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THE MALDIVES PARADISE ISLANDS MEAN BUSINESS Investor-friendly reforms are being introduced and privatization initiatives get under way. n increasingly popular holiday destination for Chinese tourists, the beautiful islands of the Maldives are being transformed into an investment paradise as the business-friendly government embarks on a major privatization program. Waves of foreign direct investment (FDI) are expected to flow into the palm-fringed chain of islands as President Mohamed Nasheed opens the doors to overseas investors and builds on the country’s soaring popularity among foreign tourists. Chinese businesses are being offered major FDI opportunities in a wide range of sectors and industries, including tourism, housing, fisheries, construction, financial services, ICT, and infrastructure. President Nasheed has also stated his desire to make the islands carbon-neutral within a decade, by switching completely to renewable energy sources with the help of investors. “We need to privatize a number of government activities and industries and turn them into private entities,” states President Nasheed. “We aim to achieve two things: first, efficient pricing and


greater investment; and secondly, reductions in public expenditure on infrastructure and corporate activities.” The government is reforming its regulatory frameworks and seeking to reduce its budget deficit to enable it to secure investments of U.S.$500 million in the short term, while decentralizing its operations and introducing ambitious reforms in education and welfare programs to raise the standard of living for its 400,000 people. As the country’s most important industry, tourism now accounts for 28% of gross domestic product and more than 60% of foreign exchange receipts. Over 600,000 foreigners visited the Maldives in 2008 as the economy jumped 8% from the previous year. In addition, more than 90% of government tax revenue is generated by import duties and tourism-related taxes, with thousands of locals relying on jobs at hotels, restaurants, airlines, airports, taxis, and stores. China is now the number one regional source of tourists to the Maldives, having recently overtaken Japan. Between January and September 2008, nearly 32,000 Chinese visitors stayed in the

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up 17% from the previous year. Those numbers are expected 060 Maldives, to rise even further in the future. President Nasheed sees major FDI

Island Aviation Services Ltd. rises. Flying under the popular Maldivian brand, the airline has a fleet of turboprop aircraft that make more than 10,000 domestic flights a year. “Hotels are opening up all over the Maldives, offering great opportunities,” says Maldivian managing director, Bandhu Ibrahim Saleem. “We will keep expanding and investing in new aircraft, personnel, training, and customer services. By 2014, I would like us

openings across the tourism sector: “People who invested a few hundred thousand dollars 20 years ago are now multimillionaires,” he says. “That is an excellent return on their investments and there are huge opportunities in the infrastructure sector as many of the projects are also tied to resort or tourism concessions.” Offering guests the ultimate in high-end hotel and resort accommodations in the Maldives is Coco Collection. The “There are huge opportunities in the infrastructure firm operates two luxury resorts: the Coco Palm Dhuni sector as many of the projects are also tied to resort Kholu and Coco Palm Bodu Hithi, with a third, the Coco or tourism concessions.” Palm Kuda Hithi—an exclusive, private island with its own luxury yacht—due to open next year. Mohamed Nasheed, President, The Maldives Blending sustainability and eco-friendly lifestyles with tradition and culture, Coco Collection’s stunning resorts to be flying to Thailand, Malaysia, Europe, and the Middle East.” boast the best in facilities, food, and views. “We are a world-class Meanwhile, with more than 1,000 locally registered fishing destination with a very innovative design,” says Coco Collection boats operating in Maldives-owned waters and up to 60,000 jobs director, Hussain Hilmy. “Each of our islands has its own atmosphere generated, the importance of the fisheries sector to the country’s welland appeal so we are able to differentiate our products even within the being cannot be over-estimated. Maldives Industrial Fisheries Co. same destination. My dream is to take our brand abroad and become Ltd. (Mifco) produces and exports niche-branded and internationally a regional player by building on our success in the Maldives.” accredited Maldivian-origin fish products to global destinations, The key gateway to the Maldives is Male’ International Airport including Japan, Germany, France, and the U.K. The state-owned located near the country’s capital city. The government is seeking organization is a star performer and is open to privatization as it looks foreign investment partners to boost its passenger and cargo to diversify into aquaculture and mariculture. operations. Ministers have also announced plans for the development “The fishing industry generates substantial revenue for Maldivians,” of five new regional airports within the next decade. says Mifco managing director, Ali Faiz. “We plan to develop further As the nation’s tourism industry continues to grow, so the number activities as aquaculture has great potential. The sky is the limit.” of visitors traveling in aircraft operated by leading aviation company Founded in 1988 as the national telecommunications carrier, Dhiraagu is a joint venture between the government and U.K.-based Utility hailed an example for the region telecoms giant Cable and Wireless. Its state-of-the-art technology Established in 1995 with a mandate to design, develop, and manage and digital networks provide fixed line, Internet, and mobile phone an efficient and cost-effective public water supply and sewerage coverage to many of the 1,200 atolls that comprise the Maldives. system, Male’ Water and Sewerage Co. Pvt. Ltd. (MWSC) stands Dhiraagu CEO, Ismail Rasheed, says: “We also facilitate growth in as a point of reference for the region. other services, such as transport and health.” The dynamic utility has ventured into consultancy, the provision of trade and services of water and waste-water appliances, and launched the successful TaZa mineral water brand with its subsidiary company. “We have used our experience to transform into an engineering and contracting company,” says managing director, Mohamed Ahmed Didi, a business graduate who held government posts before taking up the reins at MWSC. “We are committed to delivering an affordable, sustainable water supply to our people and improving their quality of life.” Better technology and expertise are crucial for a utility provider that serves isolated island communities and uses sea water as its primary water resource. “The price of water is very high and we need to be extremely efficient,” Didi says. “As such, we are always on the look-out for knowledge and new technologies, especially as costs can only be reduced with better technology.” This progressive attitude has enabled MWSC to reduce its own energy consumption by 40% per cubic meter since the company started and will play a vital role in the realization of future company objectives, which include having an innovative water production system to cater for all the islands. “We would like to see the construction of a submarine water pipeline network to link the islands,” Didi says.

Male’ Water & Sewerage Company Pvt. Ltd. Fen Building, Ameenee Magu, 20375, Male’, Maldives. Tel: +960 3323 209 Fax: +960 3324 306

by Business Focus

Maldives Report 09 2009  

Maldives Report September 2009

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