Dr Mariyam Zulfa is the former tourism minister of the Maldives, appointed by Mohamed Nasheed’s administration in November 2010. Prior to her appointment she was a Managing Partner with the law firm Duckham & Co, Lawyers. She holds a PhD from Curtin University in Australia, and in her thesis examined the competitiveness of small island tourism destinations. Dr Zulfa also holds a Bachelor of Arts in Urban & Regional Planning and a Masters of Business Administration (MBA), and has worked as a tourism law lecturer in Australia.
Daniel Bosley: What is the average resort owner thinking about the current political crisis in the Maldives and its impact on the economy?
Dr Mariyam Zulfa: I think everybody is in a state of shock at the moment because the turmoil in the country will definitely have an impact on the image of the destination. The [pro-government] forces are trying to paint the picture that there is a lot of violence in the country and that the violence is being instigated by the Maldivian Democratic Party (MDP), which is not true at all. All we are doing is holding peaceful demonstrations and calling for early elections in order to ensure the legitimacy of the government.
Our tourists come from developed countries and I think they have the maturity to understand that people have the right to freely express their views on political matters. In that sense I don’t think the resort owners should be very worried about tourists concerns as to whether the place is going to be safe or not. The resort owners like to say that the situation in the country is safe and I think it is so because the only thing we are doing here is expressing our views on the political situation, and that the current President has assumed his role after a coup.
DB: Have you had any questions from resort owners?
MZ: Not really no, because the government, as it should, has been spreading the message through its own PR machinery that the country is safe.
DB: How have different markets been reacting?
MZ: I am given to understand that many Germans, for example, and many people from the UK, are questioning the welfare of the people of Maldives and that is not necessarily a bad thing.
I have personally had a number of communications from interested persons, especially from Germany and the UK, asking what is happening in the country, and that is a good sign because the traveller is not a nameless faceless body that comes here. I think people who travel are also conscientious people who care about the well-being of the people of the countries that they visit. I would tend to think that the political concerns of a wide majority of the Maldivian people are indeed something worth listening to.
I’ve has quite an overwhelming number of emails and communications sent to me asking about what’s happening in the country and when a political resolution is going to be found, what they could do to help; because of course they will see on the media that a large number of people, including a large number of women,for the first time in the Maldives are demonstrating continuously about how unhappy they are with the coup-led government in the country.
I have also received many calls from the Maldives’ foreign investors who are concerned about the current situation.
The silly thing about what the government is trying to do is portray to the international media that there is violence in the country. Indeed, that is not the case, we are expressing our unhappiness about how undemocratic the coup is. A coup is a coup is a coup, and can never be accepted as something legal or legitimate. That is a message that I think needs to be understood by members of the travelling public who come to the Maldives.
DB: Do you think that there is a risk that resorts will trade their political support for short-term stability?
MZ: It’s not the MDP’s intention to interfere in any way with the economic gains that we have made in the tourist industry. Nevertheless, we say that some people in the resort industry were actually involved. We have information that could be used as evidence to say that some members in the resort industry were behind, for example, in financing the coup and so on. So, in that sense it is connected to the tourism industry. But it has never been the MDPs intention and it will never be the MDPs intention to obstruct the progress that we have made in the tourism industry.
But, having said that, I will say that it is our duty also to inform the travelling public that a wrong has been done unto the people of the Maldives and following from that, we provide the information about the political situation in the country so it is up to that traveller to either decide to do something about it or carry on with their decision to travel to the destination. It’s not in our agenda to affect the travellers decision to choose Maldives as a destination at all.
DB: Do you think the alleged involvement of some resort owners harms the image of all resorts?
MZ: Neither a formal nor an informal investigation has been completed so far but there is evidence to show – and material that can be used as evidence – that leads us to the conclusion that some people in the tourist industry have been behind at least the financing of some of the operations that led to the overthrow of President Nasheed [on February 7]. But I can’t categorically say exactly who was involved unless a formal investigation has been completed. Some in the industry were involved, not all. Amongst them were a couple of major players in the Maldives [tourism] industry.
DB: What did you think of the Friends of Maldives travel advisory, asking tourists to avoid particular resorts associated with these players?
MZ: I have actually not seen the Friends of Maldives advisory. I heard about it in the media to boycott the resorts of the alleged coup perpetrators, but my opinion is that it is not the MDP’s policy, it was something done by an organisation that wished us well and that their purpose would also have been to disseminate information about who were behind the activities that led to an illegitimate government coming into place. I would like to think it was done to spread information, not to deliberately harm the economy or hurt the industry in any way shape or form.
DB: What do you think of the government’s lease-extension and payment deferral decision?
MZ: The lease extension is about increasing the asset value of the properties. In the Maldives, all the islands actually belong to the government and when the second amendment to the tourism law came into place it gave the option for resorts to extend the existing 25 year leases to 50 years. A time period was given and there is a clause that stipulates that the payment must be done in completion before the lease period can be extended. So, the Nasheed government had interpreted that clause as the payment to be paid in full for the period extended. So, because the wording is such that the payment must be complete before the extension is granted, we interpreted it as the full payment.
But there is another clause which says the manner in which the payment is calculated is on an annual basis. This government has over-interpreted that clause and has said that the payment has to be made on an annual , but I have always insisted that the value of the government assets must not be allowed to decrease because the payments go to funding welfare services, housing projects, infrastructure projects, health services and so on that would benefit the local community.
The current government has not only allowed payment to be made on an annual basis but for the payment to start at the end of the 25 year period, which is years away. It is a huge loss to the government treasury, about US$150 million, and I think as a result that a lot of people will be deprived of the many projects that we have started for the benefit of the communities across the atolls.
Furthermore, I have had news that the government has borrowed US$50 million on a sovereign bond. There is no need to resort to this kind of borrowing when resort investors could provide that money easily. The interesting thing about it is that many resort operators had actually agreed to lump-sum payments, and a lot of them had already done so, because people are very conscious of the fact that services have to be provided to the people and it is a way to support the government budget to do so.
I this noticed because some the influential people behind the coup perpetrators have been pressuring me for some time now to do this so, again, it’s not everybody in the industry but some who had a vested interest in deferring the payment.
Now of course they have the power to decide in any manner that they want and this was one of the first things that they did when they came into power.
DB: The government continues to emphasise the separation of tourism and politics. Is it a good idea to have such a divide between the politics/society and a country’s biggest source of income?
MZ: Tourism and politics have always been separate so I’m quite baffled as to why now they are saying this. It has never been the MDPs intention or any other political party’s intention to harm the economy in any way. So I’m surprised as to why this message is going out to separate tourism from politics. Even in my time at the ministry I have always maintained that Tourism Minister will never be colour coded and we have worked with all stakeholders who have come from all different parties. Even with the new projects we don’t look at anybody’s political background, it has always been very robust in this sense.
DB: With Nasheed’s interest in mid-market tourism as an example, is bringing broader societal issues into tourism something the MDP is interested in?
MZ: Yes, it cannot be any other way because the Nasheed government is about the people and with tourism and every other economic policy, we have strived to put in place a fair go for all. For example the small and medium loan schemes encouraged middle-scale businesses to go into fruitful operation and we tried in every way to encourage the small business owner and the medium SME owners to get ahead in life. Because our philosophy is to do things for the people as opposed to making the rich richer, so in that sense even in tourism we came up with the mid-market policy and the policy to develop guest houses and city hotels across the country especially as a source for more people from the community to participate in the tourist industry – that is our aim. It not anything political at all.
The only way this can be viewed as political would be now people who are already successful, multi-millionaires in the industry, will tend to think that if you spread it around too much their businesses might become shaky. But the way we designed it is not to disrupt the apple cart in any way.
We were always going to emphasise the fact that Maldives is a luxury destination. People who seek that sense of luxury actually come, that was always going to be our main theme when promoting the Maldives yet at the same time we had wanted for more people to be participating directly not only in the business side but from the benefits of tourism in the communities. And also of course we wanted more tourists to see more of Maldives at a value for money price.
The former tourism masterplan, which was effective until 2011, said that islands specifically selected by the government have to be put on tender. But the way the Nasheed government did it was to open up all the islands in the country again to deviate from making the rich richer kind of philosophy to opening up the country to whoever has the ability, ambition and drive to apply for a tourism development to do so.
It was perfectly legally-allowable because the tourism law states that you can do a joint development with the government, so for example the government owned five percent and the developer 95 percent, which was legally permissible. But the interesting thing is that the current administration is saying we were doing that in contravention of tourism law – that is not the case.
Article 5 of the tourism law actually says that a joint venture can be allowed with the government as a shareholder. That is what we were doing instead of making the already rich richer, we were opening the islands to everybody who wanted to apply and with the means to do so.
In the past when you put something on tender, the process is so complicated and costly you have to know the right people in the right places, so the average person who was desirous of joining the tourism industry was very far-removed from anything to do with moving towards successful application.
Equity is what the Nasheed government was about and providing more opportunities for the able person, not necessarily the well-connected person. I don’t think there’s anything wrong with that approach so I don’t find it surprising at all when some of the already established enterprises in tourism are saying that these kinds of policies have been perpetrated by the Nasheed government for political reasons. It’s not for political reasons, it’s for reasons of equity.
DB: How do you see the political instability affecting tourism in the long run?
MZ: I don’t think that the political situation is actually affecting the tourism industry as such because Maldives is a well-established destination. The Maldives is a unique destination. You don’t find this kind of geographical competitive advantage in any other country. 1200 islands ringed into atolls, unique lagoons and beaches, the various shades of blue that make the islands so attractive. I have seen many tourists actually cry in amazement, it’s so beautiful.
The political situation is not going to affect the beauty that we have in the islands that we offer to the tourists. But I think the tourist industry has a responsibility to provide correct information about Maldivian life in general because I have had interaction from my experience as tourism minister that even the wealthiest tourists who come here are genuinely concerned about the well-being of the average person, they want to contribute financially and to better the life of the average citizen, and that is what the government was doing.
I think the tourism industry has the responsibility to provide information on the great wrong that had been done unto the average person of the Maldives which is denying them the government that has been legitimately installed through their vote.