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
