Maldives - World Number One!

Maldives is ranked number one in a list of 178 countries ranked by the World Bank in its list ‘who makes paying taxes easy and who does not’. We have even beaten Singapore (number 2 on the list).

It also says that “the Maldives levies only one small tax on domestic business in the manufacturing sector (the property transfer tax) and only hotels and banks are taxed on their profits.”

In spite of my innate patriotic urge to take pride in World Bank’s conclusions, I have serious reservations as to the accuracy of the World Bank’s assessment and the veracity of the statement above. I think our small country has one of the most ambiguous and haphazard tax regimes anywhere in the world (correct me if I’m wrong). Have a look at MEDT’s Royalty charges on foreign investments and see if you could make any sense out of it. To me this is clearly an attempt to drape a grim reality with misleading nomenclature – a royalty = a tax? Of course NO! If it was, we wouldn’t be telling the world that we have zero corporate profit taxes (with the exception of the banks, of course).

Regarding the World Banks’ statement above on profit taxes, I don’t know of any hotel in the Maldives that is taxed on its profit (again, correct me if I’m wrong).

Incidentally, not too long ago, we were on an OECD’s list of uncooperative tax jurisdictions. But OECD subsequently removed us from their list without us having to do anything to our tax regime. Thanks to yet another important act that we as a nation have perfected during the last couple of years – the art of hoodwinking the white men!

Where have all the doctors gone?

My friend Hilath calls the Maldives a ‘failed state’ and describes it as ‘terminally ill’. I’m not being cynical but I cannot think of too many reasons to disagree with him.

In spite of the level of unprecedented growth we have had over the last three decades, a large number of our people, especially the folks from the islands, live in a state that cannot be described as something very far from abject poverty. The efficacy of our government machinery (despite its disproportionately large size) to improve on its performance that many would describe as nothing short of dismal, even in the most essential areas of our lives such as basic housing, education, health facilities etc remain seriously questionable. The statement Dr. Ahmed Shaheed made about the failure of our Majlis just before he resigned from Government is probably the most glaring truth he ever spoke in his entire lifetime. Malé, heaving with over 120,000 people, is more of a spawning ground for all sorts of social ills than a capital city. The few institutions (including the very basic institution of family) that this country have are all on the verge of collapse. Civil society is virtually non-existent in this country. The only viable industry we have is run by a small cartel of thugs who have now artfully wheedled their way into our Majlis to make ‘Rayyithunnah faidhaahuri’ decisions for us based on ‘democratic principles’.

The truth is whether you and I like it or not this country really is ‘terminally ill’. But the irony is that in our small country we have so many people who call themselves ‘doctors’ – the PhDs. They are everywhere. You can find a half a dozen of them in every government ministry. But none of our ‘doctors’ seem to be doing anything about this ‘terminally ill’ patient.

When your eyes are bigger than your wallet

Rashfa, a 26-year-old graduate in marketing doesn’t find anything wrong with credit card debt and borrowings from her parents. It’s a must for her. That’s because her monthly salary of Rf 6,000 doesn’t even cover half of the expenses she has to incur on her favourite DKNY fragrances, L'Oreal and Lancome cosmetics and regular shopping sprees on bags and shoes.

Rashid, 43 a Director General in the Government and father of 3 children isn’t the kind of person you would think could end up with a RF15,000 ‘lui loan’ from Bank of Maldives. He earns slightly over USD2,000 a month from his job and through rental income. But his regular ‘medical trips’ to Bangkok, weekend ‘masdhathuru’ and daily ‘coffees’ with his friends have left him with little choice. He now has over two thousand dollars of credit card debt and an outstanding ‘lui loan’.

My friend Ahmed 28, earns less than a third of what I earn. Yet, he has a brand new HondaWave 125, an iPhone and several other gizmos and gadgets that I cannot afford even if I had the desire to buy them. He financed his Wave from Sheesha and paid for his iPhone using his brother’s credit card. Its been two months since Dhiraagu disconnected his phone line after he accumulated a whopping Rf10,000 bill from his overseas calls to his girlfriend in Malaysia.

All debt aren’t necessarily bad. We all need to borrow for various reasons. But in a society that doesn’t have mechanisms for debt funded investments like buying properties, credit is used only to buy consumer goods and luxuries, leaving nothing but bills…and more bills. We hope that our incomes will increase enough to pay the bills. But with inflation edging up to almost double digits it cannot be counted on. For most of us, average wages, after adjustment for inflation, would in fact go down.

Maldives to appear on Guinness soon!

The folks at Guinness world records probably don’t know this yet – but I have a strong feeling that we will soon make it to their list as the world’s biggest government. My curiosity and obsession with frivolous things in our small country led me to compile the statistics below from the veringe list on information ministry’s website.

Ministers and officials in the same level 36
State Ministers 12
Deputy Ministers 46
Executive Directors (includes Atoll chief, DEDs, AEDs 65
Atoll Chiefs 18
Director Generals (including Deputy DGs and Assistant DGs) 210
Directors (including DDs and ADs) 1368
Asst und sec 1153
Total Number of Verin (excluding the guys from MNDF and Police) 2,926

I had a look at figures from some familiar countries too. Sri Lanka with 87 ministers and 20 deputy ministers and Kenya with 33 ministers and 50 assistant ministers would probably be our closest rivals. But considering their populations of over 20 million and 35 million respectively, they are not real competition to us. New Zealand and UK incidentally have 21 and 27 (including non-cabinet members) ministers respectively.

Looking at industry, Deutsche Post (integrated with DHL and Postbank), the second largest employer in the world with over 500,000 employees and operating in more than 220 countries and territories is managed by a board of management comprising of only 7 members. Perhaps the guys at Deutsche Post could learn a thing or two to learn from us about bigwigs, corporate hierarchies and organization structures.

Pension and social security – another monster about to show its ugly head!

Unlike in most other countries Maldives had its baby boom during the late 60s, 70s and early 80s. With our life expectancies almost reaching levels which are comparable to much of the developed world, in another 20 -30 years time we would have a relatively large number of people in their 60s and 70s. Is anybody thinking about this? (I bolg about this because I feel the pain!)

The non-contributory pension scheme that we have for our govt staff which pays 50% of the basic salary after every 20 years (keekey dhen bunaanee? Maldives in the only country I know that pays ‘double pensions’ and ‘triple pensions’) of service regardless of age. The pensions are not indexed meaning the ‘handoo, hakuru, fuh and mas’ we can buy with it are decreasing every day. As we don’t have a mandatory retirement age govt continues paying ‘pensions’ to a number of civil servants until they die. This practice is clearly unsustainable (World Bank report on Maldives’ pension reform). Many govt employees even in their thirties are already earning pensions and with our life expectancies at its present level, they have clearly at least another 30-40 years to live during which they could earn another one or two ‘pensions’ - a huge fiscal burden in another 5-10 years time.

The other major problem is that we have no safety net for this burgeoning elderly population. With increased incidence of major health ailments such as heart diseases together with the increased life expectancy, our people remain extremely vulnerable as most people in the country does not have any safeguard such a pension plan, retirement plan, health insurance plan etc against any unforeseen circumstances.

Our govt probably finds the ‘political cost’ of attempting to overhaul the existing ‘seemingly generous pension scheme’ to be devastating. After all, who in the govt would want to do away with a plan that pays ‘pension every 20 years’ without ever having to contribute anything towards financing it, during their working life? Procrastinating decisions that one finds painful doesn’t provide a solution to the problem – it only aggravates it. Our pension and social security is one goddamned ugly hydra that’s about to surface in less than 10 years!

Maldives caught in another diplomatic row?

“Several of the fugitives, as well as some of the suspects detained in the Maldives, received training in bomb making in Pakistani madrassas”, said a Maldives police spokesman in an interview to BBC (Nov 8, 2007). Following the Maldives’ police allegation, a Pakistan High Commission official said he is “disappointed and saddened by the allegations that terror suspects were trained in Pakistan”.

Earlier this year Imad Solih, a presidential appointee to the Special Majlis raised controversy when he referred to Indian parliamentarians as ‘rapists and murderers’. Indian High Commission dispelled Solih’s comments saying “this was an uneducated and superficial viewpoint”. (I think we were in fact very lucky to have avoided a major diplomatic row - thanks to the Indian govt for understanding how ‘uneducated and superficial’ we are)

In 1983 President Gayoom himself was caught in a similar diplomatic quandary when he made a public speech claiming Maliku (minicoy island) for the Maldives.

Our neighbours are a little too big and powerful for us to be making statements that could be repulsive to them. After all, India and Pakistan both armed with nukes are among the most populous countries in the world. We are lucky that they understand how infinitesimally insignificant we are compared to them in the overall geopolitical scheme of world affairs. So, don’t you think it is in the interest of our country to keep our jingoistic urges in check?

The biggest red herring in Maldivian politics

Almost everything in politics, throughout the world are designed to either divert attention away from or to steal unjustified limelight to something that political powerbrokers want. And our small country is no exception. Laws are drafted and enacted; institutions created and disbanded; people appointed and removed to and from high offices; policies and strategies formulated, announced, implemented and their courses altered – all done to achieve this end.

Earlier this year when President’s powerful half-brother Yamin resigned from cabinet, I (not only me…several other Maldivians were also hoodwinked) believed, for a while, that he must have actually fallen out with the President. But after having observed the developments in PA, DRP and the Government over the last six months I became increasingly dubious that Yamin really did defect. I now believe that it was in fact a calculated and carefully orchestrated move to secure more economic and political grounds. My dubiety finally got sealed with the recent controversies surrounding ‘Biyaadhoo compensation’ by both the Govt and Yacht Tours owner, PA’s Jabir. Why has govt been so obsequiously currying favour to Jabir’s every demand? Why has DRP not taken any action against PA members in spite of everything that has happened? Why are people linked to PA still able to exercise so much control over virtually every affair of the govt? Why has Dhiyana continued to be a Presidential member in spite of her alleged moves against the party? And an awful lot of other answered questions make Yamin’s perceived defection the biggest red herring ever thrown by President Gayoom.

My Govt never fails to surprise me!

During the 1980s when Male was literally besieged by the sudden influx of 'raajethereymeehun' arriving in search of better lives and perceived wealth, my government came up with kudasitee (a kind of a visa regime); Port commission and reclamation of Male; decentralization; Selected Islands Development Programme and later on with Vilingili and Hulhumale development.

When our economy appeared to be in dire straits my government shocked international donor agencies (and of course me..) with a budget that’s exactly the same as our GDP; the expansion of tourism to all the atolls, MTDC, AIM; development of airports all over the archipelago; a transshipment port valued at a third of our GDP; Gulhifalhu project and a whole lot of other projects.

When the country was beset by calls for reform both from domestic and international sources in the aftermath of the murder of Evan Naseem, my govt completely bewildered me with MDP, DRP, IDP, Adaalath; furathama badalu, Police Integrity Commission, Human Rights Commission, reform agenda, Roadmap, all party talks and a whole lot of other difficult-to-understand vocabulary, phrases and institutions.

Just last week while the country is on the path of an economic meltdown (I believe another devaluation of Rf is inevitable within a year if fiscal discipline is not brought in - with record high oil prices reigning in inflation in another major challenge) my govt utterly baffled me with the announcement of an unprecedented raise in salaries of over 36,000 govt employees and free text books and fees for students!

Maldivians are the Brainiest and finest looking people in Asia!

Simon Sahreef in his blog http://www.randomreflexions.com/, says “someone pointed out in one of the comments on this blog that Maldivians were the brainiest people in Asia. There is a lot of truth to this claim.”

Just two years ago I remember reading an extended article on the Aafathis which started with the sentence ‘Ceylon meehunaa khilaafah dhivehinnakee gaige hangaduge kula madu badhan kula akah dhaa sifa reethi baekeve.’ When a child is born aunts, uncles, brothers and sisters all line up to see if it is 'fair' - 'ey baby dhontha?'

All tribes, clans and nations have an instinctive tendency to believe in the supremacy of their genetic stock, appearance and intelligence. But I sometimes wonder if we Maldivians are not taking this a little too far. For us, Srilankans are ‘orin’; Indians are ‘indiaa meeheh (pronounced in a very demeaning and derogatory tone); Bangaldeshis are ‘bangaalheen (almost a subhuman species). Years ago while in my seventh standard, I learnt from my ‘social studies’ text book that we Maldivians are ‘Aryans’. Several Maldivians including senior figures among politicians and civil society have on several occasions bald-facedly declared that we are brainiest lot in the region.

Most Maldivans that I know stand only a few inches taller than 5feet and show no visible signs of blonde hair or blue eyes - physical features of Hitler’s Aryan race. No Maldivian I know have published even a well recognized scientific article let alone making new scientific discovery. I can never think, even in my wildest dreams, the day a Maldivian would earn international recognition as an authority in any academic field.

Let’s accept the reality. We are juvenile-tuna-harvesting Austroloids and Dravidians slightly dwarfed by several hundred years of malnutrition that learnt even their ‘ABCs’ from Srilankans during the 1960s. Greek gods would have no reason to be envious of our looks and Einstein wouldn’t have definitely raised an eyebrow even if we could all combine our brains. So instead of arrogating to ourselves qualities that we don’t have, lets accept the reality and brace ourselves for the long and arduous task ahead of us before we could even start thinking about calling ourselves a civilized nation.

Deputy Ministers, Executive Directors & Director Generals – a dime a dozen!

Deputy Ministers, Executive Directors, Director Generals and a whole lot of other formidable appointments are frivolously being made everyday by our government. Not a week goes by without half a dozen new difficult-to-pronounce titles being added to the already disproportionately top-heavy civil service. I skimmed through the ‘veringe’ list on Information Ministry’s website today and was horrified by both the enormity of the top cadre of our civil service and the ‘exalted’ nature of the titles. Some ministries have at least a couple of deputy ministers and several executive directors and director generals.

I of course recognize quite a lot of the names in the ‘veringe’ list. Some of them were my former classmates, friends, and boys and girls I tutored not long ago. Some of these top civil servants took 20 years or more to reach where they are today while for others it’s a matter of leapfrogging up the ladder within less than five years. In any organization or culture there are competent, hardworking and sharp-witted people who move up the ladder quickly. I don’t know the basis for Maldivian government’s promotions - perhaps Maairaskalaange and our authorities would know. But one thing I’m absolutely certain is that in our government’s hierarchy, neither competency nor intelligence seems to be the underlying reason for these incredibly comical promotions.

Let me give you an example. I was utterly flabbergasted by the news of the appointment of a young man to the post of ‘Commissioner of Legal Reform’. Maybe this is just plain jealousy but someone who has just a basic degree in law and paper-pushing-experience at a government office does not suit my notion of a ‘Commissioner of Legal Reform’. No ill-will intnded towards the good young man.

I’ve met ‘commissioners’ from other countries. I’ve talked to their ‘Director Generals’. They are mostly the type of top class people whose presence and vast knowledge in their respective fields makes you feel humbled. These titles are the culmination of illustrious and extremely distinguished careers. They are not everywhere - and definitely don’t come a dime a dozen.

In countries several times larger than us, they have only a handful of these titles. But it baffles and hurts me to even think about why we need so many of them in our government. The bottom-line is do we have the resources to support this? Tell me.