Review.

Despite two visits by the Indian Foreign Secretary to Male to convince the new regime for early elections and an undertaking by President Waheed that he would, it looks that there will be no early elections.

With Gayoom having returned to the island, is should be known to everyone that President Waheed is not the master and the decisions are being taken by Gayoom and his followers who are all over in the new government.

Gayoom’s daughter Dunya who is the Minister of state for foreign affairs admitted to the Sunday times that her father would be working “behind the scenes” and playing an advisory role to the President.

This point that Gayoom would be calling the shots was mentioned by Nasheed also. He said “whether we like it or not- the government is now in the hands of the elements that belonged to the three decade long authoritarian rule of Gayoom. President Waheed may be the face of the government- but if you look into it, you will see that he has neither the say nor the control of a President as outlined under the Maldivian constitution.”

This is very much true. Soon after landing in Male, Gayoom ruled out early elections. In his latest speech on 16th April, he has brought in the issue of religion and the sovereignty of Maldives on those ( India included) who are insisting on early elections. He said that international calls for elections are driven by a “special motive” that poses a direct threat for the Maldives’ sovereignty and religious heritage.

His daughter Dunya Maumoon had also said earlier that until the country’s state institutions – the judiciary, the election commission and human rights commission are strengthened it would be impossible for a vote to be held. In other words, what she means is that the present regime is in no hurry to hold the next elections.

Others who are not in support of early elections have cited that the law and order situation is not conducive for early elections. Four elections were held in the last one week- two to Majlis and two the local councils and there were no incidents at all.

The fact of the matter is that early elections will not be held and Gayoom has said the last word.

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Budget deficit “substantially” underestimated while spending still unaddressed: IMF

The Maldives has “substantially understated” its budget deficit, the International Monetary Fund (IMF) has warned, by underestimating its spending and “probably” overestimating tax revenues.

“Moreover, not all of the financing for even the approved budget has been identified, and additional risks exist as well – including the need to clear reported unpaid bills carried over from 2011 and the possible loss of lease extension payments (Rf 700 million, or US$42.4 million) assumed in the budget,” the IMF’s mission chief for Maldives, Jonathan Dunn, told Minivan News.

While the 2012 budget put the deficit at less than 10 percent of GDP, “the IMF team sees the figure as more likely to be 17.5 percent of GDP, and perhaps larger than this,” Dunn said.

“The financing gap for 2012 is thus at least 7.5 percent of GDP, or about US$160 million, and possibly substantially larger than this,” he added.

As a result, economic growth and stability in the Maldives were unlikely to be maintained “in the medium term” unless the government substantially cuts spending.

Meanwhile, government revenue for the first quarter of 2012 has fallen 15.5 percent below projections, the Maldives Inland Revenue Authority (MIRA) has reported.

Revenue from tourism land rents fell 18.6 percent on the previous quarter, however the largest contributor to the drop were the new government’s changes to resort lease extension payments, which saw a 76.1 percent drop in revenue below projected figures.

Inflation meanwhile spiked 13.4 percent in February, with the price of food increasing 28 percent.

Government revenues for the quarter has nevertheless increased 76.2 percent compared to the same period in 2011, “mainly because of the significant increase in Business Profit Tax (BPT) and Goods and Services Tax (GST) collections”, MIRA noted: Rf 361.7 million (US$23.4 million) and Rf 721.9 million (US$46.8 million) respectively.

However, Dunn warned that revenue collection by MIRA “does not provide a full picture of total revenue performance in the country.”

“Revenue from import duties – previously the single largest revenue – collected by Customs and is not reported by MIRA. Due to implementation of the 9th Amendment to the Maldives Export Import Act, revenue collection from import duties is expected to decline substantially in 2012, fully offsetting the increase in tax revenues from GST and BPT.”

Solutions?

Dunn observed that printing money would only facilitate the much-larger-than-expected 2012 fiscal deficit.

“This, in turn, would imply that national imports would be substantially larger than expected, because in the Maldives, where most goods are imported, almost any spending by either the government or the private sector turns, directly or indirectly, into import demand,” he noted.

As a result, the imbalance between the demand for dollars and the supply would become even larger, “and the MMA would likely have to supply dollars from its own reserves to meet the shortfall.”

“Usable reserves at the MMA are low, so if the fiscal gap this year is financed via money creation, it is likely that the MMA’s usable reserves would soon dry up,” he said.

Another option, Dunn suggested, was for the Maldives to borrow more money. However borrowing from domestic sources “will be difficult to achieve, as it is unclear whether the banks have much more appetite for buying treasury bills.”

Obtaining foreign grants “would be helpful but is probably not realistic.” Foreign loans, meanwhile, “would have to be considered carefully, given that Maldives already has a very high debt-GDP ratio, but they may be needed in the short run to avoid the consequences of printing money.”

Dunn emphasised that the only sustainable solution was for relevant parties to rationalise the budget by boosting revenues and cutting expenditure, despite the political difficulties.

“These may be politically difficult measures, but the consequences of not reducing the budget deficit are likely to be even more difficult,” he warned.

Furthermore, ongoing dollar shortage would not be resolved while the Maldives continued to substantially increase spending, Dunn added.

The foreign currency crisis – the bane of many of the country’s importers, who are forced to use unofficial channels outside the banking system to obtain currency necessary to purchase overseas – was exacerbated by the number of unrestricted foreign exchange licenses issued to resorts and other private businesses, “without the requirement that they hold substantial capital to back up that business.”

This practice allowed such nonfinancial businesses to conduct large-value foreign exchange operations outside the banking system, “an unusual arrangement and sustains the parallel foreign exchange market,” Dunn noted.

“In a more typical situation, nonfinancial businesses [such as resorts] would have licenses only for the exchange of small-value cash transactions and would be required to channel large-value foreign exchange transactions through the banking system. In the case of Maldives, this would substantially increase liquidity in the official foreign exchange market,” he suggested.

However, “as long as the government continues to inject substantial amounts of new spending into the economy, the foreign exchange situation in the country will not be resolved.”

Growing expenditure

Dunn emphasised that “fiscal imbalances in the Maldives have been present for many years and that fiscal adjustment remains necessary”.

Faced with increasing pressure from the IMF to lower expenditure after failed attempts in 2010 to cut the salaries of civil servants – a maneuver blocked by the Civil Services Commission (CSC) and backed the then opposition – former President Mohamed Nasheed’s administration insisted that increased revenue from the new taxes would match expenditure, and boasted that the 2012 budget was the first in many years to balance income and expenditure.

Following the police mutiny and controversial change of government in what the MDP contends was a coup d’état, spending by President Dr Mohamed Waheed’s administration has escalated as it seeks to shore up support in a fractious political environment.

Newly-announced expenditure in the last few months includes:

  • The promotion of 1000 police officers – approximately a third of the force – and plans to both recruit 200 new officers in 2012 and appoint four new Assistant Commissioners;
  • Lump sum payment of two years of allowances to military personnel;
  • An unspecified amount for an international public relations firm, to combat negative publicity and “rally an alliance of support” in the international media following the controversial change of power and coverage of police crackdowns;
  • Rf 100 million (US$6.5 million) in fishing subsidies;
  • A proposal to create two new ministries, including the Ministry of Gender, Family and Human Rights, and the Ministry of Environment and Energy;
  • The reimbursement of Rf 443.7 million (US$28.8 million) in civil servant salaries from July 1, following cuts by Nasheed’s administration in 2010. In addition, civil servant working hours have been reduced to 8am-3pm;
  • The doubling of the budget for the Maldives Marketing and Public Relations Corporation (MMPRC) to US$S4.5 million.

Lost income has also increased, with MIRA warning in March of unrealised revenue from the new government’s recent decision to accept resort island’s lease extension payments in installments, an amendment that former Tourism Minister Dr Mariyam Zulfa contends was pushed through by several local resort owners with vested interests, that immediately cost the treasury US$135 million.

In March, MIRA anticipated receiving a total of Rf375 million (US$ 24 million) for lease extensions, however the income received dropped to Rf23 million (US$1.5 million) as a result of the decision.

Meanwhile today the publicly-owned State Trading Organisation (STO) dropped legal attempts to reclaim a US$1.2 million debt owed by the Meridian Services owned by MP Abdulla Riyaz of the new ruling coalition. The STO justified the decision in a letter to the court, by stating that it did not have enough board members to meet quorum and make decisions.

In a bid to address spiralling costs, the government is reviewing the Aasandha universal health scheme introduced by Nasheed’s administration on January 1 this year, which “is and will always be completely financially unsustainable in a country such as the Maldives”, according to President Waheed’s Special Advisor, Dr Hassan Saeed, in an article for newspaper Haveeru.

“The introduction of unrestricted, universal free healthcare with no agreed regulation or management was an act of folly, recklessness and irresponsible political immaturity that rivals any of the actions of Mr Nasheed’s administration,” Dr Saeed contended.

“And what’s more he knew this but still went ahead with it. And the consequence is that we now have the IMF breathing down our necks and a budget deficit that threatens to derail all government social programmes,” Dr Saeed wrote.

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Police forward case of Muleaage liquor bottles to Prosecutor General

The police concluded its investigations into the alcohol bottles allegedly confiscated from the home of former President Mohamed Nasheed and has forwarded the case to the Prosecutor General’s Office (PG).

In a press conference, Deputy Head of the Drug Enforcement Department, Sub-Inspector Ismail Fareed, noted that all  people questioned regrading the case had fully cooperated.

According to Police Media Official Ahmed Shiyam at the time, the DED investigation of the historical President’s Residence was prompted just hours after he had resigned, when a lorry emerged from the residence with “bags of trash”.

“Security stopped the vehicle and found a number of alcohol bottles in the bags. The police were notified of the situation and an investigation is underway,” Sub-Inspector Shiyam said at the time.

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“No Islamic fundamentalism in the Maldives”: Foreign Minister

The Indian government’s biggest concern is the internal stability of the Maldives,  Foreign Minister Abdul Samad Abdulla said today.

In a press briefing to brief media about his official visit to neighboring India, and his recent meeting with Sri Lanka’s Minister of External Affairs, Dr Samad, said the Indian government was eager to know how the Maldives had been progressing after the transfer of power that took place on February 7.

“The officials of the Indian government were concerned with the country’s internal stability after the events that unfolded on February 7,” he said.

Samad also said that India was concerned about whether the events that unfolded on February 7 involved Islamic fundamentalists, but he said he assured them that Islamic fundamentalism had no part to play in the events.

He expressed disappointment over statements made by officials of Nasheed’s government that the Maldives had a growing issue with Islamic radicalism and fundamentalism.

Samad further went onto dismiss such claims and said that religious fundamentalism did not exist in the country, and said he had assured Indian authorities that neither the transfer of power nor the vandalism of Buddhist relics in the National Museum on February 7 had involved any religious sentiment.

Speaking to Minivan News at the time, a museum official said that a group of five to six men stormed into the building twice, and “deliberately targeted the Buddhist relics and ruins of monasteries exhibited in the pre-Islamic collection”, destroying most items “beyond repair”.

A journalist asked Samad about the 2007 bombing of Sultan Park and the government’s subsequent clash with radical Islamists on the island of Himandhoo – footage of which later appeared in an Al Qaeda training video – to which the foreign minister replied “That was in the past.”

Dr Samad stated that he had met all key officials of Indian foreign affairs including the Minister of External Affairs, S M Krishna, and Indian Foreign Secretary Ranjan Mathai. Samad said he briefed them about the events of February 7, the works of the Commission of National Inquiry (CNI), and the all party talks.

Samad also acknowledged support from Indian High Commissioner to the Maldives, Dnyaneshwar Mulay.

“I especially thank Indian High Commissioner Mulay for briefing them about what happened in Maldives. Mulay, who was there during my meetings with Indian officials, observed the events very closely and even former President Nasheed was talking to him,” Samad said.

Samad also stressed that the Indian government was a “reliable and loyal” neighbor which had always been there for the Maldives, regardless of which government was in power.

He said that the main purpose of the trip was to get assurance of Indian support for the current government, which he claimed had been “very positive”.

India was initially concerned of the safety of Indian investments in the country, Samad said – Indian infrastructure giant GMR is currently redeveloping Ibrahim Nasir International Airport (INIA), the single largest foreign investment in the Maldives. Samad  said he had assured Indian officials that the current government of the Maldives will give the “utmost priority” in protecting Indian investments.

“Several Indian companies have huge investments in the Maldives. They have been involved in housing projects and as well as the privatisation agreement of INIA with GMR. The Indian government was concerned about these investments and we assured them that it remains safe,” Samad added.

Last week, Finance Minister Abdulla Jihad declared that the Maldives Airport Company Limited (MACL) would be unable to pay the disputed airport development tax (ADC) without risking bankruptcy – a US$25 fee that was to be charged to outgoing passengers, as stipulated in the contract signed with in GMR in 2010. The government was to pay the fee from airport revenues after its collection was blocked by the Civil Court.

Samad also said that the safety of the Indian ocean was a priority for India.

“We are at the center of a very internationally strategic area and the Indian Ocean is a huge shipping lane as well.  The recent hijacking of a foreign vessel by Somalia pirates is a concern as well. India is highly concerned about the security of the Indian Ocean.”

Samad said he had discussed strengthening bilateral relations with India and had discussed in finding solutions the difficulty in obtaining visas for Maldivians travelling to India.

He also claimed that India would soon provide the Maldives government with land in Delhi to build a Maldivian Embassy, in the heart of diplomatic area.

Sri Lanka

Regarding the meeting held with the Minister of External Affairs of Sri Lanka, Professor GL Peiris, Samad said that he had briefed the Sri Lankan minister regarding the events of February 7.

He also said that the ministers had discussed resolving visa issues and complications faced by Maldivians travelling to Sri Lanka, particularly students, to which he said the Sri Lankan minister had been very positive.

Regarding the transfer of power in February 7, Samad claimed that the government had not changed on February 7 and that “technically” it was the same government and that only the president had changed.

“If you look at our constitution, we have a presidential system. This is not a parliamentary system to say that the government belonged to the Maldivian Democratic Party (MDP). People voted both Nasheed and Waheed in the elections. Nasheed did not win the election on his own. Nasheed and Waheed got less than 25 percent of the votes in the first round [of the presidential elections 2008]. He won the presidency with the support of Gasim Ibrahim and Dr Hassan Saeed,” Samad contended.

“So if you say its Nasheed’s government that means its Gasim’s government as well, it’s even Umar Naseer’s government,” he claimed.

The MDP has contended that nearly all political appointments have been replaced with supporters of former President Maumoon Abdul Gayoom, who was voted out in 2008.

He also revealed that former government had not built any ‘special’ diplomatic relations with Israel.

“I don’t think what some people speak on political podiums is the real foreign policy. From the documents that I have, Naseem [referring to former Minister of Foreign affairs, Ahmed Naseem] did not build any special diplomatic relations with Israel like he has been saying,” Samad claimed.

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“My romantic ideas of how to deal with a dictator were wrong”: Nasheed

Allowing former dictator Maumoon Abdul Gayoom to live in peace following the 2008 election was a bad decision, former President Mohamed Nasheed has told Time Magazine.

The Maldives’ experience with the remnants of autocracy should serve as a lesson for other countries in the Arab Spring said Nasheed.

“The lesson is we didn’t deal with Gayoom. That’s the obvious lesson. And my romantic ideas of how to deal with a dictator were wrong. I will agree with that,” Nasheed told Time, in a striking reversal of his magnanimity in 2008.

Nasheed observed that “you can get rid of a dictator, but you can’t get rid of a dictatorship. You can get rid of a person very easily, but the networks, the intricacies, the establishments — you have to flush them. And to do that is not an easy thing. We have to be mindful with other countries going down the same line — for instance, Egypt, Tunisia, Libya. They’ll have good elections, they’ll probably come up with a better leader. But then the dictatorship will always try to come back. And it’s going to be impossible to hold them from coming back from within the system.”

Gayoom stepped down peacefully in 2008 after losing the country’s first multi-party elections election to Nasheed, a former political prisoner who was quickly dubbed ‘South Asia’s Nelson Mandela’ by international media outlets. The peaceful transition from autocracy to democracy was held up as a model for other countries by human rights and democracy organisations, including the Commonwealth and UN.

Nasheed, despite heavy resistance from key supporters, pledged to leave Gayoom in peace, acknowledging his contribution to the development of the tourism industry and encouraging him to assume a role as a respected elder statesman.

“Be magnanimous in times of victory, and courageous in times of defeat. The test of Maldivian democracy will be how we treat our former President,” said Nasheed at the time.

His sentiments were echoed during a state visit from the President of Timor-Leste, Jose Ramos-Horta.

“I prefer to be criticised for being soft on people who committed violence in the past than be criticised for being too harsh or insensitive in putting people in jail,” said Ramos-Horta, during a visit to the Maldives in February 2010.

“Our approach fits our reality, an approach the president of the Maldives and I share – the need for magnanimity. Immediately after our independence in 1999, I said: ‘in victory be magnanimous. Don’t rub the wounds of those who feel they lost. Make them feel they won, also.’”

Exactly two years later Ramos-Horta would become the only world leader to condemn “the obvious coup d’état”, and the “unsettling silence of big powers”.

After the 2008 election Gayoom continued to lead his Dhivehi Rayithunge Party (DRP), but in January 2010 announced his intention to bow out of politics ahead of the DRP congress, anointing Ahmed Thasmeen Ali as his successor and become the party’s ‘Supreme Leader’.

“The Maldives is a young country, and only will progress if youth become involved in politics and leadership,” the 72 year-old said during a live press conference on January 25, 2010.

“I am not young any more. I have spent many years in office, and I want to spend time with my family. I need to give the younger generation the opportunity [to lead the party] – they are capable,” Gayoom said.

A senior government source at the time observed that Gayoom’s announcement was not met with celebration by the country’s leadership.

“There is no jubilation here. It was very hard on some people when Gayoom publicly denied he ever harmed anyone,” the source said.

With Gayoom absent from the DRP, a power struggle quickly erupted between the vigorously uncompromising faction of Umar Naseer, a former policeman, and Thasmeen’s mellower, more conciliatory approach to opposition politics. The struggle came to a head with the expulsion of Naseer from the party in late 2010, a decision that sparked Gayoom’s return to active politics with a dramatic attack on Thasmeen’s leadership in a 12 page open letter.

Backed into a corner by the party’s Supreme Leader, Thasmeen did not respond, while the infighting – occasionally violent – culminated in Gayoom’s faction splitting from the party and forming the Progressive Party of the Maldives (PPM), backed by the People’s Alliance (PA) of his half-brother, MP Abdulla Yameen.

The PPM actively led protests in the lead up to Nasheed’s downfall on February 7, opposing everything from the “idolatrous” SAARC country monuments in Addu to Nasheed’s detention of Criminal Court Judge Abdulla Mohamed, an ill-fated last-ditch attempt to reform the judiciary.

Speaking to Time Magazine this week, Nasheed said he had pushed against a “witch hunt” after coming to office: “We didn’t want to purge the military, we didn’t want to purge the police.”

“There were mistakes,” he confessed. “One thing the international community finds it difficult to understand was the arresting of the judge. He asked a child to re-enact a child-abuse case in the court. The whole country was disgusted by it. The very next week, he gives an order for a murderer to be released because the Ministry of Health didn’t have a death certificate. And then [the released man] goes out and murders again. It was like releasing a hit man so he could go out and make another hit. The whole picture was getting very, very clear with gangs, drug dealers and with Gayoom and his cronies,” Nasheed told Time.

The government had begged the international community for assistance after detaining the judge, Nasheed said.

“Unfortunately, I kept on asking everyone – the Commonwealth, the EU, the Indian government – to assist us in reforming the judiciary. But they were very late in coming. And we didn’t get the necessary help from them,” he said.

“Also we were bringing in reforms very rapidly. We were liberalising the outlook of the country very, very rapidly. Especially with Islamic radicalism. Our ideas of moderation, the moderate Islam — there were some small, entrenched sections that reacted strongly against me. I thought they were odd people here and there. But there was a core of radical Islamists who fueled the coup through media and harping on about how un-Islamic I am. I must confess, I’m not the most pious of the people. But I am a strong believer.”

Nasheed predicted that Gayoom would make a move for the presidency “when he thinks it’s in his hand, when he feels the field is skewed enough in his favor.”

“His designs are to have a stronger hold on power. He would avoid an election. I am sure he would avoid the scheduled election in 2013 as well. He’d try to push back the elections as much as they can. He would talk in words that the international community will like. We had elections in 2008, 2009, 2011 that were all free and fair. But suddenly the US government is saying, ‘Oh Gayoom says, there might be a problem with the election commission.’

“This is very strange. At the same time, [Gayoom] will start running things through the military. My fear is that we’re not going back to pre-2008 Maldives. We’re going back to pre-2008 other countries, to Pakistan, perhaps, where the military becomes so strong that they call the shots.”

Nasheed said he was “shocked” at the speed with which the US, India and other countries recognised the new government, especially after “we did so much to encourage internationalism, encourage liberalism, to bring Indian investment — to get rid of anti-India phobia. We tried to have good relations. But when push came to shove, we ended up in the wrong. Somehow we were not the right people to talk to. If you want to be a regional leader, you must be sensible. And consistent. And you should lead. They should protect democracy, and they should be on the side of democrats and human rights.”

Nasheed said they tried to encourage him to form a national unity government, “but my point is, why should we try to unify the dictatorship? The coup is not unifying the country – it’s bringing back the old dictatorship. We didn’t want to have a part in it. We beat them in the elections. It’s wrong to talk about governing with Gayoom because he was rejected by the people.”

The international community had slowly begun realigning itself after realising that the ousted government was refusing to be supressed, and had backed early elections – “they should have been the first to say it, not me,” Nasheed noted.

India in particular “has the means” to push for early elections, Nasheed observed.

When those are held, “I am very, very confident that the people will decide upon us. And the thing is not who wins an election – it’s the fact that you have to have one. It’s the fact that a government is formed through the people.”

Read the full interview in Time Magazine

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MDP National Council votes to investigate manipulation of party’s constitution

The Maldivian Democratic Party (MDP)’s Gaumee Majilis (National Council) has passed a resolution to investigate an alleged ‘manipulation’ of its constitution on Tuesday.

In the National Council meeting held on Tuesday, the report of the committee formed within the party to investigate the matter was presented to the meeting by the chair of the committee Mohamed Waheed, who was also the former Minister of State for Health and Family during Nasheed’s administration.

Presenting his report to the council, Waheed stated that the committee found that the constitution had been manipulated as it differed from the original version of the party constitution that had been passed in the Party’s last congress, held on October 2010.

According to Waheed, there were two significant changes brought to the party constitution, both to the advantage of the two senior positions of the party – President and Vice President.

The amendments allegedly included in the constitution involved article 40 concerning about the party (shadow) cabinet. The second involved article 78, concerning the highest authority of the party when in opposition.

Waheed said that the committee had found that two articles were not included in the original version of the party constitution.

The article 40 of the allegedly manipulated constitution states: “The policies set by the Congress shall be executed by the Party Cabinet. The Party Cabinet shall be appointed by the Party President.”

The article 78 of the same document reads: “The President of the Party is the highest position of the party. He shall also be the highest authority in politically representing the party and carrying out the political activities of the party. However, he shall execute his duties within and in accordance with the principles of the party, which includes that his actions be in a democratic and transparent matter. He shall not execute his authorities in contrary to the party principles. The term of the Party President is five years.”

Speaking to Minivan News on Tuesday, Waheed briefly outlined what he described as a scandal.

“I remember very clearly that the version originally passed in the congress did not include a party cabinet, and did not include the phrase that the party president was the highest authority when the party was in opposition,” Waheed said.

“During the congress the powers of the Party President and Vice President were delegated to the Chairperson and the Parliamentary Group leader. But the amendment to remove the post of party president and vice president did not pass, therefore the two positions remained as ceremonial positions since their powers had been delegated.

“But the party constitution has been manipulated and now includes stipulations that were not originally included in the party constitution. For instance, see the powers that are included for the party president in the version available on the party website. It contradicts with the powers of the chairperson,” he said.

Vice President of the Party and MP Alhan Fahmy was the only member in the council who spoke against the report, citing that the findings  presented by the committee were untrue and that no changes had been brought to the party constitution.

He also stressed that the matters involving the party constitution and that the party congress was  the only body vested with the power to bring any changes to it.

Speaking in support of the report, the re-elected Parliamentary Group Leader and MP Ibrahim Mohamed Solih, said  the valid party constitution the party has to follow should be the one that was passed in the last congress of the party.

He also claimed that the findings in the report were true and that  article 40 and 78 had not been included in the original constitution of the party when it was passed.

There were also calls from some members of the council, including MP Mohamed Shifaz,  for an extraordinary congress, however debate did not materialise in the meeting.

With regard to the submission of the report, two resolutions were passed.

The first resolution was presented by the former Legal Director of the President’s Office Hisaan Hussain, which was passed by majority of 36 votes.

The resolution stated that the MDP shall view the party constitution that was passed during the last Congress as its official constitution and that this be submitted to the Elections Commission as the official constitution of the Maldivian Democratic Party.

The second resolution was presented by the former Minister of Human Resources, Youth and Sports, Hassan Latheef, which passed with a majority of 39 votes.

The resolution stated that the matter of ‘manipulation’ of the party constitution be looked into by the relevant organs of the party, and action taken by the party against those who were found guilty.

Another resolution was forwarded by Waheed, proposing to delay the previously agreed Presidential Primary of the Party in preparation for the ‘potential’ early elections that may take place in 2012.

The resolution also proposed that the election of the vacant positions of Party Chairperson and Deputy Chairperson (Administrative) be held on 16 June 2012.

However, Waheed withdrew the resolution after newly elected MDP Deputy Parliamentary Group (PG) leader MP Ali Waheed suggested that the matter be decided after former president Nasheed concluded his trip to the United States.

MDP also yesterday held its Parliamentary Group elections for this year, electing the current PG Leader MP Ibrahim Mohamed Solih for another term while MP Mohamed Aslam and MP Ali Waheed were elected as Deputy Leaders.

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