India defends its backyard in the Indian Ocean: Wall Street Journal

“The whole world is watching China’s confrontations in the South China Sea and the East China Sea—but India is watching with particular concern,” Harsh V. Pant, a defence studies professor for King’s College, London, writes for the Wall Street Journal.

“India has no territorial claims here per se, but one Indian official recently said that the South China Sea could be seen ‘as the antechamber of the Indian Ocean,’ given the flow of maritime traffic. New Delhi is nervous about Beijing’s threat to the freedom of navigation, and this is one reason it is strengthening ties with island nations in the Indian Ocean.

This month, Indian Defence Minister A.K. Antony travelled to the Maldives to shore up relations with the young democracy. He was ostensibly there to inaugurate a military hospital built with Indian assistance, but New Delhi used the occasion to make a slew of defence-related announcements.

Chiefly, Delhi will begin training Maldives’ air force and position a naval team in the islands to train Maldivian naval personnel. Mr Antony also said India would station a defence attaché in its Maldivian embassy, extend the deployment of a helicopter squadron in the islands for two more years, and help the Maldives government in its surveillance of its Exclusive Economic Zone, which extends for 200 nautical miles (370 km) from its shores.

All these take defence cooperation up to the next level. More importantly, they underscore India’s continuing commitment to Maldives, despite a somewhat contentious transfer of power earlier this year when its first democratically elected president Mohamed Nasheed resigned under pressure when protests broke out against him. Some saw this as a coup, but India isn’t taking sides. Some of this is sheer agnosticism on Delhi’s part—it doesn’t want to interfere in another nation’s internal affairs—but a lot of it is realpolitik too.

Read More…


Rising religious conservatism a challenge for tourism industry: WSJ

The Maldives, known for $2,000-a-night white-sand-and-turquoise-ocean atoll retreats, is hoping to build a more affordable tourism industry. But it’s facing a challenge from the country’s more religiously conservative population, writes Tom Wright for the Wall Street Journal (WSJ).

“Former Tourism Minister Mariyam Zulfa, who lost her job last week as the national government was ousted, had a plan to develop mid-range accommodation on some of the Indian Ocean nation’s lesser-developed islands. There are about 1,200 islands in all, although only 200 of them are inhabited.

The plan also called for a job-creating entertainment complex of bars, nightclubs and even a casino on an island close to Male, the capital, modeled on Singapore’s Sentosa island development.

Even before the plan got off the ground, it ran into opposition from Islamist leaders. They rejected what they viewed as the encroachment of Western cultural imports – like alcohol and scantily-clad women – into local communities.

Since 1972, conservative Maldivians have acquiesced in the country’s development of luxury resorts. They were restricted to uninhabited atolls, to which hotel managers fly in Spanish chorizo and French champagne, as a way of minimizing contact with locals. That’s why the plan to bring mid-market tourism to inhabited islands became a rallying point for Islamists late last year.

The fight over the tourism plan played a significant role in the downfall of former President Mohamed Nasheed, who says he was ejected in an armed coup last week.

In the weeks leading up to Mr Nasheed’s ouster, Islamist leaders staged daily street protests which painted his government as un-Islamic, focusing on its plans for tourism. His political adversaries, including some big resort owners, joined the protests.”

Read more


India’s Foreign Secretary to visit Maldives

India’s Foreign Secretary Ranjan Mathai is due to fly to the Maldives to resolve escalating political tension in the country.

The Maldives’ former Foreign Minister Ahmed Naseem welcomed the arrival of Mathi, describing him to the Wall street Journal as a “highly experienced diplomat”.

“It’s very unfortunate that India took a stance on the legitimacy of the government at such an early stage,” said Naseem told the WSJ.

India’s Special Envoy M Ganapathi also visited the Maldives last week, along with many other foreign diplomats seeking to resolve the situation.


Rising Islamism Set Stage for Maldives Coup: Wall Street Journal

In the weeks leading up to Tuesday’s ouster of President Mohamed Nasheed, his political opponents fomented opposition among conservative Muslims by claiming Mr Nasheed’s government was trying to undermine their faith, writes Tom Wright for the Wall Street Journal.

Islamists calling for jihad against Mr Nasheed played a significant part in antigovernment protests that began in January. Events came to a head Tuesday when a band of armed police and army officers backed the protesters and forced Mr. Nasheed to resign.

The emergence of hard-line Islam is a relatively new development for the Maldives. But it is stoking concern in neighboring India that it could be used as a potential base for Islamist militants. It also raises questions about the stability of a country which sits on strategically important sea lanes used to transport a large portion of the world’s crude oil.

And the rise of conservative Islam could have an impact on the country’s tourism industry. Around 900,000 foreigners come to the country each year and the development of spas and bars to cater for them has angered some Islamist leaders.

Ahmed Naseem, the country’s recently ousted foreign minister, faced opposition at home last year when he became the first Maldivian official to visit Israel. He says religious orthodoxy has become the norm as more people go to study in Pakistan and Saudi Arabia.

“This country had no one wearing headscarves 10 years ago” but it’s common now, said Mr. Naseem. The political opposition, he added, capitalized on this growing religiosity by portraying Mr. Nasheed as un-Islamic. “They’re using Islam as a tool.”

The party of Mohamed Jameel, who was sworn in as Home Minister this week, issued a pamphlet last month in the local language entitled, “President Nasheed’s Devious Plot to Destroy the Islamic Faith of Maldivians,” according to a translation reviewed by The Wall Street Journal.

The pamphlet claimed that empty bottles of alcohol, which is proscribed for Maldivians, were found in offices of Mr. Nasheed’s government. It blamed the government for planning to sell land to Israel. And it said the then-president was working to undermine Islamic law in the country.

Mr. Jameel, in an interview Friday in his offices overlooking Male’s aquamarine harbor, acknowledged the pamphlet. He said Mr. Nasheed had at times lacked sensitivity toward Muslims.

“It’s one of the obligations of the state to protect Islam,” said Mr. Jameel, who went to a religious high school in Pakistan and got his doctoral degree from London University.

The Maldives, a country of almost 400,000 people, is almost entirely Muslim. The constitution makes Islam the state religion and minority faiths are not recognized. The legal system is a mixture of common law, a legacy of the former British colonists, and Quranic law.

After the December rally, the participation of Muslim extremists in antigovernment protests grew. During demonstrations earlier this week, a group of Islamists, their faces covered, trashed Buddhist statues in the National Museum.

For now, tourism has not suffered visibly. Most visitors arrive at an airport on its own island and are ferried to their resorts on uninhabited atolls, where alcohol is allowed. But as numbers grow, more tourists also are stopping off in Male, causing frictions.

“There are some fringe religious extremist elements and we hope the radicalism doesn’t hamper the Maldives’ image as a tourist destination,” an Indian government official said Friday.

Read full story


Tata announces government link-up for residential developments

India-based construction giant Tata Housing Development has announced a multi-million dollar cooperation agreement with the Maldives government to construct residential and resort properties in the country.

The Wall Street Journal newspaper reports that as part of a Maldives government-commissioned programme valued at an estimated US$190million, Tata will develope around 350 residential flats and a number of island villa properties that will be sold both to the state and on the open market.

Tata estimates that about 80 per cent of the flat developments from the project would be sold to the Maldivian government, with the remaining properties sold privately in the country. No plans were mentioned for the proposed island villas.

Tata Housing Managing Director and Chief Executive Brotin Banerjee has told media that the project is expected to be completed within two to three years, with work carried out by a company called Apex Realty, part of the SG18 Developers group.


Maldives one of the world’s most economically-repressed countries: report

The Maldives has been ranked as one of the world’s most economically-repressed countries, in the 2011 Index of Economic Freedom report produced by the Wall Street Journal and Washington think-tank The Heritage Foundation.

The Maldives is ranked 154th out of the 183 countries ranked, a slight drop on last year but still significantly below the global and regional average, placing 34th out of 41 countries in the Asia Pacific region.

Economic freedom, as defined by the report, “is the fundamental right of every human to control his or her own labor and property.”

The Maldives scored well for several indices, including business, fiscal, trade and labour freedom, but scored poorly for government spending, corruption and property rights.

“The Maldives’ weaknesses include chronically high government spending, inefficiency of the outsized public sector, and widespread corruption,” the report observed.

The government’s role in the economy through state-owned enterprises – and employment of over a third of the country’s total labour force – was “crowding out private-sector activity.”

Furthermore, “public-sector graft remains a challenge for foreign firms operating in the Maldives”, while “bureaucracy can be non-transparent and prone to corruption. Dispute resolution can be slow, complicated, and burdensome.”

Minister of Economic Development Mahmoud Razee noted that with regard to corruption, “in the past the country has not had the institutions to monitor and provide transparency, but now the information is available. It’s the difference between having a dirty or a clean window – one lets you see inside to the full picture.”

Several companies investing in the Maldives – including Indian infrastructure giant GMR and Malaysian security technology firm Nexbis – have had their share prices become collateral in local political rivalries following accusations of corruption.

“It’s one thing to be accused of something,” Razee said. “I’m sure most companies think about this [problem], but we have not seen it become a huge issue.”

Development of the private sector was stymied by “costly credit and limited access to financial services” the report noted, and while labour regulations were flexible, “enforcement is not effective in the absence of a dynamic labor market.”

The International Monetary Fund (IMF) has consistently urged the Maldives to reduce the size of its bloated civil service wage spend, which ballooned 400 percent between 2004 and 2009.

“With the government borrowing at the rate it has, it reduces the amount of credit available to the private sector, and that constrains the ability of the private sector to provide jobs and employment,” leader of the Maldives IMF delegation, Rodrigo Cubero, said in November last year.

“That then constrains economic growth. Furthermore, by spending more than it earns, the government is putting pressure on imports and the exchange rate.”

Razee noted that the introduction of new tax regulation such as the GST and Business Profit Tax, “while not the panacea to everything, shows the government’s willingness to come to terms with [the country’s economic condition].”

“If you look at the level of companies interested and investing in the Maldives, it has not lessened,” he said.

On a positive note, the report observed the potential of the government’s mobile phone banking project, dubbed ‘Keesa’, to enhance development in the private sector. Keesa is being jointed developed by the Maldives Monetary Authority and Dhiraagu, with World Bank assistance.

Summarising, the report observed that higher levels of economic freedom “correlated strongly to a country’s overall well-being, taking into account factors such as health, education, security and personal freedom.”

Hong Kong and Singapore were ranked top, followed by Australia, New Zealand, Switzerland and Canada. North Korea, Zimbabwe and Cuba were ranked at the bottom.