How to keep the dollars?

Despite record numbers of tourists visiting the country and bringing in loads of foreign currency, our country is still facing a dire problem of lack of foreign currency, the scale of the problem is huge and biting and yet nobody is any the wiser on how to solve this problem. Even the president recently said non-committally that he will need a few more weeks to consult economists to see what can be done. So what can be done to alleviate this problem? Up until recently there was no dollar problem. Anybody who wishes to buy dollars can freely buy dollars on standard exchange rate of 12.85Rf per dollar from banks and shops. So what has happened and what’s the remedy? That seems to be the question everybody is asking.

A few answers we have compiled to solve on this issue are as follows.

  • To lessen government expenditure: This is a big thorny issue but a big brave effort can do this. The current government came to power promising a smaller, effective government which was the original idea, however the current administration is doing exactly the same as the last one albeit they are somewhat forced by circumstances whilst the earlier one was to a large extent not. The solution lies in cutting the big bureaucracy and bringing effective pragmatic changes to administration. Renaming existing buildings, or instituting new ones while retaining the same old structure is just making a parallel administration which does not cut the expenditure. A good example of this is the current local councils. The historic problem was that the islanders did not want government appointed katheebs. What they (the islanders) wanted was a way for the them to unseat the katheeb if he is despotic or undemocratic. But what they got was local councils which is not one but 5 katheebs! So the expenditure in theory increase 5 folds at-least.
  • To create more jobs for the locals: There is no improvement in this sector as of yet and despite pledges by the government to create 20k jobs in a few years, there doesn’t seem to be any indication of that yet. The job market is still as it was, where greedy human traffickers are still swamping the economy with foreign laborers. No rules or regulation seems to operate at construction industry which currently only benefits disproportionately a few big contractors and everyone else literary makes peanuts. For the local economy to benefit by retaining foreign currency, regulation could be instituted which would make more local jobs feasible and more locals start work in proper jobs in the construction industry. Currently a steady job in the construction industry is almost non-existent if not for white collar jobs. Not that skilled workers cannot be found in the country but that the construction industry is geared to provide employment to exploitive employers who employ foreign workers at sub-prime conditions and pay. Resorts and tourist facilities across the country could also be mandated to employ 80% locals because there is no sense in retaining a big unemployment ratio in the country and resort employment is not rocket science! You don’t need to import waiters and room cleaners from abroad while the same jobs can easily be filled from within the country.
  • To improve health sector: this is one big area which needs a lot of improvement lack of which causes lot of foreign currency to flow outwards of the country. The economics of seeking medical care is such that most of the time (for an islander) it would be more economical to seek medical care in India or Sri Lanka rather to get the same services in Male’ because of high cost of living in Male’. Improving on this could lessen the “medical tourism” of local to other countries which could retain a lot of foreign currency in the country.
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