Tourism minister defends under-fire economic zones bill

With additional reporting by Zaheena Rasheed

Tourism Minister Ahmed Adeeb has responded to critics of his government’s Special Economic Zones (SEZ) bill, arguing that stimulating regional infrastructure will lead to long term development.

“I think the critics have got it wrong, they believe we are trying to centralise all the housing and everything to Malé – bringing all the people from here and there and then giving all those islands to corporates,” Adeeb told Minivan News today.

The SEZ bill – recently introduced to the People’s Majlis – gives the government the authority to relax regulations for foreign investors in designated regions, prompting fears that local autonomy will be lost.

Adeeb – also head of the cabinet’s economic council – said that his government strongly believed in a model of development followed by decentralisaton, arguing that the Maldives did not yet have enough resources to facilitate devolution.

“Land, labour, and capital – the central government and the regional governments are fighting for it as we don’t have enough resources even for the existing government to cover the budget deficits.”

“I believe when there’s enough economic activity we can give more powers to the councils,” he continued.

The aim of the bill was to encourage further development of tourism outside of the central atolls – or the ‘sea plane zone’, he added, referring to the proximity from Malé’s international airport.

“Even you see even President Nasheed’s guest houses, it’s getting centralised in Malé because it’s more feasible here,” he explained.

“I believe that by doing the SEZ Act, we will bring the investment to these regions and this is the real decentralisation of investments.”


The bill has been touted as a way to incentivise investors as the government works to attract new development after years of political instability.

“Our total focus in on economics – we are not running behind our political opponents and we have stopped political rhetoric now – we have stopped responding to that but we are responding to economic issues,” said Adeeb.

Envisioning up to nine zones designated by a 17-member board consisting largely of government officials, the legislation includes the development of industrial, free-trade, offshore finance, and high-tech zones.

Article 33 makes clear that, once designated an SEZ, local councils will no longer have authority over the area.

Adeeb explained that, while consultations would be held with local authorities, the details of the incentives granted to incoming investors would be at the discretion of the central government.

“There will be consultations with the local councils, but the decision making power will be here because we want to take decisions very fast and we want development as soon as possible.”

“If Singapore had been reluctant, and had not taken the decisions they had taken, they would never have reached the economic development they have,” he added.

Although the government has expressed hope that the move could pave the way to an economy less reliant on the tourism industry, Article 74 allows up to 40 percent of any zone to be tourist-related development.

The bill requires the Maldives Customs Service to formulate regulations for each zone, while a zone administration office will provide security services.

Article 77 mandates that only 10 percent of technical experts can be foreign, though this can be overridden by the investment board – which can also add a number of additional incentives to contracts such as extended tax relief, and leasing land to foreign companies for up to 99 years.

“It will be according to investment size and scope,” explained Adeeb. “The law gives the power to give even one hundred percent of those [incentives] but that doesn’t mean that the government will act on that.”


The bill’s most prominent skeptic so far has been MMA Governor Dr Azeema Adam who has suggested that, without enhancing local employment, the bill will offer little immediate regional benefit the regions.

“In the special economic zones, developers have the right to bring any amount of expatriate workers as well, so we might be able to generate jobs, but if those jobs go to expatriates we are not going to reap the benefit of such development activities,” said Dr Azeema – who will sit on the investment board should the bill be passed.

Salma Fikry, a former recipient of a President’s Award for services to decentralisation, has suggested that the bill works against the spirit of devolved government – shifting power from elected representatives to corporations.

“Corporations don’t work for the public good, they work for corporate profit. Is Adeeb saying he is satisfied with trickle down economics?” she asked.

“This is leading the ownership of this country’s resources into the hands of a handful of corporations driven by the quest for short-term power and financial gain. It is not sustainable nor empowering for the Maldivian population,” continued Salma.

Elsewhere, the decentralisation advocacy group the Rajjethere Meehun Party has described the bill as “a monster in the making”, while members of the social community ‘The Maldivian Economist’ have questioned the bill’s logic.

“If it is for other industries, why so many benefits to tourism sector in SEZ bill?” asked the group, noting that the industry is currently thriving – with resorts often in close proximity to local councils.


NGOs, concerned citizens launch protest against MPs’ committee allowance

A group of concerned citizens and members of civil society organisations launched a protest today in response to parliament’s Public Accounts Committee (PAC) decision last week to issue a lump sum of Rf140,000 (US$9,000) as committee allowance back pay for January through July this year.

If the PAC decision stands, in addition to a monthly salary of Rf62,500 (US$4,000), at the end of August each MP would receive a lump sum of Rf160,000 (US$10,386) as committee allowance.

At a time when the country faces a crippling budget deficit, the back payment of the allowance will cost the state up to Rf12.32 million (US$800,000), rising to Rf76.23 million (US$4.9 million) in wages for 77 MPs for the whole year.

Gathered near the tsunami memorial after 4:30pm today, the protesting citizens handed out flyers to passersby with a graph showing the steep rise of MPs’ remuneration from Rf4,500 (US$292) a month in 2004 to Rf82,500 (US$5,350) a month in 2011.

“MPs do not need to be paid more money to do committee work!” reads the flyer. “It is the duty of MPs. It is one of the most important responsibilities that has to be carried out by MPs.”

As this was “clearly stated in Majlis’ law,” drawing an additional Rf20,000 from public coffers “is a gross injustice to the Maldivian people.”

Aiman Rasheed from Transparency Maldives told Minivan News that the protestors believed the decision to institute a committee allowance was symptomatic of “inherent problems in the entire system.”

“With such a high budget deficit and high inflation, we do not accept that the hike [in remuneration] is at all responsible,” he explained.

Aiman dismissed the argument that a committee allowance would improve parliament productivity: “The rules of Majlis committees, how they function, the relationship of the parties and procedures on proposing bills should be changed. Basically, they should become better people.”

For productivity to increase, said Aiman, parliament as an institution should function better.

Carrying a placard calling on her MP to not accept the allowance, Salma Fikry, executive board member of NGO Democracy House, said that the “pretext [of improving productivity] the MPs are using is utterly ridiculous.”

“The civil servants are in more close proximity to the public, so what about the productivity of civil servants?” she asked.

Salma argued that as committee meetings were “part of MPs’ duties,” the decision to issue Rf20,000 as committee allowances “is an injustice done to the Maldivian people.”

Aiman meanwhile asserted that the decision to issue a lump sum for seven months cast doubts on MPs “sincerity” as each MP would receive the back pay regardless of attendance.

Moreover, Aiman pointed out that parliamentary committees did not function for two months of the current session over a partisan dispute regarding the revision of committee composition.

“These things need to be talked about,” he said. “What we are trying to do is bring this issue to the spotlight and help the public understand […] With a constitution based on parliamentary supremacy, nothing in the country can go right if the MPs aren’t responsible. We want to create grassroots demand about what is going in Majlis and for the public to be aware of it.”

Salma however said she doubted if MPs would be moved by the protests to scrap the controversial allowances.

“Because in January this year we launched quite a strong campaign against the Parliamentary Privileges Act and we also spoke about the committee allowance during that campaign,” she explained. “But what we see today is that civic action is not bearing what it should in this democracy of ours.”

This was the case because state institutions such as the People’s Majlis were “too strong” and “has a lot of vested interest and a lot corruption,” she said.

Aiman concurred that MPs “do not bow to civic pressure” but the NGOs and concerned citizens hoped to “equip the public with relevant knowledge” to hold parliament accountable and achieve a reduction in “the almost exponential [year-on-year] growth” of salaries in the state budget.

“Thirdly, [we want] the public to understand these issues and demand accountability,” he said. “Fourth, we want to broaden the engagement of citizens with the People’s Majlis. And to let the People’s Majlis know that the people are watching you and that the people do care.”