President Anni to tweak the economy


Slowly but steadily, the monetary policy of the the present government is taking shape or at least they are giving us hints on how the future will be. Reading through the lines, interesting developments seems to be at hand in the near future. Here are some comments on what we have learnt so far from president Anni’s weekly radio address.

  • That a UN surveys shows that about 40% Maldivians who were below the poverty line. This is despite a vibrant economy and many upmarket resorts in the country.
  • the President is aiming, to reduce the fiscal deficit from 28 percent of GDP in 2009, to 15 percent of GDP in 2010.
  • Up to now the government has been burdened with a 5 billion wage bill which president Anni would like to save a 2 billion for a social safety net which in theory will go to help improve the quality of life for the poor.
  • measures already taken included monthly allowance for old people and a free health insurance scheme. (every politician will want to brag about things they have been able to achieve… and this is no exception)
  • That the government was working to provide subsidized electricity, foods and education, to the poor.
  • That the government needs a permanent source of money for this social security net which hopefully will be financed by a tax regime which will be hard fought by the opposition dominated parliament.
  • by early 2010, a new “green tax” per incoming tourist at the airport is to be introduced.
  • Also a introducing a new business profit tax on all enterprises earning above a certain threshold
  • and switching to an ad valorem-based tourist tax rather than the current bed tax which is expected to come in to effect in 2010
  • introducing a goods and services tax in 2011
  • amending the land law and charging a rent fee on an equal basis. Up to now the resorts which has been leased for tourism have very unequal rates for beds per island with the first batch of resorts paying roughly peanuts in comparison the newcomers. This might be one reason why there was a big hue and cry to extend the lease of resorts from 25 years to 50 because some of the first batch of resorts were coming to the end of their lease agreement and they wanted to keep the property at all costs, inventing all sorts of scares to frighten the new government.
  • that the government is counting on the International donors and development banks to help him kick start the process..
  • that some tweaks are also needed in the labor market which is bloated and already out of shape with a large number of illegal aliens drawing heavily on the small heap of dollars generated from tourism industry. The tweaks include introducing a fee on expatiates to force the hands of employers to hire more local labor.
  • President Anni has only 5 years to achieve all these phenomenal changes and come out unscathed. These are not minor tweaks of an already functioning economy but major upheavals on an already messed up monster in the shape of an economy…
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Introducing Work permit fee for expats

anni_cabinet

After studying a research papers submitted by the Human Resources ministry, the government has decided to impose a fee on work permits to expatriates working in the country. According to Haveeru, the government is also discussing possible effects of this proposed fee on work permits on tourism and construction industries. The fee structure will be calculated based on factors such as comparison of pay-scales for locals and expatriates in similar jobs as well as demand for jobs by locals in relevant sectors so that employers will find it attractive to hire labour from within the country rather than abroad.
The fees will come in to force on the first of next month and onwards. Expatriates who are already working in the country will be subjected the fee once their work permit is due for renewal.

To all extents the government appears to be forced into these tough considerations from various factors such as demands by IMF and World Bank for fiscal reform as well as curbing local unrest over the high unemployment rates in the islands which is especially becoming a thorny issue with the opposition dominating the Majlis and highly polarized nature of the situation of politics after the transition of power last November.

According to Human resources ministry’s figures there are currently more than 78,000 foreign workers in the Maldives.

Velidhu hires thugs to end strike..

Velidhu Island Resort
Velidhu Island Resort

According to Minivan, the employers of Velidhu Island Resort are taking law in to their own hands and going about it dirty and ugly. ie. they have called in thugs from Male’ to intimidate rioting staff who have been protesting against the employer who has refused to implement the provisions of the new labor law and the strike has been going on for the the last 10 days.

Please follow the rest of the story on Minvan

Mohamed Ramiz
Mohamed Ramiz

About the unemployment report by HRCM

The Human Rights Commission of Maldives has published an interesting report on the situation of unemployment in the country and here below are few points in the report with our thinking on the same issues.

The participation of women and young people in the labor market in the Maldives is very low compared to other South Asian nations …

That there is a difference between other Asian nations and Maldives in this matter has a very good reason. In Maldives there are basically very few options for people to choose form as work. Tourism, and fisheries are the main two industries and besides which civil service is the biggest employer which is also spread out in all our islands. First the fact that our tourism industry is mainly based in isolated islands is one good reason why many women would opt out of tourism jobs. This is more so considering the fact that the country is predominantly Muslim and culturally protective of the fairer ones.

that most school leavers do not join the work force and relative affluence has led to youth opting to stay unemployed.

Which says nothing about the relative poverty in the atolls and islands where young people are faced with stark choices after the schooling is finished say at grade 7 or 8 or after the O Levels. Obviously the report was talking about Male and not about Raajethere.

low wages and working conditions do not attract Maldivians to many job and they do not have the skills for higher paid jobs.

The report truthfully says low wages and existing work conditions does not attract locals to many job categories which is true and true of locals as well as expatriates. Nobody would like to do a low paid job but sometimes we are all faced with stark choices which we make with a heavy heart. As for the report asserting that locals do not have skills for higher paid jobs, this could be a generalization with some traces of truth. However it has to be immediately pointed out that skill are also relative a term and many a times unskilled people are imported just because they claimed to have the required skill just out of desperation for work. This rarely is an option for the locals as there are ways and means to find out if the case is a locals. This is a very common situation in resorts where there is virtually no validation of skills or paperwork submitted by staff and everybody just “grows in to” the job in the probation period.

Many Maldivians prefer white collar jobs and any other type of employment is considered undesirable, the report continues, especially by those who have completed their O-levels.

This is absolutely true and could be forgiven if we just try to understand that to Maldives O- Levels and A- levels are what is BA’s MA’s and Phd’s to other countries. O- Levels and A-Levels are still a novelty to Maldives which is nothing to other countries even Sri Lanka and Bangladesh.

the desirability for white collar jobs was passed down from parents to children in culture.

This is understandable and quite true. A good example of this is the number of PhD holders we have in Maldives who has become experts in all sorts of fields of study which rarely would have any scope of application in the country. For example what is the big use of a PhD in copyright laws in Maldives where not much is there to be copy righted? Surely we could do with more engineers and doctors and educators here in Maldives.

employers revealed the reluctance of youth and inability of females to enter into the job market were reasons for the high number of migrant workers .

What the employers has not revealed is the fact that profiting from imported labor is common practice and bribes and commissions were quite prevalent in the industry especially in tourism and construction. Although this might not be official policy of employers, it was and still is quite common.

the country is faced with an unmanageable population of migrant workers, threatening the very economy that they were brought in to sustain, ”

This is a positive development that at least some acknowledgement of the issue is taking place.

Among reasons cited by employers for hiring migrant workers was the lack of interest of urban Maldivians to work in tourist resorts and most workers were from the atolls.

Tourism is not for everyone. Nor is fishing or teaching. Tourism the way its done in Maldives is a long story of personal sacrifices,incredible camaraderie, hard work and lots of smiles. Smiling even if one wants to cry badly. (Which is bad for health, health professionals say…) So its quite understandable that urban Maldivians could not be found to fill the vacancies. Another point is what is that differentiates between an urban Maldivians or somebody from outer atolls for an employer? Surely employers pay the same for urban Maldivians and Maldivians from the outer atolls. Citing lack of urban Maldivians as a cause for hiring migrant workers therefore seems inconsistent.

Employers said locals: quit at any time; not return after annual leave or other leave; quit the job after learning skills from training at their company’s expense.

This is not very accurate it seems. Although most resorts are populated with a mix of nationalities in its workforce, there are some resorts almost exclusively run by locals including the very top jobs requiring advanced skills and expertise and yet the staff turn over is low. These employers are known to be staff friendly and there are many examples even out of resorts. So basically its a function of identifying staff as an asset which keeps staff loyal to the employer. However the majority of the employers do not fit in this category.

Drug addiction among young people was a factor which discouraged employers from hiring Maldivians..

This is a most unfair generalization which boarders on discrimination on hiring workers based on nationality. Although Maldives has a drug problem with the young generation (which most countries do by the way), few if any drug addicts or drug users would admit or portray them as such in job interviews etc. Hence for an employer to generalize that Maldivians have a drug addiction problem and favor others in their place clearly shows bias against locals (Which sadly is also common).

obstacles faced by Maldivians when looking for work include low wages, high living costs; preference of employers to hire foreign workers for low wages; lack of training and professional guidance; poor working conditions; employers’ refusal to implement the Employment Act; and lack of a pension scheme.

True. Quite true indeed.

Hassan Latheef, minister of human resources, youth and sports, said young people were not encouraged to work and were financially supported by their families. “They should be made aware that they should be contributing to the economy,” he said.

This is rhetoric. The fact of the matter is there is very few opportunities in the existing job market and most locals appear simply to have given up hope on getting a job. Its not a situation like in the oil rich gulf states where locals has no genuine need of work other than to fill up the hours of their life. Though there are some affluent youngsters who will be looked after by the affluent families, this is more of the domain of the few and well to do. Most locals do not fit in this category.

The government’s pledge to establish vocational training for young people is one of the measures adopted to tackle growing unemployment.

Already established vocational training centers has been training youngsters for some time and it appears that the existing model to do this should be revised. Under the current arrangements, students in these programs are to waste a precious few years 2 or 3 of their age learning slowly and having to be a burden on their families for the duration for the course, during which a paltry sum of pocket money is received. An improved model of vocational study could be introduced which would address these issues the students would face allowing them some inducement to pursue the studies before emerging to the job market.

Strike at Velidhu Island Resort

Velidhu Island Resort
Velidhu Island Resort

A strike is reported to be ongoing in Velidhu Island Resort. The protesters are demanding the employer not to discriminate agains staff in similar jobs based on nationality. The protesters report that some of their colleagues with same job specifications earn more than 200 dollars more than themselves (locals). Also that the local staff do not recieve annual increments on the salary while others gets 50 dollar increments per year. The problem has been duly notified to the Labour Relations Authority and apparently the strike is going on in earnest. The resort meanwhile is maintaining silence and has not defended the allegations against it.

Taj Corel rebranded as Viventha

Taj corel Hembadhoo
Taj corel Hembadhoo

President Anni is to open Taj Viventha Resort which was Taj Coral Resort also known locally as Henbadhoo. Taj Corel Reef resort was in operation since 1996 and is now being rebranded as Viventha after upgrades to the resort. The resort has 32 ocean rooms, 21 beach villas and 6 delux beach villas and two suites.
According to Miadhu Daily the resort has 120 employees, 55% of whom are Maldivians. Taj is known as one of the better resorts in the Maldives for services to the staff. In an interview with Miadhu Daily, the General Manager Mr. Drego is said to have said that the during the 18 month period in which the resort was closed for renovation, employees had been paid a salary and an average allowance so that the staff would stay with the resort.

Miadhu Daily is said to have learnt that senior officials of the Indian government and a group of prominent businessmen of India, including senior officials of House of Tata would come to Maldives to participate in the 62nd independence day of India,

Taj group’s first resort in the Maldives was Villivaru Biyadhoo in 1981, the first premier resorts developed by a foreign company in the Maldives.

Maybe, this time the president is wrong…

anni-return-2

We the resort workers are very apolitical a group of people but we also have ideas of our own and families back home who would be affected by the politics around us. We take it as matters of concern the issues of work and wage weather we are resort workers or civil servants. In the category of work, we are all in the same boat.

Time as always is short for us in resort life so a few points are in order…

Now…

On the issue of cutting government staff salary, the president seems to be wrong.. here is why. (saying this much would have been akin to blesphemy only a year ago!)

  1. The process was rushed. Some committees were arranged hastily to do meetings and come up with advise to the cabinet which was hastily given and hastily taken. Should not have been.
  2. People were not informed and legitimate concerns doesn’t seem to have been addressed.
  3. Ramazan is just around the corner, so the time is obviously wrong.
  4. The Majlis people earn a very fat salary and the government with its half of MPs and with a concerted effort could start with them first. However the bill to trim their salary was put forward by the majority people and was turned down by everyone else saying it was gimmic to fulfil campaign promises (which is also true!)
  5. Cutting cost is good and becoming efficeint is very good but we shall not go after the easy targets like hardworking people’s salaries etc.
  6. This is especially so in a politically polarized atmosphere where both the government and opposition is weak and can be used to pick on each other.
  7. The government is trying to be saintly by doing painful sacrifices while hoping others will follow which will not happen.
  8. There are indeed many other ways the government can cut costs and dramatically reduce wastage but those who are already mired in wasteful practices who were assimilated to positions responsible for cutting costs cannot register it. Fresh faces and purposeful well meaning people can do the job although such people are in short supply. Another way would be to involve the people in the islands and atolls (not the big shots from eminient families of the island… ) to come up with a list of measures which can be implemented to do this.
  9. The use of media (state media for that matter) for promoting a just cause could not be wrong. However in the zeal (or zest?) for pure democracy the government is seeming to be shying away from media as it doesn’t want to be seen controlling the media like as was the case with the past regime. This is understandable but does anybody have time learn from committing mistakes and learning from them again?
  10. In this case the math that is involved in this cost cutting is not explained. For example if 5% cost cut was implemented on civil servants who number 20000 with an average of 3000rf per month, the savings would be 3 million ruffiyaas. Which is what? Roughly the equivalent of a fish dhoni built on fiber glass… Evidently not engough to raise the ire of a large number of people. The numbers are imaginary but the point is the media should have been used to inform the people on how much would be saved. And how the saved money would benefit the people.

Do you agree? If you would like to agree to disagree then please comment below here!

Gotta job?

unemploymentgraduation
The HR ministry is tweaking their job hunting and matching software and adding the final touches their website to ready themselves for coming online on 12th this month. Its one of the many pledges the current government has made to the people to do something about the job crisis and at last somethings seems to be moving in the right direction. But the big questions is “will it work?”
Making a database and having the people enter their names and info on to a database is one thing and having the employers actually make use of the database is quite another. The employers being employers would need a good reason to log on to a government created database to find talent which is abundant wherever they seek. HR departments in most resorts recieve innumerable (that’s an exaggeration … forgive me) unsolicited cv’s and job applications from all corners of the globe (this too is not true.. cos earth is not a cube…) and the government would have a hard sell if it were to convince the HR directors to choose from fellow countrymen in the midst of an economic crisis and a dollar shortage (too distinct issues actually in Maldives). Anyways we commend their effort and hope the project bears fruit.

For our part we have added one more page in our blog to list all the employers we come across with links to their websites where jobs are listed. If you know any good links pls comment and we will add promptly..

Herethere reopens come November

handhufushi
According to Ibrahim Saleem the chairman of MTDC, the company is trying to have the island reopen as soon as November. This is good news for everyone especially the staff whose careers were cut short by the crisis in which the resort was embroiled for the last one year.
Currently the island is being reevaluated for the handover and according to Saleem the work will take another 15 days. MTDC is going to open the island for interested bidders to express interest in the next 10 days and Contrary to the earlier bidding processes, this time international bidders will also be represented which hopefully will bring capable hotels to the process. This is all very welcome news just when the tourism industry’s statistics have shown consistent decline the past 3 months and there are small signs emerging that the worst may have been over.

Fisheries Ministry banning Shark fishing in 2010

sharks_action

pic credit:http:http://sharkiezartman.com
After much lobbying by those involved in the tourism, the fisheries ministry is moving in to ban shark fishing and export of shark products.
Citing studies which seems to indicate the possibility that sharks are becoming endangered through overfishing has prompted the Fisheries ministry after discussions with Fisheries Advisory Board to enforce an export ban of shark products which will become effective in 2010 March.

Dr Ibrahim Didi the fisheries minister said that the revenue earned from tourism was five times higher than that made from exporting shark products. However he did not equate the beneficiaries of fishing industry and that of the tourism industry which is if anything very dissimilar in shape and size. Fisheries industry is almost exclusively manned by locals in outer islands whilst tourism industry is manned and womaned by locals and internationals alike creating a greater dispersion of wealth for the beneficiaries.

Shark fishing in Maldives is exclusively done for the export market as there is no local consumption of shark products. Local fishermen are lured into this type of fisheries as the rate of shark items are higher than other fisheries products compounded with the fact that the market was controlled by the then government and the fishermen were made to choose between the rock and a hard place… However with the new government and new minister in place, the ministry is at last tackling the issue which can be very delicate as the fishermen has to be convinced of the negative impact of shark fishing.

At last Herethere handover begins

Herethere or Handhufushi MTDC
Herethere or Handhufushi MTDC

Following a verdict issued by the Civil court to Yacht Tours to handover the resort to MTDC, the resort is being handed over. This is some news for the many staff of the island who were laid off most unceremoniously in the midst of the chaos when the two operators were litigating against each other for the island.

Herethere is one of the many things that went wrong when politics and businesses were combined in the last days of the former government. It involved placating PA (Peoples Association a political party belonging to Yaameen the nephew of the former president) of which Jabir (of Yacht Tours) was a member at the time as well as accommodating the wishes a large number of business people who with various means were buying shares of MTDC which was up for grabs with little oversight using proxies etc. With the share buying frenzy coming to notice of the public and the transition from the former government to the current one many questions are being raised and many a tie that was tied in the last days of the former government are being untied. Yacht Tours seems to have been found on the wrong side of the law this time and is welcome news for the laid off staff who were seen protesting when MTDC hastily decided to give the island to Yacht Tours in the first place citing many grievances against the Yacht Tours which is famous for withholding staff pay for extended periods of time.

According to media reports MTDC has sent a four-member delegation to the resort to observe the situation there before making final arrangements to take over the resort and Yacht Tours is said to be extending cooperation to MTDC in the handover process.

MTDC had claimed that the cost of insurance and cost of the stock handed to Yatch Tours amounted to MRf 11 million which the Court has ordered to pay to MTDC in two months. The verdict was delivered on 23 July. Another case case filed by MTDC to get the outstanding rents from Yacht Tours for the resort is awaiting verdict.

Of the many islands Herethere resort is the only resort belonging to MTDC from which there is a an income to be generated and it is doubtful dividends can be paid to share holders if the outstanding rent is not received by MTDC.

MTDC has paid a dividend of MRf 9,000 in 2008, while the same has dropped to Mrf 2300 this years. Shareholders are unhappy they are receiving a very small dividend this year while a handsome dividend was paid last year. There are different stories why MTDC decided to pay such a large dividend last year when some sources who bought very large numbers of shares has recovered their entire investment in one shot raising many questions.

Sonee celebrating Employees Day in Paradise.

sonee hardware

Sonee Co. in Male’ is celebrating Employees Day for their staff on the 7th and 8th of this month and celebrating it big. According to a publicized notice on their shop front, the group will close business for the days mentioned to host a celebration of Employees Day in Paradise Island Resort. Its a tremendously symbolic and welcome gesture towards staff and shows an active caring attitude to staff by the employer.

Sonee the business group mainly consists of Hardware shops and sports items retailers which was the original business they started with. Sonee used to be spelled Sony until somebody figured that Sony is a popular brand name and the spelling was changed all in a hurry. Currently the company employs a few hundreds of people most of whom are expatriates and is reputed to be a good employer.

Here in resorts such gestures towards staff ie. such as celebrating an Employees Day for staff is a dream for most of the resorts and a distant one at that. Maybe the resorts can learn a lesson from much smaller fussiness such as Sonee and mend the ways for a better more caring attitude towards the staff. After all if the staff are not happy how can the guests be?