Tuesday, December 2, 2008

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.


Anonymous said...

For you guys only dictator like Maumoon will be good for you. Only he can balance the majlis and only he can protect the rights of maldivians. without him maldives will be sold out you will say. So to save maldives from foreginers join drp and campaign to bring maumoon back.

Anonymous said...

I do not like 50 year lease. Why not sell the resorts?Then introduce sale tax and luxury tax etc. Resort owners control the Majlis.In the last election, many resort owners sponsored MPs. eg. Maria was supported for Male' Atoll by tycoon Deen. The condition was that she supports long lease periods.Universal etc switched their support from Maumoon to Anni because Anni promised them more years of tenure.Maldives democracy is by the resort owners for the resort owners and of the resort owners.
The resort owners, numbering about 100, are so rich that they have made Maldives the highest per capita country in South Asia. Their combined millions of dollars divided by Maldives population gives us this high per capita. The reality is that the vast mjority of Maldivians are below the poverty line.
and the millions of dollars owned by resort owners are kept in foreign banks. So the poor Maldivians do not even get the foreign currency to go to Trivandrum for their essential medicals.

Anonymous said...

DRP is no longer an alternative. They are not even a responsible opposition. Umar looks like the official opposition leader. I have already left DRP in favour of Umar's IDP.

Anonymous said...

I agree Ahmed! good post!
We need to find ways to create a more competitive labour market and take charge of our economy. There are lots of maldivian youngs roaming around Male'. having coffee from parents money. If we built and train them and replace with our current foreign labour force, Anni can have enough cash in.

Anonymous said...

befre we graduate to the list of developing countries we need to attract and support investors.

So this is the time to get ready and encourage investors.
Without a proper economy how are we supposed to sustain our dreams n hopes.

Don jus disagree to side with opposition. Make sure yu have a solid undestanding of wats goin on before jus being pportunistic like Umar Naseer.

Anonymous said...

Join the Idhikeeli campaign against government's plan to extend the resort lease period to 50 years.


Anonymous said...

The notion that Nasheed's government's pledge that you will get a "thaahiru dhiriulhun" only when there is enough money and the money will be there only when resort lease increased for 50 years is not sensible. In other words its to say we will sell your future to resort owners to get what you need today.

In my opinion this whole thing is a gimmick to fool us, whether you call it a government or parliament its the same people with same self interest only are in power now.

Anonymous said...

Majority Ain't liking it. Thats the fact. ANd its a real fact.

Anonymous said...

i agree with anon 3rd dec o5:39 pm that this is all a gimmick to fool us. Its ridiculous that MDP government is selling this to us as "sustainable tourism". Sustainability principles refer to the environmental, economic, and socio-cultural aspects of tourism development, and a suitable balance must be established between these three dimensions to guarantee its long-term sustainability.
Sustainable tourism development requires the informed participation of all relevant stakeholders, as well as strong political leadership to ensure wide participation and consensus building.
i could go on.....a policy towards fattening the purses of a few rich people, and using future earnings from tourism is hardly founded on principles of sustainability