By S. Chandrasekharan
President Nasheed was faced with the biggest challenge to his government when the opposition parties DRP ( both factions of Thasmeen Ali and Gayoom) and the PA mounted a series of demonstrations for the first eight days of May as a protest against the alleged rise in prices and consequent economic hardship faced by the people.
While the opposition groups were certainly inspired by the protests that started at the Tahrir square in Cairo and spread to many other West Asian countries, the similarity ends there. Maldives is not being run by a corrupt dictator as is the case with those countries. Second and more important, Maldives is now a genuine democracy and President Nasheed was elected in a truly transparent election.
The demonstrations were led by the opposition MP and youth leader Ahmed Mahlouf who is close to the former president Gayoom. The demonstrations were never peaceful. The Police had to use tear gas and baton charges repeatedly to break the crowds that indulged in violence. Window panes of buildings were smashed and motor cycles were burnt. Shops were vandalised.
On the second day of the protest, the police were bombarded with bombs, stones, water bottles and even a hammer in a case. The Police recovered petrol bombs and bomb making equipment from a nearby mosque.
The Maafannu Police station building was attacked and its window panes were smashed. Armed Police had to be deployed in the Republican Square.
In order to let the people protest if they want and at the same time control the crowds, the government designated the artificial beach area and the area around Tsunami Monument as places for protest but the opposition crowds did not adhere to the directions of the government. The situation became worse when pro government activists tried to resist the protestors and clashes ensued.
The Police had a tough time in dealing with the violent crowds. The protests that started in the nights were carried till the early hours of the morning on all days. The opposition had made a call that the protests on Friday night- that is 6th May would be the biggest- but the show turned out to be a poor one and the crowds easily dispersed in thirty minutes when the Police approached them.
The protesters called off their protests on the eighth day when the Government expressed its willingness to talk to the leaders of the protesters. The talks failed as four of the ‘supposed’ leaders of the protests who attended the talks wanted the economic reforms programme to be reversed. This no government in good sense could agree.
The Foreign Minister Ahmed Naseem rightly affirmed the government’s “steadfast and uncompromising” commitment to the right to peaceful protests but drew a distinction between peaceful and responsible exercise of that right and the politically motivated violence, rioting and destruction of property as seen in Male.
On the fourth day- that is May 4, the government formally named former president Gayoom as the person responsible for inciting violent protests.
On 30th April, a day prior to the start of the protests, Gayoom announced that he was leading a faction of the opposition party called Z-DRP ( Zaem). This party has no legal standing and is not a registered party either. His faction demanded on the same day that it will be holding protests on the government’s decision to introduce a managed float of the Rufiyaa ( Maldivian currency).
It is well known that the economic mess now seen in Maldives is due to uncontrolled and profligate expenditure of the previous government of Gayoom who is directing the protests now from behind the scenes.
Due to the current economic crisis, dollar had become scarce and was selling in the black market from 16 to 20 Rufiyaas when the fixed rate of government that had continued for over a decade was 12.75 Rufiyaa a dollar. The dollar value was raised it to 12.85 and allowed to float up to a band of 20 percent- that is 15.42 Ruffiyaa. This has resulted in price of essential commodities as Maldives depends mostly on imports. While those engaged in the tourism industry were being paid in dollars, most of the people in other sectors are being paid in Ruffiyaas and they were the ones who were affected.
The government simultaneously tried to ease the burden by reducing the import duty on a wide range of essential goods. A fifty percent cut in the import duty on diesel is being planned to reduce the costs of transportation of goods to the islands. The reform programme announced by the government included a raise in the GST in the tourism sector, income tax for high earning groups, minimum wage bill to be introduced soon and a General service tax for all sectors.
On the 25th of May, the Government reached a “staff level” agreement with the IMF delegation that would extend the cooperation for another three years. The IMF recommendation would include
- Raise import duties on pork, tobacco, alcohol and plastic products by August 2011 (requires Majlis approval);
- Introduce a general goods and services tax (GST) of 5 percent applicable to all sectors other than tourism, electricity, health and water (requires Majlis approval);
- Raise the Tourism Goods and Services Tax (TGST) from 3.5 percent to 6 percent from January 2012, and to 10 percent in January 2013 (requires Majlis approval);
- Pass an income tax bill in the Majlis by no later than January 2012;
- Ensure existing bed tax of US$8 dollars a night remains until end of 2013;
- Reduce import duties on certain products from January 2011;
- Freeze public sector wages and allowances until end of 2012;
- Lower capital spending by 5 percent.
Reports indicate that Maldives has committed itself to the reforms. This would mean a tightening of the monetary policy and the measures suggested will certainly be unpopular and will be exploited by the hostile opposition.
Nasheed inherited a bloated bureaucracy and it said that 20 to 25 percent of the workforce work for the government. Attempts to freeze the wages of government have not been successful and the unhelpful civil service commission has not been cooperative.
The Maldivian High Court has recently passed a judgement that the Finance Ministry has no authority to overturn the salaries of the civil servants against the will of the civil service commission.
Maldives spends a quarter of its GDP on oil and oil prices are rising. The tourism industry is responsible for 70 percent of the GDP and the violent unrest sponsored by the opposition would affect this valuable money earning industry. There is one report that the Taiwanese tour agencies have already cancelled the tour for this year.
A large number of media persons had landed from abroad hoping to see another “ jasmine revolution” and they would have been disappointed.
The person behind the riots, former President Gayoom is hoping to come back to the political stage in a big way. Perhaps he would like to be “ arrested”. But President Nasheed does not seem to be in a hurry to “oblige” him.