At the lavish Ashoka Palace in the Indian capital New Delhi, visuals of clear turquoise water, white beaches, exciting under-water experience and boduberu dance set the mood for the delegates of over 400 companies who were here to attend the third edition of Maldives Investment Forum on Tuesday.
Government in its keynote address tried to recapture the confidence of Indian investors as apprehension was running high due to the abrupt termination of international contract with GMR Infrastructure Ltd.
Government said they were ready to promote a transparent, hassle-free and liberal trading and investment environment and will welcome investment from India with open arms. ” The government is committed to change its legal framework to allow trade and investment to diversify economy and there has been massive progress on the infrastructure front,” Vice President Abdulla Jihad said.
“I want to assure all potential investors that Maldives is open for business. It is open 24 hours,” he added.
Even though the delegates looked impressed and were confident about the potential of doing business in the Maldives, the GMR fiasco held them back from committing immediately.
“No doubt, the Maldives looks like a dream destination for doing business. But, I would like to know more about the legal and bilateral aspects before we move forward,” said a delegate while looking at his info kit on investing in the Maldives
Another delegate who was here to explore the possibilities of investing in telecom services said, “It is very important to have a set up where we can feel secure about investing money in a certain project. Let’s see how it rolls.”
The concern over providing a conductive environment to do business in the Maldives also appeared in Indian newspapers. A leading Indian business paper Mint wrote, “The memory of the Maldives government abruptly terminating a India-Malaysia joint venture for modernising the Male airport in 2012 saw Indian industry seeking greater predictability and protection for investments in the Maldives… The cancellation of the deal had soured ties between India and the Maldives.”
Last month, GMR won a lawsuit over the termination of contract to run Ibrahim Nasir International Airport (INIA). In a major embarrassment, government was ordered to pay USD 250 million to Indian infrastructural company GMR by a 3-member Singaporean Arbitration Tribunal in its final order.
The third edition of the investment forum was held in partnership with Federation of Indian Chambers of Commerce and Industry (FICCI) to seek investments in infrastructural development, airport expansion and various other sectors to boost job creation in the country.
Jihad also announced that the country will sign its first free trade agreement early next year to boost trade and cooperation with other countries.
“It is investment, both foreign and domestic that has transformed our economy and elevated to current position. On the strength of our past achievements, the government is looking into new investments and is actively seeking foreign direct investment as it is one of the fundamental driving forces of Government policies,” he added.
The annual Maldives Investment Forum was held in Singapore in 2014 and in Beijing last year. The next edition of the forum will be held in Doha, Qatar.
The third edition of Maldives Investment Forum was all praise of President Abdulla Yameen by his cabinet ministers – Vice President Abdulla Jihad and Economic Development Minister Mohamed Saeed – as they tried to garner the interest of investors in the Indian capital New Delhi on Tuesday.
The annual forum to tap the potential of the Maldives’ tourism and infrastructure sector in the international market was started under the presidency of Abdulla Yameen in 2014 in Singapore followed by Beijing in 2015.
Here are top 5 mentions of President Abdulla Yameen at the high-profile investment forum:
GDP has grown with double digit under the leadership of President Yameen in last three years
We have seen the trust for President Yameen’s economic policies. We are seeing the results of our efforts
Far-sighted policies of President Yameen has narrowed down fiscal deficit in the country
President Yameen has eased monetary policies leading to increased credit availability for the private sector and have lowered inflation
President Yameen’s government promotes a transparent, hassle-free and liberal trading and investment environment and believes in strong, predictable and transparent commercial regime is critical for private sector led growth
Maldives government has been ordered to pay USD 250 million to Indian infrastructural company GMR by a 3-member Singaporean Arbitration Tribunal in its final order over illegal termination of contract to run Ibrahim Nasir International Airport (INIA).
The court ordered government to pay USD 208 million in damages with interest which amounted to approximately USD 250 million, Maldives Attorney General Mohamed Anil was quoted as saying by the Sun Online.
“The compensation covers the debt, equity invested in the project along with a return of 17% and also termination payments and legal costs. The compensation is net of taxes that GMIAL may be required to pay in the Maldives,” the company said, according to an Indian newspaper.
Maldivian government under the then President Mohamed Waheed terminated USD 500 million GMR contract on November 27, 2012 alleging legal and national security implications following which the company moved a plea to the international tribunal for award of damages and loss of reputation due to abrupt termination of the contract.
GMR had won the contract for 25 years through competitive global bidding process and the agreement was signed on June 28, 2010 under ex-President Mohamed Nasheed’s government.
Problems for GMR began when it decided to levy USD 27 for Airport Development Charge (ADC) and insurance charge, which was struck down by a civil court. The company had called the decision “unlawful and premature” and said the notice was devoid of any locus standi, as quoted by The Hindu.
The contract to expand and maintain the international airport was then given to Chinese company Beijing Urban Construction Group and which was later awarded to Saudi Arabia based Binladin Group in May this year.
Saudi Arabia, known as one of the closest friend’s of the Maldives, also granted the single largest loan of USD 100 million to the Maldives to finance the expansion of INIA in September this year.
Government is already facing highest deficit at 14.4 per cent, highest deficit since 2010, according to World Bank which warned in May that the Maldives is at risk of external debt distress and public debt could rise from 73 per cent of GDP or USD 693.7 million to 120 per cent of GDP by 2020 owing to large infrastructure projects.
Former Vice President Ahmed Adeeb had a contact saved in his now infamous gold iPhone as ‘Lord P’. The same gold iPhone that exposed how Adeeb and his mentor-tuned-boss turned-antagonist President Abdulla Yameen were not only involved in high-level corruption but also in wiping off anyone and everyone who did not fall in line — media, politicians, activists and even its own ministers; now has another story to tell: How the two cracked a deal with ‘Lord P’ to shroud the autocratic nature of the government with a well-crafted image of the Maldives’ economic development.
But it was not the first time when Yameen agreed to spend a fortune to negate the banana republic impression. Last summer, Yameen signed a lucrative deal with Cherie Blair- wife of former Prime Minister and Labour Party chief Tony Blair- after she was rejected by the first democratically elected President Mohamed Nasheed who had Amal Clooney by his side.
Cherie who was earlier ready to represent Nasheed calling his trial ‘an extraordinary farce’, then agreed to revive Yameen’s image for £ 210,000 (MVR 4,128,292).
Back In 2012 too, right after the coup that toppled Nasheed’s government, another Labour Party member, former Labour Cabinet Minister and former attorney general Baroness Scotland took £ 75,000 (MVR 1,457,366) to advise the then government on avoiding action by Commonwealth in a two-week work contract.
On August 12, 2015, a few days before Yameen got Cherie on board, Adeeb broke a deal ‘Lord P’, who is a professional lobbyist and political adviser, to revamp the image of Yameen’s regime.
‘Lord P’ is no one else but the man who has not only been a Member of Parliament (MP) for Hartlepool for Labour Party but also held a number of Cabinet positions under Prime Ministers Tony Blair.
The man who rebuilt the Labour Party as New Labour before its subsequent victory in the 1997 election.
‘Lord P’ is Peter Mandelson – The Prince of Darkness.
A report by Daily Mail says that 62-year-old Mandelson held meetings with Adeeb and Yameen to counsel the government on how to “rebuild its public image”.
The British Daily quoting a four-page memo says that Mandelson’s strategic advisory firm Global Counsel suggested the government to deal with the PR crisis by projecting “your vision for the country’s future”.
The memo was dated August 18, four days after the meeting took place between Adeeb and Mandelson at the resort of Gili Lankanfushi.
Headlined as ‘Next Steps’, the memo asking to set up a strategic communication to fix the international image of the Maldives as quoted by Daily Mail read:
The taskforce will benefit from start-up training and development from an external source. This is something we could guide you on as part of our current work with international investors in the Maldives
It also offered to lobby United Nations General Assembly and Commonwealth by “telling an effective story about the Maldives to international audiences”. The advisory firm also said that it would get confidence of the international investors “everywhere from New York and London to Berlin, Paris and Beijing”.
The Memo By Global Counsel
The discussion in Gili Lankanfushi was very useful in scoping out the next steps. What follows in this note assumes that the situation regarding Nasheed can be resolved amicably from the perspective of all relevant stakeholders. The Maldives is a young democracy and recognises it has further to go in order to create the institutions and space to enable democracy to flourish… Reforms to the penal code and judicial system, as well as strengthening the rule of law, are prerequisites to a healthy democracy, and the government is in the process of designing and implementing reforms in these areas that will deliver immediate benefits as well as building the foundations for a stronger democracy in the longer term.
The firm suggested that government can rebuild its image by giving an ‘accurate account’ of the government’s ‘accomplishments’ in the fields of economic stewardship, social reform and environmental protection.
It is unclear if the two went ahead with the big revival plan as Adeeb – in less than two months – was jailed for plotting to assassinate his boss Yameen.
On October 13, when Ying Staton, Global Counsel’s ‘Asia Director’ wrote to Adeeb to figure out when Mandelson and Yameen could speak on phone, he was already in middle of speed boat blast allegations and days ahead only led to his impeachment, arrest and sentencing.
Flamboyant Adeeb, one of the richest politicians, also seen as Yameen’s loyal, also got implicated in one of the country’s biggest corruption scandal with Maldives Marketing and Public Relations Corporation (MMPRC).
An audit report of MMPRC revealed that money as huge as USD 80 million received from leasing islands and resorts meant for the state was siphoned off to private accounts which benefited Adeeb, Yameen, his wife and other politicians.
And it also benefitted Cherie Blair. Omnia had billed Abdulla Ziyath, former managing director of the MMPRC for £ 210,000 (MVR 4,081,265) – the half amount of total fee charged by the firm for a six-month contract.
According to Maldives Independent, government also spent USD 19,293 (MVR 297,510) on visits of Omnia’s barrister Toby Cadman, between June and September.
My work is not yet complete. My work will be completed once the airport and the country is the preferred destination. When my work is done, I want to compare the difference between the services given in the Maldives and Singapore, Dubai – Yameen
Omnia, on the allegation of receiving the money from a company implicated in corruption, said that it terminated six-month contract early due to unpredictable domestic events and is no longer instructed by either the government or the MMPRC.
The whistleblower, Bank of Maldives former manager Gasim Abdul Kareem, who leaked the account details of Score of Flairs (S.O.F) Private Limited which facilitated the transaction between MMPRC and Omnia is now in jail on the charges of unauthorised disclosure customer information.
Adeeb was sentenced to eight years in prison for stealing USD 5,000,000 (MVR 76,850,000) from state coffers besides 15 year jail term for plotting to assassinate Yameen.
Government also hired Washington based lobbyist firm, Podesta Group in September for a sum of USD 300,000 (MVR 4,611,000) and London-based PR firm BTP Advisers in November.
Even after massive PR exercise Yameen is now isolated by his party men. Though, he is often witnessed talking about economic development and policies as ambitious as making the Maldives the next Singapore and Dubai. At an event in May this year, Yameen said:
My work is not yet complete. My work will be completed once the airport and the country is the preferred destination. When my work is done, I want to compare the difference between the services given in the Maldives and Singapore, Dubai
Battered by its international image, Yameen-led government even launched a programme ‘Visit Maldives Year 2016’ to promote tourism and also enhanced their budget but soon abandoned the ambitious 1.5 million tourist target this year alleging opposition of tarnishing the image of the country.
The government functioning on PR machinery of the west in a bid to revive the image of the country often blames opposition and its leader Nasheed for destroying country’s economy, ironically, calling them the agents of the west. Meanwhile, Nasheed continue to enjoy the support of international rights’ group, journalists and rival of the Labour Party, Conservative Party’s former leader and former Prime Minister David Cameron.