ECONOMIC FREEDOMS of Maldives

The Maldives’ economic freedom score is 48.3, making its economy the 154th freest in the 2010 Index. Its score has decreased by 0.7 point from last year, with modest declines in half of the 10 economic freedoms. The Maldives is ranked 34th out of 41 countries in the Asia–Pacific region, and its overall score is below the world and regional averages.

Despite the sharp downturn in 2009, the Maldives has undergone average economic growth of over 6 percent over the past five years. However, continuing measures to enhance competitiveness will be vital. The Maldives scores relatively well in business freedom and fiscal freedom. The overall regulatory environment is streamlined and transparent. With no system of direct taxation, government revenue relies on import taxes, tourism taxes, and income generated by state-owned enterprises.

The Maldives’ weaknesses include chronically high government spending, inefficiency of the outsized public sector, and widespread corruption. The government still plays a large role in the economy through state-owned enterprises, limiting and crowding out private-sector activity. Public ownership is widespread in every sector except tourism, and the public sector remains the largest source of employment, hiring over one-third of the labor force.

BACKGROUND
The Maldives held its first multi-party presidential elections in October 2008. President Mohammed Nasheed was sworn into office on November 11, 2008, succeeding Maumoon Abdul Gayoom, who had ruled the country for 30 years. The Maldives has largely recovered from the devastation caused by the 2004 Asian tsunami. Tourism is the centerpiece of the economy, contributing 30 percent of GDP in 2009. Fishing employs about 11 percent of the labor force, and manufacturing provides less than 7 percent of GDP.

BUSINESS FREEDOM

The Maldives’ regulatory framework has been streamlined and has become more conducive to entrepreneurial activity. However, impediments to sustained private-sector growth and diversification remain considerable, in large part due to other institutional deficiencies such as corruption and weak protection of property rights.

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Maldives signs US$13.7 mln credit agreement with World Bank

The government of the Maldives signed a credit agreement of US$13.7 million with the World Bank (WB) last week in order to accelerate economic growth by supporting key areas of the government’s macroeconomic programme.

A press release from the WB indicated that the financing includes approximately US$1.7 million from the International Development Association’s (IDA) Pilot Crisis Response programme. The WB stated that its programme for the Maldives supports the government’s credible set of reform measures to achieve upper-middle income status through economic diversification, more equitable access to services and opportunities and improved service delivery to sustain growth.

It said the focus of support will be public financial management, public enterprise reform and social protection. WB Country Director for Sri Lanka and the Maldives Naoko Ishii said the WB is pleased to support the government’s efforts to put in place important policy and institutional structures that will help regain and sustain inclusive economic growth.

The WB stated that the proposed programme is consistent with the Maldives Country Assistance Strategy (CAS) for 2008 to 2012 which aims to support the government’s efforts to better manage the economy and public finances. The WB programme is part of a broader financing effort to the support the Maldivian government with the International Monetary Fund (IMF) and the Asian Development Bank (ADB) also providing support to the government’s programme to help regain macroeconomic stability.
The IMF has approved approximately US$92.5 million over three years while the ADB has approved a US$35 million budget support operation with half expected to be disbursed in 2010 and the other half planned for mid-2011.

Source: http://www.sundaytimes.lk

South Asia’s ‘Historic Elections’ May Spur Economic Integration

South Asia’s “historic elections” in the past 18 months have advanced democracy in the region and may spur economic integration, said Sheel Kant Sharma, secretary general of the South Asian Association for Regional Cooperation.

The South Asian grouping, called Saarc, which includes India, Pakistan, Sri Lanka, Afghanistan, Nepal, Bangladesh, Maldives and Bhutan, has struggled to give a boost to the free- trade pact they adopted in 2004. Trade between Saarc members is 5 percent of the countries’ total, compared with 55 percent among European Union nations, according to the Federation of Indian Chambers of Commerce and Industry.

“There is democracy everywhere in South Asia now and so the confluence increases at overall policy levels,” Sharma said in an interview at the Saarc headquarters in Kathmandu, Nepal, on June 24. “All the countries are wedded to the principle of growing together.”

Since last year, Nepal ended its 240-year-old monarchy, the Maldives overthrew Maumoon Abdul Gayoom’s 30-year regime, Pakistan got a new government after almost a decade’s reign by coup leader Pervez Musharraf and Bangladesh held national polls in December for the first time since 2001. Indian Prime Minister Manmohan Singh won re-election in May.

Even though trade in the region has been frustrated by hostility between nuclear weapons-armed India and Pakistan, the two governments have pledged to restart peace talks by next month. Saarc members are also working on a plan to cut non- tariff barriers, improve transport connectivity and reduce their “sensitive list” -- items that are banned from trading -- by at least 25 percent by the end of the year, Sharma said.

‘Stumbling Block’

“There is an attempt to get the economic agenda going in Saarc,” said N. Bhaskara Rao, chairman of the Center for Media Studies in New Delhi. “But bilateral problems between India and Pakistan and unrest within some member states will be a stumbling block.”

Saarc was established in 1985 to improve livelihoods in a region that is home to half the world’s poor. After 24 years, the nations in Saarc, where a quarter of the world’s population lives, contribute less than 2 percent to global commerce.

Economic progress in South Asia has suffered because of the rivalry between India and Pakistan, which account for four- fifths of the region’s $1.3 billion economy. India accuses Pakistan of supporting armed extremists in Jammu and Kashmir, its only Muslim-dominated state. Pakistan denies it and says it offers only moral support to separatists.

Peace Talks

India’s Prime Minister Singh said June 17 that peace talks with Pakistan may start by July. Pakistan’s foreign office said June 25 that talks between the two sides were “unavoidable” for “durable” peace in the region. Talks between the two sides were stalled following the Nov. 26-29 attacks in India’s financial capital of Mumbai that killed 166 people. India blamed the Pakistan-based Lashkar-e-Taiba for carrying out the assault.

Saarc members also face internal problems. Pakistan and Afghanistan are grappling with the growing influence of Taliban and al-Qaeda fighters. In Nepal, political chaos has flared again as Maoist supporters staged nationwide demonstrations after their leader Puspa Kamal Dahal resigned as prime minister last month.

“As part of the political process, there have been differences in Nepal, but they are trying to sort them out within the political system,” said Sharma. “In Pakistan, the radicals were beaten in the elections and what came forward was a democratic government.”

Tamil Tigers

Similarly in Bangladesh, elections heralded a new government, “which is very reassuring,” Sharma said. In the Maldives, the long incumbency of the previous administration “led to popular discontent” and that has changed, while Sri Lanka has been able to deal with its problems after defeating the Tamil Tiger rebels, the secretary general added.

“I would view the electoral developments in the region as positive and an agent for change,” Sharma said.

He said member countries are working to harmonize customs- clearing procedures and have backed plans to put consignments originating in Saarc countries and destined for other Saarc nations on a fast track in terms of time taken for clearance.

Saarc has also identified developing ten regional road corridors, five railway corridors, two inland waterway corridors, ten maritime corridors and three aviation gateways to improve transport links in the region, Sharma said.

The New Delhi-based Federation of Indian Chambers of Commerce and Industry said bolstering democracy across South Asia would give a fillip to Saarc, and that if tariffs were slashed, intra-regional trade could rise by as much as four times to $100 billion in five years.

Source: bloomberg.com

The Maldives Tourism office is attracting investors to develop 60 of its exotic islands in projects worth $3 billion.

Dr Ahmad Ali Sawad, Minister of Tourism, Arts and Culture, said the government is focusing on four main areas, including facility development, training, medium-grade resorts and the diversification of tourism products such as eco-tourism to support the country's development.

"Since the 1980s, after entrepreneurs started entering the country, we experienced a steady rise in tourism, which has now become a major factor contributing to the economy," said Sawad.

In developing the islands within the next few years, smaller communities will be able to thrive and sustain themselves. At least 9,000 extra bed spaces will be developed, hundreds of jobs will be created and community-based tourism will help preserve local culture and heritage. Development of its international airport at Hulhule is also expected to improve capacity and services.

Although the Maldives is fundamentally considered to be a luxury high-end destination, Sawad believes catering to the average traveller will boost the tourism industry further.

"Let's face it: we are in a crisis at the moment during which time outgoing traffic is slowing down," he said "However, we feel we have a unique offering and will focus more on small and medium accommodation to cater to budget travellers."

Promotional campaigns that aim to attract a higher number of visitors from the Middle East will also be put into place soon. At the moment, travellers from the region make up less than two per cent, with the highest number of travellers being from the UK. That group is followed by Italy, Germany and China and Russia.

"It is as good a time as any to attract more Middle Eastern travellers when a substantial number of routes are offered," added Sawad.

"Still, we are looking at better access to the region through further direct routes, applying consistent exposure and a marketing campaign that pushes brand awareness."

The government foresees that with a rise in visitor numbers, there will be a huge demand for a more efficient transport system linking the islands.

Source: gulfnews.com

BML CEO set to leave this month

CEO of Bank of Maldives is scheduled to leave to her country on the 25th of this month. Although there has been no official statement on the issue, a senior official of the bank said that it has been said so and that there are signs of it being true.

Minister of Finance and Treasury Ali Hashim said that there has been such reports and that they are discussing with related authorities, but that he would not reveal anything formally now.

Miadhu News learns that although the government has assigned and announced a new board of directors for Bank of Maldives, the newly installed Board is yet to assume any responsibility. Minister Ali Hashim has also said that the changes could be brought after holding a bank meeting and that it would take around 3-4 weeks for formalities to be completed.

The Audit Report recently publicized by the Auditor General states that actions taken by CEO of Bank of Maldives without consulting the board of directors has caused huge losses the bank and that the CEO has allegedly used bank finance for personal benefit.

Therefore, a lot of people are concerned that the CEO of Bank of Maldives is set to leave the country without being held accountable for her actions at a time when the President and Finance Ministry is looking into alleged corruption involving the Bank of Maldives scandal.

Source: miadhu.com.mv

Sri Lanka investors wooed by Maldives

The new government in the Maldives, in move to privatize the economy, is looking at selling state-owned businesses and becoming more investor friendly, the Maldivian leader said on a visit to Colombo.

“We come here to open the country for business. We are looking at an ambitious decentralization program. We have some state-owned 'white elephants' that we are looking at offering to Sri Lankan businesses that are interested in investing in Maldives,” said President Mohamed Nasheed.

“The Maldivian government does not want to be the majority share holder when it is privatized.”

Nasheed, who is on a three-day official visit to Sri Lanka, told local media that he is inviting existing Sri Lankan investors in the Maldives to diversify their business and move into other areas of the economy in future.

Sri Lankan investments are heavily concentrated in the lucrative high-end hotels sector.

“We are requesting Sri Lankan companies to diversify their business from tourism to power, transport, port, airport and infrastructure. We are looking at investments in social security sectors such as healthcare and education.”

“Galle Face Hotel is investing in an island that has an airstrip. We want them to invest in an airport as the tourists who will come to the resort will need an airport.”

Most Maldivian citizens go to neighboring countries for their education and health needs. Nasheed and former president Abdul Gayoom both received their primary and secondary education in Sri Lanka.

Nasheed said 10 percent of grid electricity capacity in the Maldives is owned by Sri Lankan operators.

Taxing stimulus

Nasheed said in the face of the global financial crisis his government has taken a policy decision not to seek funding assistance but to adopt a private sector stimulus package that would return tax revenues to government coffers.

“We asked the International Monetary Fund and the World Bank not give money to the government as it’s very unproductive,” said Nasheed.

“We prefer to take tax money generated via these investments.”

Maldives is one of the largest exporters of blue fin tuna, a staple diet in high-end markets such as Japan. The other big money-spinner is the tourism sector.

Amidst the global financial crisis, by-end November 2008 over 620,000 tourists had arrived in the Maldives, an increase of 16 percent from 2007. Over 70 percent of the tourists came from Europe.

Sri Lankan hoteliers such as Aitken Spence and John Keells are amongst the largest foreign leisure operators in the tiny atoll nation.

John Keells operates three high-end resorts under the brand name Chaaya and Aitken Spence Hotels operates seven high-end resorts under the Adaaran brand.

Analysts say most hoteliers in Sri Lanka are surviving due to their Maldivian investments.

“The current security and economic situation in the country and the global financial crisis has hit local hotels badly. Already, a few operators who did not invest outside Sri Lankan are in deep trouble,” said Danushka Samarasinghe, research manager at Asia Securities.

“Sri Lanka’s JKH and Aitken Spence has benefited by investing in the Maldivian hotels sector and the recent proposals of the Maldivian government to further liberalize the economy would create opportunities for Sri Lankan corporates to reduce country risks and boost foreign earnings.”

Tangled web

The Maldivian archipelago is a chain of 1,190 small coral islands grouped into 26 atolls and its 1.6 billion dollar economy is dominated by tourism and a thriving fisheries industry.

The former British colony gained independence in 1965 and was an Islamic sultanate till 1968.

Maldives was ruled by President Nasir till 1978. Thereafter former president Abdul Gayoom ruled for the next three decades, the longest serving head of state in the Asian region.

In the 2008 presidential election, Gayoom lost the election amidst corruption charges. Nasheed won with a 54 percent majority to govern the Maldives' 350,000 strong population.

Nasheed, a former journalist, was an outspoken critic of Gayoom’s government.

Much of Nasheed’s election campaign under the Maldivian Democratic Party banner was launched from Colombo as he fearing persecution by Gayoom.

Political analysts say even though Gayoom has vacated the country’s top seat his political cronies are still in important positions.

Nasheed said some of the former government's contracts have been irregular but that he does not want a 'witch hunt'.

Nasheed said his government will be taking a fresh approach to clean up corruption and red tape that’s hindering investment and development of the country.

“We want to be transparent and operate by the book and it will happen,” said Nasheed.

Source: lankabusinessonline.com

Credit facility for Maldives, Bhutan

The government on Friday decided to give a multi-million dollar credit facility to neighbouring countries Maldives and Bhutan. The Cabinet meeting here approved a $100 million stand-by credit facility to Maldives, which elected its President in the first multi-party elections recently.

Of this, $50 million would be used for imports from India, home minister P Chidambaram told reporters after the meeting. The remaining 50% is for budgetary support, he added.

“The credit would provide aid to a close strategic neighbour in the hour of need and promote greater trade with India,” he said. Mohamed Anni Nasheed took oath in November as the first democratically elected President of the Maldives.

In case of Bhutan, the government approved an increase in assistance for Bhutan's 10th Plan by Rs 600 crore during July 2008-June 2013. The rise in aide is over and above the already-approved Rs 4,587 crore which is to be used as project-tied assistance.

The Cabinet also gave nod to a stand-by credit facility of Rs 300 crore at an interest of five per cent per annum to Bhutan for meeting the rupee payment obligations.

In another decision, the government sanctioned Rs 1,798 crore to enable Indian Space Research Organisation to develop a semi-cryogenic engine to power future inter-planetary missions within six years.

India will become the third country, after the US and Russia, to have developed the advanced propulsion system which will be used to launch space shuttles and future space missions.

“The semi-cryogenic engine will facilitate applications for future space missions such as the Reusable Launch Vehicle, Unified Launch

Vehicle and vehicle for interplanetary missions,” Chidambaram said.

Source: www.financialexpress.com

Research and Markets: 2008 Asian - Fixed Voice Market Report Provides an Overview of Some of the Main Players in That Segment of the Market

Research and Markets (http://www.researchandmarkets.com/research/9419b9/2008_asian_fixed) has announced the addition of the "2008 Asian - Fixed Voice Market" report to their offering.

This market report looks at the fixed-line market in Asia and provides an overview of some of the main players in that segment of the market within the various economies of Asia.

While the fixed-line market is growing at a comparatively slow pace and is overshadowed by frenzied activity in the booming mobile market, fixed infrastructure remains an important component in the overall development of the telecom sector. By March 2008, Asia had a total of more than two billion telephone subscribers; of these, more than 630 million were fixed-line subscribers, the remainder of course being mobile subscribers.

The standout market in terms of fixed-line subscribers is China with its 365 million subscribers representing more than half the total regional subscriber base. As shown in the table below, China is well ahead of the rest of the market in this respect. It is interesting to note that a number of the highly sophisticated telecom markets in Asia are also highly penetrated fixed-line markets; leaders in this regard are Taiwan (63% teledensity) and Hong Kong (54%). These two are followed by Singapore (42%) and Japan (40%).

Key Topics Covered:

• 1. AFGHANISTAN 1
• 2. ARMENIA 4
• 3. AZERBAIJAN 6
• 4. BANGLADESH 8
• 5. BHUTAN 14
• 6. BRUNEI DARUSSALAM 15
• 7. CAMBODIA 17
• 8. CHINA 18
• 9. GEORGIA 37
• 10. HONG KONG 39
• 11. INDIA 47
• 12. INDONESIA 69
• 13. JAPAN 84
• 14. KAZAKHSTAN 102
• 15. KYRGYZSTAN 106
• 16. LAOS 108
• 17. MACAU 111
• 18. MALAYSIA 112
• 19. MALDIVES 121
• 20. MONGOLIA 123
• 21. MYANMAR 125
• 22. NEPAL 126
• 23. NORTH KOREA 129
• 24. PAKISTAN 131
• 25. PHILIPPINES 144
• 26. SINGAPORE 163
• 27. SOUTH KOREA 175
• 28. SRI LANKA 186
• 29. TAIWAN 199
• 30. TAJIKISTAN 209
• 31. THAILAND 210
• 32. TIMOR LESTE 231
• 33. TURKMENISTAN 233
• 34. UZBEKISTAN 234
• 35. VIETNAM 236
• 36. GLOSSARY OF ABBREVIATIONS 242
• LIST OF TABLES
• LIST OF EXHIBITS
• Companies Mentioned

For more information visit http://www.researchandmarkets.com/research/9419b9/2008_asian_fixed

Source: www.earthtimes.org

President urges World Bank to prioritize Maldives private sector

President Mohamed Nasheed (Anni) has said that he had requested the World Bank officials to priorities the Maldives’ private sector over the Government in extending loan facilities. He made this statement at a press briefing held today, on establishing a transport network in the Maldives.

He also noted that the Government does not wish the transfer of people’s homes from one island to another and the Government’s long term plan was to open a national fund that would assist us in protecting ourselves form climate change calamities.

Source: miadhu.com.mv

India looks at more economic engagements with Saarc nations

The government on Friday gave its green signal for the entry of Afghanistan, with a GDP of about $8 billion, to become the latest member of the South Asia Free Trade Agreement (Safta).

In this regard the Cabinet approved the proposal for ratification of the protocol of accession of Afghanistan to Agreement on Safta. “Early ratification of the Protocol of Accession will accelerate Afghanistan’s formal joining of Safta. It will also help in full implementation of Safta by putting pressure on Pakistan to adhere to Safta norms for the sensitive list and give transit to Afghanistan,” information and broadcasting minister PR Dasmunsi said after a Cabinet meeting.

A Safta ministerial council meeting in March this year had recommended that Afghanistan would be treated at par with Maldives as far as Mechanism for Compensation of Revenue Loss (MCRL) under Safta is concerned.

The Cabinet also gave its approval for the establishment of South Asian Regional Standards Organisation (Sarso) and the charter of Saarc Development Fund (SDF). The minister said the establishment of Sarso would enhance economic engagements with South Asian Association for Regional Cooperation (Saarc) countries by cooperating in the field of standards and quality control. It will accelerate full implementation of Safta by harmonising the standards in Saarc, he added.

Dasmunsi said early ratification of the SDF would accelerate the implementation of the regional and sub-regional projects in Saarc. A functional SDF would help change Saarc from declaratory body to an entity that implements projects.

The Saarc countries had earlier aimed to increase the intra-Saarc trade from the present $20 billion to $40 billion in the next 3-5 years. According to Research and Information System for Developing Countries, South Asia has emerged as one of the world’s fastest growing regions with an average growth rate of 8% sustained over the past five years. But RIS adds that the region continues to be home for over 40% of the world’s poor and fares poorly in terms of different indicators of human development.

Saarc was set up in 1985 by the heads of India, Pakistan, Sri Lanka, Bangladesh, Nepal, Bhutan and Maldives to advance common interest. Safta was launched in January 2006 and become operational in July 2006, opening over 4, 000 commodities for trade. In 2007, Afghanistan had joined the Saarc as the eighth member.

The proposal for setting up Sarso follows the establishment of the Standing Group on Standards, Quality Control and Measurements, by the

Saarc commerce ministers in May 1998.

The group had recognised the need for the Saarc Member Countries to forge a Regional Action Plan for the harmonisation of specific product standards and the process of developing regional standards. It was agreed that the member nations would promote mutual acceptability of laboratory accreditation process.

Sarso will now look at providing access to certification scheme relating to product, systems and services of one country by other countries, including exchange of information on statutory rules and regulations having bearing on certification.

To boost intra-Saarc trade through exchange of information in regulatory systems, the countries had agreed that agricultural & food products, building material and household electrical appliances would be covered in the first instance.

It was also agreed that there would be promotion of mutual acceptability of the certification process of Member Countries in relation to safety requirements of products. The countries would also develop a process of accreditation systems based on international norms to facilitate mutual recognition at a later stage. To avoid duplication of efforts, they would share the facility of accreditation bodies to facilitate getting international approval from organisations such as International Accreditation Forum.

There would also be identification of testing and calibration facilities in the region and access to these facilities, besides informing other Saarc countries about various training programmes, and providing a list of experts in their respective fields.

Source: www.financialexpress.com

ADB, IsDB sign landmark US$4 billion cofinancing agreement

The Asian Development Bank (ADB) and the Islamic Development Bank (IsDB) signed on 16 September a landmark cofinancing agreement, which will allow them to work together on projects in common member countries (Afghanistan, Azerbaijan, Bangladesh, Indonesia, Kazakhstan, Kyrgyz Republic, Maldives, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan).

The agreement calls on both institutions to provide up to US$2 billion equivalent each over the next three years to finance projects in their common member countries.

The agreement — which is the first of its kind — is based on a 3-year business plan that includes a common vision, strategic framework, and best practice ideas in development financing.

The cofinancing will mainly target transactions in the infrastructure (including irrigation), utilities, and urban sectors. However, it may also cover education, health and other sectors in selected countries.

"This agreement is unique, timely and in line with the Accra High Level Forum and other international declarations on development effectiveness and harmonization", said Vice President Cisse of the Islamic Development Bank.

"In addition, this agreement provides a new platform from which both institutions will attempt to raise third party funds for investments in the common member countries. This is a breakthrough in collaboration between international financial institutions", said Juan Miranda, Director General of the Central and West Asia Department of the Asian Development Bank.

"The agreement takes us into a long-term partnership mode and it is consistent with the Strategy 2020 of the Asian Development Bank and Vision 1440H of the Islamic Development Bank", said Walid Abdelwahab, Director of Country Operations (Asia) of the Islamic Development Bank.

Werner Liepach, Principal Director of Cofinancing Operations of ADB, added: "Cofinancing is a precondition for effective development work these days and what is particularly enriching in this case is that we have two multilateral development institutions working together on a common platform for the benefit of their common clients."

Source: http://finance.uzreport.com

Promoting tourism in South Asia

South Asian tourism has operated at sub-optimal levels for a long period of time. With the exception of the Maldives and more recently India, all other countries need to work harder towards achieving more conducive operating environments for the tourism industry. Accounting for only 1.1% of the global visitor arrivals, South Asia's recent growth levels indicate promise of the region's ability to move forward, harnessing the vast potential that exists.

Home to marvels such as Taj Mahal, Ajantha, Sigiriya, Timpu and Takshila, the heritage and cultures of the region dates back thousands of years and is talked about everywhere. It has been a hot spot for several of the seafaring nations looking for spices and riches for several centuries in the past. It then became the play ground of several colonial powers. It is now home to almost all of the world's religions.
Yet with some 400 million people remaining below the poverty line and 71 million people affected by violence or its threat, most of South Asia remains a conflict-ridden region in the world. Poverty, health, child and gender related issues are still pulling the region's image positioning down. While the resource-base for tourism is available in abundance, the constraints have been the uncertain political climates, infrastructure and access limitations.

Two significant breakthrough initiatives that has helped tourism growth in the region in the recent past is the relative liberalisation of the Indian aviation industry and the visa on arrival travel initiatives implemented by Nepal, Sri Lanka and the Maldives for SAARC visitors. The phenomenon of economic prosperity for the region vis-à-vis 'Chindia' is another motivator creating hope for the future.

In order to fast forward the movement of tourist visitors to and within the SAARC region the following initiatives are recommended for implementation:

• Further liberalise air access between countries of SAARC, facilitating any SAARC airline to operate to other SAARC countries without restriction
• Facilitate ocean and other water based, road and highway and railway transportation of people of the SAARC (to serve tourism as well) through the liberal operation of fast ferry services, shipping services and cruising operations and exploring road and rail transport options
• Undertake joint programmes at both regional and bi-lateral levels to jointly develop infrastructure and institutions needed for setting in place tourism operations and investments driven in the main by the private sector or as public/private partnership ventures
• Commence joint initiatives at both governmental and private sector operator levels to enhance the current Buddhist circuit, the Ramayana Trail and other regional and bilateral thematic tour circuits
• Undertake the publication of an annual South Asian Tourism Events Directory (to be published an year in advance to enable tour sales for the events)
• Commence a twinning of cities programme within the SAARC region Establish a SARRC joint Climate Change Response using Sri Lanka's pioneering 'Tourism Earth Lung' initiative as the platform.

In 2007, the South Asian region had only less than 1.1% (9.7 million) of the total visitors from around the world of 898 million, coming over to the region. In comparison, Europe had 53.5% of the global arrivals, with the Asian region including East and Southeast Asia having 19.3%. Volume of arrivals to the Asia-Pacific region also more than doubled from 2000 to 2007 from 85 million to 198 million. Within this growth scenario regrettably, most of South Asia only saw marginal growth with the exceptions of some significant growth from India and the Maldives.

We have for several decades now, promoted regional tourism. As far back as the early 1980's the World Tourism Organisation (now UN WTO) set up a secretariat for South Asian Tourism Promotion based in Colombo and attempted to promote the region. This initiative failed as there was inadequate support and interest from the individual nation's state tourism organisations for its sustenance.

In the 1990's The SAARC Chambers of Commerce and Industry (FCCI) began a Nepal based initiative to promote tourism to the region. A special Tourism Committee was formed and several rounds of meetings were held. A promotional tagline of 'Magic that is South Asia' was coined and talk of a regional tourism year was initiated. It was thought that the ice would melt if private sector business and tourism stakeholders took the lead in taking regional tourism initiatives forward. Several South Asian Tourism business and trade marts have been held since then.

On the formal inter-governmental sphere, tourism occupies an important position and in the official website of the SAARC Secretariat. The First Meeting of the Working Group on Tourism was held in Colombo on 16 to 17 August 2004. In addition to the SAARC Member States and representatives of the Secretariat, representatives of the SCCI Tourism Council and the ASEAN Secretariat also attended the Meeting.

Besides reviewing the implementation of programme of activities relevant to its mandate, the Working Group made a number of recommendations for promotion of tourism in the SAARC region e.g. printing of a SAARC Travel Guide, production of a documentary movie on tourism in SAARC, promotion of sustainable development of Eco-Tourism, Cultural Tourism and Nature Tourism, collaboration in HRD in tourism sector by having programmes for exchange of teachers, students, teaching modules and materials, Promoting Cooperation in the field of tourism with other relevant regional and international tourism organizations. It also proposed a number of activities to celebrate the South Asia Tourism Year – 2005 in a befitting manner".

If one were to compare, the progress made on the ground and by other regional tourism initiatives that began its thrusts much later than the SAARC region, such as the Association of South East Asian Nations (ASEAN), Pacific Tourism Commission, European Union (EU) Tourism and most recently The Mekong Tourism Initiative, progress made must be classified at best as wanting.

Within the backdrop of the frustration of the SAARC region's under performance, in 1997, a separate initiative was undertaken led by several governments of the South Asian region titled the South Asian Growth Quadrangle (SAGQ) consisting of Bangladesh, Bhutan, 13 of the North, East and Northeast States of India and Nepal. The Asian. Development Bank (ADB) supported the initiative under the programme 'South Asian Sub-regional Economic Cooperation (SASEC), where a tourism component exists. This is an ongoing programme within the South Asian development framework of the Bank.

The dichotomy that is South Asia
South Asia can indeed be described as a dichotomy. While it has not lived up to expectations as a regional grouping, at the individual country level, tourism development in the SAARC region presents several unique models, containing some successful best practices.

Bhutan, has presented to the world a model of tourism development where its operations are based on the model of a kinked demand curve in creating premium value for the destination. Upon limiting access to tourists to Bhutan to a few tens of thousands, a premium charge is made for the visit, placing the per capita yield from a tourist at a high level. A business model aimed at conserving Bhutan's heritage, cultural and natural resources, it is also in keeping with the unique development indicator of 'Gross National Happiness' this 'Thunder Dragon' nation has presented to the world, as against the key conventional development measurement of 'Gross National Product'.

Maldives, known today as one of the most successful island destinations in the world, works on a business model of establishing strong partnerships with foreign investors and tour operators. Beginning with investments from Sri Lankan conglomerates in the early 1980's (still accounting for about 20% of all hotel rooms), Maldives Tourism, offering the 'sunny side of life' as its positioning platform, is driven in the main by some of the best international and regional brand names in the island tourism business.

Nepal, on the other hand is an example of pioneering a brand of unique community based tourism initiative. With its early model of the Annapurna Tourism Development Project and the Bhakthipur Conservation Project of the 1980's, Nepal introduced a good tourism operational model to the world with its unique nature and heritage conservation, community benefit and sustainable funding features. Sri Lanka, in addressing the challenge of global warming and climate change faced by all nations of the world, has ventured to extend its conventional positioning as a tourist destination of a treasured island with a warm people and a nature, culture, adventure offering to taking advantage of its extensive green cover to strive to be a 'Tourism Earth Lung' working towards being a carbon neutral destination by year 2018.

In my mind, South Asian Tourism could not take off in the past, as a result of three problems. They are:

1. Lack of a pragmatic approach of our political and bureaucratic leadership towards identifying and exploiting socio-political and economic opportunities and the prevalence of an environment of mistrust between India and Pakistan in the past,

2. Self-imposed limitation of access to and within the region as a result of an introvert attitude and

3. Resultant political instability, absence of rapid economic growth and ways of distributing even the growth achieved to minimise poverty.

Outlook for the future
India presents the region's largest economy as well as the largest tourism operation. India has also been the principal trendsetter in determining the region's future, whether it was to be negative or positive. With her economy growing at 9.2% in 2007 and 9.6% in 2006, it is cited as one of the most promising prospects of the world for the future. Growth is supported by market reforms, huge inflows of FDI, rising foreign exchange reserves, both an IT and real estate boom, and a flourishing capital market. India reduced her poverty levels by 10% and achieved a growth in the service sector of more than 11% and the sector forms about 53% of the economy.

The concept of 'Chindia', where the growth dynamics of both China and India will complement as Asia's newest prospects for economic super power status, augers well in positioning India away from the mindset of a poverty stricken country to that of a modern growth economy with a proud heritage and culture.

As a result, India's tourism industry is experiencing a strong period of growth, driven by the burgeoning Indian middle class (for domestic and outbound travel) and growth in high spending foreign tourists. The tourism industry in India is substantial and vibrant, and the country is fast becoming a major global destination and an outbound visitor generating market. India's travel and tourism industry is one of the most profitable industries in the country, and also credited with contributing a substantial amount of foreign exchange. This is illustrated by the fact that during 2006, four million tourists visited India and spent US $8.9 billion.

Several reasons are cited for the growth and prosperity of India's travel and tourism industry. Economic growth has added millions annually to the ranks of India's middle class, a group that is driving domestic tourism growth. Disposable income in India has grown by 10.11% annually from 2001-2006, and much of that is being spent on travel.

Thanks in part to its vibrant IT and outsourcing industry a growing number of business trips are made by foreigners to India, who will often add a weekend break or longer holiday to their trip. Foreign tourists spend more in India than almost any other country worldwide. Tourist arrivals are projected to increase by over 22% per year through till 2010, with a 33% increase in foreign exchange earnings recorded in 2004.
The tourism authorities at the centre and at state levels have also played an important role in the development of the industry, with promotional campaigns such as the "Incredible India" campaign, which promoted India's culture and tourist attractions in a fresh and memorable way. The campaign helped create a never before positioned image of India in the minds of consumers all over the world, and has directly led to an increase in the interest among tourists.

The tourism industry has also helped growth in other sectors as diverse as horticulture, handicrafts, agriculture, construction and even poultry. Recent increased growth in tourism in India has created jobs in a variety of related sectors. The numbers tell the story: almost 20 million people are now working in India's tourism industry.

Recent trends of terrorism, food security, poverty still at undesirable levels, increasing fuel costs and the still looming security issues will continue to pose challenges to unleashing the full potential of India as well as the region. The silver-lining for tourism though is an evident breakthrough in thinking and a strong desire to breakthrough the shackles of the past of protectionism and introvert attitudes of individual nations and the collective psyche of the leadership of the region.

Removing barriers for entry
While it is critical that air, sea and road access is expanded and enhanced if regional tourism development is to take off, it is equally critical to ensure that most artificial barriers in terms of visa facilitation is made as easy as possible for visitors to the region and for each of the countries in the SAARC alliance.

Currently, except for the Maldives, Sri Lanka and Nepal for the rest of the countries of SAARC, visa formalities are cumbersome. If one is to analyse the measurers taken in the ASEAN region almost all countries within the region allow visa free or visa upon entry facilitation for intra-regional travel. The ASEAN grouping goes one step further to offer an ASEAN Air Pass, where travelling to one ASEAN country qualifies a traveller to visit other countries at a concessionary airfare.

There is also in effect an ASEAN Hotel Pass (Hip-Hop Pass) with similar incentives. In the EU most countries of the union may be visited with a common EU Visa, obtained from one of the member countries. ASEAN is aiming to have a common ASEAN visa by year 2009. The South Asian region is far from achieving such levels of freeing formalities between countries of SAARC and for visitors to the region.

Promoting South Asian Tourism is not about promotion
It must also be stated that intra-regional tourism promotion to be a precursor to promoting the region for international visitors, as taking that route, will strengthen the capacity within the region to develop better structures and institutions to correct some of the problems that are endemic in the body polity of the region.

Following are a series of process-based actions that are proposed to achieve the objective stated above:

• Further liberalise air access between countries of SAARC, facilitating any SAARC airline to operate to other SAARC countries without restriction
• Facilitate ocean and other water based, road and highway and railway transportation of people of the SAARC (to serve tourism as well) through the liberal operation of fast ferry services, shipping services and cruising operations and exploring road and rail transport options
• Undertake joint programmes at both regional and bi-lateral levels to jointly develop infrastructure and institutions needed for setting in place tourism operations and investments driven in the main by the private sector or as public/private partnership ventures
• Commence joint initiatives at both governmental and private sector operator levels to enhance the current Buddhist circuit, the Ramayana Trail and other regional and bilateral thematic tour circuits
• Undertake the publication of an annual South Asian Tourism Events Directory (to be published an year in advance to enable tour sales for the events)
• Commence a twinning of cities programme within the SAARC region Establish a SARRC joint Climate Change Response using Sri Lanka's pioneering 'Tourism Earth Lung' initiative as the platform
  Conclusion

Tourism promotion is compared to the likes of dream selling. To sell dreams of people, the dreams sold must be beautiful and believable. In promoting and branding South Asia as a tourist destination area, the challenge faced by the marketer is to ensure hat the three key characteristics of brand identity are assured. They are quality, consistency and integrity. To assure that these characteristics are maintained, an intense and continuous effort need be made both at the destination and at the regional levels.
(Excerpts from a presentation made at the recent South Asia Economic Summit in Colombo.)

Source: www.sundaytimes.lk

Maldives can maintain dollar peg if budgets improve: IMF

The Maldives can maintain its dollar peg despite a steep rise in inflation if budgets improve and the island's newly re-constituted monetary authority does not print money to finance fiscal deficits, the International Monetary Fund (IMF) has said.

IMF said the main challenge facing the country was to contain the islands budget deficit which has "reached extraordinarily high levels by international and historical standards."

"The 2008 budget continues to entail a large increase in current expenditures in an election year financed by extraordinary revenue measures with significant implementation risks," the IMF said in a public information notice released this week.

"An over 50 percent increase in the wage bill and quadrupled subsidies, mainly because of administered electricity prices, pushed up overall expenditure to nearly 70 percent of GDP (gross domestic product)."

Foreign Debt

The government was planning to finance the deficit with a "too ambitious" sale of 30 islands, and had decided in Augusts to cut expenditure by 20 percent.

The deficit was financed mainly through a large increase in private capital inflows, including foreign borrowing by commercial banks, which was then on-lend to resort developers.

As a result, external debt increased sharply to near 70 percent of GDP in 2007, increasing external risks.

IMF says "external vulnerabilities will need to be monitored carefully," due to the recent rise in external debt and debt service. Though the debt was largely due to private sector activity, a close eye should be kept on risks to the banking sector.

Inflation was projected at 15 percent for 2008 up from 7.4 percent, but IMF said the country's dollar peg could be maintained if budgets improved.

Dollar Peg

"The Maldives appears to have adequate room to maintain competitiveness under the peg despite the recent rise in inflation, provided imported inflation is not exacerbated by fiscal slippages," the monetary watchdog said.

Exchange rate pegs are broken when governments use large volumes of central bank credit (printed money) to finance budget deficits.

Attempts to maintain pegs (defend the currency with foreign reserve sales) without raising interest rates could then result in a full-blown currency crisis and very high levels of inflation, as had happened in Pakistan and Vietnam in 2008.

Central banks are prevented from raising interest rates and forced to print money by finance ministries. The lack of central bank independence is known as fiscal dominance of monetary policy.

The IMF said a new central bank governor was appointed following the amendment to the Maldives Monetary Authority (MMA) law which separated the positions of finance minister and governor.

"MMA was also empowered to set interest rates and put a ceiling on the amount the government can borrow through its Ways and Means Account," the IMF said.

The government was committed to zero domestic financing of the budget. Analysts point out that any domestic financing should be conducted through the sale of bonds to the public and not the MMA to preserve the peg and low inflation.

Any MMA borrowing - even temporary - would pressure the peg and drive inflation up, undermining the long-term viability of the peg. In the past Maldives peg has been broken several times.

Fixed exchange rates also known as 'hard pegs' can be maintained indefinitely if there is no government financing or bank liquidity financing (discount window operations) by the monetary authority.

Such stable institutional frameworks, known as currency boards, are found in countries like Hong Kong, Singapore and many small islands which are financial centres, which have very high standards of living and small or effective governments.

Sustainable Budgeting

IMF said sustainable measures needed to be found to raise revenue for government, such as corporate tax and value added taxes on sales and tourism and only spend on useful areas.

IMF's executive directors in their assessment said authorities should "develop a realistic medium-term expenditure framework to prioritize spending within the available resource envelope."

The Maldives had seen more democracy in recent years, though the islands have historically reported lower levels of inflation.

Her neighbors like Sri Lanka, India have seen greater democracy, more populist vote buying spending, which has brought very high levels of inflation and abject poverty of parts of the population.

In Sri Lanka large volumes of money is spent on expanding and maintaining the civil service who are an important vote-base.

Analysts say the Maldives could be increasing vulnerable to populist spending on subsidies and civil service salaries which could result in falling living standards of especially of the poorer segments of the population.

Source: www.lankabusinessonline.com

Two companies approach Maldives for oil exploration

Two companies have approached the Maldives government about the possibility of prospecting for oil on the Indian Ocean archipelago, where the last survey in 1992 came up dry, the government said.

"We have had proposals from two parties. It's at an early stage," Deputy Trade Minister Abdulla Salih told Reuters. "It is going slowly at the moment because of a lot of changes at election time."

He declined to name the companies.

The archipelago, ruled for the last 30 years by President Maumoon Abdul Gayoom, is due to hold its first multi-party presidential elections by Oct. 10.

The Maldives is a chain of 1,200 mostly uninhabited atolls 800 km (500 miles) off the southern tip of India, known for luxury beach vacations and its environmental consciousness in developing the tourism that sustains its $1.05 billion economy.

Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) was the last to explore the Maldives, but found no trace of hydrocarbons after surveys and drilling an exploratory well to 900 metres (3,000 feet).

Ahmed Naseem, who headed the Shell survey on behalf of the Maldivian government, said companies had carried out exploration because the islands were formed in the same volcanic activity that created India's Bombay High offshore oilfield.

"It was a huge investment. They would not have left unless they were sure the structure did not allow for oil. But that may not apply throughout the Maldives," Naseem said.

Exploration in the country dates from the early 1970s, when several two-dimensional seismic surveys were carried out in the lagoons of the country's 22 coral atolls and the country's Inner Sea and four exploratory wells were drilled.

The prospect of oil exploration on the islands may strike some as jarring, since Gayoom has been one of the most vocal leaders speaking out against global warming.

His nation is seen as among the most under threat from rising sea levels with three-quarters of its islands standing no more than 1.3 metres sea level.

A U.N. climate change panel predicts seas will rise 59 cm (2 feet) by 2100, which means many of the Maldives' islands would be uninhabitable.

Gayoom, Asia's longest-serving leader, told Reuters in April that he wanted steeper cuts in greenhouse gas emissions, but not from the polluting international flights upon which the Maldives' tourism industry relies. (Writing by Bryson Hull; Editing by Jason Neely)

Source: By Judith Evans (Reuters)

Major Risks To Maldives Economy: ADB

Maldives faces a “major risk” from government capital spending and a “crucial” need to address economic inequalities, a new report from the Asian Development Bank (ADB) has warned.

The Asian Development Outlook report for 2008 sees Maldives suffering the same perils as other Asian countries –inflation pressures, a skills deficit among a young population, and “bloated” fiscal deficits.

But risks including a “shallow” financial sector, excessive government spending, the falling fish catch and the balance of trade are of particular concern for the country, says the ADB, which also highlights “regional disparities” between Malé and the atolls.

Despite highlighting renewed growth post-tsunami and healthy tourism numbers, the report calls for urgent changes in government policy – or else, it cautions, “rapid economic growth just cannot be maintained”.

Wealth Redistribution

“People in remote islands have been left behind in the distribution of gains,” the report warns, despite the economy having “reached middle-income status”.

Income levels have already become a central issue ahead of the country’s first multi-party elections, expected this year.

President Maumoon Abdul Gayoom has cited the increase in per capita income since he took power 30 years ago, but the six declared opposition candidates have all highlighted income inequalities.

Of particular concern are high unemployment rates among young people, with employment ministry statistics showing one in three young people outside Malé is without a job, whilst in the capital, one in five young women and one in six young men is unemployed.

“Vocational and skills training is underdeveloped,” says the ADB, leading to “heavy reliance on expatriate workers”, who according to 2006 census data constitute 45 per cent of the workforce.

Structural

But structural factors are also holding back the country’s growth trajectory, the bank says, warning of excessive government expenditure for the second year in a row.

“The government...pushed up current expenditures to raise public sector wages and continue power and water subsidies in the capital, Malé,” says the bank, echoing criticisms that this year’s is an “election budget”.

The 2008 state budget projects government spending of Rf 12.1 billion (US $933 million), only slightly under record-breaking planned figure for 2007.

Social service subsidies need to be “targeted,” the report says, “in order to keep public debt at a sustainable level.”

The International Monetary Fund and World Bank both warned during 2007 that government fiscal policies were unsustainable.

And meanwhile finance minister Gasim Ibrahim had promised in December 2006 that growth would hit 12 per cent in 2007. But the actual figure for the year was 6.6 per cent, significantly below the 8.7 per cent average for “developing Asia”.

However the ADB predicts an 8 per cent growth rate for 2008 – assuming “additional resorts becoming operational” and “a rebound in the fish catch to normal levels”.

Source: minivannews.com

41 countries are tax havens

Data from the Organisation for Economic Cooperation and Development points to 41 countries as having tax-haven status according to four criteria.

The four criteria are: insignificant or non-existent tax levels, absence of transparency in tax matters, absence of fiscal data exchange with other countries and attractiveness for straw companies with fictitious activities.

Some jurisdictions have taken steps to boost transparency in their dealings with the OECD, which seeks to coordinate economic policies among the world’s leading industrialised nations.

Others, notably Liechtenstein, Andora and Monaco, exchange no information with other states.

However, of the total, 38 countries have made commitments to the OECD to ensure transparency and to exchange data:

1. Anguilla
2. Antigua and Barbuda
3. Dutch Antilles
4. Aruba
5. The Bahamas
6. BahreÐn
7. Barbados
8. Belize
9. Bermuda
10. Cyprus
11. Dominica
12. Gibraltar
13. Grenada
14. Guernesey
15. Cayman Islands
16. Cook Islands
17. Isle of Man
18. Marshall Islands
19. Mauritious
20. British Virgin Islands
21. US Virgin Islands
22. Jersey
23. Liberia
24. Maldives
25. Malta
26. Montserrat
27. Nauru
28. Niue
29. Panama
30. Samoa
31. Saint Kitts et Nevis
32. Sainta Lucia
33. Saint Martin
34. Saint Vincent and the Grenadines
35. Seychelles
36. Tonga
37. Turks et Caicos
38. Vanuatu



The OECD has labelled three states as non-cooperative

1. Andorra
2. Liechtenstein
3. Monaco

Source: AFP

41 countries are tax havens

Data from the Organisation for Economic Cooperation and Development points to 41 countries as having tax-haven status according to four criteria.

The four criteria are: insignificant or non-existent tax levels, absence of transparency in tax matters, absence of fiscal data exchange with other countries and attractiveness for straw companies with fictitious activities.

Some jurisdictions have taken steps to boost transparency in their dealings with the OECD, which seeks to coordinate economic policies among the world’s leading industrialised nations.

Others, notably Liechtenstein, Andora and Monaco, exchange no information with other states.

However, of the total, 38 countries have made commitments to the OECD to ensure transparency and to exchange data:

1. Anguilla
2. Antigua and Barbuda
3. Dutch Antilles
4. Aruba
5. The Bahamas
6. BahreÐn
7. Barbados
8. Belize
9. Bermuda
10. Cyprus
11. Dominica
12. Gibraltar
13. Grenada
14. Guernesey
15. Cayman Islands
16. Cook Islands
17. Isle of Man
18. Marshall Islands
19. Mauritious
20. British Virgin Islands
21. US Virgin Islands
22. Jersey
23. Liberia
24. Maldives
25. Malta
26. Montserrat
27. Nauru
28. Niue
29. Panama
30. Samoa
31. Saint Kitts et Nevis
32. Sainta Lucia
33. Saint Martin
34. Saint Vincent and the Grenadines
35. Seychelles
36. Tonga
37. Turks et Caicos
38. Vanuatu



The OECD has labelled three states as non-cooperative

1. Andorra
2. Liechtenstein
3. Monaco

Source: AFP

India raises limit on export of river sand, stone to Maldives

India has increased the limit on export of construction materials - river sand by 30 per cent and stone aggregate by 95 per cent - to Maldives for the next financial year.

The government has hiked the shipment quantity of river sand (also known as construction sand) to 5.85 lakh tons for 2008-09 from 4.50 lakh tons in the current financial year, the Directorate General of Foreign Trade said in a notification.

The export quantity of stone aggregate has been increased to 5.26 lakh tons from 2.70 lakh tons.

However, export of river sand needs to be cleared by the Chemical and Allied Product Export Promotion Council (CAPEXIL).

The notification specified that the mining of sand meant for export should not be undertaken in the prohibited coastal regulation zone area.

Maldives relies heavily on imports, of which 10 to 11 per cent go from India.

Minister of State for Commerce Jairam Ramesh had said at Male on January 31 that non-tariff barriers between India and SAARC countries, including Maldives should be removed.

As a part of this exercise, India has already allowed release of 20,000 tons of rice, 17,000 tons of sugar and other items to Maldives.

Source: economictimes.indiatimes.com

India to work for proactive economic cooperation with Maldives

A fervent desire on the part of India to lift the traditional assistance and trade-driven cooperation with Maldives to a comprehensive relationship structure comprising economic and academic cooperation and a healthy two-way trade regime is in evidence as Minister of State for Cooperation Jairam Ramesh began discussions with Ministers and officials here on Tuesday.

Mr. Ramesh, on a three-day visit to Maldives as part of his drive to expand trade and investment ties within the SAARC countries, told The Hindu that the time has come for India to take a hard look at its economic cooperation with Maldives and make it more proactive and even unilateral when it came to responding to the aspirations of a rich and young society that was trying to achieve its political and economic aspirations in a changing world.

Maldives is the third stopover for Mr. Ramesh. He had visited Bangladesh and Pakistan and is scheduled to visit Sri Lanka within the next two weeks.

The Minister’s tour of the SAARC nations and interactions with delegations is in preparation for the SAFTA Ministerial meeting in New Delhi on March 1 and 2.

“We have to send a signal that India’s perspective vis-À-vis SAARC countries is changing; that we are no longer prisoners of reciprocity and that we are sensitive to the concerns of our partners,” Mr. Ramesh said.

Pointing out that Maldives was one of the outstanding economic success stories of the past three decades with 7 per cent GDP growth and a per capita income in the region of $3000, Mr. Ramesh said India had to see how it could go beyond trade to investment and cooperation in diverse areas.

The present level of trade and investment interactions between the two countries was not commensurate with the potential. With a 11 per cent share, India was behind Singapore and Sri Lanka in exports to Maldives and there was scope for improvement here.

“In private investment, we figure nowhere, compared to Singapore and Malaysia.”

Mr. Ramesh identified the expansion of the list of items traded between the countries, making of the annual assessment of Maldives’ import requirements automatic, cooperation in the fisheries sector (particularly in tuna fishing), and greater Indian engagement in Maldives’ higher education needs as some of the areas where the two countries could have fruitful joint initiatives.

While India’s exports to Maldives during 2006 were worth Rs. 384 crore, imports were worth less than Rs. 6 crore.

“We must import more items and quantities from Maldives,” he said.

The Minister, who is being accompanied by Marine Products Export Development Authority chairman G. Mohan Kumar, said he would focus on bilateral cooperation in tuna fishing and processing during his talks with Maldivian officials.

India has already announced major plans to develop its tuna resources, particularly in the Andaman and Nicobar Islands. Fisheries in Maldives faces a challenge as from 2011, the country will lose its duty-free benefits in Europe.

Source: hindu.com

JAIRAM RAMESH TO VISIT MALDIVES FOR INTENSIFYING ECONOMIC COOPERATION

The Minister of State of Commerce, Shri Jairam Ramesh will be visiting Maldives from January 29th to 31st as part of his drive to expand trade and investment ties within SAARC. He has already visited Bangladesh and is scheduled to be in Sri Lanka in two weeks time. Interactions with delegations from Pakistani and Bhutan have also taken place. In addition, Shri Ramesh has visited all the important border trade centres in the region including Petrapole, Moreh and Attari/Wagah. The visit assumes significance in light of the forthcoming SAFTA Ministerial meeting in New Delhi on March 1st-2nd, 2008.

Shri Ramesh will also review the working of the Indo-Maldives Trade Agreement of 1981 in light of the changes that have taken place in the economies of both countries. India supplies essential commodities like rice, wheat flour, eggs, potatoes, stones and sand as part of this Agreement. Even though wheat exports from India are banned, as a measure of the importance it attaches to SAARC in general and Maldives in particular, India supplies wheat flour to Maldives.

India accounts for around 10-11% of Maldives imports, next to Singapore and Sri Lanka and is on par with UAE. Exports from India to Maldives are presently in the region of about $ 100 million. Singapore accounts for almost 90% of the FDI into Maldives, followed by Malaysia. Shri Jairam Ramesh’s visit is to explore how India can expand its trade and investment presence in Maldives, a country of great strategic significance to it.

Fisheries is one important area for bilateral cooperation that is proposed to be discussed during Shri Ramesh’s visit. Cooperation in tuna is one specific area that will be discussed now that India has also announced major plans to develop its tuna resources, particularly in the Andaman and Nicobar Islands. n addition, Maldives has sought India’s assistance to develop it as a trans-shipment and logistics hub because of its strategic location. Maldives has also expressed in expanding the scope of training in IT.

Source: pib.nic.in