Is there a billionaire in Maldives?

‘Billionaire Gasim Ibrahim’? I’ve come across this at least a dozen times over the last few years. Miadhu Daily is particularly fond of referring to Mr. Qasim Ibrahim as a billionaire. I’m not too sure if this is a satire on Mr. Qasim or someone is aiming for a bargain at inflating his ego. The words ‘millionaire’ and ‘billionaire’ have become a ubiquitous term in our Maldivian psyche and vocabulary in the recent past. I’ve seen a rise in this phenomenon particularly in the aftermath of the 2006-2007 resort-leasehold gambling game that saw the creation of a handful of overnight millionaires.

A millionaire or a billionaire, according to conventional thinking is someone who has a net worth of a million or a billion, measured in a major international currency such as the US Dollar or Euro. This definition unfortunately excludes, from the millionaire / billionaire club, wannabes who are eager to somehow do some clever math in Indonesian Rupiah to get into this elite club. (There goes my hope of ever claiming to be a billionaire!)

Now going back to the original question – is Mr. Qasim a billionaire? In the absence of tax returns or disclosure requirements this is difficult to ascertain with absolute certainty. But based on anecdotal evidence assuming that Mr. Gasim owns 10 resorts in Maldives, a few hotels overseas and shares in several local companies, and has liabilities of almost similar magnitudes, it is highly unlikely that Mr. Qasim’s net worth would even be USD200 million.

Another question that begs to be asked is - Is there a billionaire in Maldives? I still remember how I had a lengthy argument with a local businessman a few months ago when he said Mr. Champa Afeef will make it to the Forbes list in a year. For a while I thought my friend was joking. It was hard to believe that this fairly well-educated man in his forties, who has spent half his lifetime doing a sizable private business, was unable to have an appreciation of the arithmetics needed to figure out that an economy that’s entire value hovers around only a billion US dollars cannot possibly produce an individual billionaire. Do 300 feet-tall Sierra redwoods grow on our islands? Or has anyone ever spotted a 100 ton blue whale swimming in our lagoons? I, for one, would be happy to see the New Year 2009 produce a Maldivian billionaire, but the hard fact of the matter is that the size of our economy is infinitesimally small to give rise to a Warren Buffett or a Lakshmi Mittal. It is highly unlikely that even the combined net worth of Mr. Qasim, Mr. M.U Manik and Mr. Champa Afeef would tally a billion dollars!

Wish you a very Happy New Year!

Some Concerns on the Universal Pension Scheme

If my understanding of National Social Protection Agency’s interview to Haveeru is correct, 13000 people including former Ministers Karanka Ibrahim Rasheed and Umar Zahir will be drawing Rf2000 per month from NSPA in a month’s time.

It looks like the Government put forwarded this universal pension scheme as a means to provide a safety net for our burgeoning elderly population. Anyone could see the merits of a universal pension scheme as our early baby-boomers are already headed towards retirement. My concern with NSPA’s pension scheme is not because it includes ex-ministers, but because this scheme, in its present form as explained in NSPA’s interview, will most probably become unsustainable in the next five to ten years. And I’m also a wee bit skeptical as to how much of a free transfer of resources this country can afford from the current working population to the retired. Now don’t get me wrong – I’m all for any effort that would ensure a higher standard of living for all age-groups of people in this country.

In the absence of a proper mechanism to do a means testing, the pension will have to be made a universal state pension. With around 13,000 eligible people eligible today, the total cost outlay of this scheme to our taxpayers is a whopping Rf 300million annually. And what we sometimes quite conveniently forget is that unlike in most other countries where baby boomers were a post-war phenomenon, we had our baby-boom during the late 60s, 70s and early 80s. With our life expectancies reaching levels that are comparable even to that of the developed world, in another 20 years the baby-boomer will reach retirement and we will have over 38 thousand people eligible for this universal pension. And the cost of this scheme would then spiral out of control to Rf900 million annually. And lets not forget the financial burden our government already has on account of the non-contributory pension scheme that pays 50 percent of the basic monthly salary as an on-going pension after every 20 years of service, to all government employees.

While most of us appreciate NSPA’s efforts to provide a safety net for our seniors, it appears that without major overhauls to the pension schemes, in terms of the way we fund them, they would collapse in less than ten years. And to me, the most painful part of this is that once the decision has been made to provide a universal non-contributory pension without any means testing, the ‘political cost’ of attempting to overhaul the scheme would be fatal to any government.

If you are buying Euros in Male you need to know this

A friend traveling abroad gave me a call to say that he is buying Euro as no bank would sell him the 1,500 Dollars he needed today. It made me a little curious as to how our local banks could simply go on selling Euros at a time when the country has an acute shortage of hard currency. A few punches on the calculator will tell you how they do it. Banks in Male are selling Euro at Rf 18.13 which is actually a premium compared to the USD rate of 12.85. This is equivalent to paying Rf13.10 for a Dollar! Most people who happily buy Euros at this rate are somewhat beguiled into believing that they are avoiding a loss by not paying Rf13 or above for a Dollar. So, the next time you buy hard currency don’t buy Euros at this rate unless you have no problem with buying Dollars on the black-market for Rf13.10!

First 30 Days – A Summary of Achievements of the Government

It’s been just over a month since a new president was sworn into office in the living memory of over 80 percent of our people. The jubilation and euphoria is still very much alive. Thirty days in office is an important milestone both for President Nasheed and all Maldivians, regardless of the political affiliations. The Press and Publication’s Section of the President’s Office has published a document entitled ‘First 30 Days – A Summary of Achievements of the Government’ to mark the occasion. My friend who asked me to have a look at this document was utterly outraged and thought this is nothing but an affront to the President himself. And after having a cursory look at the document, I can’t find any reason to disagree with him. It is disheartening to see the capable new team at the President’s Office giving this rather premature opportunity for Mundhoodh to have the last laugh.

‘Vicks-Vaporub’ treatment for the Economy

Kasimbe’s biggest regret in life is that he didn’t agree to amputate his thumb a year ago, after what looked like an insect bite worsened to develop gangrene. The year long ‘Vicks-Vaporub - Balm’ treatment he took was to no avail. Gangrene formed and he opted, against Dr. Balakrishnan’s advice, not to do away with his thumb for the thought of having to live, for the rest of his life, without a thumb, was too painful to him. Now, a year later, he is leaving to Trivandrum to amputate his entire left arm in a desperate attempt to save his life.

Kasimbe isn’t alone in delaying painful decisions. That’s what we did as a country, under Gayoom, for 30 long years. We procrastinated, delayed any decision that looked painful. We knew our problems - we did not pay the real cost of our electricity, health care, fuel, and water etc; almost one in every five adult is a civil servant; five out every hundred Rufiyaa we earn goes to support our military. With no direct taxation the budget revenues were inadequate to finance the uncontrollable government expenses. We were living beyond our means. Every time we had a shortfall, we borrowed our way out of it without ever attempting to find a permanent cure to the problem. Our policy makers knew very well that this sort of ad-hoc and piecemeal policies only gave symptomatic treatment that provided a momentary relief from pain, rather than addressing the real problems. Addressing the real problems and bringing the much-needed structural changes to the economy were simply delayed because the people at the helm of our affairs found the changes to be too painful. So, we continued to treat our economy with ‘Vicks-Vaporub’, for a good 30 years and the result is…nothing but gangrene.

It’s been over a month since we closed Gayoom’s chapter. And now it looks like the looming dollar crisis is going to be the first real challenge to our new Government. I can understand why President Nasheed’s government wouldn’t want to face the inevitable devaluation, at least during his all important first 100 days in office but if we are counting on the USD100 million loan pledged by the Indian Government to save our Rufiyaa, that’s tantamount to applying ‘Vicks-Vaporub’ on Rufiyaa. The real ailment remains untreated – only to recur in another month or two.

The lost opportunity for a ‘paradigm shift’

How my friend Ali Farsighted, over a casual coffee, talked about the need for a ‘paradigm shift’ in Maldivian thinking is still fresh in my memory. That was a few weeks after the 26th Dec tsunami. I thought Ali was on the money in his thinking on his ‘paradigm shift’ in population consolidation. His contention was that the calamity had given our people a once in a lifetime opportunity to rethink the way only 300 thousand people are living on 195 islands which are suited to one thing only - a subsistence based, nomadic fishing community.

I also remember how another friend of mine, then working at Planning Ministry, distanced himself from the Government’s decision to develop R. Dhuvaafaru, when I asked him how the Ministry had selected the island as the new abode for the residents of Kadholhudhoo. Today, after 4 years, the island has been developed for its 4,000 inhabitants, at a cost of over Rf390 million – that’s a staggering hundred thousand rufiyaa per person. Another island destroyed by tsunami, Th. Vilufushi, has also been developed at whopping cost of 340million rufiyaa – that’s over Rf 130,000 per inhabitant for the 2,500 odd people who will ultimately call the island, home. Only two islands have set us over three-quarters of a billion rufiyaa behind. And there’s so much more to this. Now that our people ‘know’ what their ‘rights’ are, there are some 190 odd islands that would not shy away from going Maduvvaree’s way. After all, if people in Dhuvaafaru, Hulhumale, Vilufushi and Male can have safe infrastructures in their islands, there is no reason to believe that the Government cannot provide the same to Madduvvarians. The demands will be unstoppable. Decentralization and ‘local governments’ aren’t going to do the trick.

I must say, Ali was damn right. Tsunami was the only opportunity we had to convince Yahuya Average that he has no choice but to move away from his fishing village of less than 300 people if he wants his two sons and three daughters to complete Cambridge A levels and his grandmother Faathumafulhu to undergo the cataract surgery that she had required for years, without having to leave his home island. But now it looks like we have lost that opportunity forever. New Housing Minister has said on record that he doesn’t want too many Hulhumales. Housing Minister is right. Large scale dredging does irreversible damage to our coral islands. But if the plight of Yahuya Average’s fifth generation children are to be anything other than buying land to settle down alongside Dalits in Indian ghettos, we cant help but be fascinated by the seemingly utopian Bushry’s ‘safe island’.

Maldives – moving closer to end years of anti-Semitism?

What has Israel bashing got to do with defending Islam in Maldives? Quite a lot – at least to some local politicians. In this otherwise lethargic country some people could get really worked up when it comes to Israel and Jews. In fact, over the years, the politicians and Imams in our small country has honed and fine-tuned their skills in anti-Semitism to such an extent that Hitler himself would be turning in his graves. We even have a special home-grown Dhivehi language word, ‘i-yahoodi kan’ - is there an English equivalent? The closest that I can think of is the sleaziest form of trickery and chicanery. Views and opinions on Israel and Jews have been a make-or-break issue for politicians. Gayoom’s early political career, for instance, owes a great deal to a carefully nurtured Maldivian’s fear of Jews. Many believe it was Gayoom who was largely the architect of the about turn President Nasir took in the 70s after being the first country to recognize the state of Israel. Now, after 30 years, yet another aspiring politician Umar Naseer seems to be trying his luck on the same platform.

During Gayoom’s last few years, however, there were some signs of a détente - we co-sponsored the US resolution on holocaust remembrance in 2005; and in 2007 we co-sponsored another US- resolution condemning holocaust denial. Now our pragmatic foreign minister Dr. Shaheed who was accused by the likes of Umar Naseer to have clandestine links with U.S billionaire George Soros and Zionist organizations have gone one step further by saying that he would “not rule out engaging in diplomatic relations with Israel”.

What I as a Muslim cannot understand is why we so often talk about ‘Islamaphobia’ in the west while we ourselves are so much engrossed in such hatred towards the Jews. Is this about doing our bit to defend Islam? I have absolutely no clue, but the Prophet Mohamed that I’ve read about and come to know of did co-exist with Jews in 7th century Yathrib. And I’m sure our today’s ‘Kasautee-moms’, glued to the box 16 hours a day and those lanky Billabong-clad ‘parteys’ out on our streets couldn’t care less about a never-ending centuries old war that’s being waged half way around the world for reasons that they know nothing about. It looks like our hatred of Jews and anti-Semitism is nothing but just another political tool in the arsenal of a few pseudo-religious politicians aspiring to ride on a holier-than-thou kind of political platform.

Why aren’t investments coming to South Asia’s most business friendly country?

I was very happy when the World Bank’s ‘Doing Business Report 2006 and 2007’ report ranked the Maldives as the most business friendly country in South Asia. This coincided with the time Mohamed Jaleel was quoted by our media almost every other day, about the development of a USD300million transshipment port in Ihavandhippolhu, a USD 200million port city in Gulhifalhu and an integrated infrastructure project in Hulhumalé phase2. My happiness turned out to be somewhat short-lived. The promised investments did not come and the projects appear to have been shelved now. To make matters worse, funds have even dried up for most of the 50 or so resort islands that are currently in various stages of development. I cannot help asking why we are unable to attract FDI the way some small countries like Cyprus, Trinidad and Tobago, Mauritius, Malta are doing. If Nasheed’s government is serious about getting FDI, he needs to get his Minister Rasheed to quickly remove the bottlenecks and address some of the pressing problems in the area.

▫ Interference and corruption – government has previously mixed political objectives and influence with commercial and infrastructure projects (Ihavandhippolhu transshipment port, Gulhifalhu, Hulhumale phase 2, Hulhumale Ceylinco project etc). This gives wrong signals to investors who know that they need ‘influential business partners’ on their side if they want to stand a chance of winning a project or approval for a project. However, most investors with a good international standing would want to be judged on the basis of technical criteria rather than their political connections and knack for influence paddling. As for corruption, with Transparency International giving us a world ranking of 115 – way below countries like India and Srilanka, it’s a little… ahem…a paper bag, anyone?

▫ Inadequacy and ambiguity of legal framework –ambiguous and conflicting messages are given to potential investors, often as a result of vested interests of powerful figures within the government. Important pieces of legislation in areas such as intellectual property and instruments to deal with WTO’s TRIPs etc are non-existent. The lack of rules and regulations that unambiguously protects the interests of investors exacerbates the ambiguity and makes the operating parameters of the investment climate hazy. Can someone tell me the latest policy on EEZ fishing licenses, for instance?

▫ Unclear entry requirements and non-transparent operating conditions – Another major deterrent to attracting FDI is the lack of clarity in rules concerning entry and operation requirements and conditions in major sectors of the economy. For instance, over the recent years MMA has had a policy of licensing banks of international repute based on their ratings. But I’m not too sure how Moody’s would rank the Mauritius Commercial Bank, the most recent bank to set-up shop in the Maldives. Another example of how not to do things is the way someone (Gawd, I cowed again!) tried to get commission from each and every FDI initiative that ever crossed the Trade ministry’s door.

▫ Insufficient coordination – Foreign Investment Board and the FISB, instead of proactively seeking investments, are passive in their approach and only serve to rubber stamp projects approved at the very top. In addition, insufficient coordination among multiple govt agencies and the bitter ‘turf wars’ within government agencies, often owing to rather petty political squabbles and vested interests, continue to derail our efforts to attract FDI.

▫ Lack of expertise –FISB’s mandate and authorities are somewhat nebulous and the resources of the agency are too thinly spread. As a result there are serious shortfalls of institutional capacity and expertise necessary to promote and implement projects at the agency.

Enough of Human Rights and Political Reform! Where is the Economic Reform?

Maldives has become probably the first micro-state to have a Human Rights Ambassador. This would be seen by many as an indication of our intention to proactively promote and internationally advocate for human rights. After all, why else would a country the size of Maldives opt to have a human rights ambassador? Most micro and small states that I know of limit their engagement in the area of human rights to the domestic front. Championing human rights, I don’t think, would be seen by many to be within the gamut of foreign policy of a microstate.

Over the last few years, we have done a remarkably good job in the area of human rights. In fact I can’t think of any other microstate that made the kind of strides we made in this area in such a short span of time. On the domestic front we developed a well functioning Human Right Commission. Internationally, we acceded to most of the international conventions such as the International Covenant on Civil and Political Rights, the UN Convention against Torture, the Optional Protocol to the UN Convention against Torture, the International Covenant on Economic, Social and Cultural Rights, the Optional Protocol to the International Covenant on Civil and Political Rights, and the Optional Protocol to the Convention on the Elimination of all forms of Discrimination Against Women – just to name a few. We have also successfully completed the diffusion all the criticisms we faced in the aftermath of the 2003 jail shooting incident - kudos to Dr. Shaheed for what he did as Foreign Minister.

The bottom-line is, given the size of Maldives and its geopolitical significance, I believe we have put more than adequate resources in this area and we shouldn’t be spending any more of our meagre resources to venture into new areas in human rights. In fact we have been so much engrossed in human rights and political reforms that we have completely forgotten about other important areas such as economic reforms. Anymore resources and energy in this area is only going to further clog and dampen the much needed economic reforms.