President Dr Mohamed Waheed Hassan has told Reuters that China will grant the Maldives US$500 million (MVR7.7billion) in loans during his state visit to the country.
The loans, equal to nearly one quarter of the Maldives’ GDP, would include $150 million (MVR2.3billion) for housing and infrastructure, with another $350million (MVR5.4billion) from the Export-Import Bank of China, reported Reuters.
This state owned bank is mandated with facilitating the export and import of Chinese products and promoting Sino-foreign relationships and trade, according to its official website.
China’s aid may provide an immediate salve to the government’s financial ailments which are on track to leave a MVR 9.1 billion ($590million) deficit in this year’s budget.
Former Foreign Minister and current UN Special Rapporteur to Iran, Dr Ahmed Shaheed, explained that it was unlikely China would give any money to the Maldives as cash, suggesting that it would more likely come as assistance in kind, which was often difficult for the economy to “absorb”.
Shaheed said that the loan should not be interpreted as a change in foreign policy after former President’s Nasheed and Gayoom both recognised the importance of cultivating ties with China.
“This is very much in keeping with past policy. There has been a growing Chinese interest in the Maldives – a relationship based on trade, tourism and political contact,” said Shaheed.
“The lines so far drawn have demonstrated that the Maldives remains primarily SAARC focused, followed by trading partners in the EU and Singapore. China has moved into this second category,” he added.
“Nothing will change the fact that we are only 200 miles from Trivandrum,” he said.
A Chinese embassy opened in Male’ in time for the opening of the SAARC summit last November, reciprocating the opening of a Maldivian mission in Beijing in 2007.
Indian officials were reported at the time as having concern that the move was part of China’s “string of pearls” policy which supposedly involves Chinese attempts at naval expansion into the Indian Ocean.
On this matter, Shaheed acknowledged that India would be worried about Waheed’s arrival in Beijing after its apparent diplomatic failings during the Maldives’ recent troubles.
However, Shaheed said that a genuine policy shift would have to involve enhanced military cooperation, something avoided by former President Nasheed after his predecessor had shown some interest.
“Nasheed understood that the Maldives should not become a playground for the big powers,” he said.
Similarly, when asked upon his recent return from Sri Lanka what the Maldives’ policy was regarding Sino-Indian competition in the region, President Waheed is said to have responded that the policy of a small nation like the Maldives ought to be to avoid too great an involvement in geopolitics.
Waheed’s first official state visit after becoming president saw him travel to India in May. The Maldives National Defence Force (MNDF) conducted joint naval operations with India in the same month.
More recently, Waheed has visited the United Kingdom, Saudi Arabia and Sri Lanka.
The vast rise in the number of Chinese tourists visiting the Maldives was a point Waheed was keen to make to both Reuters and the Chinese state news agency, Xinhua.
“The purpose of this visit is we have a growing relationship with China,” Waheed told Reuters. “The most tourists from one nation are coming from China. So it is really important to have a good relationship and to also encourage Chinese tourists to continue to come to the Maldives.”
China leapfrogged the United Kingdom in 2010 to become the number one source of arrivals for the country’s travel industry.
Official figures from the Maldivian Ministry of Tourism reveal that China has provided 22.2 percent of all arrivals to the Indian Ocean nation this year – up 14.5 percent from last year.
When speaking with Xinhua, Waheed thanked the Chinese for choosing to visit the Maldives before going on to give praise to China’s policy of non-interference in foreign affairs.
In a comment piece for local newspaper Haveeruthis week, Waheed’s Special Advisor Dr Hassan Saeed said that the Maldives should not tolerate interference from people “who fail to practice what they preach in their own country.”
“We need to have the confidence to challenge those diplomats and politicians in the international community who sometimes seem to let their personal political sympathies determine their approach to our problems,” said Saeed.
Xinhua reported that Waheed had lauded China for understanding the international affairs of smaller countries.
“China is emerging as one of the superpowers now. In that sense, it will inevitably play a significant role in world affairs,” said Waheed.
On this point, Shaheed argued that the mention of ‘non-interference’ alongside ‘world power’ was a non-sequitur.
“The world has moved on from this approach. It is now state business to interfere when partners appear to have violated agreements,” he said.
Shaheed added that praise for a host country’s policies was standard in these instances, “a nicety”, and suggested that people should “not read too much into it.”
It was an ordinary blue felt pen, and not a bullet, that killed Mohamed Nasheed’s term as the first democratically elected president of the Maldives, writes Bryson Hull for Reuters.
“After rising to acclaim as a champion of democracy and action against climate change, Nasheed is now back on the streets where he led a nearly two-decade campaign to bring full democracy to an archipelago ruled more like a sultanate.
A Reuters investigation, drawing on more than a dozen interviews including with witnesses who have not spoken out before, reveals a coup of opportunity that capitalised on opposition discontent, political missteps and police and troops loyal to the old order.
Nasheed says a cabal of former regime strongmen conspired with opposition leaders to force him to make a choice: resign in two hours, or face the introduction of live ammunition into a duel between loyal and rebelling security forces, then only being fought with batons and rubber bullets.
“The generals were in league with the mutinous police,” Nasheed said at a recent news conference, acknowledging that he had erred in not clearing out officers loyal to Gayoom.
“We never did a purge of the military. We have a history of murdering our former leaders and I wanted to change that.”
Even as the Commonwealth urges an investigation and new President Waheed has proposed a presidential commission to investigate his own ascendancy, military leaders have taken no chances.
They have emptied the four armories around Male and put the weapons inside the MNDF headquarters after some tense squabbles between factions inside the forces, three sources told Reuters.
This week, the criminal court threw out several graft cases against opposition figures, a sign of the old impunity provided by a pliable and poorly educated judiciary.
Nasheed’s supporters remain on the streets in peaceful protest, demanding an election be held before it is due in October 2013, which the new president has said he will do if the conditions are right.
“I think it is important that democracy be upheld there, and there is concern that the president (Waheed) might find himself heavily influenced by the previous Gayoom regime,” a diplomat from a Commonwealth country told Reuters.
“There must be no return to the pre-2008 days. The importance of the early elections it to ensure there is a clear democratic mandate.”
Few of the million or so tourists who visit the Maldives each year would catch even a whiff of the troubled politics or growing militant threat roiling the islands of one of the world’s most renowned get-away-from-it-all destinations, writes Bryson Hull for Reuters.
“Taking a page from the book of Gayoom, Nasheed ordered [Chief Judge Abdulla] Mohamed’s arrest and defied a Supreme Court release order, sparking more than three weeks of sometimes-violent protests by opposition parties that scented a chance for their own Arab Spring in the Indian Ocean.
The reason, Nasheed says, is because the judge, like the other 200-odd criminal court judges, was illegally sworn in for a life term and has blocked every attempt to bring multi-million-dollar corruption, rights abuse and criminal cases against Gayoom’s allies and relatives.
“Gayoom is running the judiciary,” Nasheed said. “When he lost the presidency, he was clever enough to carve out a territory and hide there, or get protected there. And none of the cases are moving.”
So to make good on his electoral promise to enact a new constitution and establish an independent judiciary, Nasheed says he has acted outside of it.
“You have to push everyone to the brink and tell them ‘You do this or we all fall’,” Nasheed told Reuters in an interview at the presidential bungalow in Male, the capital island.
“I think it would be so wrong of me not to tackle this simply because I might fall or simply because people may raise eyebrows.”
And it has done just that, drawing private diplomatic rebukes from Western nations which backed his ascendancy to lead the archipelago of 1,200 islands out of 30 years of Gayoom’s rule, which was widely criticised as dictatorial.
“It’s just indefensible. It’s almost like Nelson Mandela coming out and locking up all the white people,” a businessman based in Male who works with a government-linked company told Reuters, asking not to be identified.
But while the political fray goes on with all eyes on the 2013 presidential election, Maldivian intelligence officers and Western officials say hardline Salafist and Wahabist groups are gaining political ground in the more distant atolls and making a beachhead in Male.
The capital island is home to almost 200,000 of the Maldives’ 330,000 people, all Sunni Muslims. It is also home to the majority of the estimated 30,000 people on the islands who are addicted to heroin, according to UN estimates.
“It’s potentially a tropical Afghanistan. The same forces that gave rise to the Taliban are there – the drugs, the corruption and the behavior of the political class,” a Colombo-based Western ambassador who is responsible for the Maldives told Reuters on condition of anonymity.
“The Salafists are taking over atoll after atoll. They work on the ground and it is insidious. Nero is definitely fiddling while Rome burns.”‘
On the pristine equatorial shores of the Maldives, an archipelago best known for luxurious resort hideaways swathed in coral reefs and cerulean seas, India and China’s regional cold war is warming up, writes Bryson Hull for Reuters.
“Stretched across 90,000 sq km (35,000 sq m) of the Indian Ocean southwest of India, the Sunni Muslim nation of 1,192 islands finds itself sandwiched between the two Asian rivals, and both flexed their muscles at a meeting of South Asian nations hosted by the Maldives last week.
China preceded the heads-of-state meeting of the eight-nation South Asian Association for Regional Cooperation (SAARC) by opening its first embassy in the Maldives, a ceremony attended by Vice Foreign Minister Zhang Zhijun.
Two Maldivian officials said China had hurriedly rented a space to open the embassy in time for the summit, while the actual embassy is being built. Officials with the Chinese delegation declined repeated requests by Reuters for comment.
“The bureaucrat in me says the timing is right. You want to open something like that when there is a big official around. But opening it right before SAARC is a way to tweak India,” an Asian diplomat told Reuters on condition of anonymity.
India’s response to China’s diplomatic display included a show of military force and political largesse.
Navy frigates patrolled off the Gan atoll, where the summit was held, to protect VIP visitors including Afghan President Hamid Karzai, and Indian Prime Minister Manmohan Singh held a one-day state visit to the capital island, Male.
“This is our extended neighborhood. We wish to work with the Maldives and other like-minded countries to ensure peace and prosperity in the Indian Ocean region,” Singh told the Maldivian parliament.
India extended a $100 million credit line, inked pacts on maritime and counterterrorism cooperation, and both nations agreed “their respective territories would not be allowed for any activity inimical to the other and by any quarter.”
New Delhi has long been concerned by any moves China makes to boost its presence in neighboring countries, and is worried about the so-called “string of pearls” ambition to expand Chinese maritime influence in the Indian Ocean and beyond.
China made its present felt throughout the SAARC summit. The post-summit giveaway bag included porcelain pens and diaries from the Chinese Foreign Affairs Ministry detailing “Five Years of China-SAARC Cooperation.” A box for a new 40-inch TV in the media center bore a sticker: “China Aid.”
President Mohamed Nasheed has sent a message of sympathy to His Majesty King Harald V of Norway, after a bomb attack in Oslo and a shooting rampage on Utoeya Island killed 92 people on Friday.
Norwegian police have since arrested 32 year-old right-wing anti-Islam fanatic Anders Behring Breivik, as the country comes to terms with its worst attack since World War II and the single worst attack by a lone gunman.
85 of the casualties were young people attending the annual summer camp for the youth wing of Norway’s ruling Labour party.
One of the survivors told news agency Reuters that the gunman was dressed as a policeman and “would tell people to come over: ‘It’s OK, you’re safe, we’re coming to help you.’ And then I saw about 20 people come toward him and he shot them at close range.”
Another survivor told media that Breivik “seemed very focused. He took his time and picked victims out one by one. People lay on the ground, and he went over them and shot them in the back. He shot them all twice to make sure they were dead.”
Breivik had undergone compulsory military training as part of Norway’s national service and held licenses for several firearms, including automatic weapons. He surrendered to armed police who arrived at the Utoeya Island camp 40 minutes after being called by panicked attendees.
Police are investigating whether the car bomb, which exploded outside government offices in Oslo, was linked to Brevik’s purchase of six tons of fertiliser for a farm he bought 10 weeks ago.
Al-jazeera reported that under Norwegian law, Breivik faces a maximum sentence of 21 years extendable indefinitely in five year increments.
Norway has meanwhile entered a period of national mourning.
“This is beyond comprehension. It’s a nightmare,” Norwegian Prime Minister Jens Stoltenberg told press in Oslo.
In his letter to the Norwegian King, President Nasheed said he was “deeply shocked and saddened to hear about the bomb attack on government buildings in Oslo and the subsequent shooting on Utoeya Island. The Government and the people of the Maldives and I condemn this wanton act of terror in the strongest terms. At this time of distress I extend my profound sympathy and support to Your Majesty, the Government and the people of Norway.”
The GMR-Malaysia Airports Holdings Berhad (MAHB) consortium that recently won the controversial bid to develop Male’ International Airport will spend US$373 million on the upgrade, MAHB has reported.
Speaking at the opening of the cavernous Delhi Terminal 3 last week, GMR Manager P Sripathi told Maldivian journalists that physical work would begin on the airport towards the end of this year.
“The first phase is organising the finances and transitioning the airport from a government-run enterprise to a privately-run enterprise,” he explained.
“The transition will be a new thing [for the Maldives] and we will be there to help with that. We have done such things in other places, and we know how to go about it,” he said.
“There are over 100 various items have to be agreed and signed off between the [incumbent] Maldives Airport Company Limited (MACL) board and ourselves, but we expect to see work start on the new terminal 9-10 months from now.”
Sripathi said that within six months GMR would upgrade existing facilities at Male’ International Airport “to a level that international passengers and tourists may [expect]. We will deal with the ‘pinch points’ that are there today.”
Ultimately the development will involve 45,000 square metres of new terminal, repair and expansion of the runway, parking and taxiing space, and a turning point so more flights can be landed in the space of an hour.
The infrastructure giant’s ‘brownfields’ approach – refurbishing an active airport, as opposed to a ‘greenfields’ or ‘from scratch’ project – mirrors that of its much larger airport development in Dehli. The old terminal was upgraded prior to the opening of the new one last week, which is now expected to cater to 90 percent of the airport’s passengers, with capacity of 34 million per annum upgradable to 100 million.
Sripathi acknowledged that while nothing of similar scope was going to be built in the Maldives – Male’ International Airport currently handles 800,000 passengers per annum (each way), “[Dehli] is definitely in the vein we are planning.”
Representing a company about to plow US$400 million into Hulhule, Sripathi is unsurprisingly unconcerned about rising sea levels: “Worried? Absolutely not. Land that has been there for 2500 years is not going to disappear in 25 years,” he chuckled.
Local controversy regarding privatisation and the recent political upheaval have given equally little pause to the infrastructure juggernaut – but its recent entertainment of the Maldives press pack suggest it is sensitive to domestic public opinion.
“We are not worried, because we are out of the fold. We are here to do a job,” Sripathi said.
The debate [over privatisation] has obviously been there for a long time, and is perhaps coming to an end, that we leave to [the politicians]. We are only here to do our bit.”
Accusations by opposition parties about the transparency of the bidding process were not something in which GMR saw itself involved, Sripathi said.
“Let me distinguish our role from the government’s role,” he said. “Whatever the political debate that goes on in the country, we shouldn’t be interfering – that is not our duty. That is between the executive and the [opposition]. In this particular instance, if there is opposition to privatisation then this debate has taken place over many years. Otherwise government wouldn’t have initiated this privatisation program in the first place.
“The World Bank IFC has [monitored] this exercise and given a very good report, and that is where this should stop,” he said.
The government’s calculations acknowledge that the strength of GMR’s bid came from its US$78 million upfront payment (compared with US$27 million from the second-highest bidder) and in particular, its 27 percent sharing of fuel revenue.
Based on GMR’s forecast, the government anticipates that 60 percent of government revenue from the airport deal will derive from fuel – $74.25 million annually between 2015-2020, increasing to US$128.7 a year from 2025-2035. This in turn was the most significant element of the final ‘net-present-value’ calculations to determine the winning bid.
The Turkish-French consortium TAV-ADPM, who expressed dissatisfaction with the bid evaluation process to newspaper Haveeru and requested a “re-evaluation of the bids”, expressed disbelief that the GMR-MAHB consortium would be able to offer such a high percentage of the fuel trade to the government “without facing any loss.” TAV-ADPM had offered 16.5 percent, warning that pushing prices higher would drive buyers away.
Sripathi claimed 27 percent was “absolutely reasonable. We have done our homework, otherwise we would not have made the bid.”
“In Male [airport] there are two types of fuel trade going on: MACL sells directly to airlines, and in another kind of sale, parties buy from MACL and then sell to airlines,” he explained. “We looked at the margins of both lines of business, kept the same percentages, and calculated what we could offer the government if we took over all this and amalgamated it under one umbrella. The margin we can give to the government? 27 percent.”
Quizzed as to whether it was reasonable to estimate a revenue share by forecasting fuel prices over the lifespan of a 25 year agreement, Sripathi replied “everybody predicts. There are international agencies that predict the way fuel prices will go up and down.”
“I’m talking about the top line,” he said. “Bottom line, if the fuel prices go up, similarly everywhere will go up and the selling prices will also go up. We have to put a margin in there.”
At its airport in Hyderabad, GMR allows five independent fuel suppliers to compete to offer the most competitive price to the airlines.
In Male, “the volume does not support that. In India there are refineries and many fuel companies operating, and fuel companies can sell directly to the airlines,” Sripathi noted. “But in the Maldives fuel is imported, and the volumes are such that not many people come and buy fuel – the model is different.”
While its fuel figures are undoubtedly one of the major reasons behind GMR’s winning bid, a simple fuel monopoly is unlikely to recoup the consortium’s US$400 million investment.
Either GMR anticipates that global growth in the fuel trade is worth the risk, or it is taking a hit on the fuel price for the sake of offering a much lower 10 percent share of gross airport revenue, as compared to the other bids (TAV-ADPM offered almost 30 percent). The only figures available to the government in estimating this revenue (a staid US$20.43 million by 2025-2035) will have derived from the existing commercial revenue from the airport.
Compared to the glittering Gucci-lined corridors of airports in tourist cities such as Dubai, Male’ International’s 4-5 meagre departure lounge shops and dilapidated eateries look positively downtown in comparison – a striking missed opportunity, given the bulging wallet of the average visitor to the Maldives.
Sripathi indicated that the consortium is very interested in the well-heeled concourse traffic – sufficiently interested for the infrastructure giant to invest a sum equal to almost half the country’s entire GDP.
“It’s a lovely project. The type of tourists coming are from the very high-end tourism market, therefore the business opportunities are plenty,” Sripathi hinted.
“I would say the airport is naturally located to advance a lot aspects, like cargo. For example, many people would be surprised to know just how much cargo goes through the airport, because of the number of international connections and wide body aircraft using the airport. People are transiting air freight through the Maldives from places like Colombo – this means there is niche value out there.”
Some investment will be recovered through a US$25 airport development tax, set by the government for all bidders to be levied only on international travellers at time of departure and added to ticket prices.
Many longer term “vision” projects associated with the airport seem designed to appeal to government planners. The airport will be unlocking 50 acres of land and will develop “what we envision will become the Maldives’ financial district,” Sripathi said. “That’s from our vision document. [The government] asked what can be done, and we used our expertise and experts from the US, and this is one of the things we have proposed.”
The company also runs a social responsibility foundation, GMR Varalakshmi, that funds schools and vocational training in areas where it operates. The company took the Maldivian media on a tour of its centre near Hyderabad, which included a residential technical training college running free courses for 500 young people in trades ranging from air-conditioning and electronics to IT, sewing and hotel management – often in conjunction with the group’s partners and suppliers. Guides emphasised the importance given to instilling discipline and professionalism in students, as well as technical training.
Regarding salaries and employment of existing airport staff in Male’ – a key point of contention among the opposition parties critical of the deal – Sripathi commented that the company was “not about to bring Indian standards [of employment] to Maldives – income levels and expenses are dependent on place – it is independent.”
Ground handling, currently outsourced to Island Aviation, will be taken over by the new airport company, Sripathi confirmed.
“Whether we need more than one ground handling company depends on the size of business,” he said. “If size of business allows it, then we can [involve another company], otherwise there will be single party doing it to international standard.”
For other airport staff – aside from security, immigration and air traffic control, which will continue to run by the government as per other international airports – the 1500 people currently working at the airport “will become part of the privatisation process. We are in talks MACL board members,” Sripathi said.
“We are looking at their concerns and anxieties – ultimately people think somebody is coming into the country to take over the airport. But we are here to help develop the airport’s assets and show people its full potential,” he continued.
“But what is important keep in mind is that investment in an airport is a heavy investment – US$400 million is a heavy investment. These sorts of numbers must be returned to us – and the government – otherwise we both cannot survive.”
Disclosure: Minivan News and 10 other representatives of the Maldivian media recently toured Hyderabad airport and attended the opening of Dehli Terminal 3 as guests of GMR.
Correction: A previous version of this article erroneously referred to ‘Malaysia Airlines (MAHB)’ in one instance, where it should have read ‘Malaysia Airports Holdings Berhad (MAHB)’. This has been corrected.