This country is in serious trouble. It’s a broken nation, to say the least. Economist, Paul Collier, in his TED talk “New Rules for rebuilding a broken nation” offers some serious advice that the leader of a broken nation like the Maldives could use.
Paul Collier makes it very easy to see what our small country under President Nasheed is doing wrong.
Firstly, we prioritized politics instead of security and economics. Our experience over the past 15 months have shown that an election doesn’t produce an “accountable and a legitimate government”. What it produced for us was a rather murky win for MDP coalition and a humiliating loss for DRP. The result is disastrous. An unreconciled pugnacious DRP is on the verge of taking this country to the brink of a civil war. Estranged coalition partners are acrimoniously bickering over MDP’s betrayal to them. So, from the standpoint of most political parties this has become a bitter zero-sum game - we can only go up if we bring those guys down!
Secondly, our government, both during Gayoom’s last few years and now, is focused on seizing ad hoc short-term opportunities and do-good projects with the help of unprincipled politicians (they are ubiquitous - you can’t stretch a leg without poking one in the ass ;-) . The result is an unsustainably large fiscal deficit and overall bad economic policy. Instead of focusing on front-loading economic reforms and creating an inclusion agenda on the political front our meager resources are being spent on doing-nothing commissions and frivolous political posts to fight the ghosts of Gayoom era.
Thirdly, Nasheed’s Government seems to be doing very little to address what Paul Collier calls “the three critical things” in a post-conflict situation: creating jobs, improvement of basic services especially health and providing a clean government. Government did ‘create’ jobs, in fact hundreds of jobs - not for the ordinary men and women but as rewards for activists and political cronies. Health services? Well, I only hear from my wife’s doctor friends that they are using normal thread to tie the umbilical cords of newborns at IGMH. As for the issue of ‘clean government’ my dubiety is fuelled by what a highly influential friend of mine told me a few months ago - ‘mi fas aharu nimey iru aharumen dhemigannaanan’. With an attitude like that among senior officials I don’t see our government going too far with creating a ‘clean government’.
Friday, March 26, 2010
Monday, March 22, 2010
Growing Githeyomirus and Building Flats
Growing githeyoirus? Here’s how you do it: put some soil into a pot, add a bit of cow dung, plant a few seeds and just water the pot everyday to see lots of red fiery ‘githeyomirus’ growing on your little plant in just under three months.
I’ve always thought growing githeyomirus was as simple as that; but that was only until I decided to give it a try. I planted seeds, watered the little plants, added not just cow dung but lots of different fertilizers. But the plants simply refused to grow. Most plants withered and died before they grew six inches tall.
What went wrong? Well, being the typical jack-of-all-trade Maldivian that I am, I just thought I knew everything there is to know about growing githeyomirus . What most of our type i.e., the jack-of-all-trade Maldivians don’t often realize is that most things in life are easier said than done.
The problem with us is this: we Maldivians know - we simply know too much about too many things.
Now, building flats, anyone?
Upon taking the oath of office Nasheed must have sought the advice of one of his brilliant jack-of-all-trade advisors on how to build flats in our islands. I bet the answer would have been very much like this: Sir, here’s how you do it - 1. Get finance. 2. Get an architect to design the flats. 3. Get a contractor to build. It’s so simple. Play House Disney’s Oso the Special Agent stuffed bear’s 3 special steps even seem more complicated than this. ;-)
22nd December 2008: one of President Nasheed’s I-know-how-to-build-flats ministers, brimming with confidence, went on TV to say that work on 5,000 flats would begin early 2009 and discussions with Chinese Government on the construction of 25,000 houses are progressing.
Fifteen months have passed since the announcement. Any hope I had of becoming a githeyomirus farmer has long dissipated. The 10,000 flats and the 25,000 houses have long been buried along with so many other phantom projects pitched continuously at our unsuspecting. President Nasheed, in the meantime, earned the title ‘flat dhonbe’ from his people who continue to live their miserable lives harvesting rainwater in mosquito-infested polyethylene tanks and defecating on public beaches and ‘four-gear’ latrines.
I’ve always thought growing githeyomirus was as simple as that; but that was only until I decided to give it a try. I planted seeds, watered the little plants, added not just cow dung but lots of different fertilizers. But the plants simply refused to grow. Most plants withered and died before they grew six inches tall.
What went wrong? Well, being the typical jack-of-all-trade Maldivian that I am, I just thought I knew everything there is to know about growing githeyomirus . What most of our type i.e., the jack-of-all-trade Maldivians don’t often realize is that most things in life are easier said than done.
The problem with us is this: we Maldivians know - we simply know too much about too many things.
Now, building flats, anyone?
Upon taking the oath of office Nasheed must have sought the advice of one of his brilliant jack-of-all-trade advisors on how to build flats in our islands. I bet the answer would have been very much like this: Sir, here’s how you do it - 1. Get finance. 2. Get an architect to design the flats. 3. Get a contractor to build. It’s so simple. Play House Disney’s Oso the Special Agent stuffed bear’s 3 special steps even seem more complicated than this. ;-)
22nd December 2008: one of President Nasheed’s I-know-how-to-build-flats ministers, brimming with confidence, went on TV to say that work on 5,000 flats would begin early 2009 and discussions with Chinese Government on the construction of 25,000 houses are progressing.
Fifteen months have passed since the announcement. Any hope I had of becoming a githeyomirus farmer has long dissipated. The 10,000 flats and the 25,000 houses have long been buried along with so many other phantom projects pitched continuously at our unsuspecting. President Nasheed, in the meantime, earned the title ‘flat dhonbe’ from his people who continue to live their miserable lives harvesting rainwater in mosquito-infested polyethylene tanks and defecating on public beaches and ‘four-gear’ latrines.
Tuesday, March 16, 2010
Maldives’ Freakonomics: Lesson One - ‘Hakuru’ Business
After I wrote a blog post on how to make loads of money in the Maldives, someone asked me if the ‘hakuru’ pushers really do make that kind of money and how and why are people lured into the business.
Well, the IRR of over 7000% and NPV of Rf44million was no joke. And a gross annual income of Rf8million isn’t unrealistic if you start with a seed capital of, say, Rf100,000. Just think about this - for someone to have Rf5 million cash on him at any given point in time his annual income has to be, even by the most modest reckoning, at least Rf50million. So, my estimates were in fact very prudent. The numbers were worked out based on very prudent and realistic assumptions.
Now, for the question – do all of them make that kind of money? Well, ‘Hakuru’ business is no different from any other capitalist enterprise. So, to make really big bucks from it you have to be at the top of the pyramid. The average foot soldier ‘partey’ probably makes very little money - perhaps just enough for his daily fix.
Then, why are so many people in the business? That’s because our country offers a very conducive environment for ‘Hakuru’ businesses to thrive. To many young people ‘hakuru’ offers not only an escape but a shortcut to great wealth and power with relatively little risk.
Ok, they are not making money. So, what’s their motivation?
Here’s a profile of two ‘partey’ kids I know. Makmoor and Maumoor, both in their late teens, are two out of eight siblings. Their mother, father, 8 siblings and a few other relatives lived all their life in two match box sized slum-like rooms located right in the heart of ‘Bah’lha’ territory in Male. The family, forced to live mostly on the generosity of their distant relatives ever since their father died of heart failure a few years ago, have been trying to eke out their existence any way they could. Both kids dropped out of school before they reached grade 8. So, the best job they thought they had access to was provided by highly visible, incredibly lucrative neighbourhood ‘Bah’lha gang’. The kids grew up marvelling at the glory and power of Bah’lha gang’s boss ‘Addey’ and his Lexus sports car. Addey has everything they could ever dream of – he’s cool; he has money, power, sex and glory! He is their role model. They know all too well that if they are to make it to the top someday money, power, sex and glory will all be theirs too. Risks? No worries. Being convicted 7 times in Maldives does absolutely no harm to the glory and power of a ‘boss’.
The ‘partey’ kids aren’t very different from the rest of the kids on the streets of Male. The typical twenty-something GRO at Sonevafushi would probably be dreaming of becoming a Sonu Shivdesani one day or making it all the way to the top. Likewise, Makmoor and Maumoor, having grown up in abject poverty and being denuded of whatever little moral values engrained in them – thanks to their preadolescent exposure to ‘hakuru’ fuelled highs - are only trying to climb their way to the top of the capitalist enterprise they know.
Well, the IRR of over 7000% and NPV of Rf44million was no joke. And a gross annual income of Rf8million isn’t unrealistic if you start with a seed capital of, say, Rf100,000. Just think about this - for someone to have Rf5 million cash on him at any given point in time his annual income has to be, even by the most modest reckoning, at least Rf50million. So, my estimates were in fact very prudent. The numbers were worked out based on very prudent and realistic assumptions.
Now, for the question – do all of them make that kind of money? Well, ‘Hakuru’ business is no different from any other capitalist enterprise. So, to make really big bucks from it you have to be at the top of the pyramid. The average foot soldier ‘partey’ probably makes very little money - perhaps just enough for his daily fix.
Then, why are so many people in the business? That’s because our country offers a very conducive environment for ‘Hakuru’ businesses to thrive. To many young people ‘hakuru’ offers not only an escape but a shortcut to great wealth and power with relatively little risk.
Ok, they are not making money. So, what’s their motivation?
Here’s a profile of two ‘partey’ kids I know. Makmoor and Maumoor, both in their late teens, are two out of eight siblings. Their mother, father, 8 siblings and a few other relatives lived all their life in two match box sized slum-like rooms located right in the heart of ‘Bah’lha’ territory in Male. The family, forced to live mostly on the generosity of their distant relatives ever since their father died of heart failure a few years ago, have been trying to eke out their existence any way they could. Both kids dropped out of school before they reached grade 8. So, the best job they thought they had access to was provided by highly visible, incredibly lucrative neighbourhood ‘Bah’lha gang’. The kids grew up marvelling at the glory and power of Bah’lha gang’s boss ‘Addey’ and his Lexus sports car. Addey has everything they could ever dream of – he’s cool; he has money, power, sex and glory! He is their role model. They know all too well that if they are to make it to the top someday money, power, sex and glory will all be theirs too. Risks? No worries. Being convicted 7 times in Maldives does absolutely no harm to the glory and power of a ‘boss’.
The ‘partey’ kids aren’t very different from the rest of the kids on the streets of Male. The typical twenty-something GRO at Sonevafushi would probably be dreaming of becoming a Sonu Shivdesani one day or making it all the way to the top. Likewise, Makmoor and Maumoor, having grown up in abject poverty and being denuded of whatever little moral values engrained in them – thanks to their preadolescent exposure to ‘hakuru’ fuelled highs - are only trying to climb their way to the top of the capitalist enterprise they know.
Wednesday, March 10, 2010
How to make loads of money in the Maldives
Today, I have a little research in freakonomics. After a friend of mine recently told me how he could quadruple Rf 3,000 in 2 days I became a little curious on the profitability of certain businesses in Maldives. It’s no surprise. If you are looking for a get-rich-quick business here are the two most promising business ideas.
Number 1: Start a ‘Hakuru’ Business
Initial Investment: Rf 100,000 (you can start with as little as Rf1000)
Internal Rate of Return: 7014%; Net Present Value: 44,482,281
(Based on a 5 year cash flow - 50% annual growth of sales, 10% discount rate)
Risk Profile: Low to Moderate i.e. if you play your cards right.
Qualification: Any unemployed, half-literate, wannabe rags-to-riches can do this.
Entrepreneurial skills: Ability to form and control a ‘gang’. A few rules apply if you want to become filthy rich in this. Remember Chika? A few tips you could use are: look good, be smart, tough, ruthless and shrewd, but not tempting to arrest. And know how to motivate the foot soldier ‘parteys’ below you and manipulate your political contacts.
Expenses
Cost of Goods 600000
Partey distribution network cost 180000
Cost of 'partey' fighters, weapons & protection money 420000
Total Annual Variable Costs 1200000
Income
Drug sales 7,200,000
extortion & mercenary income from politicians 960,000
Gross Annual Income (1st Yr) 8,160,000
Number 2: Become a ‘Membaru’
Initial Investment: Rf 500,000
Internal Rate of Return: 196%; Net Present Value: Rf 4,071,429
(Based on a 5 year cash flow; 10% discount rate)
Qualification: 5th grade education would suffice.
Risk Profile: Totally Risk Free. Once you get there you are invincible. Infallible. You get a Carte blanche for everything. You can sell votes, party hop and do anything you want.
Entrepreneurial skills: Must be an inherently talented rabble-rouser, a born firebrand. Must be able to stand on podiums of political rallies and shout out a non-stop 30 minute miscellany of the most unimaginably nonsensical rhetoric, absolutely devoid of any intelligence.
Expenses
Office rental & staffing costs 180000
Beys-sitee, 'gifts' to constituency 120000
Total Expenses 300000
Income
“Membaru” salary 780,000
Other income (selling votes, wheeling and dealing) 480,000
Gross Annual Income 1,260,000
Number 1: Start a ‘Hakuru’ Business
Initial Investment: Rf 100,000 (you can start with as little as Rf1000)
Internal Rate of Return: 7014%; Net Present Value: 44,482,281
(Based on a 5 year cash flow - 50% annual growth of sales, 10% discount rate)
Risk Profile: Low to Moderate i.e. if you play your cards right.
Qualification: Any unemployed, half-literate, wannabe rags-to-riches can do this.
Entrepreneurial skills: Ability to form and control a ‘gang’. A few rules apply if you want to become filthy rich in this. Remember Chika? A few tips you could use are: look good, be smart, tough, ruthless and shrewd, but not tempting to arrest. And know how to motivate the foot soldier ‘parteys’ below you and manipulate your political contacts.
Expenses
Cost of Goods 600000
Partey distribution network cost 180000
Cost of 'partey' fighters, weapons & protection money 420000
Total Annual Variable Costs 1200000
Income
Drug sales 7,200,000
extortion & mercenary income from politicians 960,000
Gross Annual Income (1st Yr) 8,160,000
Number 2: Become a ‘Membaru’
Initial Investment: Rf 500,000
Internal Rate of Return: 196%; Net Present Value: Rf 4,071,429
(Based on a 5 year cash flow; 10% discount rate)
Qualification: 5th grade education would suffice.
Risk Profile: Totally Risk Free. Once you get there you are invincible. Infallible. You get a Carte blanche for everything. You can sell votes, party hop and do anything you want.
Entrepreneurial skills: Must be an inherently talented rabble-rouser, a born firebrand. Must be able to stand on podiums of political rallies and shout out a non-stop 30 minute miscellany of the most unimaginably nonsensical rhetoric, absolutely devoid of any intelligence.
Expenses
Office rental & staffing costs 180000
Beys-sitee, 'gifts' to constituency 120000
Total Expenses 300000
Income
“Membaru” salary 780,000
Other income (selling votes, wheeling and dealing) 480,000
Gross Annual Income 1,260,000
Wednesday, March 03, 2010
Islam, the army and everything else is costly in Maldives. Here’s why
Islam is a costly affair. So is the army. And so are the other institutions. Everything in this country is costly. Expensive. Obscenely expensive, to say the least.
Under Gayoom we had a huge problem: almost one in every five adult was a civil servant; we never bothered to pay the real cost of our electricity, health care, water etc; five out every hundred Rufiyaa we earned went to support our military (I’ve tried but haven’t figured out why we continue to do so). And with no taxation the meagre Government revenue was far too inadequate to finance our expenses. So, we found the easy way. We borrowed. Every time we had a shortfall we simply borrowed our way out of it without ever attempting to find a permanent cure to our prolonged illness.
We lived beyond our means back then. And 15 months after Nasheed was sworn in amidst much euphoria of change, we are still living way beyond our means. Our government was and still is probably the biggest spender in the world in relation to the size of the economy.
Well, the cost of providing services and maintaining the bureaucracy of a government to 300 thousand people dispersed on 195 tiny islands not much bigger than football pitches is an innately costly affair. There’s absolutely no doubt about that.
But here’s a question we need to think about: can a country the size and nature of Maldives run a government with less money? Yes, indeed. If other microstates like Mauritius, Cape Verde and Aruba are able to run with government expenditures of only around a third of their GDP, there’s little reason to believe we can’t do the same.
Bringing the much-needed structural changes was and still is the key issue. But sadly, these changes were and still are simply delayed because they are too painful to the people at the helm of our affairs.
Disproportionately large public institutions were created and sustained, largely with borrowed money, for the political expediency of a few individuals. State and deputy ministers, political appointees, brigadier generals and so forth are created not based on any real need but simply to camouflage trickery.
It’s easy to blame it on the 300 thousand people and 195 tiny islands. But the fact of the matter is this: no other microstate maintains 77parliamentarians, 54 state ministers, 75 deputy ministers, a countless number of other political appointees, over 29 thousand civil servants and thousands of military personnel –all paid through the tax payer’s nose. The world’s richest country, a microstate, incidentally, is run by a prime minister, his deputy, 3 ministers and 5 alternate ministers!
Under Gayoom we had a huge problem: almost one in every five adult was a civil servant; we never bothered to pay the real cost of our electricity, health care, water etc; five out every hundred Rufiyaa we earned went to support our military (I’ve tried but haven’t figured out why we continue to do so). And with no taxation the meagre Government revenue was far too inadequate to finance our expenses. So, we found the easy way. We borrowed. Every time we had a shortfall we simply borrowed our way out of it without ever attempting to find a permanent cure to our prolonged illness.
We lived beyond our means back then. And 15 months after Nasheed was sworn in amidst much euphoria of change, we are still living way beyond our means. Our government was and still is probably the biggest spender in the world in relation to the size of the economy.
Well, the cost of providing services and maintaining the bureaucracy of a government to 300 thousand people dispersed on 195 tiny islands not much bigger than football pitches is an innately costly affair. There’s absolutely no doubt about that.
But here’s a question we need to think about: can a country the size and nature of Maldives run a government with less money? Yes, indeed. If other microstates like Mauritius, Cape Verde and Aruba are able to run with government expenditures of only around a third of their GDP, there’s little reason to believe we can’t do the same.
Bringing the much-needed structural changes was and still is the key issue. But sadly, these changes were and still are simply delayed because they are too painful to the people at the helm of our affairs.
Disproportionately large public institutions were created and sustained, largely with borrowed money, for the political expediency of a few individuals. State and deputy ministers, political appointees, brigadier generals and so forth are created not based on any real need but simply to camouflage trickery.
It’s easy to blame it on the 300 thousand people and 195 tiny islands. But the fact of the matter is this: no other microstate maintains 77parliamentarians, 54 state ministers, 75 deputy ministers, a countless number of other political appointees, over 29 thousand civil servants and thousands of military personnel –all paid through the tax payer’s nose. The world’s richest country, a microstate, incidentally, is run by a prime minister, his deputy, 3 ministers and 5 alternate ministers!
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