Back to blogosphere

The blogger in me has hibernated for over nine months now. Visitors to this blog and my friends have at times questioned me about my long absence. For those of you out there who want to know, here’s what I have to say.

Firstly, I got busy preparing for my daughter Anna’s arrival.

Secondly, I felt that I was making unnecessary enemies. We have a culture in which all criticisms are taken as personal attacks. Even the slightest criticism could precipitate a totally unwarranted flurry of rabid animosity on you.

Thirdly, I guess I just got sick and tired of crying wolf all the time. Visitors to this blog were accusing me of being too cynical in my outlook.

Then, I thought of taking a break. I thought of just waiting for something positive to happen so that I could write a nice and happy blog post about it. So I went into hibernation at the end of April 2009.

After two months or so I had a look at the major events on the international front to see if there was anything positive I could write about. Many things of course did happen during my absence. But there was nothing that could even remotely be described as positive - H1N1 assumed pandemic status; Ahmedinejad got re-elected in Iran; Air France flight from Rio to Paris crashed killing all 228 people on board; the legendary King of Pop died; and Chinese authorities clamped down on ethnic Uyghurs. :-(

On the domestic front things were going from bad to worse. Amidst the acrimonious political bickering and skulduggery on both sides of the political divide there was little the few ‘good’ elements in the country could do to remedy an economic, social and political situation that had spiralled out of control. And finally, the day my country bloated its Majlis from 48 rabblerousing ‘ikhlastheri’ members to 77, I buried whatever remains of my hope to write a blog post on anything positive.

Fast forward nine months, my little bundle of joy is six months old and it dawned upon me just yesterday that my interest in blogging is still very much alive. So, I decided that it’s time to make a comeback to the blogosphere :-)

Fiscal Discipline - Ali Hashim's predicament

A finance minister is perhaps the last person to win a popularity contest during a recession. When Alistair Darling proposed his budget it was derided by media as a "fantasy Budget". A writer on the Economist dubbed the budget as “a dishonest piece of pre-election politicking”. Meanwhile, in our small make-believe microcosm of the UK, our finance chief Ali Hashim is faced with a similar predicament. His only consolation is that there are no malicious financial journalists to deride him in his country. The few so-called professional journalists in the country have long given up on any interest to graze in their country’s arid financial landscape - thanks to the greener pastures offered by a highly polarized political landscape.

Ali Hashim’s eye-watering Rf 12.6 billion budget didn’t come as a surprise to me. Big budget numbers have become very much the norm for us. Over the last few years our government has in fact been the biggest spender in the world in relation to the size of the economy. The highest spending governments like that of Cuba, by comparison, have government expenditures at around 80 percent of their GDP.

Is Ali Hashim to be blamed? It appears that he has largely done what he could - trying to trim current and capital expenditures which were largely vestiges of the previous regime. It is the structural problems in the public sector, the disproportionately large civil service, low budget revenues and inadequate tax receipts that engendered the tradition of “fantasy budgets”, in the Maldives. The budget, particularly the revenue projection, as described by G.A Member Jabir, is a “fantasy”. This fantasy, quite ironically is spawned by nothing but the greed and the insatiable demands of powerful political figures in the parliament and government. These are the people that have, for political expediency, shut their eyes to the financial black hole this country is headed to. The Finance Ministers, at least the last three of them, were left with no option but to curry favour to their demands. And much to the amusement of their political masters, each one of these finance ministers soon morphed into someone akin to a Paris-Hilton-inspired wastrel, armed with a credit card.

Another question that begs to be asked is why President Nasheed’s government is unable to break this tradition of “fantasy budgets”? The simple answer to this complicated question is that while most of the powerful figures within the government view any spending cuts as something tantamount to political masochism, the opposition MP’s are crying foul over the budget not “adequately addressing” the concerns of their electorate. Amidst the on-going political bickering and skullduggery ahead of the parliamentary elections, both the Government and opposition MPs seem to be united in humming the tune of spend, baby, spend!

I am no expert in public finance. But I don’t think it takes anything more than commonsense to figure out that if you keep on spending money you don’t have, you are invariably on a path to bankruptcy. Incidentally, a fellow blogger has highlighted some facts and raised interesting questions on the cost of our political reforms. Fiscal restraint and broadening the revenue base remain the only short-run macroeconomic policy variables that are available to Finance Minister Hashim. And given the desperate times, draconian measures are needed to address his Herculean task. A man entrusted with the task to introduce fiscal discipline to a country that has been so much used to there’s-no-tomorrow spending sprees would not be a popular man. The stakes are indeed high for Ali Hashim. The efficacy of his fiscal reforms and his very own survival now hinge on his ability to say no to the pig-headed men and women warming the all too important seats of the government, Majlis and the judiciary. The indications are that Ali Hashim has the nerves to flex his muscles to enforce fiscal discipline. The premature graying, after all, isn’t the only thing that Ali Hashim and Alistair Darling have in common. ;-)

The question of ‘rich pickings’ in the Maldives

Last week the Economist ran an interesting online debate. The question was on whether the time has come to tax the rich more.

Perhaps owing to a somewhat idiosyncratic resentment towards what the Economist terms “undeserving rich”, like many other thousands of followers of this debate, my immediate knee-jerk reaction, given the dire state of economic conditions and public finances throughout the world, was to be inclined towards Professor Piketty’s arguments that was in favour of taxing the rich more. But as the debate progressed, I found my dogmatic conviction waning in no time. And by the end of the debate I was confused, to say the least.

Arguments on income disparity have been one of the most frequently used populist political tools throughout the world. And the Maldives certainly is no exception. During the political upheaval of the last four years, the phenomenon was particularly widespread. On the one hand Gayoom and his supporters espoused arguments attributing the country’s relatively high per capita income to the government’s policies. At the same time they were quick to vehemently brush aside any criticism by the then opposition MDP, on issues such as the high incidence of poverty and skewed income distribution, as an inevitable price the country had to pay for economic growth and entrepreneurial dynamism.

Much of the criticism during this period was buttressed on the findings of the first VPA of 1998 which put a staggering 45 percent of the population below the poverty line (based on a poverty line of Rf 15 per person per day). However, by the second VPA of 2004, the figure was down to 19 percent. The Gini coefficient – a measure of inequality in income distribution expressed as a ratio between 0-1, with lower values indicating more equal distribution – in the meantime, improved from 0.39 to 0.33 in Male and 0.40 to 0.36 in the atolls during the same period. Contrary to popular belief, this makes our Gini coefficient comparable even to developed countries like the UK and the US.

It has been four years since the second VPA was published. Gayoom’s extravagance and the populist backlash catapulted Mohamed Nasheed to the highest office in the country late last year. It is a little too early to say how President Nasheed’s government’s policies are going to shape, over the long term, the stubbornly perverse affairs of the malefactors of the great resort-wealth and the multifaceted dynamics of the question of inequality. However, with stories like that of the alleged failure of the government to safeguard the interests of 23,000 individual shareholders of MTDC rife, the early indications are that establishing dominion over the all-powerful, party-hopping robber barons are easier said than done.

400 percent increase in pay??!!

The biggest economies in the world - US, Japan and Europe are in their first simultaneous recession since World War II. In spite of the trillions of dollars Governments around the world have pumped in to prevent their economies from going belly-up, the challenges seem increasingly intractable.

Perhaps oblivious to what is happening in the outside world, for many in this tiny Indian Ocean state of Maldives, their country seems to be totally insulated from the world’s problems. So insulated are we that even the bearers of the beacon of justice in this country found it a very a propitious and fitting moment to demand a whopping 400 percent increase in their pay. Their willful myopia and make-believe state of opulence seem to be completely draping the grim realities of their economy which is literally on the ventilator. I am clueless as to what fuels these frivolous demands. Ignorance? Greed?

Let me quote a story a good friend of mine told me sometime ago about the state of affairs of our small country. With their bellies full, he says, most of the lions, albeit halfheartedly, were forced to retreat into their dens last year. A few more, still, are on the prowl. The hyenas are now going on a rampage over what is left of the carcass. The vultures, waiting for their turn to scrape the bones of what is left of the little meat on the carcass, are ominously circling in the sky. The men and women wielding the sticks to shoo away the beasts have long become nonchalant and blithely shielded their eyes from the events unfolding in front of them.

When is this madness going to stop? I don’t enjoy crying wolf. But what I know for sure is that somebody’s got to do something to tame these wild animals and perhaps put some sense into the thick skulls of the men and women warming the all too important seats of the government, Majlis and the judiciary, if we are to stay afloat. Finance Minister, sir. Ahem, ahem! ;-)

Gulhifalhu Phantom Business Park

President Nasheed is traveling to UK with an important mission. He is pressing ahead with the new foreign policy thrust area of the Government – ‘economic and commercial relations’ - which Foreign Minister Dr. Shaheed describes as “the top priority of the Maldives”.

Among the important agenda items of President’s trip will be discussions held with a “British company to develop a harbour and build warehouses in Gulhi Falhu”.

Gulhifalhu Global Business Park (GGBP) project was one of three ‘mega-projects’ envisaged by the previous administration. Along with a transshipment port in Ihavandhippolhu and an integrated infrastructure project in phase II of Hulhumalé (moon bay marina??), the Government was banking in on the idea of raking in USD 200 million from the project to the finance its budget in 2008. The euphoria was, as usual, short lived. The ‘mega-project’ soon turned into just another one of those ‘phantom projects’. The resultant revenue shortfall of USD 190 million, which, against a backdrop of dwindling foreign reserves brought about by spiraling import bills owing to the unprecedented surge in oil prices in the international market back then, created intense economic and political pressures that culminated in the fiasco that ended up in the resignation of Gasim, Jaleel and Shougee.

GGBP was initially planned to be developed ‘jointly’ by Boskalis International and Capital Investment & Finance Ltd. Boskalis International, a company that quite literally, epitomizes the Dutch phrase “God created the world, the Dutch created the Netherlands”, was the contractor. Three hundred thousand, of course, minus one person (thank you, Idham) were all duped into believing that GGBP was going to be ‘developed’ by the Boskalis. Meanwhile, the real ‘developer’, alas, was some no-name “Capital Investment & Finance Ltd of the United Kingdom!!!! Due diligence, anyone? Have a look at their website. Anyone who knows a thing or two about due diligence will tell you this company has all the hallmarks of a typical paper company setup by a middleman. The so called “Capital Investment & Finance Ltd of the United Kingdom” was nothing but a fly-by-night company setup by a mahattaya Raj from Srilanka (thanks again, Idham). I don’t think I can ever understand why a government, seriously wanting to develop its flagship ‘mega-project’ would want to so deceptively feign into such despicable trickery. The name Boskalis was thrown around like badithakuru-viheyrey-alafaiy to hoodwink an unsuspecting public into believing that we were going to have a business park developed by the Dutch when the government was in fact getting into an agreement with a Sivarajah Manivannan’s two pound company (Sigh! Idham, you have every right to get even your tenth generation children to yell out ‘I told you so’ to all Maldivians).

Fast-forward one year. Its goodbye phantom projects, hello mega-projects, again. With President Nasheed intending to hold discussions with a “British company” to develop Gulhifalhu, the ‘mega-project’ hullabaloo is back with all its characteristic gusto. As an average Maldivian who is perhaps a little too obsessively convinced on the idea that a mega-island, gulhifalhu or Moon Bay Marina is our only hope if the plight of our people are to be anything but buying land to settle down alongside Dalits in Indian ghettos, I can only hope that it’s not another no-name fly-by-night “of the United Kingdom” company that my President is going to hold discussion with, this time around.

Launching my humble ‘Artwork’ Blog

Announcing the awakening of the shy, unassuming and mediocre student of J. Swampillai dormant in me for over 17 long years! I’ve launched my artwork blog on http://canvasknaim.blogspot.com . Over the next few days I’ll be making more posts.

Water shortages, ‘four-gear gifilis’, ‘futtaru’ garbage dumps and ‘transshipment ports’

Waking up to the first cock-a-doodle-doo only to stand in the early morning sun for hours on end in order to fill a 5 litre container with clean drinking water is becoming almost an annual ritual towards the end of every North-east monsoon for Shameema and hundreds of mothers like her, eking out their existences in their small villages. Shameema is not from a war-torn Afghan village but from Maldives where per capita income is almost ten times that of Afghanistan. Her island of Mulhadhoo, registered home of 350 people, located in the northern Ihavandhippolhu of Maldives is one of 60 odd islands to which her Government is contemplating on supplying reverse-osmosis drinking water on board small boats, after a prolonged dry spell.

Like most Maldivians living outside Male, Shameema and the rest of the eighty odd residents of the Mulhadhoo store their rainwater harvested from their corrugated iron roofs in polyethylene kalhuhan tanks; dispose their waste onto a dump on the seaward futtaru side of the island; and defecate into holes dug, as-and-when-nature-calls, on public beaches or ‘four-gear’ gifili latrines.

Meanwhile an army of Maldivians, mostly men anointed by their mighty political parties and financed by deep-pocketed bigwig resort-owners are preparing for their ritual once-in-every-five-years onslaught on islands like Shameema’s Mulhadhoo. This year an unprecedented 465 of them, sipping Italian Lavazza espressos in trendy cafés in Male or savoring the taste of an exotic vilaathu-sherbet in one of Maldives’ top-class luxury resorts, are meticulously planning their onslaught. Their arsenal will comprise of, among other things, an ostentatious display of verbose rhetoric on democracy, human rights, accountability and several other clichéd but little understood terms. There will also be a fool’s paradise of desalination plants that would, so they say, ensure a copious supply fresh water to all the households; diesel generators that would keep the fans and air conditioners running in houses with corrugated iron roofing sheets exposed to 12 hours of merciless equatorial sun to create an ambience that could perhaps be the envy of people living high up on the Swiss Alps. And there will also be an abundance of brand new 6 cylinder Yanmar engines that would propel fishing vessels out to the vast expanse of the Indian Ocean to enable diminutive weather-beaten fishermen to catch a glimpse of the mythical ‘minikaaraajjey gaskara’.

Shameema is no stranger to the chicanery of the Machiavellian planners. She knows that in a few weeks time she would be unable to stretch a leg without poking either a ‘rayyithunge khadhim’ or one of their lackeys. And though Shameema portrays an outward sense of nonchalance, she has a secret little reason to celebrate as well: the ephemeral treasures that come along with the politicians. The last time she was very lucky to grab a handful of those notes adorned with pictures of ‘medhuziyaaraiy’. But she remains unimpressed and nonchalant. And so are the majority of the people of Ihavandhippolhu and the rest of Maldives, for their taste for fantasy desalination plants, diesel generators bridges and flats have been cloyed by countless empty promises on phantom projects like the USD 300 million transshipment port that the previous government decided to ‘build’ in Ihavandhippolhu in the run up to the last parliamentary election.

I recently asked a good friend who I consider to be perhaps my small country’s version of Jeffrey Sachs, if he has anything to say about our politicians and Shameemas. His answer is simple. “Don’t put the blame only on the politicians. For as long as we have 142 islands with populations of less than a thousand people, there is no end to the stories of ‘empty-kalhuhan’, ‘four-gear gifilis’, ‘futtaru’ garbage dumps --- and the ‘transshipment ports’ are only a phenomenon deployed, not perhaps to camouflage trickery or finesse evil but to keep hope alive in an otherwise squalid and desolate environment”. As someone who as a child only accidentally escaped from the world of ‘fenthaangi/four-gear gifili’ induced Ascariasis,; and after thirty years, is still morbidly terrified of those horrid parasites that, ahem, creep out of the rectum after a spoonful or two of that slimy abhorrent stuff called ‘antipa?’, I can’t find any reason to disagree with him.

Our Special friendship with India: beyond the mirch-masala of Bollywood?

India has always been our special friend. In Foreign Minister Dr. Shaheed’s words, “our primary strategic interests lie with India. And there is nothing that can change this plain fact”. India, despite the current economic chill, isn’t too far away from making its behemoth economy a global economic powerhouse.

We have with India strong military cooperation; bilateral trade, albeit, heavily skewed in favour of India; assistance in human resource development; and of course there is India’s unwavering relief and rescue, come the tidal surges of the south-west monsoon.

With a retired Lieutenant General as our government’s envoy in India, the relationship that was fostered under Gayoom, particularly in the aftermath of ‘Operation Cactus’ was largely centered around ‘defense and military cooperation’ which left us with, among other things, white elephants like INS Tillanchang. I, of course, don’t downplay the significance of IGMH, MITE, the recent USD 100 million budget support loan and the innumerable times India had lent a helping hand to us.

While we were deeply engrossed in Bollywood’s copious outflow of never-ending sultry mirch-masalas and India’s military toys, another small country Mauritius, located off the coast of Africa in the Indian Ocean signed a double taxation avoidance treaty with our mighty neighbour in 1983. Under the treaty no resident of Mauritius were to be taxed in India on capital gains made on the sale of shares of Indian companies by investors resident in Mauritius. The treaty did not have any affect until 1992 when India opened the country for foreign financial investors. During the same year Mauritius tactically allowed foreigners to register companies in the country for overseas investments. Foreign investors eager to reap the benefits of the Indian economy’s boom quickly routed their investments through Mauritius as this exempted them from capital gains tax completely. According some estimates nearly 40% of the $45-50 billion FDI inflows into India between 1991-2006 came through the tiny African state of Mauritius.

Luxembourg and Liechtenstein, two microstates in the heart of Europe, perhaps offer some interesting clues on the type of synergies that we could develop with India. Luxembourg and Liechtenstein with populations of around half a million and 40 thousand respectively, are among the richest nations in the world – thanks to their highly successful banking and financial sectors.

Nasheed’s government appears to be working towards steering the course of our special relationship with India to gear it more towards commercial ties. With key figures within MDP’s top brass who are known for their India-centric policies at the steering wheel, the day we could become to our behemoth neighbour what Liechtenstein is to Europe is perhaps not far way.

Thank you President Nasheed

Not one iota of harm and no hardship whatsoever to anyone’s job or prospects for career advancement will be caused on account of any criticism or dissatisfaction with the government. This is the unequivocal statement President Nasheed has for anyone who is dubious of his commitment to free speech and democracy. The statement couldn’t have come at a more opportune moment. Of late, I have noticed that a growing number of bloggers are becoming increasingly apprehensive of the Government’s stance on what my good friend Hilath calls “the noble principles of democracy and free speech”.

Carbon Neutrality: Can A.S.I Moosa beat Pope Benedict XVI?

If there’s any single quality in President Nasheed that differentiates him from the rest of us ordinary folks, it has to be his intrepid and almost uncanny ability to dream big even in the direst circumstances. In relative terms his ambitions to construct 10,000 housing units, build up a reserve of USD 800 million and keeping a market determined rufiyaa exchange rate at Rf 10 for a dollar at the end of his five year term, would rival even the most audacious hopes and dreams of Barack Obama - the name that has already become the epitome of dreams, hopes and ambitions for hundreds of millions of people throughout the world. And our President Nasheed is far from being done with setting goals and ambitious targets. On the environmental front he has a new dream – the target to make Maldives a carbon neutral country within the next 10 years! He has given this seemingly insurmountable challenge to A.S. Moosa (Sappé).

I did a bit of googling on the idea of carbon neutrality and to my utter surprise the task President has assigned to Sappe is in fact far more challenging than I initially thought. To succeed in his assignment, A.S.I Moosa would have to tussle, for the next ten years, with none other than Pope Benedict XVI. Almost a year and a half before President Nasheed set the carbon-neutral goal for our small country, the Vatican announced its plan to become the first carbon neutral state in the world through its climate forest in Hungary. Four other nations - Iceland, New Zealand, Norway and Costa Rica, have the same plan.

Carbon neutrality refers to achieving net zero carbon emissions by “balancing a measured amount of carbon released with an equivalent amount sequestered or offset”. Whether this is a feat A.S.I Moosa could possibly perform for our small, acutely resource constrained island nation that the UNDP has identified in its Oil Price Vulnerability Index (OPVI) as the most vulnerable country in the World to oil prices hikes, remains to be seen.

We are yet to know how A.S.I Moosa plans to go about to confront his daunting task. I don’t have any background knowledge to say anything about the issue from an environmental angle. But one thing I know for sure is that a lot of Maldivians are convinced that we need to do something to reduce our precarious dependence on imported fossil fuels. When oil prices hit USD 147 in July last year, I, for one, thought doomsday wasn’t too far away for our small country. With the unprecedented oil price hikes of 2007-2008, we were clearly caught off-guard as no developments plan in the country had factored in oil at the prices prevalent in the world market during that time. We were saved from an oil-price induced bankruptcy only by the dampened demand for oil brought about by the global financial meltdown.

Most Maldivians would presumably agree that despite the presence of high levels of sunlight and vast expanses of ocean which are potential sources of alternative solar and tidal energy for the country, our government under Gayoom did little to tap into these sources of power. This might very well be the approach A.S.I Moosa would take in his bid to beat the Holy See in the race to become the World’s first carbon neutral country.