India reported to be releasing further credit to Maldives

Indian media has reported that the country will re-open its US$100million standby credit facility to the Maldives during the scheduled visit of newly elected President Abdulla Yameen later this month.

Whilst the President’s Office was unable to comment on the validity of the story, the New Indian Express has today reported that the Indian Government is expected to “unfreeze” the remaining part of the loan.

The Indian government agreed to grant the facility during an official state visit by Prime Minister Manmohan Singh in 2011, in order to help the Maldives meet short-term budgetary needs.

The first installment of US$30 million was granted in October 2011, with a further installment of US$20million released in time for the early 2012 visit of President Dr Mohamed Waheed to India.

A third installment of the facility however, was delayed after tensions between the Indian and Maldivian governments rose just weeks ahead of the eviction of the Indian GMR group which had been undertaking the development of Ibrahim Nasir International Airport.

Whilst the official reason given for the delay in the disbursal of the third loan installment was described as a result of the Maldives Government’s failure to complete the required paperwork, a diplomatic source at the time suggested that perceived anti-Indian rhetoric from senior political figures could yet have a bearing on future financial assistance.

The failure to secure the third credit installment was soon followed by the Indian government calling in US$100 million worth of debt.

Despite the current governing Gulhifaivaa Coalition comprising many of the parties that made up the previous administration, President Yameen has made improved relations with India a top priority after winning the November 16 run-off election.

Yameen’s PPM suggested the termination of the GMR agreement – currently the subject of a US$1.4 billion arbitration case in Singapore – was done against its advice.

In the weeks following his assumption of office, Yameen has talked openly of the potential of Indo-Maldivian relations, whilst the Indian High Commissioner to the Maldives has called the country’s bilateral ties “privileged”.

After Yameen had written to Indian PM Singh inviting him to visit the Maldives as soon as he was able, the President’s Office announced this week that Yameen would be visiting India on his first official state visit on December 22.

Budget support

Local media has today reported that a revised budget will be sent to the Majlis today, after repeated delays required to accommodate the campaign pledges of President Yameen.

Finance Minister Abdulla Jihad – reappointed to his position under the new president – had presented a MVR 16.4 billion budget for 2014 with a projected deficit of 2.5 percent of GDP to parliament on October 30.

Yameen has expressed concern over the economic vulnerability of the Maldives and pledged to reduce state expenditure by MVR 1 billion.

“State debt is sky high. The state budget’s expenses are extremely high. Hence, we have to prioritise reducing state expenditure. I will start work very soon to reduce budget expenses,” Yameen said during his inauguration speech.

The Maldives Monetary Authorities’ (MMA) most recent quarterly review noted that Government finances had “further deteriorated in the first six months of 2013” due to a sizeable shortfall in expected revenue coupled with a marked increase in recurrent expenditure.

“These developments have resulted in a widening of the budget deficit as indicated by the large financing requirement of the government during the first six months of 2013. The difficulties in accessing long-term foreign funds to finance the budget deficit resulted in the government resorting to the Maldives Monetary Authority and other domestic sources to finance its growing deficit,” the report stated.

The Yameen administration also announced earlier this week the securing of 50 million yuan (US$8.2 million) in Chinese grant aid “for the implementation of developmental projects and the advancement of public services.”

The MMA’s November figures showed that gross international reserves had fallen in monthly terms whilst showing a slight year-on-year increase. The country was reported to have enough reserves to cover 2 and a half months’ worth of imports.


President to visit India on December 22

After receiving and invitation from Indian Prime Minister Manmohan Singh, President Abdulla Yameen will make an official visit to the country on December 22.

Indian media has also reported that President Yameen will be the chief guest at the convocation of the SAARC-established South Asian University (SAU) on Dec 24.

The invitation came in reply to a letter by Yameen to the prime minister in which he assured Singh of his administration’s desire for enhanced bilateral ties and urged Singh to pay an official visit to the Maldives as soon as it was mutually convenient to do so.

Since taking office, President Yameen has stressed his desire to enhance recently-strained relations between the neighbouring countries.


Government to cut costs, include new pledges in revised budget

The People’s Majlis Budget Committee has asked Finance Minister Abdulla Jihad to submit a revised budget on Monday November 25, following new President Abdulla Yameen Abdul Gayoom’s request to cut costs in the state budget for 2014.

Jihad – who also held the post of Finance Minister under former President Dr Mohamed Waheed Hassan – had presented a MVR 16.4 billion budget for 2014 with a projected deficit of 2.5 percent of GDP to parliament on October 30.

Speaking at the Majlis Budget committee today, Jihad asked for five days to revise budget to reduce state expenditure and include the Progressive Party of the Maldives’ (PPM) pledges made during the presidential election.

Yameen has expressed concern over the economic vulnerability of the Maldives and pledged to reduce state expenditure by MVR 1 billion.

“State debt is sky high. The state budget’s expenses are extremely high. Hence, we have to prioritise reducing state expenditure. I will start work very soon to reduce budget expenses,” Yameen said during his inauguration speech.

Jihad said today that state debt would reach MVR 30 billion (US$1.9 billion), approximately 78 percent of GDP.

During this week’s budget debate, opposition Maldivian Democratic Party (MDP) MPs maintained their call for the PPM’s pledges to be included in the new budget. These include providing “unlimited” health care under the state’s health insurance scheme Aasandha, designating a General Practitioner to each family, MVR 10,000 (US$650) for fishermen regardless of fish yield, MVR 8000 (US$518) for farmers and increasing old age pension from MVR 2300 (US$150) to MVR 5000 (US$325).

MDP Parliamentary Group Leader Ibrahim ‘Ibu’ Mohamed Solih said he was concerned that government MPs were advocating against the inclusion of funds for pledges in the new budget.

The Majlis will insert the funds necessary for the pledges if the government fails to do so, MP Rozaina Adam warned.

At today’s Budget Committee meeting, Jihad said the government is currently reviewing methods to decrease recurrent expenditure of MVR12 billion (US$778 million) which accounts for 73 percent of the budget.

He appealed to the Majlis to pass revenue raising measures which include hiking T-GST from 8 percent to 12 percent, revising import duties, delaying the abolishing of tourism bed tax for one more year, raising airport departure charge from foreign passengers from US$18 to US$30, leasing 12 islands for resort development and introducing GST for telecommunication services.

President Yameen also wants to revise the local council framework to reduce the numbers of island and atoll councilors, Jihad said.

The current model of more than 1,000 elected councillors established by the Decentralisation Act passed in 2010 by the then-opposition majority parliament was branded “economic sabotage” by the ousted Maldivian Democratic Party (MDP) government, which had proposed limiting the number of councillors to “no more than 220.”

The PPM had also advocated against increasing any airport taxes with PPM aligned Dhivehi Qaumee Party (DQP) annulling an Airport Development Charge (ADC) through the courts when Indian Infrastructure giant GMR was in charge of managing the airport. The GMR was booted out of the country in 2012.

Speaking at a rally to celebrate PPM’s presidential win last night, Yameen vowed to take only half the presidential salary of MVR 100,000 (US$6500) and decrease political posts at the President’s Office.

“The reason behind this is that Dr Jameel and I both live a simple life. No matter what has been said about us we are not wealthy. We want to be an example to others and lead by example,” Yameen said.

Highlighting the state’s dire financial state, Yameen asked his supporters for time and patience. He has previously said it would take two years to straighten the financial affairs of the country.

However, in the same speech, Yameen said he had ordered Jihad to include MVR 300 million for youth development in the 2014 state budget and pledged that the government will include the same amount in the state budget every year.

Meanwhile, the Majlis Finance Committee last night decided they will await instructions from the new government before approving loans sought by Dr Waheed’s administration. These loans include funds for budget support, building harbors in 22 islands, and funds for a Malé City electricity project.

“I do not think we should pass these loans when President Abdulla Yameen has said he wants to cut costs and reduce state debt,” Dhivehi Rayyithunge Party (DRP) MP Visam Ali said.


Ibrahim Muaz appointed President Yameen’s spokesperson

Ibrahim Muaz has been appointed President Abdulla Yameen Abdul Gayoom’s spokesperson, according to the President’s Office.

Muaz was candidate Yameen’s official spokesperson during the Progressive Party of Maldives’ (PPM’s) presidential campaign.

He previously served as communication director at the Foreign Ministry during former President Dr Mohamed Waheed’s administration, before which he worked at Television Maldives (TVM) and other media outlets.


Government formulating roadmap for first 100 days to implement PPM manifesto

A roadmap for the first 100 days of the new administration is being drawn up to implement the Progressive Party of Maldives (PPM) manifesto and fulfil campaign pledges, President Abdulla Yameen Abdul Gayoom has said.

Speaking to press after an impromptu PPM council meeting yesterday (November 18), President Yameen explained that the roadmap would “outline what will begin to be implemented by the 30th or 45th day.”

“Committees have been formed and work has started on implementing what we promised for youth and fishermen in our manifesto,” he said.

The PPM’s campaign pledges include raising the old age pension to MVR5,000 a month, designating a General Practitioner to each family, providing subsidies for fishermen and farmers, and creating more than 90,000 jobs.

At the ongoing budget debate in parliament, opposition Maldivian Democratic Party (MDP) MPs have been calling on the government to incorporate its policies in next year’s budget and fulfil its campaign promises, pledging their assistance and cooperation.

Both opposition and government-aligned MPs agreed that the government should be offered the opportunity to revise the budget based on the PPM manifesto. A budget of MVR16.4 billion (US$1 billion) was submitted by the outgoing administration on October 30.

President Yameen meanwhile told reporters that he has asked Finance Minister Abdulla Jihad to revise recurrent expenditure as “more than a billion could be saved.”

Funds could be reduced from budget items in recurrent expenditures, he said.

Recurrent expenditure of MVR12 billion (US$778 million) – wages, subsidies and administrative costs – accounts for 73 percent of government spending in the proposed budget.

“We will bring big changes to the budget. The budget has to be changed to one that addresses what our parties pledged to do for the public,” he said, referring to the pledges by other parties in the PPM-led coalition.

Other parties in the coalition government include the Jumhooree Party led by business tycoon Gasim Ibrahim, the Maldives Development Alliance led by tourism magnate Ahmed ‘Sun Travel’ Shiyam, the religious conservative Adhaalath Party, former President Mohamed Waheed’s Gaumee Ihthihad Party and a number of smaller parties.

The new administration was also in the process of “restructuring” the President’s Office, Yameen said, and all political appointees at the office were dismissed on Sunday (November 17).

Government ministries would follow “the example the President’s Office is showing” to reduce the number of political appointees and posts, he said.

Cabinet ministers would not formulate new policies but focus on implementing the manifesto, he added.

President Yameen also met former President Maumoon Abdul Gayoom at the President’s Office yesterday.

In a statement following the meeting, Yameen said the PPM leader assured the new administration of political support and assistance through the People’s Majlis.

He expressed confidence in implementing the party’s manifesto with the cooperation of coalition partners as well as the opposition in parliament.

The focus of the new administration was on reducing costs and increasing government income, President Yameen said.

“The aim of our efforts will be to provide at the earliest possible opportunity all the services we assured for the public,” he said.


Comment: Et tu Maldives?

For those looking for a bright side in the rather anticlimactic win of the much delayed/canceled/rescheduled Maldivian Presidential elections by the anti-democratic coalition led by Abdulla Yameen Abdul Gayoom, there’s some solace that this will probably be the final episode of the overly drawn out election saga.

Had President Nasheed won, there might well have been an endless number of elections till the anomaly was rectified.

Local democrats as well as the international community was waiting in apprehension to observe what clever trick would be employed to undo the election should Nasheed win again. Thankfully, the Maldivian public had other plans and rendered the whole discussion moot. It voted in another Gayoom to power.

Kingmaker Gasim

Gasim Ibrahim – who won 23% of the votes in first round – proved to be the decisive factor.

Yameen’s last minute deal with Gasim, who had just a day earlier hobnobbed with MDP leaders and publicly announced that 60% of voters of his voters would never vote for Yameen, clinched the victory by a slim margin of merely 5374 votes.

The election so far har been ugly affair, with the anti-democratic forces pulling every stop and resorting to every dirty trick – from subverting the electoral process, getting anti-constitutional rulings from the Supreme Court, harassment of the Elections Commission, flexing muscles available in the form of the Maldives Police Service to obstruct elections, and holding the whole process to ransom by refusing to sign voter registries – and hemorrhaging millions in public funds all the while.

However to Yameen’s credit, he did win the election – at least this round of it – fair and square.

For his part, President Nasheed had some gracious words of defeat and congratulations to the winner, pledging to respect the people’s verdict and uphold the democratic process.

Reading into the results

The elections prove one thing: the Maldives electorate is yet to mature. The outcome of the election was more or less decided on November 9th, when – despite all the ugly episodes that played out in full public view – the public actually rewarded Abdulla Yameen with a slightly increased vote share.

It was clear that a large section of the public was not going to be swayed by an actual manifesto, or promises of justice, and police and judicial accountability.

President Nasheed handsomely won all the major population centers, resorts and foreign boxes. However, it is clear from the results that there is still another Maldives. A more isolated, isolationist, xenophobic and paranoid Maldives that is still susceptible to dangerous emotive politics.

It is remarkable that this victory was pulled off on the back of exaggerated anti-Nasheed rhetoric with strong Islamist and hyper-nationalist overtones, as opposed to any realistic development plans or policies.

This rhetoric was often of fantastic nature – ranging from evil Christian Westerners and Freemasons trying destroy Islamic unity in the Maldives, to Nasheed attempting to build temples for GMR staff and other such absurdities. Yet, it found resonance among a large section of the population. Voting for ‘dheen’ and ‘qawm’ became the catchphrase for the anti-Nasheed voters, although it isn’t immediately clear what exactly Abdulla Yameen has ever done to protect or uphold either.

Nevertheless, the result is what it is, and in a democratic process, the public verdict is supreme.

With any luck, the newly installed government will not pursue overtly isolationist, xenophobic policies while in power. After all, the Maldives – which is dependent on imports for everything from oil to basic foodstuffs – is no North Korea.

Challenges and fears

The most immediate challenge facing Yameen Abdul Gayoom is the tanking economy which has largely been in free-fall since the February 7 2012 coup d’etat. He inherits a nation on the verge of bankruptcy and – unlike the previous Dec 23 coalition that disastrously fell apart – it will take an extended period of stability within his large coalition to pull off a sustainable recovery.

The concerns for liberals are clear. Would the extremist Islamist Adhaalath Party be put in charge of the Education ministry as speculated? Will the mullahs be oversee the curriculum for our young students? Subjects such as science and history are usually the early victims of subjecting the school syllabus to Taliban scrutiny. Pakistan has already attempted this with disastrous results. Five years of Adhaalath extravagance is sufficient time to destroy one promising generation of Maldivians.

The fear is that instead of a modern, cosmopolitan outlook necessary to succeed in an increasingly interconnected world, children may be inculcated with inward looking, ignorant ideologies that the Adhaalath party favours.

The Adhaalath party controlled Ministry of Islamic Affairs of the Nasheed government attempted to ram through the Religious Unity Regulations in 2010 that would have severely curtained media freedom, given expansive powers to the clerics to censor media and publications, and would have explicitly banned the mere criticism of mullahs under the threat of five years in prison.

Liberal actors within the Nasheed government stopped that heinous piece of anti-democratic drivel from being gazetted as law, thereby preserving media freedom and basic liberties for a little longer.

Would Abdulla Yameen similarly step in to defend the public from the censorship friendly mullahs? Would he defend the free media and ordinary citizens and bloggers’ rights to challenge authority? Or would he continue in the family tradition of locking up potential troublemakers and/or making them disappear?

Would the Yameen regime continue to uphold the unwelcome precedent of extreme media hostility set by Waheed? The Waheed regime – supported by the same actors that won yesterday’s elections – routinely boycotted opposition media, explicitly denied them police support (in violation of the constitution), and have sat in silence as their journalists were attacked, pepper-sprayed and harassed in public by police and other outlaws. Raajje TV was also subject to serious arson attack that destroyed the station this year, despite receiving advance warning and requesting for police assistance.

The Maldives Press freedom index has been one of the biggest casualties since the fall of the last elected government – having reversed all the giant leaps it made under President Nasheed and returned to abysmal pre-democracy levels.

One would hope that President Yameen will channel his efforts towards rectifying the media situation. But it doesn’t seem an encouraging prospect, considering Yameen’s own party, PPM, continues to boycott media channels that it sees as being aligned with the opposition.

Yameen’s electoral victory is also a possible shot in the arm for wanton police impunity which has been on public display since the overthrow of the Nasheed government last year. Police brutality has gone unaddressed under Waheed’s regime – indeed, it has been richly rewarded with perks and promotions and flats. This is likely to continue under Yameen. As a candidate, Yameen has actively sought Police support with the promise of housing, supplies and weapons.

On the subject of the runaway judiciary, Maumoon Abdul Gayoom has thrown in some kind words for the international media’s sake about how it requires reform. However, it does not seem likely that Yameen would do anything to threaten his friends in the Judiciary who ensured him multiple attempts at resurrecting his lacklustre campaign, which allowed him to eventually emerge as winner.

Finally, it remains to be seen how the MDP deals with the electoral loss. When the MDP was in government, one of the most frustrating deals was the lack of a capable or democratic opposition to hold the government accountable. The then opposition routinely failed to challenge the MDP government on corruption or policy, choosing instead to pick up far more far reaching national issues like random statues and Israeli airlines and massage parlours.

Some commentators hope that the MDP could now actively play that lacking role in the Yameen government. President Nasheed has pledged as much.

Yet, one can predict right away that the horse trading season will begin soon on the parliament floor, and quite a few MDP MP’s are likely cross the aisle looking for greener pastures. This possibility means quite simply that the MDP might have reduced effectiveness going forward as an Opposition party.

Furthermore, if MDP loses its Parliament strength – and it likely will – it further reduces chances of judicial reform or oversight from the elected Parliament.

After nearly two years of punishing instability and conflict, the Maldives and its economy desperately needs some stability and return to the rule of law. While the return of an elected government is welcome, democrats remain apprehensive of the Gayoom clan.

When slightly more than half the voting public gives a mandate to a media-hostile, blatantly anti-democratic coalition put together by a former dictator, it surely justifies this apprehension.

Furthermore, keeping together the chaotic coalition will be an interesting challenge and one that constantly threatens us with instability. For now, the coalition has been given a mandate to protect of ‘dheen’ and ‘qawm’; we will see Yameen Abdul Gayoom’s final report card five years from now.

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