Revisiting the values

community elders meeting
community elders meeting

Any project by a political party or government “to create awareness and public education” will very likely be met with skepticism and be quickly associated with political  propaganda. Its exactly the same thing that happened with the recent efforts to start a project just like that. If they were to do it right, they should have anticipated this and avoided the labeling. But the problems are there and nobody doubts it. We have harassment of foreigners, robbery, mugging of foreign teachers, doctors, students threatening and intimidating teachers, gang wars and all the vices one can think of in incredibly small communities. Blaming it all on lack of employment is the easy excuse not to think seriously about the issue. So yes there is an issue or rather an abundance of issues and better we acknowledge the facts now do something about it.

A big one time one year project to ‘reeducate’ will not work in this case because we seems to have the fundamentals wrong in this case. Over the years, we have unthinkingly created monster sized issues: of ignorance of social skills, respect for persons and races, blotted out the definition of corruption and failed to install the values based stories in the young.  Examples.

  • We still do not have the equivalent for phrases like thank you or the expectation for that in the normal discourse. So if you give me a sweet you will very likely get a smile from me and that’s it. 🙂 Nor is it particularly beneficial to waste precious time thanking and ‘welcoming’ the thanks, it looks artificial but that’s where we are.
  • For years now, we have been ridiculing fellow human beings from neighboring countries in our dramas, and films (which are in essence part of our literature) with characters like “Pindey” who is the perpetual fool (Bangladeshi), not good for anything but ridicule. Maybe a story might have a use of such character to satisfy our ego or whatever, but overdoing this has created a sense of superiority and there are fellow humans suffering exactly because of this. Everyday there are hundreds of Bangladeshi waiters and servers who are subjected to verbal abuse in tea shops and café’s which is the validation of the above observation.
  • Corruption is so endemic in our society that it’s hardly recognizable now. From simple things like getting preferential treatment in hospitals and banks because of relatives who work inside to big things which involve thousands or millions of rufiyaa, we are flushed with it, if nothing else.

So verily seems we have to start somewhere with something. We have to change our attitudue to ourselves and foreigners alike. We have to start a values based system in education and upgrade the books where the stories are missing. Instead of “Foolhudhiguhandi” stories we shall go for stories that actually show kindness and good manners to young ones.

Occupancy dropping!

mdp women protestors drenched in protest
mdp women protestors drenched in protest

After an average high season of tourists in November to February, occupancy rates in resorts are dropping across the board with an alarming urgency. Our friends in many resorts say the situation is desperate in many resorts as the continuing political struggle in Male’ is taking a heavy toll on the tourism industry.

And there is no end in sight for the problem 😦

The parties to the struggle are firmly locked in immutable positions and there is very little room for either party to maneuver.
For the vanquished MDP, it has to maintain the story of being wronged and unlawfully ousted narrative to gain lost ground to some of politically unpopular policies it pursued while in power.

For the victors (DRP, PPM, Adhaalath and the coalition), they have not yet finished distributing the political chairs amongst themselves and have only a few months to face the election. So they will also try their best to retain the temporary advantage they have and make a good impression on the voters.

Both sides of the conflict are using media to spin their version of story and are being increasingly graphic in their story telling. Sometimes it seems as if the only real reason for the continuing protests is in Male’ to take good pictures to put in the media. Above pic is a good example of that.

Taking all these into context one wonders, why are we fighting? What is the real price of this in-fighting? Is this an affordable fight? Already we have been able to inflict 200 million ruffiyaas worth of damage in a few hours to police buildings and equipments. What more do we need? Loss to tourism income might not be as visible as burnt and torched buildings, but once the resorts revenues gets below to a certain threshold, they will start laying off workers and closing for ‘renovations’. But who cares?

Finding a job for everyone..

The recent round of middle east turmoil and popular action to remove corrupt regimes from power started with an economic problem. Joblessness. The same kinds of problems are being experienced in more developed countries such as Spain, Italy and Greece. Here in Maldives, we had a culture of government appointing political and civil service jobs as favors for katheeb’s and atholhuverins and their friends and families for a long long time. At that time those who didn’t have the right connections had to make their own way to resorts or somehow manage to scrape a living. Time however has changed with the new popular administration and the changes that are currently being brought simply needs an urgency in creation of jobs for the local people. The current thinking for solving the housing problem is through real-estate business like as done anywhere else, which is almost a new concept for the country. There still is more needed to be done to facilitate this type of business such as changing existing laws on land ownership and laws on mortgage etc. All these measures will soon be taken up and fast-tracked as our version of ‘welfare-state’ is being built, after which the problem of jobs will come again around with a vengeance. This time it will be in the form of home-owners who needs jobs to pay for mortgage!

Fortunately we currently seem to have the capacity to provide jobs for prospective homeowners and taxpayers in the private sector as well, but its by no means in an orderly fashion. Our current job market is in serious chaos and it needs drastic restructuring to be efficient and useful for the local economy.

Broadly here are the industries and the situations thereof which needs to be taken in to consideration.

Tourism industry:
Tourism industry provides most jobs for local economy and this industry can still provide more opportunities by quota adjustment by profession. Currently the situation is that almost any number of foreign workers for any position can be employed for any length of time. Apart from a requirement that 50%ratio of expats to locals workers need to be maintained (even which is not a hard or fast rule!) there is no more encouragement for employing local workers.

Construction industry:
construction industry has vast potential for local economy but is actually the worst in terms of work opportunity for local workers. Its not a problem of lack of talent but rather lack of willingness to tackle corruption in the industry. Construction industry as its currently running is only useful for a handful of big contractors and a few smaller ones who are have the right connections to the big ones. Its almost a no-go area for local artisans and craftsmen because of lack of job security, poor work conditions, and extremely meagre wages designed to discourage local workers. Being businesses everyone tries to get the most profit which equates to finding the cheapest labor which is where the local worker looses out.

Fishing industry:
This is one industry which can be better managed by innovative means. Only depending on one type of product, one type of boats, and one methodology to fish have exhausted the industry and drastic measures needs to be made to revive the industry.

Agriculture industry:
Although we would love to call it an industry, we do not yet have much of agriculture in any comparable industrial scale. Because our islands are small and soil is not very fertile, traditional methods of agriculture as practised in other countries will not work. Things like hydroponics and aquaculture are perfectly suitable for some varieties and needs to be propped up. A most pressing problem for this industry is financing and small business assistance, which also needs to come up somehow somewhere and the sooner the better!

Apart from The Static-Company (they export R/O plants) we do not yet seem to have any exportable manufacturing products but there are many encouraging signs. We have successful businesses in bottling plants for water and soft-drinks and a few canning factories for fish cans. What we can successfully introduce to local economy with little effort and financing include, cookies, biscuits, soap, detergent, lotion , perfume etc. These small scale productions can be introduced to aspiring enterprising souls through chambers-of commerce activities and small businesses initiatives.

There is great urgency in propping up institutions and mechanisms to help create and sustain other industries by providing capital and finance services. With the upcoming income tax regulations and associated restructuring, its hoped that the government will not be forced to take loans from local banks which is the cause of all financing woes the the country faces.

When they are right, even when wrong…

Maldives Association for Tourism Industry has an interesting Operating Guideline: It reads “The member is right, even when s/he is wrong!”. This is an interesting operating guideline which pretty well sums up MATI. The association also has a 5 point agenda the first one of which is resort lease period extension.. To all extents MATI seems to have achieved the first point in the agenda with the government agreeing to extend the existing lease period of the resorts to 50 years if the resort agrees to pay a sum of money. Currently all resorts has individual land lease agreements with government which were drawn up as was when needed, hence the conditions were favourable for the first batch of resorts and gradually got tougher for the latest batch of resorts.

The goods and services tax bill (3.5%) was heavily fought over in the parliament, by the opposition and the government and all sides made concessions to others. That much was apparent from the media. But what was not apparent was the involvement of MATI the resort owners club which cut a deal with the government to extend the existing resort leases. The government has agreed to the cartel’s demand upon the resorts paying a further 100000$ dollar per resort per year for the extension. Now the important question that comes to mind is what sort of leverage the cartel has over the political process? Other than pledges or promises of campaign funding what more leverage does the resort owner’s cartel have? What was the big need for the government to cut a deal with the resort owners over the tax bill in the first place? These are tough questions needing straight answers nobody seems to have.

The Goods and Services Tax is currently only a framework of laws which requires further regulations and by-laws for the process to work, which are still in the process of formation. GST law requires implementation by January 1st next year by which time the by-laws in and in-laws should in theory be in place.. MATI is sounding out the lack of these very regulations as an excuse to delay the process and asking to delay the GST implementation. The government expects the regulations to come through parliament by November.

The reasons MATI gives for delaying the GST implementations are many and they include the following:

  1. that the resorts need time to upgrade theirs accounting softwares
  2. that the existing bed tax  is still  to continue for further 3 years
  3. that the resorts are obliged under the new pension laws to deposit 7% of staff salary for pensions, which will be required to be implemented on May the next year. MATI sees an issue with this saying that expatriate workers are short term employed and this requirement is unworkable. However labour law does not differentiate between local and  expatriate staff on the issue of worker contract, so MATI’s  concern over this issue is unfounded. I.e. both the local and expatriates are short term (1 or 2 year) employed in legal speak.
  4. MATI reminds another bill income tax is also in the offing
  5. The unavailability of English translations of the GST bill is also an issue with MATI which is in the process of being translated.

None of the points MATI raises seems to warrant delaying the implantation of GST (3.5%) for a whole one year which is one fifth of a presidential term in office. With MDP pressed to show success on election pledges, its unlikely that the government will want to add any further delays to the GST which in the first place was heavily delayed by the opposition dominated Majlis.

Given the fact that various forms of taxation is coming to the country with popular backing, to stay for good, MATI is clearly out of the line and its understandable. Its understandable since the cartel consists of roughly a handful of ‘resort-barons’ who owns the most expensive real estate properties in the country and who are in their own words “ right, even when they are wrong!” which brings to mind and important fact that democracy cannot be savoured while the economy is shackled.

Here are some points generally in the direction of why MATI is wrong..and why MATI should not be overly worried about their very own ‘concerns’.

  • Taxes are nor borne out by resorts. Taxes are and they are meant to be passed on to customers. How resorts wants to deal with tax as a burden is another matter.
  • Resorts were required by law to payout 99% of service charge to staff but few if any resort has implemented this requirement.
  • The pitiful amounts of salaries most resorts pays to staff is not something to be gloated over. Much less is to be lamented over is the meagre 7% of staff salaries for the pension fund which compared to an average resort’s income scale is peanuts. And that is dried ones of course! A sample quick accurate approximation is like this: (100staff X 250$) X7%=1750$. Which is what?nothing right?
  • Resort owners has been threatening with the demise of tourism in the country from day one. With these new tax issues the clamour for impending doom of tourism will grow louder. But what is certain is that no resort owner will ever let go of any of their islands because of these new latest requirement to spend, which just tell us that all this noise is just noise and not much else.
  • The resorts having to re-negotiate on existing contracts between tour-operators maybe a problem in the short term. However most such contracts are short term based, specifying the rates the resort sells their rooms to the operator for one year or for one season. This maybe one issue the forth coming by-laws of the GST bill will iron out come November.
  • Another place where ironing out will be needed is about the resort’s lease and rent law which seems to suggest that rates will only be applied in relation to land area, without taking to consideration the proximity of resort to airport or Male’. Also where there is great demand and limited supply, as in the case of our resort islands, the government shall not make it unduly easy for resort-barons to lengthen the lease life of the islands for no reason than their greed.
  • Asking for extensions and exemptions for one year citing book keeping difficulties is excessive as the modest GST is not that complicated at all.
  • The rate of GST or such finer details of technical issues shall ideally be not passed at parliament as law. It would have been better for the taxation authority to deal with the finer print and have the Majlis play a supervisory role in the matter.

GST tax in various countries are different and arrived at differently. Its complicated in most cases for reasons related to many factors of the country’s economy, politics as well the law.

Its 7% in Singapore as of 1 July 2007
its 10% in Australia on most goods and services
its > 5% in Canada
its 5% in Hong Kong
It will be 4% in Malaysia come 3rd quarter of 2011
its 15% in New Zealand on October 1, 2010.

Who are these clowns at MJA?

Hirigaa Ahmed Zahir with the president

MJA stands for Maldives Journalists Association which is run by a “Hirigaa Ahmed Zahir” a “journalist” in Haveeru. The Association is just an “association” and the number of real journalists associated to MJA according to them is 70. Quite a number in a paper-scarce country like ours.

Nevertheless MJA currently being in Sri Lanka briefing foreign diplomats and media on “the challenges facing the Maldives media” feels actually very un-journalistic. Not that our journalism is all smooth and calm but we are witnessing quite an improvement on media freedom compared to what was before. The problem with MJA seems to be that the association has aligned itself with the opposition and is failing to acknowledge this as politics. Politics and journalism are very different walks of life and its very unlikely that Sri Lankan media will be bought with anti-govt rhetoric of MJA or any other. Sri Lanka is the most advanced country in this south Asia region in terms of media and MJA will be making clowns of themselves by trying to tell how victimized they are to Sri Lankan Media. Sri Lanka is not exactly unaware of what this country went through in terms of media freedom or what was lacking of it.