Wednesday, February 11, 2009

Are we heading towards difficult times? Some inspiration by 'Maldive'

Here's a comment by my good friend 'Maldive' to one of my previous posts.

I have been following the global financial crisis very closely n have been wondering about its impact to the Maldives. As my profession and background is very much in the financial and management side, I often wonder what can our government do to minimize the impacts of this recession the world is facing. I guess without a doubt we will be highly exposed to this recession come 2009.

The points you have posed are absolutely correct and the best part is that you have shown me that atleast there are some people in Maldives that are fearing about the impact of this crisis. It is rather sad realizing that our country is a victim of a new epidemic that’s spreading viciously from island to island, community to community, family to family and inviduals to indivudals.

What I am talking about is politics. Media headlines is all about Politics and nothing makes headlines if it is not politics. This is a sad dose of reality and I wish sooner rather than later we change this and start realizing that there are better things to life than just politics. Anyways, I am not here to talk about politics, and funnily enough my new year resolution is about totally stop talking about politics!I would like to mention couple of solutions that our government could start taking to help minimize the impact of this financial/ecomic meltdown. What I am about to highlight is twofold. One is actioning through spending and the other actioning through earnings.

Both related to the dollars or foreign reserves!When it comes to spending, we have to aknowledge that Maldivians are lavish spenders. Going to Colombo, Bangkok, Dubai, or India is more like visiting a next door neighbor. What we don’t realize is that the sum total of these spendings in any given year could reach to a significant amount of foreign exchanges leaving our own reserves and damaging the economy. Every dollar that leaves our nation is an outflow of foreign exchange reserves and these are more like just wasting our wealth! I think we need to educate us (the individuals) in stopping from spending lavishly on these unwanted trips!

Individuals can make a difference, and these individuals firstly needs to be taught of the consequences of their decisions. When it comes to earnings, I am highlighting the fact that we need to show our exporters (mainly MIFCO), the right way of doing things. I believe and I know this as well, MIFCO is renowned to be run very inefficiently! This is where we could generate huge cost savings (by finding ways of running as efficiently and effectively as possible) and ultimately pass those savings in terms of more effective and competitive pricings. Promoting our local stocks is another way of moving forward especially knowing that we rely so heavily on imported goods.

If MIFCO could be run efficiently, why not all Maldivians rely on their produce? If our fishermen can catch fish, why not we buy fish instead of chicken? If Srilanka can sell eggs, why not we start doing this in large scale locally? If we can sell eggs, why not we start selling poultry? My point is, we are capable of these things! My point is generating demands for local produce can help our economy big time and we will be able to minimize this risk that’s daunting our shores! Availability of fruits and veggies, kaashi and the baraboas, can also be done. Those farmers needs a little bit of a pat on their backs, and the full governmental support! These are the times in which our economic saviours will not be wearing a suit and sitting in the parliament wondering about what next to do with the thousands of irrational incomes they would receive at the end of the month! These are times where the economic saviours will be YOU and ME, the common man, or should I say that everyday fisherman or farmer that you picture wearing a sarong, a torn apart shirt, a funny hat, and lots of reddish nuts in their mouth!I also believe we need to do something about every dollar that leaves our economy via the remittances made by the expats.

Our workforce has a huge percentage of expats and every dollar that leaves our shores is a wound that our economy suffers. Its impact can only be realized in tough times and as we move into such an era, I guess our governments needs to come up with some creative means of holding on to these dollars. Cutting back on the expats could be one approach, but I don’t believe that’s the only approach either. We could easily devise a short term plan in which the banks could play a role in holding on to those dollars (maybe by way of a special expat saving scheme – or something!)!!!Anyways, as Naseer had highlighted, we are moving into some tough times, and I guess tough times calls on to tough measures. I wish to add just one word to Naseers final statement – Spend only what you earn WISELY!

1 comment:

  1. Unless we increase domestic production so as to reduce outflow of currency from the country, we wont be able to increase our output and economic growth. This crisis maybe a good starting point.