Extending Resort Lease: What is at Stake

By Ahmed Salih

Why do we Maldivians fear increasing resort leases to 50 years? It is not the type of ownership we are concerned with. It is the influence the owners will exert in running the country. This is the most important resource the country has – nothing to compete or compare with it. Who controls these vital resource controls the country.

It is unlikely, any other industry or any economic activity could match in the foreseeable future with the resorts to have a proper balance in economic power or political power. This balance is becoming more important than ever especially when we march in a democratic environment where funds are required for campaigning.

Need a fact? Look at the parliament now and five years ago. The little balance we had there was because President could then nominate members and politically influence the elections of the parliament members. When this equalizing power is removed in the next election, the majority if not the whole parliament will be controlled by the tourism industry or those industries that feed to tourism industry.

We have already seen what has happened. As his influence was diminishing during the last regime, Mr. Gayoom invited the big guns from the tourism industry to join the cabinet. Messrs Qasim, Deen, Thasmeen and Hilmy were seeing sitting in the cabinet. Some of them had never before seen the working of a government from inside. The others such as universal and Champa played the role of the king makers.

The argument from the president down the line for raising the tenure of the resorts is to generate the funds required for development. This is an old argument. The tenure of the lease period has been increasing since the introduction of the tourism in 1972. In 1970s, the tenure was for 10 years. Then the next government raised the limit to 35 years and collected part of the future rent. This government wants to increase the limit to 50 years and collect some more of the future rent. Leasehold period of 99 years will come. It is not likely that the industry will have to wait for 30 years but only 10 maximum - with the election of the next presidency. Then freehold or ownership will not be much far away.

The other arguments is also stale: why should Maldives be shy when countries like Bangladesh and India do it? These countries are huge, compared with Maldives. They have two of the three factors of production – land and labor. But we do not have either land or labor. These countries attract foreign investments to create jobs. Do we currently have such a workforce needing these basic jobs? Most of the youngsters who need may need jobs hardly can stand in this country according to one of the entrepreneur. So, why are we in a hurry? To get part of commission to own pockets again?

Our economy is strong as far as the numbers go. We enjoy a higher GDP than our neighbors. What we need is a system to spread the country's wealth evenly and without corruption.

The expected taxes from these resorts, and the rights of the few Maldivians who will work there, depends on the law made in a parliament dominated or controlled by the same industry.

The parliament has so far failed to make the leasehold or the rent even out across the board. The owners of those islands leased for agricultural purposes in the past still enjoy ownership and very low rent.

Before we raise the tenure limits of the resort, what we need is to nationalize the rights of those 'owners' who had leased these islands for agricultural purposes before 1970 and then introduce a minimum rent calculated at the current market rate for all resorts.