Sunday, October 24, 2010
Everything in MALE'???? still??
1. Male' has a population of over 100,000 people. Official number in 2006 indicates 103,693 living in Male'.
2. Congestion in Male' is so severe, it is difficult to walk around, drive or ride in Male'.
3. Housing conditions are very poor and families live in small rooms less than 120 square feet, and it is among the cities with the highest population density in the world.
The list goes on...bottom line is, Male' is not at all suitable for anyone who wants a decent living, raise a family, and live a peaceful life. The reason, is OVER-POPULATION! How we have got here, is a very long story. Long story short, mainly due to policies that attracted people, and these policies were for political reasons.
We all had very high hopes and expectations when the present government came to power. I was happy to see a President talk about important economic reforms needed for the country. He was ready to take, and took drastic measures in 2009, in order to address the macro economic imbalances. The government made political hard decisions, for the benefit of the broader economic well-being. And that's something we need to applaud.
However, some of the recent events have made me think, that the present government doesnt want the population of Male' to be reduced. The President doesnt want the outer atolls to be developed? Recently, he has inaugurated the building of a flat for teachers in MALE'. He has repeatedly talked about construction of flats in Majeedhee Magu, MALE'. And also in another location in MALE'. A military hospital in MALE'. New Dhiraagu Building, in MALE'. All this, when we have enough barren land in Hulhumale', and if all these projects were diverted to Hulhumale', at least there will be no additional inflow to Male', and will lead to settlement and development of Hulhumale'. At least people living in those flats and buildings can have a better decent living.
Wednesday, October 6, 2010
The Agony of Reform
Maldives embarked on ambitious political reforms, and adopted a new Constitution two years back. Under the new Constitution, we’ve been ensured separation of powers, with an ‘omnipotent’ Parliament, an independent Judiciary, and a ‘helpless’ Executive. The Constitution guarantees the citizens so many rights, so that the Courts cannot convict us so easily, as was a our current President convicted for stealing from Velaanaage.
An independent Civil Service Commission is formed, replacing the Public Service Division inside the President’s Office. There are five members with huge salaries heading this commission. Apart from this commission, there are many other commissions and institutions that were formed since then. Following is a list:
1. Human Rights Commission
2. Judicial Service Commission
3. Police Integrity Commission
4. Prosecutor General’s Office
5. Elections Commission
6. Anti-Corruption Commission
7. Employment Tribunal
8. Maldives Media Council
9. Maldives Inland Revenue Authority
10. Local Government Authority
11. The Supreme Court
Most of these commissions have at least five members, earning almost the same remuneration as a cabinet minister. The newly elected Parliament has 77 members, also earning a fortune. The Supreme Court – with 7 Judges!
We’re not done yet. Soon, there’ll be at least 5 Councilors governing every inhabited island. At least 5 Atoll Councilors in each atoll. In order to support the salaries of all these people, the civil servants, and the politicians, our country will be spending almost Rf5 billion every year, while the government revenue reaches almost only Rf7 billion! The situation gets worse with the increased number of political appointees, and the promises of the politicians to increase the salaries of the civil servants.
So, what have we achieved since the reforms began? I see, mostly ‘rent-seeking’ activities, whereby people in powerful positions and high bargaining power, trying to maximize their personal gains, and trying the control as many poor, helpless people in the society. The society has become so polarized, the objective of the people in the opposition being toppling the government at any cost, even if it means destroying the society at large.
On the macro front, the economy has become extremely vulnerable, and the country is spending about Rf 900 billion on imports of goods every month. When we take into account the outflow of dollars from Maldivians traveling abroad, and other expenditures, we are spending more than we earn, at every level of the economy. Meaning, the government expenditure is greater than its revenue. The dollar outflow is greater than the inflow. At the end of the day, the country is faced with a twin deficit – a budget deficit and a current account deficit. Meanwhile, the IMF has stated that Asia will be engine of growth in 2010 and 2011, with high economic growth in China, India, and other South East Asian economies. Our closest neighbor, Sri Lanka, expanded its economy by 8.5 percent in the three months to end June from a year earlier (Bloomberg). Its economy is expected to grow at 8 percent this year according to the Central Bank of Sri Lanka.
Bottom line is, we are paying a very high price for the reforms that we began few years ago. Hey, I’m not saying that we go back to the old days, or to amend the Constitution like the Sri Lankans did.
Tuesday, September 21, 2010
Our capital Male' - making the place livable
| Osaka | Male' | |
| 2 room apt rent | 2,218.00 | 1,400.78 |
| cup of coffee | 6.10 | 2.72 |
| gasoline liter | 1.41 | 0.70 |
| fast food meal | 7.21 | 7.00 |
Male' has become such an expensive city, as cost of living has increased dramatically over the last six years, and it is still on the rise. What led to the sudden transformation of Male'; migration of many from the atolls in search of jobs, better health care and better education. As the population increase, it creates a bigger market for the businesses, and hence, more jobs are being created. This led to attraction of more people to settle in Male'. So, it is a vicious cycle of increasing urbanisation. The 2004 tsunami was a shock that intensified the situation, after which the rent prices in Male' hiked alarmingly as there was a sudden flow of migrants from the atolls, thus, boosting demand.
It makes economic sense to have a large population, and there are many commercial benefits of it. However, not at the expense of the deteriorating social fabric of the society, and the low quality of life as more than hundred thousand people live on the small island of Male'. Large families live in small rooms, husband and wife do not get their privacy, children do not have enough space to study and run around, youth do not have enough entertainment opportunities, and the list goes on.
Another drawback is the extremely high rent prices in Male', eating up a high proportion of the income of many workers. Hence, teachers, doctors and other civil servants have no choice, but demand higher salaries. These huge salaries again lead to further increasing prices of goods and services, together with rent prices.
In order to prevent further migration, and to reduce the population of Male', other atolls, or other city centers with bigger land space need to be developed. Places like Hulhumale', and other big islands like those in the South. An immediate and urgent attention has to be given to this matter, and what's most important is the political will to do so. If housing units can be developed in Hulhumale', and attractive financing packages arranged, government can easily afford to reduce the salaries of the civil servants. If the teachers and other civil servants are given cheap accommodation, they should be willing to accept even a lower salary than their present one.
It is extremely important that government policies are geared in that direction rather than developing further infrastructure in Male'. However, the government has recently announced that 1,300 housing units will be built in Male', and has identified the location/sites for these developments. This will again lead to further inflow, and deteriorating the 'livability' in the island. We can easily divert these funds to Hulhumale' or any other atoll, so that social conditions in Male' will improve.
Thursday, September 16, 2010
Education and development - pathetic case of Maldives College of Higher Education
In our case, we have achieved universal primary and secondary education, and our literacy rate is relatively high compared to other developing nations. However, our tertiary education system has been very much neglected for a long time. The Institute for Teacher Education was established in 1984, and laid the foundation for producing quality teachers to teach in our primary and secondary schools. A few years later, in 1987, the School of Hotel and catering services was established, and provided the opportunity to train people for the tourism industry. In 1991, the Maldives Center for Management and Administration (MCMA) was established, and started providing valuable management and accounting courses. In 1998, the government formed the Maldives College of Higher Education (MCHE), and the previously mentioned institutions were changed into faculties and brought into the umbrella of the college.
Since then it has been 12 years. The academic standard of our college has not been improving year by year, rather it has been deteriorating. The college has not been able to create an intellectual environment, with academic debates and discussions, extremely vital for the developmental policies of this country. The country needs a strong academia with research, so that evidence-based decisions are made, and policies are formulated accordingly. The college has not been able to develop its standards so that it can achieve the University status. I remember back in 2004, the Faculty of Management and Computing (FMC), did not have a enough full time lecturers for microeconomics & macroeconomics (because I had to work as a part-time lecturer at that time). Six years on, even now the faculty is in the same situation. When I compare the overall standard now and back then, it has deteriorated alarmingly now. The situation is no better in the Faculty of Education.
Why has the College not performed to our expectations? What are the reasons for not having a strong pool of lecturers/professors after all these years? I dont know the exact answers for these questions. But, for a start, the admission criteria and procedures need to be reviewed in most of the college faculties, since the quality of graduating students can be maintained only if the college adheres to such criteria. Government needs to review the situation and find out the reasons why academic staff are not retained in the college, and implement measures to improve the situation. Government also needs to review the performance of the top management of the College, the College Council, and bring about necessary changes. Most of all, the government needs to acknowledge the importance of tertiary education, a strong academia, and credible research for the development of the country.
What we see are large, nice buildings that have been built with the loan assistance of international institutions, however, the quality of education, and the quality of the courses do not match up to the architectural quality of the buildings. We always tend to give too much emphasis on the physical infrastructure (hardware), rather than the quality of service or human resource (software). As a result, we've got modern physical infrastructure, but very weak software to operate this hardware.
Monday, September 13, 2010
Privatize Bank of Maldives
However, last two years have not been such favourable years for the bank, and this was made worse by the negative publicity in the media about the health of the bank. Recently, with the publication of its 2009 Annual Report, we have been hearing more about the bank, especially when it was revealed that the bank's earnings and profits fell during last year.
Briefly looking at the financial statements, we see that although deposits have increased, lending of the bank has fallen by almost 17 percent. Earnings per share has fallen to Rf9.3 in 2009 from Rf50.2 in 2008 (an 82% reduction). The bank has increased its investments on government securities despite its low appetite on commercial lending. All these factors remind me of only one thing, once again; that our bank should not be owned by the government.
As at now, the government directly holds 51 percent of the bank, while the public holds only 29.3 percent. Which means, there are 8 directors nominated by the government, and 3 elected by the public shares holders, in the board of directors. The fact that the government has the control of the bank, has led to the bank doing many mistakes in the past, like engaging in 'connected-lending', where lending has been done to politically connected people. Some of these connected people have less probability of repaying their loans on time, as a result, the bank's profits will be affected. Another drawback of the government ownership is its influence on the bank regarding investments on government securities. Since, the Ministry of Finance is the owner of the bank, and the ministry is also the seller of government treasury bills, the Ministry is in a position to instruct the bank to invest on these securities, when the government is in need to finance its budget shortfalls. In this case, the bank is not acting in the best interest of its share holders and its core business, further, the private sector will be deprived of its borrowings.
For this reason, it is always advised that commercial banks are freed from government ownership; instead, they be better regulated, monitored and supervised by the state. I don't seem to understand why the government has been so keen to privatize places like Ghiyasuddin, or the Islamiyya School, when these places are public education schools, with relatively good standards of education. If the government genuinely believes that the role of a government should not be conducting businesses, privatization of Bank of Maldives should be on the top of their privatization list. With limited government ownership, and strong regulation by the MMA and CMDA, the bank can be strengthened, and be able to serve its purpose better and effectively.
Thursday, September 9, 2010
Why we need a United Maldives
From our very early childhood, we've been reading and hearing about the uniqueness of our country, Maldives. I've always been proud to say 'I'm from Maldives', whenever I get introduced to someone while abroad. We have been unique not only due to the geography or the natural beauty of our islands, lagoons and seas; but also due to the homogeneity of the population. We've been boasting about this 'one-ness' all the time, saying that we speak the same language, we are the same race, we have the same religion. And until recently, we always had the same President. So, we were 'unique', and that's the story of Maldives. That's not all, we've also been talking about the peacefulness of our islands, with no violence, no protests, and very less crimes; almost a 'Pleasant-ville' kinda place, where people have been kind, polite, obedient, and well-behaved. I can still remember those days., and I'm not that old.
But now? Do we still have that one-ness? I dont think so. Our society has been transformed in many ways, socially and economically. Every day we hear about an incident of either a gang fight, or a person being killed, or a person dead being over-dozed, or a political protest, or a mass demonstration, or tourist resort being shut-down because of a strike, or a Supreme Court being hi-jacked by the Police, or a cabinet submitting mass resignation, and the list goes on.
I agree that we've obtained many civil liberties that were non-existent earlier; we've now got freedom of expression, we've got a free media, we've got a separation of powers, and independent Judiciary, a Supreme Court, political parties, a human rights commission, a police integrity commission, and most of all, a brand new Constitution with many political and governance reforms. However, I still wonder, are we 'better-off'? Will you choose violence for peace and harmony? Will you choose polarization and political dividedness to national unity? Will you choose gang violence to the peacefulness we had in Maldives? I don't know about you, I surely dont want most of the reforms at the expense of the uniqueness and the one-ness that we had.
From an economic and developmental point of view; why do you think most of the African countries are still lagging behind on economic development? According to two famous economists Easterly and Levine, ethnic fragmentation has been a big impediment to economic growth in Africa. Many other factors like corruption, mis-trust to the institutions, the judicial system, and higher authority, are all impediments to growth and development. Today, we see similar characteristics in our society. The country is becoming fragmented and polarized. There people of different political parties, with different opinions or personal grudges. There are people following different sects of the religion, or having their own 'group' of friends with their own style of dressing. There are many expatriates, with their own set of beliefs and culture. There are 'gangs' with their rival other 'gangs'. There are many independent and autonomous institutions or commissions working 'on their own', without any regard to others. With all these, I dont see many possibilities of our country moving forward with further economic growth and development, unless somebody somewhere does something to unite us all once again.
Tuesday, September 7, 2010
Local Councils - can we afford these governance reforms?
We are also getting Island Councils to replace the Island Offices, and each Island Council is to be run by Island Councilors. A minimum of 5 (five) Councilors will be there in each Island, some islands having 7 (seven) depending on their population size. So we would expect a minimum total of one thousand Island Councilors to be elected in the whole country. With a salary of Rf15,000 each, it would come to Rf15 million per month in salaries for only Island Councilors.
In total we will be spending about Rf19 million per month only on the salaries of these Atoll and Island Councilors. On top of that, there will be a new institution, the Local Government Authority, with a new set of staff and other expenditure.
End result? The Island Councilors will be from different political parties, even the Atoll Councilors will be from different political parties. The Local Government Authority will have members from different parties, and in the end, just like our Parliament, there will be minimal productive work done in all these institutions. The politicians in the Councils will get monthly fat salaries, and they will argue, fight, conspire, and promote their party policies. We would have a textbook model of democracy, local government, or decentralization, however, in practical terms, I don't envisage a situation where things would run as smoothly as they are outlined in the Act. Main reason is that we dont have enough people who are sincere, competent and with the will to govern, and make things better. Most of all, I don't think our country can afford it economically.
Monday, September 6, 2010
You wanna be a Parliamentarian?
That's not all. They get to choose the Supreme Court Judges, Civil Service Commission, Human Rights Commission, and all the other Commissions, plus the Broadcasting Corporation board directors. They can question the Ministers, well, almost anybody in this country. And they get Rf 62,000 per month as a salary with many other benefits like health insurance, sick leave. What more can you ask for?
The Parliament is considered as one of the three 'powers' according to the Constitution. The President doesn't get four months holiday, and the Judges dont get four months holiday. The Majlis is supposed to supervise, and oversee the work of the government, independent commissions, and the judiciary, yet, the Majlis is on leave most of the year?
Thursday, September 2, 2010
Can you believe it? People gather at President's Residence to protest about 'Baibalaa'
So, considering all the various social and economic problems facing today, I just couldn't believe that priorities could become Bai-balaa all of a sudden. Apparently the President came out and met the crowd, assured that he will look into the matter. (http://www.sunfmlive.mv/beta/?page=details&id=2161)
Monday, August 30, 2010
We are heading into another recession?
Just when we thought the American economy is on the path of recovery, and hence there is hope for the world economy, we have started to see signs of a second recession - what we normally call a 'double-dip' recession.Many economists have tried to study the impact of the stimulus spending by the US government on the actual GDP growth. And from what we know, close to $800 billion has already been spent since the second quarter of 2009. Many are now predicting a slow down in the American economy as these stimulus spending has already run out, and this is evident from the predictions shown on the chart above.
The Fed Chairman Ben Bernanke last Friday expressed some hope for the year 2011, however, he also acknowledged that the economy was weaker than hoped and promised additional measures.
However, there is serious doubt as to how much intervention Bernanke is referring to, as the politicians at the Congress are less willing to spend additional money as stimulus, despite policy recommendations by some economists like Krugman and Stigilitz, on continuing the stimulus spending.
Hence, with low investor confidence and a dearth of policy interventions, there is every reason to believe that we are headed into a double-dip recession. What's more disturbing is the fact that many have started to predict that this recession could turn into a prolonged depression, similar to that experienced by Japan recently for a decade. “There are many ways in which you can see us almost surely being in a Japan-style malaise,” said the Nobel-laureate economist Joseph Stiglitz,
Sunday, August 22, 2010
Reminding ourselves about the 'Asaasee's
Number of deaths within last three weeks: 1
Total injured within last three weeks: 8
Source: Haveeru
Last thursday, a 16 year old boy was attacked by knife. Male' streets have become unsafe, and what are the authorities doing about it? We have all hired a President, and paying him Rf100,000 every month. We have hired 77 Parliamentarians, and paying them all Rf4.8 million every month, and all these people have appointed and put in charge Judges, and we are spending more than Rf700,000 every month to all of them. On top of that, we have at our service Police, and a Defense force, and I'm not sure how we are spending in total every month on them. Yet, our streets are unsafe, young children are being killed.
...And we are being told that we have a new Qanoon Asaasee, and with the new Qanoon Asaasee, we have a better governing system; we have a separate Executive, a separate Legislature, and a Separate Judiciary. With new political and governance reforms, things are ought to get better. Maybe, we need to revisit to the basics: Qanoon Asaasee also means the 'basic or primary law'. When I say returning to the basics, I am referring to the main objectives we are trying to achieve. The only reason we want political reforms or governance reforms, or democracy, is for us to achieve some basic objectives. We need to achieve some outcomes, and in order to get there, we have all agreed on to form some basic laws, and then enact other laws and regulations. Then we have all agreed to hire some people according to these laws, and allow these people to serve us; to uphold the laws and regulations, to work for us in order to achieve those objectives that all want to achieve.
So what are those objectives? I'm guessing one of them could be, a safer society with less crimes. A society where people do not have a fear that they could be attacked by another and killed on the street. A society where, even if somebody harms another, that person is properly punished, and such acts are prevented. I'm also guessing that we want to respect the human dignity. I'm also guessing we want to achieve economic prosperity, ensure that people are properly fed, appropriate clothing, and shelter is provided. Appropriate education and health services are provided. We want to have a decent job, and earn a living. So, these are some of the basic objectives we want to achieve, and everything else is just a means to achieving these objectives. So, be that the Qanoon Asaasee, or any other law or regulation. If, the Qanoon Asaasee, the Laws, the Regulations, the President, the Parliamentarians, the Judges, the Police, and whoever I've left out, cannot work together to achieve these objectives, then I'm thinking,...we have serious problems to rethink about.
Thursday, August 19, 2010
Sin City
The Courts or the Judges might say, there is not enough evidence to convict according the existing laws. The Police might say, the Courts are not doing their job, and Parliament doesn't provide appropriate laws to do their job. The Executive has been blaming the Judiciary on this matter.
In another case, within this week, two men serving their 15 year sentence were released, saying that they get a 3 year probation, and if they do not commit any crime during this period, their sentence is pardoned. And these two guys are those involved in the Sultan Park bombing. Unlike in the first case, these two guys have been already convicted, and serving their sentence. And just like that, the government decides to pardon them, those who have committed acts of terrorism, and as a result our country suffered immeasurable damage in the international forefront.
So, Maldives has become a haven for anybody with a mind and will to commit crimes, hu? There's less chance you'll be convicted, and even if did get a sentence, the government will pardon you within 2-3 years.