President Waheed thanks former President Nasheed for new Arabiyya School building

President Dr Mohamed Waheed Hassan has expressed gratitude to former President Mohamed Nasheed for his decision to construct a new building for the Arabiyya School in Male’.

Dr Waheed made the remarks during a ceremony on Thursday to officially open the new school premises in Chandhanee Magu. In his speech, Dr Waheed reportedly said that Islamic education should not be reserved only for students of Arabiyya, and that the Quran and Sunnah should be the basis of education in all other schools as well.

He also thanked officials of the Education Ministry under the Nasheed administration for the new Arabiyya School project.

The previous government shut down the old Arabiyya School in March 2010 after cracks in the building caused a wall to collapse. Arabiyya students were transferred to Mandhu College while construction on a new building began in early 2011.


Parliament refutes President Waheed’s claim of 100 pending bills

The People’s Majlis has refuted President Dr Mohamed Waheed Hassan’s claim last week that 100 pieces of legislation needed to implement the 2008 constitution have yet to be passed by parliament.

In a press release yesterday (August 23), the parliament secretariat revealed that 43 bills were required to give effect to the constitution adopted in 2008, of which 24 were submitted and 18 were passed by parliament during the past five years.

The legislation was mandated by article 299 (b)(2) of the constitution, which states, “the People’s Majlis shall until the enactment and commencement of laws required to give effect to this Constitution, approve a course of action in relation to these matters. The Executive shall within thirty days of the commencement of this Constitution draw up a list of such laws and submit it to the People’s Majlis. Within ninety days of the commencement of this Constitution, the People’s Majlis shall draw up and approve a schedule for enactment and commencement of such laws.”

The parliament’s press statement noted that current Attorney General Azima Shukoor was in the same post in 2008 when the list of 43 laws was submitted. Azima – former President Maumoon Abdul Gayoom’s last attorney general – was reappointed to the post by President Waheed following the controversial transfer of presidential power on February 7, 2012.

“Therefore, given the situation, we regret the false claims made by the President in a way that could cause loss of public confidence in parliament, and which was made with the intention of achieving a specific purpose,” the press release stated in conclusion.

President Waheed made the claim at a ceremony on Thursday night to confer national awards of honour and recognition. In his speech (Dhivehi), President Waheed contended that the public has not enjoyed the benefits of the reforms envisioned in the 2008 constitution due to “loopholes in a very young and incomplete constitutional framework.”

“We see a person who does not have the approval of the People’s Majlis, in charge of the highest number of state employees. We are in a situation where the people doubt the highest court in the country. Suspects in criminal cases are in state institutions. Murderers and people who have committed arson roam freely in the streets. The rights of women and children are unprotected,” President Waheed said, according to the President’s Office website.

President Waheed further contended that all the provisions in the constitution “cannot be said to have been drafted with the whole country’s framework of governance in mind.”

As the constitution was drafted during the final years of “a long rule,” he argued, some provisions were added “with the intention of changing the condition that existed then.”

“When the drafting of the constitution was completed under these circumstances, a number of problems were noted,” he said. “Some 100 laws needed to implement the constitution have yet to be formulated.”

The Majlis statement meanwhile provided a list of the bills passed, pending and yet to be submitted by the executive. The six pieces of legislation currently under review at the committee stage include the freedom of information bill, the education bill, the penal code, the criminal justice procedures bill, the evidence bill, and the jails and parole bill.

Among the 19 bills that have yet to be submitted include legislation on public referendums, freedom of expression, press freedom, parliamentary ombudsman, state secrets, defamation, women’s rights, public services, trade unions, legal counsel, civil justice procedures and national security.

The executive was also required to submit amendments to existing laws governing the Human Rights Commission, the Civil Service Commission, the auditor general, children’s rights and family matters.

The legislation passed by the parliament in the past five years for implementation of the constitution included bills establishing independent institutions such as the Elections Commission, Judicial Service Commission, Police Integrity Commission, Anti-Corruption Commission and the Prosecutor General’s Office.

Parliament has also passed laws governing the courts, presidential and parliamentary elections, freedom of assembly, decentralisation, parliamentary privileges, political parties, customs, state pensions, state benefits for persons with special needs, and electoral districts.


Adhaalath Party quits President Waheed’s coalition

Additional reporting by Mohamed Naahii

The Adhaalath Party (AP) has quit President Mohamed Waheed’s ‘Forward with the Nation’ coalition due to “mysterious events”, a day after the party slammed Waheed for telling the AFP the party had “extremist” individuals.

During a two day official visit to Sri Lanka, President Waheed told the news agency that it was “better to work with” the self-claimed Islamist party despite some elements within the party holding “extreme views”, since excluding the party from mainstream politics risked marginalising it. This, he said, would have a “negative long-term effect”.

In a statement (Dhivehi) published on the Adhaalath Party’s website Tuesday (July 9), the party said that it had been offended by the remarks and that such comments from the president would affect its relationship with Waheed’s party Gaumee Iththihaadh Party (GIP). The party also denounced the claim that it held extreme views.

“The Adhaalath Party does not by any means hold extremist views. The party is working to introduce Islamic principles to the country, to protect the Islamic faith of the country and the country’s sovereignty,” read the statement.

“Therefore, the party leadership and its members are deeply disappointed by such allegations,” it added.

Yesterday (July 10) following the party’s announcement that Waheed’s comments would have a “significant negative effect” on their relationship, Adhaalath decided to leave the ‘Forward the Nation’ coalition during a meeting of their Consultative Council.

A near unanimous 97 percent of the council voted to leave the ‘Forward with the Nation’ due to “mysterious events”, as well as the coalitions prospective inability to succeed in “saving the nation” from former President Mohamed Nasheed’s “sacrilegious actions”, AP President Sheikh Imran Abdullah told local media.

“By the will of God, Adhaalath Party will continue to facilitate in providing a safe passage in order to save the nation from Nasheed,” said Abdullah.

He added that the party’s efforts to resolve issues within the coalition last week were “of no use”, however despite leaving ‘Forward with the Nation’, AP will continuously work toward “taking people to safe harbour”.

In a statement (Dhivehi) released today (July 11), the Adhaalath Party detailed their reasoning for leaving Waheed’s coalition.

“They were not putting much effort in preventing Nasheed’s anti-religious, anti-nationalist secular rule from coming back. The ‘broad coalition’ was formed with high hopes to prevent this, but now it seems the coalition is incapable of it,” read the statement.

“No solution has been proposed by other members of the coalition,” it continued.

“By the will of almighty Allah, the Adhaalath [Party] will do whatever it can to protect the sovereignty of this country and its religion from all threats and will continue its actions within the best interests of the state,” it added.

Earlier this week – prior to Waheed’s AFP interview – reports were circulating that the GIP and AP had a falling out with each other after the Adhaalath Party expressed concern over a lack of campaign activities.

Meanwhile, there have been unconfirmed reports suggesting that Adhaalath is now considering the possibility of entering into coalition with resort tycoon Gasim Ibrahim’s Jumhoree Party (JP).

The GIP and ‘Forward with the Nation’ still hopes to work together with AP “even after the presidential elections,” the coalition stated in a press release issued yesterday, following the AP’s announcement it was leaving the coalition.

“The Coalition does not have any hard feelings towards Adhaalath Party,” read the statement.

“We also thank Adhaalath Party Leader Sheikh Imran Abdulla and other members for their time and support in forming this coalition.

“We believe that, even though we do not campaign together, our final goal must be to strengthen democracy and uphold democratic values and also to work in the best interest of the people,” it concluded.

The President’s ‘Forward with the nation’ coalition which is backing Waheed’s bid for election in September, now includes the government-aligned Dhivehi Rayyithunge Party (DRP) and the Dhivehi Qaumee Party (DQP). However, several key members of DQP have since defected to the Progressive Party of the Maldives (PPM), while DRP leader Ahmed Thasmeen Ali was recently taken to court by a series of creditors.

The Adhaalath Party President Sheik Imran and Sobah Rasheed, AP Member and team leader of Waheed’s election coalition media team, were not responding to calls at time of press.

Jumhoree Party (JP) Spokesperson Moosa Ramiz and Gaumee Itthihad Party (GIP) Spokesperson Abbas Adil Riza were also not responding to calls at time of press.


MDP expresses concern with President Waheed’s appointee to JSC

The Maldivian Democratic Party (MDP) has expressed concern over President Dr Mohamed Waheed’s appointment yesterday of former Department of Judicial Administration (DJA) Spokesperson Latheefa Gasim to the Judicial Service Commission (JSC), alleging the appointee had ties with the Jumhoree Party (JP).

In a press release yesterday (June 24), the party characterised Latheefa Gasim’s appointment as an attempt to “increase the political and other forms of influence of a particular group and promote their self-interest” through the judicial oversight commission.

“Latheefa Gasim is the wife of Mohamed Ikram, who is employed by Jumhoree Party presidential candidate Gasim Ibrahim as the head of V-media’s political department and a presenter of VTV, who campaigns for Gasim Ibrahim,” the party said, adding that Ikram was also a member of business magnate Gasim’s JP.

JP Leader Gasim Ibrahim is the parliament’s representative on the 10-member JSC, which consists of three judges from the three tiers of the judiciary (trial courts, High Court and Supreme Court); a representative of the President, the Attorney General, the chair of the Civil Service Commission; the Speaker of Parliament, a member of parliament elected by the People’s Majlis, a member of the public selected by parliament; and a lawyer elected by licensed practitioners in the Maldives.

Gasim, the JP MP for Alif Dhaal Maamigili, is the chairman of the Villa Group of businesses, which owns resorts, tour operators, a cement packing factory, a gas provider, an airline and several retail outlets.

The MDP alleged in its statement that Gasim has been “working ceaselessly” through the JSC to bar former President Nasheed from the upcoming presidential election on September 7, adding that the rival candidate has made public remarks to that effect.

Latheefa Gasim’s appointment to the commission has secured “two seats for the Jumhooree Party presidential candidate,” the press release continued, which has afforded the JP leader “further opportunities to advance his political and personal interests and exert extreme influence on the JSC.”

The press release also noted that Latheefa Gasim had made several statements to the media concerning MDP presidential candidate and former President Mohamed Nasheed’s trial at the Hulhumale’ Magistrate Court.

The former DJA spokesperson was not responding to Minivan News at time of press.

Latheef Gasim’s appointment yesterday followed the removal of Mohamed ‘Reynis’ Saleem by President Waheed last week ostensibly over allegations that the lawyer commissioned gangs to retrieve money owed to him.

The President’s appointee on the JSC was summoned to the police for questioning over the allegations in May.

The Criminal Court meanwhile refused to grant police an arrest warrant to take Saleem into custody, a decision which was backed upon appeal by the High Court.

Saleem was the defence counsel of Deputy Speaker of Parliament Ahmed Nazim in criminal cases involving an alleged scam to defraud the now-defunct Ministry of Atolls Development.

The cases were dismissed by the Criminal Court shortly after the controversial transfer of presidential power on February 7, 2012.

Meanwhile, in her report to the United Nations Human Rights Council following a visit to the Maldives, UN Special Rapporteur on Independence of Judges and Lawyers Gabriela Knaul observed that the JSC had a “complicated” relationship with the judiciary, given that the commission “considers that it has exclusive jurisdiction over all complaints against judges, including over criminal allegations, while the Prosecutor General understands that the criminal investigation agencies have the competence to investigate criminal conducts by anyone.”

The special rapporteur stated that there was near unanimous consensus during her visit that the composition of the JSC – which includes representatives from all three branches of government instead of exclusively the judiciary as was the norm in other nations – was “inadequate and politicised”.

This complaint was first highlighted in a report by the International Committee of Jurists (ICJ) in 2010.

“Because of this politicisation, the commission has allegedly been subjected to all sorts of external influence and has consequently been unable to function properly,” Knaul observed.


Chief of Defence Force warns of increasing risk of terrorist attacks, youth enrolling in terror training camps

Chief of Defence Force Major General Ahmed Shiyam has warned of a rising risk of terrorist attack in the Maldives, during a joint local and US military inauguration to establish a level of alerts for terrorism in the country.

Shiyam cautioned against assuming the country was completely safe from terrorist attacks simply based on the fact that no major terrorist activities have been uncovered in the country to date, warning there was an increased risk of terrorist attacks stemming from “religious extremism and political turmoil.”

He added that while messages encouraging such activities are circulating via social media, these focused mainly against a certain group of people, or to encourage youth to partake in activities of ‘jihad’.

“Some [Maldivian] youth have already joined up with terrorist organisations. They are now travelling to various war zones and locations and enrolling in a number of terrorist training camps. Although some of these youth have managed to travel back to this country, the whereabouts of others remain unknown. This is a warning sign of how terrorism is spreading across our country,” Major General Shiyam stated.

He stated that it is immensely important for the security forces to be well-trained in counter-terrorism measures and to ensure the forces remain ready to respond should such an incident occur.

Speaking of the necessity to identify the challenges faced in counter-terrorism operations, Major General Shiyam emphasised the importance of reviewing and revising the country’s counter-terrorism policies.

Shiyam stated that terrorism is a danger that presents itself in many different forms, including but not limited to incidents which arise through political or social activities.

“Regardless of how these dangers come forth to us, ultimately the result is the same: that is the destruction of our nation’s social fabric,” Major General Shiyam said.

Increased pressure in 2012 to conform to stricter form of Islam: US

The US State Department’s 2012 Report on International Religious Freedom notes that, especially following the February 7 controversial transfer of power, there has been an increased pressure in the Maldives to conform to a “stricter interpretation of Islamic practices.”

The report highlighted that there have been increased reports of religious freedom abuses. Concerns were also raised over government restriction of religious freedom.

“There was an increasing use of religion in political rhetoric, which led to derogatory statements about Christianity and Judaism, and harassment of citizens calling for a more tolerant interpretation of Islam. Anti-Semitic rhetoric among conservative parties continued,” the report said.

The report also referred to statements made by President Waheed, who came to office following last year’s transfer of power.

“During the year, President Waheed warned the nation that foreign parties were attempting to influence the country’s ideology and promote secularism; he urged citizens to resist these impulses,” the report read.

The report further pointed out incidences of societal harassment and abuse targeted towards citizens, especially women, who do not conform to strict, narrow guidelines seen to acceptable in Islam.

No religious freedom, SOFA agreement: Islamic Minister

Minister of Islamic Affairs Sheikh Shaheem Ali Saeed has meanwhile said that the Maldives will not grant religious freedom following the release of the US State Department’s report, and further declared that he will not allow the government to sign the proposed Status of Forces Agreement (SOFA) with the United States.

“Religious freedom cannot be granted in the Maldives, Insha Allah [God willing]. The Constitution of the Maldives itself restricts such a thing from being permitted, nor do our citizens want such a thing. It is the responsibility of our citizens to safeguard our military interests and Insha Allah they will uphold that,” Shaheem is quoted as saying in local media.

Furthermore, “There is no way that the SOFA agreement can be signed, allowing foreign forces to stay on our land. Nor can we allow them to make the Maldives a destination in which to refuel their ships,” Shaheem said.

“The reason is, the US might attempt to use the Maldives as a centre when they are attacking another Muslim state. There is no way we will let that happen,” he said, asserting that he “will not compromise on the matter at all”.

A leaked draft of a proposed SOFA with between the Maldives and the US “incorporates the principal provisions and necessary authorisations for the temporary presence and activities of United States forces in the Republic of Maldives and, in the specific situations indicated herein, the presence and activities of United States contractors in the Republic of Maldives.”

Under the proposed 10 year agreement outlined in the draft, the Maldives would “furnish, without charge” to the United States unspecified “Agreed Facilities and Areas”, and “such other facilities and areas in the territory and territorial seas of the Republic of Maldives as may be provided by the Republic of Maldives in the future.”

“The Republic of the Maldives authorises United States forces to exercise all rights and authorities with Agreed Facilities and Areas that are necessary for their use, operation, defense or control, including the right to undertake new construction works and make alterations and improvements,” the document states.

The US would be authorised to “control entry” to areas provided for its “exclusive use”, and would be permitted to operate its own telecommunications system and use the radio spectrum “free of cost to the United States”.

The US would also be granted access to and use of “aerial ports, sea ports and agreed facilities for transit, support and related activities; bunkering of ships, refueling of aircraft, maintenance of vessels, aircraft, vehicles and equipment, accommodation of personnel, communications, ship visits, training, exercises, humanitarian activities.”

Former US Ambassador to Sri Lanka and the Maldives, now Assistant Secretary of State for South and Central Asia Robert Blake, told the Press Trust of India that the agreement referred to joint military exercises and not a future base-building endeavor.

“We do not have any plans to have a military presence in Maldives,” Blake said, echoing an earlier statement from the US Embassy in Colombo.

“As I said, we have exercise programs very frequently and we anticipate that those would continue. But we do not anticipate any permanent military presence. Absolutely no bases of any kind,” Blake said.

“I want to reassure everybody that this SOFA does not imply some new uptake in military co-operation or certainly does not apply any new military presence. It would just be to support our ongoing activities,” he said.


PPM condemns sacking of Dr Jameel, declares continuing support for government

The Progressive Party of Maldives (PPM) has declared it will continue to support and cooperate with the administration of President Dr Mohamed Waheed, despite condemning the “harsh and abrupt” sacking of Home Minister Dr Mohamed Jameel Ahmed.

Jameel was dismissed from his post two days after being unveiled as the running mate of PPM presidential candidate Abdulla Yameen last week.

The President’s Office has this week maintained that as Dr Jameel was a presidential appointee to the home minister role, his decision to stand as a direct rival to President Waheed in the upcoming election made his position untenable.

In a press release issued Sunday (May 12) following an emergency meeting of the PPM council in Addu City, the largest party in the current coalition government expressed “concern and regret” over President Waheed “sacrificing national interest” to serve his presidential ambitions.

“As you would recall, while the new government was at a critical juncture, Dr Mohamed Jameel Ahmed was appointed minister of home affairs for his competence, daring as well as academic and legal talents; and not under any circumstances in consideration of a party,” the press release stated.

It added that Dr Jameel served President Waheed faithfully and had won the respect of the security services and the public.

“Despite President Dr Mohamed Waheed Hassan Manik prioritising self-interest at this time, PPM will always prioritise national interest. To that end, continuing to support the government on behalf of the beloved people of the Maldives until the end of the upcoming presidential election and completion of Dr Mohamed Waheed Hassan Manik’s presidential term is PPM’s aim,” the press release continued.

The PPM council’s statement concluded with the assurance that the party would not consider any course of action that could lead to political turmoil and unrest.

The sacking of Dr Jameel fueled speculation that the minority party in parliament could withdraw its support of the governing coalition.

Despite its decision to back the government, the PPM council decided that President Waheed’s recent trips out of Male’ constituted campaigning with state funds and appealed to its members not to welcome the president during his visits to islands.

Speaking at a press conference in Addu City following the council meeting, MP Ahmed Mahloof said the party was concerned that the president’s “self-interest” dictated the sacking of Home Minister Jameel.

Mahloof claimed that 90 percent of people who had greeted President Waheed during his trips to islands were PPM members.

“From now on PPM members will not come out during the president’s trip to islands. We cannot provide cooperation when he is campaigning at the state’s expense,” he said.

Responding to the PPM decision, Political Affairs Advisor to the President Ahmed ‘Topy’ Thaufeeg told Sun Online this week that people greeting the president in his visits were not “puppets” of political parties.

“President Waheed is accepted by the people as their president. He has gained the people’s support. People went out to welcome and support former President Maumoon, also because he was a good person. Similarly, President Waheed receives support because he is accepted by the people and because he is a good person. The people are not asked to do this by parties. This is sincere support by the Maldivian people,” he was quoted as saying.

On Sunday, President’s Office Media Secretary Masood Imad told Minivan News that both President Waheed and Dr Jameel understood the reason for his dismissal as home minister. Masood added that no other PPM cabinet members would be affected by the decision.

“I don’t think there would be a need to throw out other PPM members from the cabinet, that is unless they themselves wished to resign from their positions,” he said.

Masood said at the time that the PPM had continued to offer their support to the current government even after Dr Jameel’s dismissal. He added that any other cabinet appointees who decided to stand directly against President Waheed in the upcoming elections would also be required to leave their posts to prevent possible conflict of interests – regardless of their party affiliation.


Meanwhile, speaking to press on Tuesday upon returning from campaigning in Addu City, former President Maumoon Abdul Gayoom said President Waheed’s coalition did not pose a threat to PPM’s presidential bid.

The PPM figurehead and leader argued that power sharing coalitions were not a feature of presidential systems, such as in the United States.

The party also does not accept that Dr Jameel was dismissed because of a potential conflict of interest, Gayoom said.

“Our PPM members are also in cabinet because we want to serve the public. It is not a coalition government formed to support a particular individual who is running for president,” he was quoted as saying by local media.

Gayoom’s remarks followed an announcement by the government-aligned Dhivehi Rayyithunge Party (DRP) of a formal coalition with President Dr Waheed’s Gaumee Ihthihaad Party (GIP) ahead of the presidential election in September.

GIP Spokesperson Abbas Adil Riza told Minivan News yesterday (May 14) that the party was confident the alliance backing Dr Waheed could defeat the two largest parties – PPM and the opposition Maldivian Democratic Party (MDP).

PPM MP Ahmed Nihan however insisted that even if the president’s coalition included all other political parties in the country, the election will remain a contest between the rival ideologies of former President Mohamed Nasheed and former President Gayoom.

“Just 48 hours ago we concluded a meeting in Addu Atoll, one of the largest areas in the country outside of Male’. Given the numbers of people we met there, it is clear there are only two parties,” he said yesterday.


President ratifies fiscal responsibility bill to limit govt spending and public debt

President Dr Mohamed Waheed Hassan Manik ratified the fiscal responsibility bill on Monday (May 6) and issued a decree to delay the enforcement of 22 provisions that require specific guidelines for implementation.

The legislation submitted in 2011 by the previous administration was passed 42-10 by parliament on April 15 this year.

“The Act ensures accountable, transparent and sustainable government implementation of the state fiscal policy,” according to the President’s Office website.

Following ratification and publication of the Act in the government gazette, President Waheed issued a decree in accordance with article 39 of the Act (Dhivehi), which authorises the president to delay enforcement of any provision of the law by one year if it requires rules or a mechanism to be set up before implementation.

The executive decree issued on Monday delayed the enforcement of articles 10 to 28 and 32 to 34 of the Act.

The new law sets limits on government spending and public debt based on proportion of GDP, stipulating that public debt must not exceed 60 percent of GDP from January 1, 2014.

Moreover, borrowing from the central bank or Maldives Monetary Authority (MMA) to manage the government’s cash flow should not exceed one percent of the average revenue for the past three years, while such loans would have to be paid back in 91 days at the market interest rate.

The provision was however among the 22 postponed for the next 12 months, which also included sections requiring the government to submit statements or reports to parliament outlining its fiscal strategy, debt repayment plans and budget position.

The ratification of a law on fiscal responsibility comes amidst concern over soaring levels of public debt, which is projected to reach MVR 31 billion (US$2 billion) or 82 percent of GDP by the end of 2013.

Nominal GDP in 2012 was MVR 34 billion (US$2.2 billion).

Economic growth in 2013 is meanwhile forecast at 4.3 percent, down from 7.1 percent growth in 2010 and 7 percent in 2011.

An International Monetary Fund (IMF) mission in November 2012 explained in a statement that economic growth slowed to 3.5 percent last year on the back of “depressed tourist arrivals earlier in the year and weak global conditions,” which have been “only partially offset by strong performance in construction and fisheries-related manufacturing.”

The original forecast for economic growth in 2012 was 5.5 percent.


According to figures revealed by the Finance Ministry in December 2012, nominal GDP in 2011 was MVR31,447 million (US$2 billion) while the estimate for 2012 was MVR34,148 million (US$2.2 billion).

Real GDP in 2011 was MVR20,461 million (US$1.3 billion). Nominal GDP per capita in 2012 was estimated to be MVR 80,260 (US$5,206) per annum.

Real GDP measures the value of all goods and services produced in a country expressed in the prices of a base year – 2003 in the Maldives.

The Finance Ministry also revealed that the ‘total external public and public guaranteed debt’ was estimated to reach MVR 13.7 billion (US$888 million) in 2012.

Of the MVR 4.1 billion (US$330 million) of the loan assistance spent in 2012, more than 50 percent was from multilateral financial institutions and 28 percent from bilateral donors.

A total of MVR 1.9 billion (US$123 million) from loan assistance has been spent for various projects in 2012 while the rest was spent for budget support.

As of September 2012, MVR 561 million (US$36.4 million) was received as budget support – US$16 million from the Asian Development Bank and US$20 million from a standby credit facility extended by the Indian government.

Moreover, the government spent more than MVR 1 billion (US$64.8 million) in 2011 and MVR 1.1 billion (US$71.3 million) in 2012 to service foreign debts as interest and repayments.

The figure was expected to remain the same in 2013.

In addition, the government spent MVR 660.5 million (US$42.8 million) in 2011 and MVR 2 billion (US$129.7 million) in 2012 to service domestic debts.

Government spending on loan repayment and interest payments was expected to reach MVR 3.1 billion (US$201 million) in 2012.

Including an estimated MVR 13 billion (US$843 million) in domestic debt, the total public debt is expected to reach MVR 27 billion (US$1.7 billion) in 2012 and MVR 31 billion (US$2 billion) in 2013 – 82 percent of GDP.


Government suspends new development projects due to budget constraints

The government has decided to delay implementation of new development projects financed out of the state budget due to shortfalls in revenue, Finance Minister Abdulla Jihad confirmed to Minivan News today.

Jihad said that the cabinet decided to postpone planned infrastructure projects that have not yet started in an attempt to ease cash flows rather than deducting a specific amount from the development budget.

“We are in the process of [drawing up a supplementary budget]. Hopefully by the end of the month we will have something,” he said.

The decision to suspend new projects was revealed by Housing Minister Dr Mohamed Muiz today following the signing of contracts to build harbours in four islands.

Speaking to press after the signing ceremony, Muiz said he was instructed by the finance ministry not to commence any further infrastructure projects included in the 2013 budget, such as harbour construction or land reclamation.

Muiz explained that government-funded projects in the pipeline will be pushed back until parliament passes bills to raise additional revenue.

The move follows parliament’s rejection last week of government-sponsored legislation to raise the airport service charge to US$30, which was among a raft of measures proposed by the Finance Ministry in the estimated 2013 budget to raise MVR 1.8 billion (US$116 million) in new income.

Other measures included hiking Tourism Goods and Services Tax (T-GST) to 15 percent from July 2013 onward, leasing 14 islands for resort development, introducing GST for telecom services as well as oil, and “selectively” reversing import duty reductions.

Following the narrow defeat of the airport service charge amendment bill in parliament, Jihad told local media that a “significant amount” would be lost from projected revenue as the additional income was anticipated in budget forecasts.

“If the amendments for the import duty are not passed, we will find it extremely difficult to manage the budgets of institutions. So it’s critical that the parliament expedites work on the bills and support them,” he was quoted as saying by newspaper Haveeru.

The bill proposed by the government to raise the airport service charge was defeated 28-27 despite the ruling coalition’s provisional majority in the 77-member house.

During the parliamentary debate last week, MPs of both the opposition Maldivian Democratic Party (MDP) and government-aligned Progressive Party of Maldives (PPM) – respectively majority and minority parties in parliament –  accused President Dr Mohamed Waheed of using state funds to finance his presidential campaign.

Supplementary budget

Dr Waheed meanwhile told the people of Thulusdhoo in Kaafu Atoll yesterday (April 20) that there was no cause to worry about the budget or rumours of impending bankruptcy.

“The Maldivian economy is not really that bad,” he was quoted as saying by Haveeru.

President Waheed however conceded that “difficulties” had arisen due to spending beyond the country’s means in the recent past.

As a consequence of deficit spending financed by loans, Dr Waheed said the government had to spend an amount almost equal to the state’s wage bill on interest and loan repayments.

“We Maldivians are not indebted to anyone. We are proud people. We pay back what we borrow. We don’t have any outstanding payment, to any party,” Dr Waheed said in his speech, according to the President’s Office website.

He added that the finance ministry was preparing to submit a supplementary budget to parliament before the end of April, which would seek funds needed to provide services to the public without interruption.

Economic Development Minister Ahmed Mohamed – a senior member of the government-aligned Dhivehi Rayyithunge Party (DRP) – however told Haveeru last week that a supplementary budget would be of no use if parliament failed to approve the proposed revenue raising measures.

“Numbers written on paper will not increase funds. One or two billion rufiya can be added to the budget through the supplementary budget,” he explained. “But shouldn’t there be a way to get that three or four billion rufiya?”

The minister also referred to media reports suggesting that some government offices have exhausted their annual budgets after the first three months of the year.

Parliamentary approval

During the budget debate in December 2012, Majority Leader MP Ibrahim Mohamed Solih warned that the additional revenue projected in the budget was unlikely to materialise.

The MDP parliamentary group leader claimed that the import duty revision to raise tariffs on oil “will not be passed in this Majlis.”

Moreover, he said at the time, the MDP would not support increasing T-GST without consultation with the tourism industry.

Predicting that revenue in 2013 would reach “only MVR 11 billion at most,” Ibu warned that income would not be enough to meet recurrent expenditures on salaries and administrative costs.

Meanwhile, Minority Leader MP Abdulla Yameen, parliamentary group leader of the PPM, said at the time that the government’s objectives or policies could not be discerned from the proposed budget.

“These projects are very random or ad hoc. The government’s planning should be better than this,” he said.

While President Waheed had taken note of the high salaries paid by institutions such as the People’s Majlis as “a serious problem,” Yameen said he could not see “any kind of sign” of reducing recurrent expenditure or salaries and allowances for government employees.

The state’s wage bill amounts to 48 percent of recurrent expenditure, which accounts for 70 percent of government spending.

2013 budget

A public sector investment program (PSIP) of MVR 3.1 billion (US$201 million) was proposed within the 2013 budget.

This included MVR 1.5 billion (US$97 million) from the state budget, MVR 21 million (US$1.3 million) from domestic loans, MVR 1.2 billion (US$77 million) as foreign loans and MVR347.6 million (US$22.5 million) as free aid.

After parliament trimmed more than MVR 1 billion (US$64.8 million) from the MVR 16.9 billion (US$1 billion) budget submitted by the Finance Ministry, Jihad warned that funds allocated in the budget would not be enough to manage expenses and predicted that a supplementary budget would be needed before the end of the year.

Parliament’s Budget Review Committee approved MVR 1.6 billion (US$103.7 million) in cuts from recurrent expenditure and added MVR 389 million (US$25.2 million) for infrastructure projects.

The budget items that the committee reduced included; overtime pay (cut 50 percent), travel expenses (cut 50 percent), purchases for office use (cut 30 percent), office expenditure (cut 35 percent), purchases for service provision (cut 30 percent), training costs (cut 30 percent), construction, maintenance and repair work (cut 50 percent) and purchase of assets (cut 35 percent).

The committee also instructed the Finance Ministry to reduce an additional MVR 605.7 million (US$39.2 million) from office budgets.

In December 2012, the Finance Ministry ordered offices to cancel all overseas trips, such as for study tours and training, and to seek approval from the ministry for all official trips that were not completely funded by foreign parties; cancel all repair work for the rest of December; and cancel purchases of capital items that were not included in the public sector investment programme (PSIP).

In the circular, the Finance Ministry noted that 15 percent had previously been deducted from office budgets to reduce the fiscal deficit “as a result of income being lower than estimated in the 2012 budget passed by parliament.”

However, since government spending necessary to provide essential services to the public could not be reduced, “the state’s expenditure has to be further controlled as additional measures are needed to reduce the state’s budget deficit,” the circular stated.

In July 2012, the Finance Ministry instructed all government offices to reduce their budgets by 15 percent, with only 14 of 35 offices complying by the given deadline.

“Some offices will face difficulties. But we don’t have a choice,” Jihad told local media at the time.


Optimistic about democratic future, “despite a few hiccups”: President Waheed

President Mohamed Waheed Hassan has stated that he is considering contesting in the upcoming presidential elections “in view of the current achievements and the general reading [he] gets from the public,” adding, however, that “much work has still to be done during the next few months.”

Although the Progressive Party of Maldives (PPM) has previously stated that Waheed could contest as the party’s candidate if he became a member, local media has recently reported that Waheed is considering running through his own 3217-member strong Gaumee Ithihaad Party (GIP).

GIP has recently announced that it is seeking to form coalitions with other political parties.

“Democracy is in its infancy [in the Maldives]. Despite a few hiccups, I am very optimistic about our democratic future,” Waheed stated in an interview with AFP, one year following the contentious transfer of power on February 7, 2012.

Waheed, who was Vice President during the previous administration, was sworn in as President after former President Mohamed Nasheed resigned following street protests and a police mutiny.

The Maldivian Democratic Party (MDP) has maintained that the transfer of power was brought about through a coup d’etat. However, the Commission of National Inquiry(CNI), a Commonwealth-backed inquiry established by Waheed, concluded that the transfer of power was legal.

The credibility of the CNI report is now being challenged by parliament’s Executive Oversight Committee, after six of the country’s most senior police and military intelligence figures testified that none of their evidence was included in the final report. All six have since been suspended or dismissed.

Nasheed, again the presidential candidate of the Maldivian Democratic Party (MDP), has an ongoing trial against him for the arrest of Criminal Court Chief Justice Abdulla Mohamed. The MDP contend that the charges are a politically motivated attempt to prevent him from contesting the election.

According to AFP, Waheed said his full year in office was “marked by ‘inclusiveness’, while rejecting opposition claims that he was stifling individual freedoms and had become a hostage of Islamic extremists.”

During the past year, Waheed has ratified the “Freedom of Peaceful Assembly” bill, which redefines limitations on assembly and political gatherings.

MDP Spokesperson Hamid Abdul Ghafoor previously alleged that the ratification of the said bill was “a direct response to the MDP’s proposed revolution.”

“We are not happy with this bill, and on principle alone we are against it. The current government feels the need to restrict freedom of expression and unwind the democratic gains of this country,” Ghafoor alleged.

“As our honeymoon with democracy nears its end, I am convinced that a new model for true democracy will glow from these islands,” Waheed said.

In response to Waheed’s remarks, Ghafoor said that Waheed seemed to be in “a state of total denial.”

“Waheed became president through a coup d’etat, completely wrecked our economy, made a pact with the Islamists, caused foreign investors to lose confidence, and inflation is rocketing. He has done everything a liberal democratic leader would never do,” Ghafoor alleged.

Correction: An earlier version on this article mistakenly reported that GIP has 2099 members. The party has 3217 members.