Raising the resort tenure limit to 50 years

The proposal currently in the Majlis to raise the tenure limit of tourist resorts to 50 years has raised a virtual storm mainly because of two reasons. One, resort islands comprise by far the most valuable economic resource in the Maldives. Two, many people fear the move will ultimately lead to transfer of full ownership of the islands. How real is this fear?

Increasing the lease period on resorts to 50 years could create a situation similar to what's called "lease hold" in Common Law countries like the United Kingdom. Leasehold is a form of property tenure where one party buys the right to occupy land or a building for a given length of time. As lease is a legal estate, leasehold estate can be bought and sold on the open market and differs from a tenancy where a property is let on a periodic basis such as weekly or monthly. Until the end of the lease period (often measured in decades; a 99 year lease is quite common) the leaseholder has the right to remain in occupation as an assured tenant paying an agreed rent to the owner.

In contrast to the above, full ownership of the land as well as buildings is called "free hold," where you own the land indefinitely and can do as you please with it. But this difference is mostly theory, and there is no real difference in practice between lease hold and free hold. In both cases you have full ownership of the land for all practical purposes.

Considering the above, many people believe that increasing the lease period is just one step from granting full ownership. Others however disagree. They believe that a lease situation can be maintained indefinitely; and as long as such a lease situation exists government will have control over the islands.

Now a fundamental question: What difference will it make if resorts are given on free hold basis? Opponents believe it will hamper the government's ability to regulate land use and levy taxes. Supporters believe it will help owners to raise finance to develop the properties.

Thus there are no clear-cut answers to the issue. But one thing is certain. Any decision People's Majlis takes on the matter could have the potential of haunting the Maldivian people for generations.

Cushioning the Impact of Employment Law

When the Employment Act came into force on 10 July this year – 45 days after ratification – it created havoc in workplaces across the country. Government budgets ran out of money and supervisors were overwhelmed with sick leave notices. This lead some people to believe the Act is unsuited for the Maldives, especially when applied to tourist resorts, industrial sites and shift duty stations. Others however pointed out that the 48-hour work week stipulated in the Act is the norm in the European Union, and if that norm can be implemented in hotels and factories in EU, there should be no reason it cannot be applied in the Maldives.

At first tourist resorts were not included in the Act, but were later included following agitation by resort employees spearheaded by TEAM. Now resort managements are coming under increasing pressure to implement the provisions of the Act fully. But many people –not just resort owners –believe there are serious controversies in the Act, particularly when implemented overnight without sufficient preparation in resorts and industrial sites.

Some people believe the employment law was basically drafted with the working conditions of civil servants (government office staff) in mind. Apart from the budget shortage (which could have been avoided if implementation was delayed till January) the law can be applied to civil servants with no major problems, they believe. The question is, were the working arrangements in tourist resorts and shift duty stations studied sufficiently before the law was implemented?

Are you shocked to learn that you will need to employ 7 people to keep just one person on duty in a 3 shift duty system, if each employee avails all the rights stipulated in the Law –maximum working hours, rest days, sick leave and holidays? If one is shocked by this statistic one needs to study the law carefully. Employees of course deserve all these rights and more. However, one must also realize that tourist resorts have been operating under various systems of employment for decades. Thus, there is an existing baseline. Shifting from this baseline to the level required by the law would need careful planning.

Tourism, together with fish processing plants, forms the back bone of the economy. We need to make sure sufficient and efficient labor is available for these growing sectors of our economy. A competitive labor market is absolutely essential to ensure that we attract foreign investment for the tourist industry. While the human rights record of China is far from ideal, there may be a few things we can learn from their experience in managing their labor force and succeeding in producing committed workers.

[This article is based on ideas submitted by Mohamed Shiham, an employee of a 5 star resort in the Maldives.]

Is the Civil Service on Right Course?

Article 54 (Haa) of the Civil Service Act says a Permanent Secretary's post must be created and filled in each responsible office of the government. To anyone except the Civil Service Commission (CSC), the wording of this article and its context leaves little doubt as to its meaning: each ministry must have one and only one permanent secretary. But today some ministries have more than one permanent secretary. What gives?

Having two permanent secretaries in a ministry is more than a mere cosmetic issue. It dilutes the responsibilities of a permanent secretary (PS) described in Article 55 of the Act, and weakens the line of authority from minister to PS and onwards to civil service staff.

Perhaps the most serious accusation leveled against the erstwhile Public Service Division (PSD) of the President's Office was its tendency to create posts for people. CSC came with the promise of making the practice history. But history appears to be repeating with vengeance.

How does the performance of CSC compare with that of PSD? In the late 1980s, PSD introduced the post of Director General (DG) as the senior most public servant in a ministry. For more than 5 years PSD managed to maintain a single DG in each ministry. Similarly after introducing the post of Executive Director (ED), PSD managed to maintain a single ED in a ministry for 3 to 4 years. Compared to this CSC managed to maintain a single PS in a ministry for just about 6 months. Interestingly, throughout the presidency of Ibrahim Nasir, he managed to maintain a single Director to head each department and a single Vakeel to head each division of a ministry.

CSC inherited an extremely top heavy bureaucracy. Let us hope the Commission manages to take decisive action to streamline the civil service.

Free Healthcare – a context!

By Ahmed Afaal

Is there any such thing as free health care? Or is it just an attractive jargon that pleases people? Health care is a basic right for every citizen of every country and Governments are supposed to provide appropriate access to services, a statement well understood by everyone! In the recent past there has been a lot of talk about health care reform in almost all corners of the world. Health care reform becomes a major talking point of each political election. In the 1990's economists in their quest to find better and efficient ways to finance collapsing health care systems started the health care reform jargon. With advancement and sophistication in health care interventions, escalating costs left governments and the public struggling to afford health care and hence more and more people did not have access to health care, even in the developed world.

If we look at the most advanced health systems of the world for example, the United Kingdom is one that boasts "free" health care. But the National Health System (NHS) of the UK has in the recent years struggled to cope with the costs and slowly is moving towards a more market based system. Free health care is mainly seen in economies with high taxation. However even with this, there is division for example in the UK Labour Party whether to introduce a new health tax to supplement the already expensive NHS budget which stood at a staggering 53 billion pounds in 2001 (The Guardian, November 30, 2001) and keeps increasing. Who pays? The people with a tax burden of over 40% of there earnings! Do we call this 'free' health care? Most related literature state that the UK health system is on one extreme of the financing spectrum, not a very good one.

On the other extreme in the US where health care financing is based mainly on private insurance. This system has left millions without access to health care. This year the estimated number of people without insurance in the US has reached over 43 million. Why? People can't afford healthcare. No wonder, health care becomes a major campaign slogan of every American election. In the recent presidential campaign in the US, Barrack Obama proposed government subsidies on the current expensive market based system (Times, September 29, 2008) in an attempt to relieve the burden paying insurance. Also recent experience such as the bail out of insurance giants AIG shows the vulnerability of such a market. Again most literature on the subject if you read indicate that the US has one of the most regressive health care financing systems in the world.

Countries like France have made their health systems more responsive by innovation. Social Health Insurance schemes with co-payments and capitations have improved the sustenance of their systems. However, still there are questions about such systems. For example in the last election campaign of the previous Premier of Australia, John Howard in his campaign promised 'free" healthcare for all Australians. But just 3 months into his term, he raised the health care tax rate – his answer to the public? If the government implemented free health care Australia will go bankrupt and he said something along the following lines "I'm sure Australians will forgive me since my financial advisors were wrong at that time. I cannot make Australia go bankrupt just because I made an election promise" Perhaps one of the reasons his government did not last too long this time.

Coming to the context of the Maldives which is what we need to get worried about, we have a system that is extremely regressive. Out of pocket payments have made people beg for health care. Many families have gone into unrecoverable debt since they had to borrow for health care. Just like all other parts of the world, health care costs will keep on escalating. The more sophisticated the more expensive it becomes. Good financing schemes are the only solution to this phenomenon of escalating costs. Government has failed to implement a proper scheme to finance the Maldivian health system, at least in the past and so far we have to wait and see what will come up with the new Administration. One fact though is that the current political environment has made health care financing one of the major talking points.

On a positive note, slowly the concepts of insurance are creping into the country. A good sign, but how sustainable is it? We saw the first Government Employees Insurance Scheme collapse before it was really even born. A bitter experience! Now the new scheme "Madhana" is claiming that it is a more promising scheme. We have to wait and see.

Note: A first version of this article was published in Mr. Afaal's blog, http://afaal.blogspot.com. This edited version is provided to this blog for the readers of this blog.

Giving a Boost to "Maldivian"

By Dhivehi Dhariyeh

Since the controversial demise of Air Maldives the country has been without a national airline in the international market. The issues surrounding the failure of Air Maldives have not had an independent analysis up to today; we need such an audit to learn lessons from the mistakes of the past.

To compensate for the failure of Air Maldives a new domestic airline was launched as Island Aviation. Through a steady growth strategy the company has expanded its fleet and operations successfully. The company currently has a fleet of 5 aircraft of which 4 are Bombardier Dash 8 family, composing of 2 Dash 8 Q300 (50 seat) and 2 Dash 8 Q200 (37 seat) aircrafts.

The company then took the bold step of venturing into the international market with its turboprop fleet much to the amusement of critics and competitors. With its dedication and effort it has overcome the odds and is successfully expanding its international operations including a rebranding of the airline division as Maldivian. The company's executive management and staff should be acknowledged for this progress and growth which was generated on its internal profitability and resources. The company has announced the next step in its growth by the delivery of a Dash 8 400 (75 seat) aircraft around early 2010. This looks to be a sound decision based on the fact that turboprops are more fuel efficient than jets and the Q400 matches the speed of a jet aircraft which used to be the main weakness of turboprops.

In light of the importance of having a suitable national airline the government needs to work out a solution to give a boost to the efforts of Maldivian. As such mainly two points are of importance now first increasing the capital of the company to speed up its expansion and putting in place an independent and capable strategic management body.

To increase the capital of the company the government should increase its share in the company and allocate a percentage of the company for interested private parties to invest in. For example let 4 private parties invest up to 10% share each, thereby giving a total investment of 40% to private parties while government holds 60% of the company. This seems to be the viable option since attracting an established foreign airline to a JV is slim due to the current economic conditions and the previous assessment of the feasibility by Qatar Airways.

With this increased capital the company should step up its expansion plans and look to acquiring an aircraft of greater capacity and range to allow it to serve feasible routes such as Bangkok, Malaysia and Dubai. An ideal aircraft for the purpose would be an Airbus A319 or similar type. Such an aircraft should be acquired in the short term, preferably somewhere in 2010. To aid this, the physical and human resources of the company should also be developed.

The company should also be appointed a professional and independent Board of Directors and ensure compliance with Corporate Governance Code even though it's not a public company. It should also be looked into the viability of bringing in a foreign CEO who's experienced in international airline operations. The government should reduce its dependence on the company's dividend (as with other SOE's) as a primary source of government revenue and let the company reinvestment a greater portion of its profits into its expansion.

[This article was submitted by Dhivehi Dhariyeh, a visitor to this site.]

Corrupting the Citizen

By Ahmed Afaal

On October 8, 2008 and on October 28, 2008 the Maldives underwent arguably the most democratic, the freest and the fairest elections in her entire history. This paves the new direction for future elections in the country.

Among the elections held in the country, the upcoming parliamentary election would be one that needs to be watched very carefully. In the past parliamentary elections have been influenced by money, and people with high governmental influence. Maldives went through a stage where the people were, in my words "made corrupt" by persuading them to accept money, goods and many other favours. This lead to a mass corruption where votes were given in return for something, i.e. votes were bought and many people still think that this perhaps is the norm.

Given this, during the last two parliamentary elections a large number of new faces came into both the Special Majlis and the Majlis. Their intentions were clear from what they have done so far. They have fought definitely on behalf of the people in a way that no previous parliament has ever done. They have passed the new constitution that is modern and people friendly. Many laws, most of them good and some with flaws while other laws contradicting each other were also passed.

No one in the country can deny that the current parliament's achievement in facilitating the democratic process, making the government more accountable, and the contributions to the special Majlis in the separation of powers is historic. The achievement of the outgoing Special Majlis in getting a new constitution needs mentioning.

Ironically, the sad truth though is, in order to bring this to the people, powerful business people and other influential people had to, in my words "further corrupt the citizens" by pumping more money and doing more favours to get votes. Votes were sold to the highest bidder last time around. Perhaps this was the only way that these members could have penetrated into the parliament.

Question now is that are the same parliamentarians going to come out this election and advocate that what they did was wrong? Would they come out clean?

Maldivians will definitely watch the actions of these people carefully. Especially these were the very people during the last presidential election, were most vocal and critical about this issue targeting it to the then ruling party's actions. Also, though we have a presidential system, parties will be fighting to get as many members in. Are there going to be totally new politicians who will defy the odds? Will there be those who have the courage to stand up to make the election clean? Would there be those who would and could educate and persuade the public to go on the right path? Only time will tell. We will have to hope that this endemic does not blow into an epidemic but rather get eradicated.

[*This analysis was presented by Ahmed Afaal, for the readers of this blog. He has his own blog (No politics) at http://afaal.blogspot.com/. As always I welcome contributions from the readers of this blog, which I will publish for the benefit of other readers and to keep this blog rich in content.]

Architect of Modern Maldives Ibrahim Nasir Passes Away

Maldives Independence hero and the man widely regarded as the architect of modern Maldives, Ibrahim Nasir Rannabandeyri Kilegefaanu, died in a Singapore hospital yesterday evening. He was 82 years old and was survived by 3 ex-wives, 2 sons and a daughter.

Born in 1926 in the island of Fuvahmulah and educated in Sri Lanka, Nasir became Prime Minister of Maldives in 1957 during the Southern Crisis. He became President on 11 November 1968 when Maldives became a republic for the second time. After completing 2 terms as President in 1978 Nasir handed over power peacefully in a unique display of democratic norms.

Nasir's greatest service to the nation, and the deed that ensures him a place of honor in history, is gaining independence for the Maldives from Great Britain on July 26, 1965. While settling the Southern rebellion was also notable, it was marred by human rights abuses.

Nasir's other services to the Maldives include:

1. Starting English medium education (1960)
   


2. Starting A level education (1976)
   


3. Initiating the Atoll Education Center project and opening the first center (Eydafushi, 1978)
   


4. Starting nurses training (1963)
   


5. Opening health centers in all atolls (starting with Naifaru, 1965)
   


6. Opening the first modern hospital (1967)
   


7. Building the first airport (1966)
   


8. Starting tourism (1972)
   


9. Establishing the first radio station (1962)
   


10. Establishing the first TV station (1978)
    

[Note: Nasir's services are too many to be accurately listed in full. A 20-year period of rule would obviously have negative aspects too. However, it is not customary to dwell on those aspects in an obituary note.]